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Amy.Offord_111 Aug 14



African states are seizing the opportunity to meet fast-rising power demand with clean energy, writes Ian Lewis.

The scale of the challenge for the African energy sector is well known. The World Bank estimates that in rural areas around one in three Africans have no access to electricity – that compares to 13% for the world as a whole. Even where communities do have access to grid electricity, the supply may be unreliable or unaffordable. 

It is now generally accepted that renewable energy will play a  major role in solving the energy  access challenge – national energy policies across the continent are increasingly prioritising the need to develop solar and wind projects to replace fossil fuels and reduce the  reliance on erratic hydropower.  This has encouraged ambitious propositions for increased renewable energy use in Africa, which while challenging, don’t look as far-fetched as they once were.   

The International Renewable Energy Agency (IRENA) believes Africa could meet around half of its electricity generation requirements from renewable energy by 2030 if the investment is forthcoming. There is the potential for renewable energy capacity totalling 310GW to be in place by the end of the next decade, seven times the 42GW capacity available in 2017, the agency says. If that could be achieved, not only would electricity access improve, it would also result in carbon-dioxide emissions reductions of up to 310 megatonnes a year.

The economic and health benefits would be significant, says IRENA in its January 2019 report, Scaling Up Renewable Energy Deployment in Africa. The renewable energy sector already employs 10.3m people glob-ally, so millions more jobs could be created in Africa. Increased access to electricity, especially in more remote areas, would improve productivity and spur economic growth. Health would improve through the improvements in healthcare services that power would bring, and because of the reduced exposure to polluting fuels, such as diesel from generators and kerosene used in lamps.


Assessments of the solar and wind potential available in Africa confirm that the resources are there, IRENA says. But there’s a caveat – achieving such an expansion in renewable energy is estimated to require an average $70bn a year investment. The national climate change commitments and power-sector policies of governments on the continent indicate that, at best, only around half of the hoped-for 310GW of renewables could emerge if those plans were realised, the agency said in 2017.

However, countries such as Ethiopia, Kenya, Nigeria and Rwanda are now taking a more positive view of the role of renewables, incorporating their development both as part of utility-scale grid power and at the off-grid level into national energy policy. 

Clean energy offered through mini- and micro-grids is providing power to communities far from the national grid that once had little prospect of electricity access, thanks to the plum-meting cost of the technology and the proliferation of companies able to offer such services affordably on a commercial basis.

However, it is at the utility-scale grid level that renewables could make the most difference to the overall energy mix. As energy demand in Africa grows, the task is to ensure that most of the required increase in power generation is met by sustainable, clean energy sources. 


While the operation and maintenance costs of solar and wind are low compared to thermal power plants, upfront costs are high. This creates a problem for countries such as Ghana, which is pushing the use of solar energy to meet the country’s commitments under the Paris climate change agreement.  In 2018, the government said it wanted to boost utility-scale solar generation to 250MW by 2030 from around 22.5MW. 

“Renewables is an area we have been concentrating on and finding investors,” said Mami Dufie Ofori, Executive Secretary of Ghana’s Public Utilities Regulatory Commission. “Together with the Energy Commission, we are trying to identify how best we can encourage it and price it. However, the initial investment is very high, whereas operation and maintenance [cost] is very low. How do you price that so the investor will get their money back, but at the same time ensure the community isn’t paying an exorbitant cost? We have to balance that. “Technological developments are ensuring that some of these solar systems are getting cheaper and cheaper. We hope that technology can lead us to achieve affordable costs.”

Support from development finance institutions (DFIs) is crucial to the development of large-scale renewable energy projects in most sub-Saharan African countries. The list of projects backed by the World Bank, the African Development Bank and other multilaterals is growing fast. 


