Introduction
Africa’s energy transition is taking place within a complex and evolving legal, economic, social, and political environment. Whilst the global movement towards decarbonisation continues to accelerate, many African states remain heavily dependent on oil and gas. However, they are in the process of seeking to expand renewable energy and meet climate commitments. This has created challenges where long-term energy projects are exposed to legal uncertainty and disputes. Disputes are emerging across the energy sector, liquefied natural gas (LNG), oil and gas, and renewable energy projects. These disputes often arise where regulations meet with long-term contractual commitments that can be difficult to put into practise.
Regulations and the Energy Transition
Governing energy projects across Africa varies significantly between jurisdictions. While many states have introduced reforms aimed at modernising their energy sectors and attracting investment, the pace and consistency of reform remains uneven.
In Nigeria, the Petroleum Industry Act 2021 represents one of the most significant regulatory reforms in the region’s oil and gas sector in decades. The legislation replaces outdated laws, such as the Petroleum Act of 1969, with a modern framework designed to boost investment, improve transparency, and promote sustainable development in the community.
South Africa presents a different regulatory dynamic. The Renewable Energy Independent Power Producer Procurement Programme has played a central role in driving renewable energy development. However, regulatory delays and political intervention, particularly during the period between 2016 and 2018, exposed vulnerabilities within the system. The primary disruption was the refusal to sign new Power Purchase Agreements (PPAs) for renewable projects awarded in Bid Windows 3.5 and 4. In addition, the refusal to sign was justified by claiming a surplus in generation capacity and that renewables were too expensive. This led to an impact on investment, jobs, and economic consequences.
Kenya and Morocco are leaders in African renewable energy, with Kenya leveraging geothermal, hydro, and wind for high renewable share, targeting 100% green power by 2030. Morocco focuses heavily on large-scale solar, Noor complex, world’s largest Concentrated Solar Power (CSP) plant, and wind, aiming for 52% renewable capacity by 2030. Kenya’s renewable energy achievements often hide the inequalities that threaten social stability and economic inclusion. While overall electricity access reached 79% by 2023, regional disparities remain:
- 8 million Kenyans still lack electricity access, mostly in rural areas.
- 69% of households rely on traditional biomass for cooking, creating indoor air pollution responsible for 26,000 annual deaths.
- Power tariffs rank among Africa’s highest, making electricity unaffordable for many low-income households.
At a regional level, organisations such as the African Union, Economic Community of West African States (ECOWAS) and Southern African Development Community (SADC) try to promote regulatory harmonisation and cross-border integration. In practice, however, these initiatives have achieved mixed results. For example, the West African Power Pool (WAPP) was established to integrate national grids and support electricity exchange among 14 member states, helping create a platform for coordinated energy trade and infrastructure planning. Similarly, the SADC Protocol on Energy provides the legal basis of the Southern African Power Pool, which is designed to facilitate regional electricity. Providing a framework for cooperative energy development across the region’s utilities and governments.
However, these initiatives also illustrate the limitations of regional integration in practice. Implementation of agreed protocols have been inconsistent, leaving member states to pursue different domestic energy policies and standards.
Disputes
Disputes arising from Africa’s energy transition reflect the tension between long-term investment and regulations of states. These disputes commonly fall into two categories: investor–state arbitration and contractual disputes.
Investor-State Arbitration (ISDS) in Africa involves foreign investors using international tribunals (like ICSID) to resolve disputes with African governments, often triggered by policy changes in mining/energy sectors, leading to claims over expropriation or regulatory breaches. However, the system faces scrutiny for costs and sovereignty concerns, prompting African nations to explore reforms and continental agreements like the AfCFTA Investment Protocol.
Investor protection is primarily provided through Bilateral Investment Treaties (BITs), multilateral treaties, domestic foreign investment legislation, and contractual arrangements between investors and host states. Together, these frameworks form the legal basis for bringing claims against states. In parallel, some jurisdictions are strengthening their domestic arbitration frameworks. Nigeria, Africa’s largest economy, is positioning itself as a leading commercial arbitration centre following the introduction of the Arbitration and Mediation Act in May 2023, which replaced the 35-year-old Arbitration and Conciliation Act. The new law aligned closely with international standards and permits third-party funding, which was previously prohibited. Nigeria has also strengthened its international arbitration profile through a collaboration agreement between the Lagos Chamber of Commerce International Arbitration Centre (LACIAC) and the Permanent Court of Arbitration, headquartered in The Hague, signed in June 2023 to promote arbitration and alternative dispute resolution across the region.
Several high-profile disputes have involved investors bringing claims against the Democratic Republic of Congo, the AVZ Minerals lithium project, where the government revoked permits, triggering arbitration and legal battles over ownership rights and disclosures, leading to investor losses and regulatory action (ASIC suing AVZ for misleading investors). In addition, banking administration disputes involving Afriland First Group SA v DRC.
Contractual disputes
Alongside investor–state claims, contractual disputes remain a prominent feature of Africa’s energy sector. Under power purchase agreements, disputes commonly arise in relation to tariff adjustments.
