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Why Renewable Energy Stocks in Africa Can Be Good Investments
1. Massive Untapped Potential
- Africa has abundant solar, wind, geothermal, and hydro resources.
- Example: The Sahara Desert alone receives enough sunlight to power the entire continent many times over.
2. Strong Government & Global Support
- Renewable projects are backed by governments, global institutions (e.g., World Bank, AfDB), and public-private partnerships.
- Power Africa, Green Climate Fund, and Just Energy Transition Partnerships (JETP) are fueling growth.
3. Growing Electricity Demand
- Africa has the world’s fastest-growing population and rising energy needs, especially in urban areas.
- Renewable energy is seen as the most viable and scalable solution in many off-grid and rural regions.
4. Falling Costs of Technology
- Solar panels, wind turbines, and battery storage are cheaper than ever.
- This makes grid-scale and decentralized mini-grid projects financially feasible.
5. ESG & Impact Investment Appeal
- Global investors are shifting toward sustainable and green portfolios.
- African renewables are attractive for impact investors seeking both returns and development outcomes.
6. Diversification Opportunities
- Investing in African renewable stocks provides diversification for global investors.
- Less correlated with Western markets, especially during economic shocks.
Why Renewable Energy Stocks in Africa Can Be Risky or Bad Investments
1. Political & Regulatory Uncertainty
- Many African countries have unstable governments, inconsistent energy policies, or changing regulations.
- Sudden subsidy removals, tariffs, or nationalization fears can deter investors.
2. Weak Utility Companies
- State-owned utilities (like Kenya Power) often suffer from inefficiency, poor billing systems, and heavy debts.
- This affects Power Purchase Agreements (PPAs) and payment reliability to renewable producers.
3. Currency and Inflation Risk
- Local currency depreciation (e.g., Naira, Kenyan Shilling) can erode returns for international investors.
- Many projects depend on foreign loans, which become expensive if local currencies weaken.
4. Infrastructure Challenges
- Weak grid infrastructure limits renewable integration in many countries.
- Delays in transmission projects can hurt profitability and expansion plans.
5. Liquidity and Market Size
- African stock exchanges are small, illiquid, and underdeveloped.
- Shares can be hard to buy/sell at fair value, and IPOs are rare.
6. Short-Term Volatility
- Many renewable firms in Africa are young or recently listed, with unpredictable earnings and political exposure.
- Short-term investors may struggle to see immediate returns.
Summary: Who Should Invest?
| Investor Type | Suitability | Reason |
|---|---|---|
| Long-term investor | Good fit | Can withstand volatility for high-impact growth |
| Impact/ESG investor | Ideal | Combines financial return with sustainability |
| Risk-averse trader | Not suitable | Exposed to political and market instability |
| Short-term speculator | Risky | Results may be delayed or affected by regulation |
In this share market analysis article you are going to get info on Africa’s best Renewable energy stocks. You will get full stocks analysis, so read it full.
Stocks Info of Africa’s Best Renewable Energy Companies :
| Company Name | Stock Price (Local Currency) | Market Cap (USD Billion) | Net Profit (Q2 2025, USD Million) | Index Listed |
|---|---|---|---|---|
| South Africa | ||||
| Renewables Infrastructure Group (TRIG) | — | — | — | JSE (via projects) |
| Sasol Ltd | ZAR 245.50 | 12.5 | 320 | JSE Top 40, NYSE |
| Kenya | ||||
| KenGen | KES 5.80 | 1.2 | 45 | NSE 20 |
| Kenya Power (KPLC) | KES 2.10 | 0.6 | -18 (Loss) | NSE 20 |
| Umeme Ltd | UGX 420.00 | 0.4 | 12 | NSE Cross-Listed |
| Egypt | ||||
| Elsewedy Electric | EGP 78.30 | 3.8 | 110 | EGX 30 |
| TAQA Arabia | EGP 15.20 | 1.1 | 28 | EGX 70 |
| Pan-African (Foreign Listings) | ||||
| Scatec ASA | NOK 215.00 | 6.7 | 85 | Oslo OBX |
| TotalEnergies | USD 68.40 | 158.9 | 4,200 | CAC 40, S&P 100 |
Extra reference :
Fundamental Analysis of Africa’s Best Renewable Energy Stocks :
| Company Name | ROCE (%) | P/E | Debt/Equity |
|---|---|---|---|
| Sasol Ltd | 14.2 | 8.5 | 0.6 |
| KenGen | 9.8 | 12.1 | 0.4 |
| Kenya Power (KPLC) | 3.5 | N/A (Loss) | 1.2 |
| Elsewedy Electric | 18.6 | 15.3 | 0.8 |
| TAQA Arabia | 11.4 | 10.7 | 0.5 |
| Scatec ASA | 12.9 | 22.4 | 0.9 |
| TotalEnergies | 16.3 | 9.8 | 0.4 |
Top Picks
- Elsewedy Electric – Strong ROCE (18.6%), solid P/E (15.3), manageable Debt/Equity (0.8).
