Africa

A rapidly growing population with insufficient access to electric power.

March 2025

In terms of power supplied from the grid, Africa is the world's most under-served continent.

And although there is huge potential for renewable power generation, for many people diesel generator sets are an essential part of daily life. And those generator sets work harder than anywhere else.

Note: all references to 2024 in this article are based on Q1 - Q3 data plus a forecast for Q4. 2024 data will be updated in late April / May 25.

A Growing Population Demanding More Electric Power

Africa has the fastest growing population in the world, growing an average 2.5% a year over the last 10 years and accounting for 40% of the world's entire population growth during that time. Growth in 2022 was the same as the entire population of Malaysia.

Population is expected to reach 2.5 billion by 2050, with the region second only to Asia. Africa also has one of the world's youngest populations with 70% of people below the age of 30.

Much of Africa is underserved by utility grid supply. Although accounting for almost 20% of the world’s population, Africa consumes only 3% of the world’s electricity.

Today, 600 million people, around 40% of the population, more than the entire population of Europe, have no access to electricity at all.

Those who do have access to grid-supplied electricity endure regular outages. Africa suffers more outages than any other global region, averaging around 1,200 hours a year, equivalent to more than three hours a day.

Some countries, particularly Nigeria, have a significantly higher figure with more than 4,000 hours of outages a year, equivalent to 11 hours a day.

600 million people in Africa, more than the population of Europe, have no access to grid-supplied electricity.

Electricity Generated by Utilities per Head of Population

(kWh, 2022)

Source: US Energy Information Administration (kWh), World Bank (Population)

Marina Business District, Lagos, Nigeria

$1.1 billion opportunity for diesel generator sets in Africa in 2024

Diesel Generator Sets in Africa

For most businesses in Africa to function, a generator set is an absolute requirement and around half of all businesses either own or operate one. In a third of African countries the total output of off-grid generator sets exceeds grid generation capacity.

This means that across the African continent, there's a high level of familiarity with generator sets and the brands of generator sets and their engines are as well known as automobile brands.

Generator sets endure a tough working life, sometimes lasting not much more than 5 years, which means regular overhauls and replacement.

All the major brands have well-developed distribution networks to support customers. And alongside these, there are a large number of independent / self-employed service agents supporting generator sets at lower cost and using cheaper will-fit parts.

Annual Usage of Diesel Generator Sets in Africa

% of Market by Value

Source: Genstat+ from Parkinson Associates. Based on 2024 Q1 – Q3 data.

Diesel Generator Sets Opportunity in Africa

Overall, the African market for diesel generator sets was worth around $1.1 billion in 2024 (based on Q1-3 data and a forecast for Q4).

Reflecting the economic structure of the region, the market is heavily weighted towards lower power ratings. A typical generator set is around 50 kVA and its owner is a small to medium-sized business.

In the last 5 - 10 years, we have noticed a gradual decline in the African market at lower ratings, particularly below 75 kVA and especially below 30 kVA. Some of this may be explained by improved utility performance but we believe more generator sets are co-existing alongside renewable generation / energy storage and at the very lowest power ratings, some may have been displaced.

At ratings above 2000 kVA the picture changes and the African market has seen substantial growth over the last 5 years with a CAGR of around 20%. Although there is an emerging data center sector in Africa, in global terms, this is very small. Most of the market growth at these higher ratings has come from the mining sector: Africa has some of the world's richest mineral resources.

Africa Diesel Generator Set Opportunity by Power Band

(US$ m)

Source: Genstat from Parkinson Associates. Values based on OEM ex-works. Includes price inflation. 2024 forecast based on Q1 – 3 data plus forecast for Q4.

Major Markets

Of around 60 territories in Africa, including offshore islands, the top five markets (Nigeria, South Africa, Egypt, Democratic Republic of Congo and Algeria) account for more than 40% of the market opportunity for diesel generator sets.

Among the top five markets:

Nigeria, Egypt and South Africa are Africa's top three economies.
Nigeria, Algeria and Egypt are significant oil producers and are among the world's top 30 oil producers.
All five countries are engaged in mining.

Beyond the top 5 - 10 markets, the opportunity begins to fragment quickly.

