Unlocking Value in East African Infrastructure

East Africa continues to offer a strong pipeline of investable projects across critical minerals, digital infrastructure, transport and power. Demand remains a key driver, but execution and deal outcomes are increasingly shaped by a number of factors including regulatory stability, evolving fiscal requirements, offtake risk, currency exposure, supply chain integrity, robust ESG frameworks and financing strategy.

This briefing highlights the developments and key investment opportunities that matter most for investors, sponsors, lenders and developers seeking growth and steady returns as governments increasingly turn to PPPs, asset recycling and strategic stake sales to deliver on commitments made in recent and upcoming elections across the region. The central question has shifted from merely identifying opportunities to effectively structuring projects and investments for bankability and deliverability.

Critical minerals

East Africa’s mining sector is generating meaningful deal flow, driven by global demand for battery metals and rare earths, projected to quadruple by 2040. Today, the real challenge lies in how projects are structured. Governments are tightening local content rules, pushing for greater state participation and insisting on downstream processing. In this environment, financial viability alone is no longer sufficient to advance a project through to development. Social licence considerations - including community engagement, local content commitments and alignment with host state development objectives - are increasingly relevant to how investors, lenders and host governments assess project readiness. Sponsors who consider these factors early in the project lifecycle may find it easier to build stakeholder support and reduce delivery risk over time.

Tanzania illustrates how the terms negotiated around fiscal treatment, state participation, ESG commitments and downstream value-addition can determine whether a project reaches bankability. Two recent developments highlight this:

• Nyanzaga Gold Project: Perseus Mining’s US$523 million investment provides for a 20% non-contributing state interest alongside a negotiated fiscal regime covering royalties and tax treatment, balancing state revenue expectations against investor returns; and
• Epanko Graphite Project: Following EcoGraf’s updated bankable feasibility study, KfW IPEX-Bank received a mandate to arrange US$105 million under Germany's UFK scheme. The project's ESG credentials, regulatory alignment and downstream processing commitments are important factors in securing DFI and ECA support and crowding-in private capital. 

These developments illustrate the dynamics investors in Tanzania and comparable jurisdictions increasingly face: (i) fiscal regimes - particularly royalties, tax treatment and non-contributing state interests require careful calibration across the mineral development agreement; (ii) DFI and ECA financiers are setting an increasingly high bar on ESG performance and regulatory compliance; and (iii) capital providers increasingly expect projects to demonstrate downstream value-addition rather than raw commodity export. Getting these elements right is critical to bankability.

Kenya highlights what happens when that foundation is less stable. In September 2025, the High Court struck down the Mining Regulations 2024 on the basis that they had been adopted without the necessary public participation and transparency, leaving investors navigating an unclear permitting landscape and potential licensing bottlenecks, while international lenders stall capital deployment and require elevated risk premiums. Together with the lingering effects of the 2019 mining licence moratorium, investor and lender hesitancy has crystallised. The case is a reminder that regulatory durability is not a given - and when it falters, bankability quickly follows. Here, managing legal and political risk is central to structuring, not an afterthought. Concession agreements, stabilisation clauses, political risk insurance and BIT protections remain critical tools, but they need to be deployed early and deliberately.

Data centres and digital infrastructure

Africa holds less than 2% of global data centre capacity, despite surging smartphone adoption, AI demand and data sovereignty requirements. The supply-demand gap is clear. The real challenge is structuring projects that can close it on terms that work for investors and lenders.

Investability hinges on aligning four elements simultaneously: energy supply, land rights, regulatory approvals and customer commitment. Power security requires either a dedicated PPA with a creditworthy offtaker or a self-generation arrangement, with step-in rights and capacity guarantees embedded in financing documents. Land tenure must be sufficient for lenders to take security. Licensing and permitting pathways need to be mapped and sequenced before capital is committed. And offtake agreements must give lenders the revenue visibility required for non-recourse or limited-recourse financing. Projects that fail to lock in any one of these elements risk stalling, regardless of underlying demand.

Kenya illustrates how this plays out in practice. The 100 MW geothermal-powered campus being developed by G42 and EcoCloud at KenGen Green Energy Park, and backed by a broader US$1 billion initiative involving Microsoft, shows how integrated power-digital strategies can unlock hyperscaler demand. It also underscores that these projects sit at the intersection of energy infrastructure, sovereign policy and commercial agreements, meaning that structuring must address all three simultaneously.