Case study analysis
The Mozambique LNG project shows how energy disputes in Africa are closely linked to security conditions, political stability, and human rights. TotalEnergies declared force majeure on the project in April 2021 following escalating Islamist insurgent attacks near the Afungi construction site in Cabo Delgado province. These attacks, including violence in and around the town of Palma, made it impossible to guarantee the safety of personnel, forcing the evacuation of workers and the suspension of construction. The deteriorating security environment led to significant project disruption, adding an estimated USD 4.5 billion in additional costs and delaying the anticipated start of production.
The declaration of force majeure raised complex legal issues, particularly concerning the application of force majeure clauses and the extent of the host state’s obligation to provide security for strategic energy infrastructure. Although security conditions have improved over time, the force majeure was only lifted in late 2025. Even then, a full restart of the project remained contingent on government approval of revised budgets and schedules, with total project costs increasing to approximately USD 20.5 billion and first production now anticipated around 2029.
The project became the subject of legal scrutiny. In 2025, the European Centre for Constitutional and Human Rights (ECCHR) filed a criminal complaint in France alleging that TotalEnergies was complicit in human rights abuses committed by Mozambican security forces assigned to protect the project site during the period of suspension. While these allegations remain challenged and unresolved, they demonstrate how disputes connected to major energy projects extend beyond contractual matters.
South Africa’s renewable energy sector provides a clear example of how disputes can arise where state-owned enterprises act as contractual gatekeepers within energy transition frameworks. Between 2016 and 2018, Eskom delayed the signing of power purchase agreements with independent power producers under the Renewable Energy Independent Power Producer Procurement Programme. This refusal affected 27 projects under Bid Window 4, involving approximately 37 independent power producers, and stalled an estimated ZAR 58 billion in investment.
This also gave rise to legal and regulatory disputes. Industry bodies, including renewable energy associations, warned of potential legal action, alleging that Eskom was abusing its position as the sole purchaser and grid operator. Although the dispute was eventually resolved in April 2018 following a change in political leadership and the signing of the outstanding agreements. In addition, legal challenges, including attempts by interest groups to invalidate the signed contracts and later disputes concerning tariff arrangements, continued to affect the sector.
Nigeria’s oil and gas sector has been a focus point for international arbitration, with multiple disputes involving major international oil companies, including Shell, ExxonMobil, Eni and others. These disputes typically arise from complex contractual arrangements such as production sharing contracts, joint operating agreements and gas supply agreements, and frequently concern issues of taxation, environmental compliance, and contractual interpretation.
The most prominent illustration of these risks is the dispute between Nigeria and Process and Industrial Developments (P&ID). Under a 2010 Gas Supply and Processing Agreement, P&ID was to construct gas processing facilities to treat associated gas supplied by the Nigerian state. P&ID alleged that Nigeria failed to provide the agreed gas, rendering the project unviable. Arbitration proceedings resulted in a USD 6.6 billion award in favour of P&ID in 2017, which accrued interest and grew to over USD 11 billion, representing one of the largest arbitration awards ever issued against a sovereign state.
Nigeria challenged the award before the English courts, alleging that the agreement and arbitration had been procured through fraud and bribery involving Nigerian officials and advisers. In a series of decisions, the English High Court set aside the award, finding that it had been obtained through fraud and was contrary to public policy. The case exposed significant governance and corruption risks within Nigeria’s energy sector.
In addition, Nigeria’s energy transition introduces new risks of disputes. As the state positions natural gas as a transition fuel, carbon regulation, and gas flaring controls centre. These intersect with existing contracts, creating potential tension between environmental objectives and investor expectations.
The Lake Turkana Wind Project (LTWP), a 310 MW development, despite its scale and importance to Kenya’s energy transition, the project has been affected by disputes relating to land rights, environmental issues, and infrastructure problems. These issues had a direct impact on project delivery.
Land rights have been central to the disputes surrounding the project. In 2021, the Kenyan courts found that land title deeds associated with the project had been acquired ‘wrongly’, in breach of domestic land laws. The ruling held that the acquisition process failed to adequately recognise the rights of local pastoralist communities, including the Turkana and El Molo peoples, whose ancestral lands were used for grazing and cultural purposes. The case raised serious concerns regarding the absence of free, prior and informed consent.
Regulatory uncertainty remains a central challenge across African energy markets. Frequent legal reforms, inconsistent implementation, and political intervention increases and contributes to disputes. Tensions between locals and protections under bilateral investment treaties continue to generate legal conflicts. As traditional sources of projects have become more constrained, there has been a shift towards alternative funding partners, including Chinese and Gulf investors. These shifts may introduce new contractual structures and dispute dynamics. As states seek to balance economic development with climate commitments, these considerations are likely to play a growing role in both decision-making and dispute resolution.
Conclusion
Africa’s energy transition is not only affecting the energy projects themselves, but has an impact on social, economic, and political matters. Whilst the transition presents opportunities for sustainable development and investment, it also introduces new sources of disputes. Regulation uncertainty, contractual matters, and policy objectives have been generating disputes across oil and gas, LNG and renewable energy projects. With a shift from using oil and gas to renewable energy, the opportunities for disputes arise, due to the implementation of domestic and international legal reforms, protecting and benefiting the community, and proportionate economic distribution.