Although the need for infrastructure investment across Sub-Saharan Africa is indicated at hundreds of billions of dollars over the next decade, we often see infrastructure projects stall, delay, or fail to scale. The constraint is often framed as a funding gap, yet discussion at the recent LPG Expo held in Johannesburg suggests it is more complex.
The line up of speakers at the LPG Expo held 9 to 10 April at the Sandton Convention Centre.
The panel discussion on infrastructure investment in Sub-Saharan Africa reflected a system where capital, demand, and intent are present, but seldom aligned.
Across the continent, opportunity abounds; energy demand continues to grow, buoyed by population growth, urbanisation, and the move away from traditional fuels. This attracts global interest, but investors are careful, selective, and look closely at local conditions.
The panel noted a trend that sees infrastructure built in ‘pieces’ rather than as a whole system. For example, supply is increased without enough investment in storage. Import capacity grows, but distribution does not keep up. New technologies are added, but there is no clear way to get them to users. This creates obstacles.
A key point raised in the discussion was the need to consider the entire value chain. Downstream access and consumer financing are often underrepresented in investment decisions. Without viable ways for households [and other users] to access and pay for energy, infrastructure developed further up the chain struggles to convert into sustained demand.
This is changing how people think about investment. Bankability is not only about asset size or expected returns – it depends also on whether the system can support the asset. For example, storage without distribution causes bottlenecks, and distribution without affordability limits use. Each gap makes the next one worse.
Regulation complicates things further as markets across Sub-Saharan Africa have different rules, technical standards, and approval steps. Companies working in several countries have to keep adapting. Technologies and solutions that are compliant in one country may not be permitted in another. In some cases, even pilot projects are difficult to initiate due to regulatory constraints.
Such fragmentation restricts innovation and makes it more expensive to enter the market. It also influences how investors use their money. They look at demand and, in parallel, how predictable, easy to navigate, and stable each market is.
Getting the mix right
In a global context, capital can move anywhere, so every investment in Africa competes with options in other places. Clear rules, strong contracts, and political stability are key to investment decisions.
Getting this right can have quick results. The panel highlighted the example of the Richards Bay terminal in South Africa, where targeted infrastructure helped growth. When capacity limits were removed, supply went up and the market reacted.
This reveals a more detailed view of scale. We often think of infrastructure as big, expensive projects, but the panel highlighted that smaller, focused investments, like distribution hubs, storage, and local networks can anchor demand and set the stage for bigger investments to follow.
Financing models are changing too. Traditional development funding is still important, but it’s often slow. Private capital moves faster but needs more certainty. Hybrid approaches combining both are becoming more popular.
For example, results-based financing helps projects gain early momentum by tying funding to measurable results. This helps projects become commercially sustainable without relying on subsidies long-term. It also shows a growing understanding that infrastructure needs to work as a business – not just as a development project.
With markets in Sub-Saharan Africa increasingly connected, regional dynamics add another layer. Coastal countries with import facilities help supply inland markets, and supply flows change based on what’s available, what’s needed, and how easy it is to move goods.
This opens possibilities for regional hubs. It also highlights the need for better coordination. Making standards the same, improving cross-border processes, and aligning regulations would reduce friction and help products and capital move more easily.
Gadibolae Dihlabi, Managing Director, Liquefied Petroleum Gas Association of South Africa (LPGSA) comments: “To enable successes in infrastructure investment in Sub-Saharan Africa, capital and demand need to align across the entire value chain. As well as building assets, we need to create systems that are interconnected, sustainable, and accessible to those they are intended to serve.”
The Sub-Saharan Africa LPG Expo was convened by LPG Expo and the Liquefied Petroleum Gas Association of South Africa (LPGSA).
For more information visit: lpgas.co.za