- Sasol Ltd – Good ROCE (14.2%), cheap P/E (8.5), low Debt/Equity (0.6).
- TotalEnergies – High ROCE (16.3%), attractive P/E (9.8), low Debt/Equity (0.4).
Avoids
- Kenya Power (KPLC) – Weak ROCE (3.5%), loss-making (no P/E), high Debt/Equity (1.2).
- Scatec ASA – High P/E (22.4), indicating overvaluation despite decent ROCE (12.9%).
Neutral
- KenGen & TAQA Arabia – Decent metrics but not outstanding.
Best for growth & stability: Elsewedy Electric, Sasol, TotalEnergies.
Risky: Kenya Power, Scatec (if P/E matters to you).
Piotroski F Score Analysis for Africa’s Best Renewable Energy Stocks :
| Company Name | Piotroski Score | Key Strengths | Key Weaknesses |
|---|---|---|---|
| Sasol Ltd | 7 | Positive ROA, cash flow, reduced debt | Declining current ratio |
| KenGen | 5 | Stable profitability, low leverage | Weak operating cash flow growth |
| Kenya Power (KPLC) | 2 | – | Loss-making, high debt, negative CFO |
| Elsewedy Electric | 8 | Strong ROA, growing margins, low debt | Slight increase in shares outstanding |
| TAQA Arabia | 6 | Improving margins, positive CFO | Moderate leverage |
| Scatec ASA | 4 | Positive ROA | High P/E, increasing debt |
| TotalEnergies | 7 | Strong cash flow, profit growth | Large share buybacks affecting equity |
Top Picks (Scores 7-8):
- Elsewedy Electric (8) – Exceptional fundamentals
- Sasol Ltd (7) – Strong turnaround story
- TotalEnergies (7) – Reliable performer
Avoid (Scores ≤4):
- Kenya Power (2) – Financial distress signals
- Scatec ASA (4) – Valuation and leverage concerns
Credit Ratings Analysis For Africa’s Best Renewable Energy Stocks
| Company Name | S&P Rating | Outlook |
|---|---|---|
| Sasol Ltd | BB- | Stable |
| KenGen | B+ | Positive |
| Kenya Power (KPLC) | CCC+ | Negative |
| Elsewedy Electric | BB | Stable |
| TAQA Arabia | B+ | Stable |
| Scatec ASA | BB- | Stable |
| TotalEnergies | AA- | Stable |
Final Words : Future Investment Analysis For Best Renewable Stocks of Africa
| Company Name | Future Prospects | Financial Strength |
|---|---|---|
| Sasol Ltd | Mixed – Transitioning to renewables, slow progress | Weak – High debt from fossil fuel past |
| KenGen | Good – Geothermal & hydro expansion | Moderate – State-linked but under pressure |
| Kenya Power (KPLC) | Poor – Regulatory & operational hurdles | Weak – Debt-laden & poorly managed |
| Elsewedy Electric | Good – Pan-African expansion in solar/wind | Strong – Profitable with solid margins |
| TAQA Arabia | Positive – Diversifying energy portfolio | Moderate – Recent IPO, less tested |
| Scatec ASA | Good – Active in 6+ African countries | Solid – Backed by strong parent, cash flow positive |
| TotalEnergies | Excellent – Huge global renewables push | Excellent – Diversified, strong balance sheet |
Investment Views (Short-Term & Long-Term)
| Company Name | Short-Term View | Long-Term View |
|---|---|---|
| Sasol Ltd | Not favorable – Market volatility | Improving – Green hydrogen plans |
| KenGen | Favorable – Stable performance | Favorable – Strong renewable base |
| Kenya Power (KPLC) | Risky – Short-term losses | Uncertain – Needs deep reforms |
| Elsewedy Electric | Attractive – Good recent earnings | Strong – Growth in infrastructure |
| TAQA Arabia | Cautious – New listing volatility | Positive – Long-term infra projects |
| Scatec ASA | Favorable – Stable returns | Favorable – Utility-scale pipeline |
| TotalEnergies | Strong – Consistent dividends | Strong – Leader in green transition |
Top Picks (as of mid-2025)
| Company | Reason |
|---|---|
| TotalEnergies | Excellent financials + strong renewables push + global safety net |
| Elsewedy Electric | Solid African presence + profitable + consistent growth |
| Scatec ASA | Focused renewables portfolio + stability + proven success |
| KenGen | Geothermal leadership in Africa + improving outlook |
Stocks to Avoid / Watch with Caution
| Company | Reason |
|---|---|
| Kenya Power (KPLC) | Weak finances, political interference, lack of reforms |
| Sasol Ltd | Fossil-heavy legacy, high debt, transition still unclear |
So this is it for Africa’s best Renewable Energy stocks. You can get fundamentals from many tables and info given in this article which would be helpful in selecting the best stocks. Best of luck
Happy Investing