The Akosombo dam

Ghana is the most attractive market in Sub Sahara Africa for investors in the power sector, according to Fitch Solutions Power Risk/Reward Index.

This is coming at a time whereby the nation is grappling with power fluctuation, whilst its energy sector debt has gone past US$5 billion dollars.

According to the research arm of ratings agency, Fitch, the country’s score of about 85% which places it 1st in Sub Sahara Africa signify low levels of risk private investors face whilst entering the market.

This also points to a secure return on investment for private sector players.

Additionally, the population has affordable electricity, whereas there is continued growth in sustainable power sector development.

Importantly, the electricity penetration rate in the country is estimated at about 84%, positioning it as number one in West Africa.

Fitch Solutions expect markets such as Ghana where governments prioritize cooperation with the private sector through measures such as public private partnerships to see the highest level of investments in sustainable electricity generation sources such as non-hydropower renewables over the coming decade.

“We expect that markets where governments prioritise cooperation with the private sector through measures such as public private partnerships will see the highest level of investment in sustainable electricity generation sources such as non-hydropower renewables over the coming decade.”

However, the report said while there are many reasons for low levels of investment in non-hydropower renewables in the region, a key inhibiting factor is the high levels of risk faced by private investors entering the market. 

In most SSA markets, the ability to pay for electricity is limited by the low income levels of the general population, which, in turn, is exacerbated by the lack of diversified economic growth.” 

Kenya is ranked second behind Ghana, whilst Cameroon, South Africa, Namibia and Uganda follow suit in 3rd, 4th, 5th and 6th respectively as other markets attractive to investors in the power sector in the Sub Sahara Africa region.

CountryRisk/Reward Index
Ghana85%
Kenya76%
Cameroon75.4%
South Africa61.5%
Namibia61.3%
Uganda61.1%
Ivory Coast61.0%