North Africa: Clean energy surge in MENA pipeline

Dii’s MENA Energy Outlook 2026 report says the region closed 2025 with 43.7GW of operational renewable capacity

Africa is emerging as an increasingly strategic pillar of the fast-accelerating clean energy transition in the Middle East and North Africa (MENA) region.

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New data from Dii Desert Energy – a MENA-based energy transition think tank established in 2009 – shows renewable capacity, project pipelines and cross-border infrastructure rapidly reshaping regional energy markets.

According to Dii’s MENA Energy Outlook 2026: Renewables, Hydrogen and Energy Storage developments, the MENA region closed 2025 with 43.7GW of operational renewable capacity, driven overwhelmingly by solar PV and wind, while its active project pipeline surged to 202GW, nearly matching aggregated 2030 national targets. 

North Africa gains traction in the MENA construct

North Africa, in particular, is gaining prominence as a production and export hub linking African renewable resources to European demand centres.

Cornelius Matthes, CEO of Dii Desert Energy, said: “2025 Can be described as a breakthrough year for the energy transformation in the MENA region, with an unprecedented surge in new capacity for both solar PV, wind and BESS, all purely driven by market factors with the lowest prices globally.”

The report highlights North Africa’s growing role in global energy trade, underpinned by ultra-low solar and wind costs, expanding transmission infrastructure and deepening integration with European markets. 

Hydrogen pipeline linking North Africa to Europe

Algeria and Tunisia are central to this shift, with both countries now embedded in the SoutH2 Corridor, a 3,300km hydrogen pipeline agreement linking North Africa to Central Europe via Italy, Austria and Germany.

Dii notes that Africa’s competitive advantage lies in its ability to deliver some of the world’s lowest-cost renewable electricity, increasingly described as the region’s “new green currency”.

This positions African markets not only as exporters of clean electrons and molecules, but as potential hubs for energy-intensive industries such as green manufacturing and data centres.

… but hydrogen projects stalling elsewhere

Progress on electricity interconnections is reinforcing this trajectory. The ELMED interconnector, a 600MW high-voltage subsea cable between Tunisia and Italy, recently secured funding and approvals, strengthening North Africa’s role in cross-Mediterranean power trade. 

These projects are narrowing the implementation gap between announced capacity and operational delivery, a challenge that has historically constrained African energy development.

However, the report cautions that while renewable deployment across Africa and the wider MENA region is accelerating, hydrogen development remains uneven. 

Despite a pipeline of 127 active hydrogen projects, execution is concentrated in a handful of large schemes, with most stalled by regulatory uncertainty, lack of secured offtake and uncompetitive economics relative to fossil fuels.

This imbalance is particularly relevant for African markets, where infrastructure gaps and financing constraints persist. 

Dii stresses that Common User Infrastructure and structured offtake mechanisms will be critical to unlocking large-scale hydrogen exports from North Africa, especially as Europe’s demand for low-emission fuels grows.

Storage key to grid stability in MENA

Energy storage is also emerging as a key enabler for African grid stability. Across MENA, operational storage capacity reached around 25GWh in 2025, with projections showing a six-fold increase to 156GWh by 2030. 

Battery energy storage systems now dominate new deployments, reflecting falling costs and the need to integrate rising shares of variable renewable energy – a challenge mirrored across African power systems.

While Africa’s momentum is gathering pace, the Middle East remains the region’s primary scale driver.

‘Capital mobilisation’ needs to continue

Saudi Arabia has tripled its installed renewable capacity in a single year, reaching 11.7GW, while the UAE has launched globally significant projects combining gigawatt-scale solar with long-duration battery storage. 

These developments are setting benchmarks that North African markets are increasingly positioned to replicate.

Dii says that Africa’s clean energy prospects are strengthening as electrons race ahead of molecules.

With renewable costs continuing to fall and cross-border infrastructure advancing, African countries – particularly in the north – are becoming integral to the region’s clean energy export strategy.

Sustaining this momentum, the report warns, will depend on continued capital mobilisation, resilient supply chains and faster conversion of project announcements into operational assets.

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