AI, Energy, and the Future: Why Minigrid Companies Should Power Africa's Data Centres
While there are many unknowns about how AI will evolve, one thing is clear: it requires massive amounts of energy. In developed markets, this is already a challenge, but for developing countries, particularly in Africa, it presents both a major issue and a golden opportunity.
The Growing Demand for Energy and AI in Africa
AI is a critical tool for education, healthcare, finance, and more. However, the demand for AI-driven services will require massive amounts of data storage and computing power, which in turn will require an immense amount of energy. Africa’s energy deficit becomes a bottleneck not only for basic domestic and business needs but also for universal access to AI.
With over 600 million people in Sub-Saharan Africa still lacking access to electricity, there’s a clear challenge. Africa has one of the youngest, most tech-savvy populations in the world, and as demand for AI and digital access grows, the need for reliable, renewable energy will be just as pressing as it is in developed markets. We cannot let this technology deficit pile on top of other issues. It needs to be addressed, and in my opinion, it can be.
Minigrid Companies: From Subsidy Dependency to Energy Providers for Data Centres
The current minigrid sector in Africa is often seen through the lens of subsidy dependence. For too long, minigrids have relied on subsidies to make up the gap between energy provision costs and what the market can bear. The old ABC model—Anchor (e.g., mobile phone towers or factories), small Business, and Consumer—has not led to the scalability or sustainability needed to drive lasting change.
However, despite all of the above, the minigrid sector has significant, untapped value. The process of setting up a minigrid is complex and involves navigating regulatory environments, tariff structures, technical builds, funding, customer acquisition, and long-term operation. These companies have the local expertise, the technical know-how, and the relationships with governments and communities to make them invaluable in a world where the need for independent, reliable power has suddenly surged forward, everywhere.
As AI’s demand for energy grows, data centres will become a major anchor for energy systems in Africa. Minigrid companies, with their already complex operational expertise, are uniquely positioned to meet this need. In addition to subsidised energy provision, minigrid companies can expand to powering data centres, creating a sustainable business model that does not rely on outside funding but instead on commercial energy sales to these high-demand facilities.
A Golden Opportunity for Investment
Consider the macro perspective. Providers of subsidies, whether from governments or international organisations, may begin to prefer funding renewable energy-based minigrids and large-scale solar projects that power data centres. Why? Because these projects are self-sustaining. Data centres require constant, reliable power, and the business model behind this is inherently profitable.
The renewable energy minigrid model for data centres can also develop local expertise—training workers, developing energy markets, and increasing the long-term sustainability of the energy sector. This makes it an attractive proposition for both private investors and subsidy providers.
Is This Too Much for the Current Minigrid Sector?
It’s tempting to think that this shift might be too much for the current crop of minigrid companies. After all, they’ve been reliant on subsidies for so long. However, this change isn’t as radical as it seems.
Minigrid companies already have the necessary on-the-ground knowledge, the regulatory relationships, and the technical capabilities to deliver reliable energy to data centres. With the right investment and a shift in focus, these companies can evolve and thrive in this new landscape. This isn’t a leap; it’s an evolution.
Two Paths: Adapt or Delay
There are two paths forward for the minigrid sector. The first is a window of opportunity for current companies to adapt. They can build on their existing expertise, relationships, and infrastructure to lead the way in powering data centres across Africa. The second path is for outside players—companies currently focused on energy provision in wealthy economies—to enter the market late, buying up expertise and delaying the energy revolution in Africa.
Either way, the shift towards data centres powered by minigrids is inevitable. This is the moment for minigrid companies to demonstrate that they can deliver reliable, sustainable energy solutions that not only power homes but also power the future of AI and digital infrastructure in Africa.
This Matters
The demand for AI is growing rapidly, and the need for energy to support it is even greater. If Africa is to remain competitive in this new digital economy, it must invest in the energy infrastructure that supports it. Minigrid companies, with the right adaptation, can play a leading role in providing that energy.
This is one of those moments. Whether it’s deserved or not is irrelevant. Now is the time for minigrid providers to step up, and for investors to recognise the potential of this shift. Let’s make this happen and position Africa as a leader in the AI-powered, renewable energy future.