The Kenya Cloud Policy 2025 and ongoing EU data protection adequacy negotiations add a further dimension. Cross-border data flow capability is fast becoming a commercial differentiator, and robust data governance and transfer mechanisms need to be built into facility design and customer contracting from inception; not retrofitted later.

Transport and connectivity

Transport remains central to East Africa's investment case. Governments across the region continue to prioritise roads, rail, ports and airports to reduce logistics costs and support regional integration. External factors are also reshaping the landscape. Red Sea disruption has rerouted significant cargo volumes around the Cape of Good Hope, driving an uplift in demand for East African ports that sponsors and lenders are pricing into long-term asset valuations. For private capital, the question is which assets are sufficiently prepared, financeable and politically durable as fiscal pressure pushes states towards targeted PPPs and phased concession models.

Regional corridor development remains a core theme. The Kisumu-Busia/Malaba expressway, backed by the AfDB and NEPAD, illustrates how multilaterally supported assets delivering measurable logistics gains continue to attract capital. In rail, TAZARA's US$1.4 billion modernisation with CCECC, the US$553 million DFC-backed upgrades supporting the Lobito Corridor, Uganda's proposed connection into Tanzania's network and Ethiopia's rail electrification programme highlight intensifying corridor competition. The opportunity lies in identifying which routes offer the clearest operating model, cross-border alignment and export rationale. 

At ports, throughput of circa 41.1 million tonnes at Mombasa, and continued activity at Lamu, support Kenya's multi-gateway and LAPSSET strategy - though value increasingly depends on integration into wider corridor and inland logistics networks. In aviation, Kenya's revised approach to JKIA following the cancelled Adani-linked proposal and Ethiopia's Bishoftu project confirm that pipelines remain active, but funding, procurement structure and operating concession terms are now as critical as headline demand.

The core structuring challenge is cross-border alignment. Corridor projects require harmonised concession terms, land frameworks, tax treatment and dispute resolution across multiple sovereigns. EAC and COMESA harmonisation efforts matter here as common frameworks reduce structuring complexity and give sponsors and lenders greater confidence in project durability. Without them, investors must forge alignment themselves through intergovernmental agreements, mirrored concessions and unified dispute resolution. Cross-border legal and regulatory alignment remains a key precondition for bankability.

Energy

East Africa’s energy landscape is increasingly defined by how private capital is unlocked, not by pipeline size alone. Hydrocarbons remain long-term revenue and industrialisation plays, but the immediate opportunity for private capital lies in transmission, cross-border power trade and distributed energy solutions - demand is clear but delivery depends on credible structuring.

Capital follows workable frameworks. Projects such as EACOP and Tanzania LNG remain strategically important, but investor focus is less on headline value than on whether the legal and commercial framework supports delivery. That means fiscal stability, land access, environmental and social compliance, durable host-government arrangements and risk allocation capable of supporting long development timelines and external scrutiny.

The stronger play is often in getting electricity to market, rather than generating more of it. Kenya’s planned increase in electricity imports from Ethiopia, together with its transmission PPP with Africa50 and Power Grid Corporation of India, illustrates a wider regional point: grid constraints and regional interconnection are increasingly shaping where capital can be deployed. Where projects are backed by long-term concessions, availability-based revenues and clear payment structures, transmission offers a more investable route than generation alone.

Bankability also depends on the wider macro-financial environment, FX availability, convertibility, repatriation and public payment risk can be as decisive as project terms. The financing toolkit is widening beyond traditional DFI and export credit support to include blended structures combining concessional capital, commercial debt, impact funding, local capital markets and, where available, green or sustainability-linked instruments. Emerging opportunities in green hydrogen, battery energy storage and scalable mini-grids, will only attract capital at scale where regulatory and financing frameworks are sufficiently clear and adaptable.

Looking ahead

East Africa’s infrastructure pipeline remains attractive. Capital will gravitate towards projects with careful legal and commercial structuring around clear regulatory pathways, rigorous risk allocation, durable revenue structures, comprehensive ESG integration and human capital objectives aligned with host-state priorities.

Our team advises on Africa’s most complex matters collaborating with our StrongerTogether network of leading local firms. Contact us if you would like to know more. 

Freshfields Africa Strategy Group - Andrew Murphy, Pervez Akhtar, Joshua Kelly, James Chapman, Bukunola Alakija and Amanda Mapanda