For producers of diesel generator sets, this has major implications for approaches to both product distribution and sales organizations. In smaller markets, many distributors are trading companies, representing multiple brands and selling a wide range of products.

2024 Africa Diesel Generator Set Opportunity

Source: Genstat from Parkinson Associates. 2024 based on Q1 - 3 data and forecast for Q4.

Two of the top five markets are worth calling out.

In 2023, the South Africa market had been boosted by load shedding as the main electric utility Eskom rationed power, with outages often lasting more than 12 hours a day. And the market for diesel generator sets more than doubled as a result, to around $120 million. In 2024, the situation stabilized and the market returned to more normal levels, around $60 million.

In 2024, the market in Democratic Republic of Congo grew substantially, by more than 80% to around $110 million. Almost all of this growth was at ratings above 1000 kVA with two thirds of growth between 3000 and 4000 kVA. By value, the 3001 - 4000 kVA power band accounts for almost half of the market in the country.

This growth has the mining sector written all over it. The Democratic Republic of the Congo accounts for two-thirds of global production of cobalt, a vital element in lithium-ion batteries and most of the mines are remote and not connected to reliable grid supply.

Top 5 Markets in Africa 2024 (US$ m)

Source: Genstat from Parkinson Associates. 2024 based on Q1 - 3 data and forecast for Q4.

Market Supply

Africa has long been an established market for European and US generator set brands and the engines and alternators that power them.

Most diesel generator sets are imported into Africa and European producers have a well-established presence. Today exports from Europe account for around a third of the overall market, with units produced in China also accounting for around a third. Imports from the Middle East account for around 20%.

Around 12% of the overall market is accounted for by units assembled in Africa, rising to around a third of the market between 7.5 - 250 kVA. Many of these are OEMs of major engine brands.

Premium generator sets are highly valued and around 40% of the market is accounted for by the major global vertically-integrated OEMs, around 55% by midmarket OEMs / independent producers, including local producers, and around 5% by low cost producers (most of these from China).

Nigeria is the only country where there is significant local production: this has been driven partly by the local regulatory environment and also by the huge opportunity available (Nigeria accounts for around 15% of the entire opportunity in Africa).

Africa Opportunity 2024 by Source, All Power Bands > 7.5 kVA

Source: Genstat+ from Parkinson Associates. . Based on 2024 Q1 – Q3.

Opportunity by OEM Type in Africa 2024

Source: Genstat+ from Parkinson Associates. Based on 2024 Q1 – Q3.

Major Sectors

Diesel generator sets are installed widely across all business sectors but some are worth looking at more specifically.

Telecoms

Africa is a major continent with vast distances to cover and installing landline-based telecommunications was always a challenge. For reasons of cost and practicality, the region was quick to embrace mobile communications and today has a thriving smartphone market, driven by its young and rapidly-growing population.

The continent has around 200,000 cellular network towers and more than 35% are not connected to the electricity grid. For those that are connected, regular and durable power outages in many countries mean that a source of standby power is essential.

Diesel generator sets have met this need for many years, but at a cost: in the region, up to 50% of operating costs for a cellular tower can be attributed to fuel and maintenance of generator sets. More recently, generator set OEMs have focused on increasing efficiency and reducing operating costs, with the latest variable speed hybrid generator sets reducing fuel consumption by up to 40%. Combine this with extended service intervals, large fuel tanks and remote monitoring and the savings can really add up.

When diesel generator sets reach the end of their working lives at cellular towers and it's time to replace them, many network operators and towerco companies are now exploring carbon-reducing alternatives, usually involving solar and energy storage.

In Africa, we're seeing a gradual weakening of the market in the 7.5 - 30 kVA power band, of which the telecoms sector is a significant player, and it's likely that in most countries, demand for diesel generator sets from the telecoms sector has passed its peak in the region. But there's still a large population of generator sets at telecoms sites and for generator set OEMs and their distributors, there will remain a very considerable and profitable opportunity for parts and support for some time to come.

Cellular network operators and towercos are showing interest in solar as an alternative to diesel generator sets

Mining

In Africa, the mining sector is a huge consumer of electricity, accounting for more than 20 GW of power and consuming 3 x that of all residential users.

