Nuclear’s Next Big Play: Early Investment in Africa and Newcomer Markets
In the global shift toward clean, secure, and scalable energy systems, nuclear power is re-emerging as a strategic pillar—not only for industrialized nations but increasingly for the Global South. Nowhere is this resurgence more evident than in Africa and other newcomer markets, where a combination of rapid population growth, electrification imperatives, and climate commitments is reshaping the continent’s energy calculus. Nuclear energy has always been about more than just technology. It is an economic choice, a financial strategy, and increasingly, a measure of whether countries can align capital, risk management, and political will with long-term energy security.
With the continent’s population expected to surpass 2.5 billion by 2050, electricity demand is projected to triple. While renewable energy will play a crucial role, limitations in intermittency and storage are making nuclear power an increasingly essential option for reliable baseload supply. According to the Nuclear Business Platform (NBP), Africa is projected to collectively achieve 15,000 MW of nuclear capacity by 2035, representing a market opportunity exceeding $100 billion.
For investors, the potential is significant—but so are the risks. Nuclear projects are capital intensive, politically sensitive, and financially complex, challenges that are amplified in newcomer markets. Success will depend on understanding how to navigate both the First-of-a-Kind (FOAK) and Nth-of-a-Kind (NOAK) phases, while managing financing and regulatory risks in regions like Africa. Those who master this landscape will be best positioned to capture value in the next wave of nuclear growth.
Africa’s Nuclear Landscape: Momentum and Opportunity
The momentum across the continent is unmistakable. Rapid urbanization, rising industrial demand, and the need to reduce reliance on costly fossil fuel imports are driving African governments to embrace nuclear energy as a source of long-term, low-carbon, baseload power. As grids strengthen, both large-scale reactors and SMRs are set to play an increasingly vital role. Yet amid this ambition, the financial reality remains: building the first nuclear reactors is always the most challenging step.
The Financial Realities of Nuclear in Africa
Nuclear projects worldwide are capital-intensive, but in Africa the financial risks are magnified.
First, the cost of capital is much higher. While OECD countries may secure long-term loans at 3–4% interest, African nations often face rates above 10–12%, dramatically raising the levelized cost of electricity (LCOE).
Second, sovereign credit ratings are generally lower, meaning governments struggle to secure affordable financing without guarantees or external backing.
Third, political and regulatory uncertainty heightens perceived risk. A single policy change, leadership transition, or regulatory bottleneck can stall projects for years, eroding investor confidence.
Finally, many African utilities already carry heavy debt burdens, raising concerns about their ability to honor power purchase agreements (PPAs) over multi-decade periods.
For investors, these realities underscore a critical point: traditional financing models are insufficient for African nuclear markets. Innovative frameworks are required to mitigate risk.
Risk Mitigation: Models and Mechanisms
Traditional financing models, reliant on sovereign guarantees or multilateral funding, are insufficient to meet the scale of Africa’s nuclear ambitions. Instead, tailored financial mechanisms are needed to match market conditions. Several financial and contractual mechanisms can reduce risk and unlock capital for African nuclear projects.
Vendor Financing and BOO Models: One proven strategy is vendor financing, where reactor suppliers fund part of the project in exchange for long-term electricity revenues. Turkiye’s Akkuyu project illustrates this with a Build-Own-Operate (BOO) model, where Rosatom retains ownership and recoups investment by selling electricity. African countries negotiating with Russia, China, or Korea may pursue similar structures.
Sovereign Guarantees and PPAs: Government-backed guarantees are another key tool. By providing sovereign guarantees on repayment or securing long-term PPAs with creditworthy off-takers, governments can reduce risk premiums and lower financing costs. South Africa’s Renewable Energy Power Producer Procurement Program (REIPPPP) has shown how bankable PPAs can mobilize billions in private investment.
Multilateral and Regional Financing: The involvement of multilateral development banks (MDBs) and regional financial institutions could be transformative. The African Development Bank (AfDB), for instance, could play a catalytic role in de-risking nuclear investments by co-financing projects or creating a regional Nuclear Infrastructure Fund. Such mechanisms spread risk across multiple actors and create shared accountability.
Public-Private Partnerships (PPPs): Hybrid PPP models can also distribute risk. Governments can retain ownership of strategic assets (like reactors and fuel cycle facilities), while private firms invest in robotics, maintenance, or waste management services. This creates entry points for investors without requiring them to shoulder full reactor risk.
Regulated Asset Base (RAB) Models: Adopted in the UK for the Sizewell C project, the RAB model allows investors to begin earning returns during construction, reducing exposure to cost overruns. Similar models could be adapted for African contexts with support from regulators and MDBs.
Turning FOAK Risk into Opportunity
The high risks associated with FOAK projects often deter investors. Yet, they also create opportunities for first movers. Those willing to partner with governments, provide vendor financing, or co-invest in enabling technologies like robotics and AI-driven monitoring stand to secure long-term market positions.
As African nations move from FOAK to NOAK nuclear projects, investors who establish early relationships stand to gain significant advantages. They can benefit from lower costs on subsequent units, leverage their position to dominate supply chains, and secure long-term returns from assets that can generate value over a long period of time.
The path is not without hurdles, but the reward is entry into one of the fastest-growing nuclear markets in the world.
Strategic Considerations for Investors
For business groups and investors evaluating African nuclear opportunities, three principles stand out:
Diversify Entry Points – Not every investor needs to fund reactors directly. Infrastructure development, training, waste management, and supply chain services all offer profitable niches.
Leverage Partnerships – Working with established African conglomerates, MDBs, and international vendors can reduce risk and accelerate market entry.
Focus on Long-Term Returns – Nuclear requires patience. But with stable, inflation-protected revenues over decades, it remains one of the most resilient asset classes for infrastructure investors.
Conclusion: Africa as the Next Nuclear Investment Frontier
Nuclear energy’s journey is not just about megawatts—it is about markets, capital, and long-term growth. Africa’s $100 billion nuclear potential highlights this reality, sitting at the intersection of urgent energy needs, rising demand for clean baseload power, and a global push for decarbonization. But this is not unique to Africa. Across newcomer countries worldwide, similar dynamics are unfolding as governments explore nuclear power to secure energy independence, diversify away from fossil fuels, and strengthen long-term energy security.
Yes, FOAK projects will be challenging everywhere. Financing costs are high, political risks are real, and credit ratings often remain hurdles. Yet with innovative financing models, strong partnerships, and a willingness to share risk, these barriers can be overcome.
Africa’s nuclear future is not theoretical—it is in motion. The next major milestone will be the 5th Africa Nuclear Business Platform (AFNBP), to be held in Abuja, Nigeria, from 21–23 April 2026. Hosted by the Nigeria Atomic Energy Commission (NAEC), the event will convene high-level government officials, industry leaders, and global investors to shape the continent’s next energy chapter.
For policymakers, investors, and developers, this is the time to act. Africa’s newcomer nuclear markets present not only a massive commercial opportunity—but a once-in-a-generation chance to catalyze clean, resilient, and sovereign energy systems for over a billion people.
The future of nuclear isn’t just about technology. It’s about capital, partnerships, and strategic foresight. Those who invest early—smartly and collaboratively—will be the architects of the Global South’s nuclear renaissance.
