Africa faces an annual energy funding gap of between $31.5 billion and $45 billion.
Blended finance is advancing major projects including Sonangol’s $2.5 billion raise, Mozambique LNG, and EACOP’s $2 billion equity and $3 billion debt.
Hybrid structures are now being extended to midstream and downstream assets, freeing up capital for pipelines, refineries, and other critical infrastructure.
Africa’s oil and gas sector is no longer a question of where to invest, but how. As large-scale projects emerge across the continent, foreign capital is becoming increasingly difficult to secure amid geopolitical pressures, energy transition dynamics and ground risks. In response, companies are increasingly turning to mixed financing structures that combine equity, development finance, commercial financing and strategic partners. These structures help de-risk investments while expanding access to capital, and demonstrate that energy finance in Africa is evolving, not declining.
The challenge of investing in Africa
Africa’s energy investment gap currently stands at between $31.5 billion and $45 billion annually, highlighting the need for innovative financing strategies. Speaking at the MSGBC Oil, Gas and Power Conference and Exhibition hosted by Energy Capital and Power in December 2025, Dr. Riverson Oppong, Africa Director of the Society of Petroleum Engineers, highlighted that Africa will require an estimated $375 billion in upstream and midstream infrastructure development over the next 10-12 years for the natural gas sector alone.
“Despite the immense potential of holding 8% of the world’s gas reserves, we are not participating on the world stage. Our constraints lie in policy, commercial framework, infrastructure and financing,” Oppong said.
It is precisely this gap that is pushing energy companies toward hybrid financing structures. Can these structures effectively address the continent’s energy shortage? All signs point to yes. This approach expands the pool of capital available at a time when traditional bank financing for upstream assets is more selective. By tiering multiple funding sources, companies can move forward with projects that are difficult to finance through a single channel. Development finance reduces perceived risk and lowers borrowing costs for commercial lenders, while equity partners and strategic investors diversify capital structures and enable larger transactions.
Hybrid financing practice
Blended finance is already well established across Africa. Angola’s Sonangol raised $2.5 billion in January 2026 through a combination of a $750 million international bond issue and a $1.75 billion facility led by the African Export-Import Bank to support its upstream expansion. The Nigerian National Oil Company aims to pool internal resources with private investment to raise $30 billion by 2030, following profits of $4.26 billion in 2025.
Major projects are also utilizing hybrid structures. The TotalEnergies-led o LNG project has raised $15.4 billion from 30 lenders through a combination of development finance, equity and commercial loans. In South Africa, Renergen will finance the Virginia Gas project through debt and equity, with the second phase scheduled to come online in 2026. Nigeria’s Aradel Energy has secured a $250 million structured finance facility from Standard Bank to expand its upstream portfolio.
Blended financing is also increasingly being introduced in the midstream and downstream sectors. The East Africa Crude Oil Pipeline, scheduled to begin exporting in October 2026, is seeking $2 billion in capital and $3 billion in debt to complete construction. Angola’s Sonangol is appealing to Chinese investors for a potential $4.8 billion to develop its Lobito refinery, and has already mobilized $1.4 billion in capital.
These examples demonstrate how blended finance is becoming an important tool for keeping trade flowing across Africa’s oil and gas sector. By spreading risk and unlocking a broader pool of capital, companies can pursue projects that would otherwise be out of reach, demonstrating that innovative financing is now at the heart of the continent’s energy expansion.
