Private capital isn’t the problem, poor project structure is

SAM MATSEKETE

Across Southern Africa, the demand for energy finance is no longer a forward-looking concern, it is immediate, structural and accelerating.

Industrial expansion, mining growth, urbanisation and energy security imperatives are driving a substantial pipeline of renewable energy projects.

Yet the prevailing narrative continues to frame private capital as hesitant.

This is a misdiagnosis.

From an institutional investor perspective, the binding constraint is rarely risk appetite. It is the absence of consistent, bankable structure.

Capital exists, but scale and aggregation lag

Renewable energy infrastructure requires long-duration funding.

Pension funds, insurers and sovereign-backed pools are natural providers of such capital.

However, across much of the region, domestic savings remain shallow, fragmented and insufficiently intermediated to support infrastructure at scale.

The consequence is not a lack of capital, but a mismatch between project ambition and available funding depth.

Zambia’s Copperbelt Energy Corporation green bond illustrates the point.

Initially targeting US$150m, the issuance closed closer to US$200m, signalling robust investor demand.

Critically, demand was unlocked by structure.

A green bond format widened the investor base. Policy support and tax incentives enhanced risk-adjusted returns.

Offtake agreements with mining houses, credible, hard-currency-generating counterparties, underpinned predictable revenue streams.

Investors were not funding a concept. They were pricing contracted cash flows.

Notably, a significant share of that capital originated from jurisdictions with deeper pension pools and more sophisticated capital markets.

This underscores a strategic vulnerability: regional infrastructure remains partly dependent on external balance sheets.

If infrastructure sovereignty is a policy objective, then deepening domestic savings mobilisation and bond market capacity is not optional, it is core economic strategy.

Bankability, not intent, determines capital flows

Renewable projects carry clear developmental value from emissions reduction to grid resilience.

But institutional capital is fiduciary by design. It allocates against defined risk-return thresholds, not developmental intent.

Four variables consistently determine investability: revenue certainty, regulatory stability, counterparty strength and currency risk.

Where these are clearly defined and appropriately allocated, capital flows competitively.

Where they are not, pricing becomes punitive or capital exits entirely.

The implication is straightforward: successful projects are not those with the strongest narratives, but those with the most disciplined structuring.

De-risking, in this context, is frequently misunderstood.

It is not about concessionary support or blanket guarantees.

It is about allocating construction, market, regulatory and currency risks to the entities best equipped to manage them.

Resolving the policy–market disconnect

Energy reform in the region is characterised by a persistent structural tension.

On one hand, governments are mandated to deliver universal access and affordability. On the other, private capital requires commercial viability and predictable returns.

Attempting to satisfy both objectives simultaneously, within individual projects, often undermines both.

The sequencing matters.

Capacity must first be expanded on commercially viable terms before it can be redistributed through subsidies or cross-subsidisation mechanisms. Where industrial users are willing to contract at cost-reflective tariffs and capital is available to finance generation against those tariffs — regulatory frameworks should enable, not obstruct, these transactions.

Delays and administrative friction between bankable offtakers and willing financiers directly suppress new capacity.

Scaling commercially viable supply creates the fiscal space to address affordability more sustainably. Compressing all policy objectives into a single project structure typically renders it uninvestable.

Capital markets as energy infrastructure

Closing Southern Africa’s energy deficit will require more than project pipelines, it will require functioning financial architecture.

Pension reform, domestic bond market development and standardised project documentation should be treated as core infrastructure enablers, not secondary policy considerations.

Well-structured renewable energy assets offer exactly what institutional investors seek: predictable, long-duration cash flows with inflation-hedging characteristics.

The issue is not alignment, it is execution.

Capital flows to clarity, consistency and credible risk allocation.

The question is not whether private capital is available. It is.

The question is whether projects and the policy frameworks surrounding them meet the threshold of commercial discipline required to deploy that capital at scale.

When they do, capital does not hesitate, it scales.

Sam Matsekete is the Group Chief Executive Office for Old Mutual Zimbabwe