Many mining operations are not connected to the grid and even where there is a connection, a source of local power is always essential. In most cases, that has meant extensive reliance on diesel generator sets, many of them operating for prime power.

It’s also a very competitive business and today, when it comes to renewing power assets, many mine operators are looking for more cost-effective solutions, with a close eye on emissions produced. This means growing interest in microgrids that combine renewable generation, usually from wind or solar, energy storage and some conventional power generation from generator sets where it's requirement.

It's a change that won't occur overnight: mines are large, capital-intensive operations and are still heavily reliant on fossil-based power generation. But expect change over time as assets are renewed.

Microgrids served primarily by wind or solar generation are becoming attractive for mining operators

Diesel generator sets co-existing with other forms of power generation.

The Future

Grids in Need of Reform and Investment

Across Africa, many utilities are in urgent need of both reform and investment and several large economies in Africa, including South Africa and Nigeria, have power grids that have been close to collapse.

But high financial and other risks can make financing of projects difficult, discouraging many investors and international banks. Many utilities also suffer from skills shortages.

In the short to medium term, it's difficult to see this changing, which means that in many countries where there are supply challenges, businesses and consumers will continue to take matters into their own hands and provide their own source of standby power.

As Africa's population increases further, potentially doubling by 2050, the issue of investment in grids will become even more acute.

Transmission lines near Pretoria, South Africa

Renewables

Geographically, Africa is ideally placed for renewable power generation: on average, the region has 3,000 continuous hours of sunlight every year, giving it the world’s richest solar resources. However Africa has so far installed less than 1% of global solar capacity.

In theory, for commercial applications, renewable power generation should be growing substantially and displacing diesel generator sets. But in practice, power outages are often so long and so frequent, that, for now at least, most businesses would lack the space to generate and store enough solar-produced electricity. And this means they tend to opt for tried and tested diesel generator sets as the solution.

There is an opportunity for solar and storage to displace some smaller diesel generator sets, mostly below 30 kVA, for small business applications and we believe this is starting to be reflected in the market data. In countries like Nigeria, over time we see solar / storage impacting more strongly on the residential sector and gradually displacing the many small gasoline-powered generator sets (which are outside the scope of this article).

Microgrids

At the opposite end of the scale, for much larger businesses, there are significant and exciting opportunities for microgrids in Africa. Most are likely to be developed by private companies for their own use, for example mining operators who have plenty of land to support the installation of solar panels and wind turbines.

Over the longer term, microgrids could be ideal for bringing utility-supplied electric power to remote settlements which are difficult to connect to the grid. But for now and the foreseeable future, we see private companies as the main drivers.

There is huge untapped solar potential in Africa

The task ahead for Africa's electric utilities is colossal:

600 million people, more than 40% of the population have no access to electricity, equivalent to more than the population of Europe, or almost two times the population of the United States.
Average outages of more than three hours a day for those who do have access to electricity
The fastest growing population in the world, adding the equivalent of the population of Malaysia every year and likely to almost double to 2.5 billion by 2050.
A land mass three times the size of Europe or the United States with a significant population living in remote areas, difficult to access.
Existing transmission and distribution infrastructure in urgent need of investment.

There's little doubt that distributed generation and microgrids are the likely solution to Africa's electric power deficit. The challenge lies in the scale of the solution and how it will be funded. For the foreseeable future, developments are more likely to be from private investment, for example large companies investing in their own microgrids, with a more piecemeal approach at utility level.

Taking everything into account, for the foreseeable future, although the opportunity for diesel generator sets is likely to see some erosion at the very lowest power ratings and lose some ground to microgrids at higher ratings, through the 2020s and at least well into the 2030s it's likely that Africa will continue to be a significant and growing market for diesel generator sets.

Insights on Opportunity for Producers of Diesel Generator Sets

To find out more about this study, contact us at at enquiries@parkinsonassociates.com

Parkinson Associates publish an opportunity database, Genstat, available quarterly and annually, for diesel generator sets, split by 12 power bands for every country. Click here to find out more.

To find out more about our research in the diesel generator set industry, click here

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