According to the African Development Bank, Libya faces an annual infrastructure financing shortfall of $37.2 billion (about 85.8% of GDP) needed to modernize its energy, water and transportation systems by 2030. Eliminating this deficit is critical not only for economic recovery but also to stabilize public finances, create jobs and enable the country to leverage its natural resources for long-term growth in line with the African Union’s Agenda 2063.
Unlocking the potential of hydrocarbons
With Africa’s largest proven oil reserves, Libya’s hydrocarbon sector is central to the country’s economic recovery. However, production is limited by aging fields, undeveloped basins, and outdated infrastructure. Current estimates suggest an investment of $3 billion to $4 billion will be required to increase production to 1.6 million barrels per day, with a long-term goal of 2 million barrels per day within three years.
Investments will target pipelines, storage facilities and refineries such as Zawiya, increasing efficiency, expanding export capacity and generating revenues that can fund broader infrastructure projects. Reliable power and water systems that support oil operations will also strengthen the sector’s resilience. Without this investment, Libya risks leaving its oil potential untapped and missing out on important opportunities to stabilize its finances and secure its position as a regional energy supplier. For international partners, supporting Libya’s oil sector offers both commercial benefits and a strategic means to strengthen regional energy security.
Developing energy that is resistant to climate change
Libya’s energy strategy extends beyond hydrocarbons. With 3,200 hours of sunshine per year, high solar radiation and strong winds, the country is well-positioned to expand renewable energy. Expanding solar and wind power projects can diversify the energy mix, reduce operational risks and align Libya with global climate efforts.
Some projects are already underway. Libya’s first 1MW solar power plant in Kufra was developed by Infinity in collaboration with Al Juf Free Zone and began operations in July 2025. TotalEnergies’ 500MW Sadada solar power project, in collaboration with General Electric Company and the Renewable Energy Agency, is expected to come online by the fourth quarter of 2025. These efforts are the first steps towards achieving Libya’s 4GW renewable energy goal. 2035 signals an even more resilient and sustainable energy system.
Attracting investment through reform
Recognizing that infrastructure financing cannot rely solely on oil revenues, Libya has introduced reforms to attract and diversify foreign investment. Decree No. 944 allows 100% foreign ownership in the oil and gas sector and provides tax incentives such as a five-year holiday and a 10% corporate tax rate. The Public-Private Partnerships Act 2024 provides a clear legal framework for joint ventures across energy, water and transport projects.
These reforms are already generating momentum. Italian energy giant Eni has invested more than €8 billion in projects in Libya, and other global investors are also exploring partnerships across hydrocarbons and renewable energy. These measures are accelerating the modernization of energy infrastructure, economic recovery and integration into regional energy markets, transforming Libya from a high-risk market to a viable investment destination.
The Libyan Energy and Economic Summit scheduled for January 24-26, 2026 in Tripoli will be the focus of these developments. Bringing together policy reforms, private capital and renewable energy initiatives, the summit is expected to spur further international investment, close Libya’s infrastructure gap and unlock its economic potential. Strategic spending on hydrocarbons, combined with climate-smart energy projects and investor-friendly reforms, could ultimately realize Libya’s vast economic potential while positioning it as an important regional energy hub.
