Africa is home to more than half of the world’s best solar resources as well as possessing great potential for hydroelectric and wind-power projects, according to the IEA. It is also uniquely placed to contribute to industries behind the transition away from fossil fuels. It accounts for 80% of the world’s platinum reserves, half of all cobalt reserves, and 40% of manganese reserves, all of which are expected to be crucial to technologies such as autocatalysts and electric batteries, the agency said.

The report’s figures also pose a challenge for the West and the U.S. in particular, which is seeking to secure diverse sources of critical materials. In recent years, the West has lost clout in Africa as China has become the continent’s largest trading partner and fourth largest investor. Much of China’s investment in Africa goes toward energy projects and the nation’s lead in renewable technologies will likely see it grow as a funder of African renewable energy projects, the IEA said.

“Energy investment on our continent has fallen short,” wrote

William Ruto,

president of Kenya, in the report’s foreword. “It is imperative we take bold steps to more than double energy investment here in the next decade, with a primary focus on clean energy.”

From around $90 billion today, annual spending on Africa’s energy needs must more than double to $200 billion by 2030, two-thirds of which will need to go toward clean energy projects, the report said. 

Despite the investment goal—which the IEA says will allow African nations to meet their agreed climate targets as laid out in the Paris Agreement and achieve universal access to modern energy systems—energy spending in Africa has been falling over the past five years as investment in fossil fuels has declined and spending on renewable energy projects has flatlined. The continent makes up just 3% of global energy spending. 

The indebtedness of many African nations is holding back public spending on energy projects while private investors are reluctant to invest because of a prevalence of fragile states, absent regulations and perceptions of political or reputational risks. 

All of these are pushing up the cost of capital which makes many African energy projects financially unviable despite ample local resources and proven technologies such as wind or solar power, the report said. 

The cost of capital for a large-scale renewable energy project in Africa is up to three times higher than in advanced economies and China, the IEA said. For smaller projects, which will be crucial in rural areas, the costs are even higher. 

Concessional financing—in which lenders such as international development banks offer developing nations more generous terms such as lower interest rates or longer repayment periods—will be crucial to overcoming those obstacles, the IEA said. 

The IEA estimates that only half of electricity grid projects in Africa are commercially viable without such assistance, while most clean cooking projects would be unaffordable.

Despite accounting for 20% of the global population, investment in African energy projects is far too small, leaving much of the continent lacking basic access to electricity or clean cooking fuels, the IEA said. 

Currently, 600 million people across Africa lack access to electricity and almost one billion have no access to clean cooking fuels. 

$25 billion a year alone would be enough to provide basic access to electricity and clean cooking fuels to all Africans, equivalent to the cost of installing one LNG terminal, something European nations have done in record time following Russia’s invasion of Ukraine. 

The report came as African leaders met in Nairobi for the third and final day of the Africa Climate Summit, which has seen calls for debt relief for African nations facing the effects of climate change and hundreds of millions of dollars pledged to Africa’s nascent carbon credits initiative. 

African nations are seeking redress for the effects of climate change they experience despite contributing little to carbon emissions, the main driver of global warming. The continent accounts for around 2% to 3% of global carbon emissions but is particularly exposed to extreme weather.

Write to Will Horner at william.horner@wsj.com