Pursuing universal energy access in Africa is predicated on the deployment of decentralized, off-grid renewable energy systems. Drawing on examples from community-led energy initiatives in Ethiopia, Malawi, and Mozambique, we traced how the development and management of off-grid energy systems is constrained by multiple, systemic supply chain fragilities.
In our study, we conducted field visits between 2022 and 2024 across Southern and East Africa to investigate these supply chain bottlenecks. Our findings point to three main challenges: geographic barriers, technological and financial constraints, and governance-related regulatory hurdles.
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Geographic Barriers
While decentralized renewable energy systems have been shown to be more resilient to a range of shocks than centralized grids, their practical deployment is inhibited by unpredictable globalized supply chains and local logistical challenges.
Landlocked states such as Ethiopia and Malawi must navigate multiple layers of customs clearance and varying modes of transport to deliver equipment and components from neighbouring ports, Djibouti in the case of Ethiopia, and Beira or Nacala in the case of Malawi.
Internal logistics are equally challenging: limited and poorly maintained road and rail networks complicate the transportation of bulky equipment to remote rural areas. These vulnerabilities are exacerbated by climate-induced risks. Notably, Cyclone Idai and Tropical Storm Ana caused destructive impacts that damaged physical energy infrastructure and disrupted fragile equipment supply chains essential for ongoing energy services affecting energy access and shortages of critical components.
Technological and Financial Constraints
Technologically, the sector suffers from dependence on Global Production Networks (GPNs), with a disproportionate reliance on Chinese manufacturing, especially for solar PV system components. This dependency exposes project developers to international market shocks and trade volatility.
Without a diversified market, a critical consequence of this lack of local industrial integration is the “repair-or-replace” dilemma. The absence of domestic spare part inventories and specialized technical labour often renders minor component failures terminal for entire projects, along with the accumulation of off-grid waste. Lack of local markets and unstructured sourcing of components result in higher transportation costs and often prevent project developers from receiving standard warranty support for imported equipment.
Compounding these technological difficulties is a long-term Foreign Exchange (Forex) liquidity crisis. In Ethiopia and Malawi, the time lag between local currency mobilization and the acquisition of US dollars for imports, ranges from 12 to 24 weeks, exposing developers to substantial inflationary pressures and currency devaluation risks. This undermines the financial viability of solar home systems and other off-grid energy initiatives before they reach users on the ground.
The misalignment between high-level energy policy and fiscal regulation presents a barrier to development of the off-grid energy sector. Despite stated national commitments to renewable energy adoption, the prevailing tax regimes in many jurisdictions are unsupportive and even counterproductive.
In Mozambique, the cumulative impact of import duties of VAT and port fees can raise project costs by nearly 50%. Even where exemptions exist, as in Ethiopia, they are often applied inconsistently to ancillary components, such as wiring and mounting hardware, which are as vital as the panels themselves.
Technical capacity gaps within customs administrations compound existing bottlenecks; the misclassification of specialized renewable energy components leads to protracted bureaucratic delays, sometimes exceeding eight months. This administrative inertia reflects a lack of coordinated governance, where fiscal objectives are prioritized over energy security and rural development.
Governance Regulatory Hurdles
To address these systemic constraints, a shift from mere procurement to strategic regional integration is needed. In the short term, policy interventions could focus on reviewing tariffs and duties on import of off-grid system components. Customs procedures should be streamlined and digitalised while ensuring transparency in tracking of imports through project developers.
Additionally, governments should initiate green economy channels for the prioritized allocation of Forex to energy developers. Aggregated procurement models, facilitated by national trade associations, could allow smaller enterprises to achieve economies of scale and secure more robust manufacturer warranties.
In the longer term, Africa’s energy transition could be supported by the development of regional manufacturing hubs and the promotion of cross-border infrastructure and intracontinental trade networks, such as through the African Continental Free Trade Area (AfCFTA), ratified in 2021.
A potential approach could be to begin with local manufacturing of ancillary components, such as inverters, cables and mounting structures, which typically account for more than half of the cost in solar PV systems. By leveraging resource endowments such as Mozambique and Malawi’s mineral wealth for producing sub-components like transformers and conductors, the region can begin shifting from reliance on imported technologies toward participation in renewable energy value chains.
This shift is essential to transform off-grid energy in the region from fragmented decarbonization efforts toward a more integrated network that directly contributes to renewable energy supply chains.
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