As capital for Africa’s electric vehicle (EV) and broader energy transition grows, investors are increasingly selective about which markets are able to absorb it.
This was highlighted during an African Solar Industry Association webinar held on April 1 when the African Infrastructure Investment Managers (AIIM) outlined its African Transition Acceleration Fund (ATAF), a blended finance vehicle targeting early-stage energy transition projects.
While capital availability is increasing, investment is flowing towards markets that offer policy clarity, coordinated infrastructure and bankable business models, according to AIIM. South Africa’s fragmented EV rollout may limit its ability to meet these criteria.
Presenting on behalf of the ATAF, AIIM Investment Manager Zoe Pierre stressed that early-stage capital remains contingent on commercial viability.
“If any of our businesses aren’t commercial, we won’t invest,” Pierre said. “Rapid EV growth alone does not guarantee investability. Projects must demonstrate predictable revenue, scalability and long-term returns.”
Pierre noted that, while declining battery costs have improved EV economics, investment decisions continue to prioritise bankable business models over technology or market size.
Investment is currently being directed towards markets such as Kenya and Rwanda where policy support, targeted incentives and more integrated EV ecosystems reduce risk. In contrast, South Africa’s EV infrastructure is developing in a fragmented, province-by-province manner, complicating investment.
Standalone charging networks remain difficult to finance while fleet-linked models with secured demand are viewed as more investable.
Pierre emphasised that attracting private capital requires not only innovative financing structures but consistent policy frameworks, coordinated infrastructure and reliable revenue streams. Without these, early-stage projects may struggle to reach financial close.
“South Africa’s challenge is translating potential into bankable, investment-ready projects,” she said.