In Senegal, support from the Multi-lateral Insurance Guarantee Agency (MIGA) has enabled construction of the country’s first utility-scale wind-farm to get under way. Ground-breaking on the 158.7MW Taiba N’Diaye wind farm project to the north of Dakar took place in December 2018 and developer Lekela expects it to be completed in 2020. The 46-turbine windfarm will add around 15% to Senegal’s electricity generation capacity, providing some 300,000 households with electricity, mainly in rural areas. 

Lekela hopes that, as the largest wind project to date in West Africa, it will act as a showcase for the technical, financial and institutional feasibility of large-scale wind projects in the region. The developer’s ownership reflects the importance of combining private sector and DFI funding and know-how at this stage in the development of the renewables sector. UK-based Lekela is 60%-owned by private equity investor Actis and 40%-owned by a group led by Mainstream Renewable Power, which includes the International Finance Corporation (IFC) and the Rockefeller Brothers Fund.

In Mozambique, the IFC is backing the country’s first utility-scale solar power plant, which aims to reduce reliance on hydropower and bring power to rural areas. The project, which also includes support from the Climate Investment Funds, is to deliver power to the national grid and provide energy to some 175,000 households.

In Zambia, the Scaling Solar programme pools World Bank, IFC and MIGA services and instruments to support grid-connected solar photovoltaic (PV) power plants. A 48MW plant located outside the capital, Lusaka, will sell power to Zambia’s power utility company through a 25-year power purchase agreement (PPA).


Once grid-scale renewable energy is established and the risks are reduced, the private sector is likely to play an increasingly important role in the sector. In the continent’s more developed economies, this is already happening. 

South Africa is blazing a trail in terms of its efforts to mobilise private investment in the renewables sector, as it seeks to wean its power sector off its dependence on coal, which still accounts for around 80% of electricity generation. According to 2018 Energy Ministry data, of a total installed capacity of 51.3GW, thermal (mostly coal) accounted for 46.8GW, hydroelectric for 661MW and other renewables for 3.88GW.

After becoming South Africa’s President February 2018, Cyril Ramaphosa quickly sought to revamp the country’s approach to the energy sector, including the extension of an independent power producer (IPP) programme for the renewables sector.

Cash-strapped state utility Eskom had previously been reluctant to sign PPAs with private renewable power providers, or indeed develop grid-scale renewables projects itself, saying they were too expensive compared to coal. And the case for solar and wind hadn’t been helped by previous President Jacob Zuma’s interest in developing nuclear power, rather than alternatives.

In March 2018, Ramaphosa’s administration said Eskom would sign agreements for 27 Renewable Energy Independent Power Producer Projects (REIPPPs), intended to add some 2.3GW to the grid, while the REIPPP programme as a whole is intended to boost capacity as much as 30GW over the coming years.    

The tumbling cost of renewables technology has already brought down the price at which power can be sold to Eskom – by some estimates it is cheaper than coal in some areas. This could solve a number of problems, but has actually created another one. 

Early 20-year PPAs that Eskom signed with renewable IPPs back in 2011 and 2012 were based on the higher prices prevailing then. That has led to calls for those agreements to be renegotiated to push down the cost of electricity to match that of more recently built projects, saving debt-laden Eskom money. But pushing through the renegotiation of 20-year contracts is unlikely to bolster confidence among investors eyeing the new wave of renewable IPPs that their future cashflows are secure. Ramaphosa has gone on the offensive, telling the South African parliament in March that Eskom’s financial and operational challenges were not caused by renewable IPPs. 

“With each successive round of the renewable energy IPP programme, the cost of electricity has dropped substantially. In the most recent round, for example, prices for wind were down to around $0.62/kWh, which compares favourably with Eskom’s average cost of supply,” he said. Ramaphosa will still need to tread a delicate political line if he is to keep everybody happy.


North Africa’s leading renewables markets provide different opportunities and challenges than most of those south of the Sahara. For example, Maghreb states could harness their copious solar energy to provide power for the huge European markets via trans-Mediterranean transmission lines, and send power to each other. A lack of regional cooperation is holding back progress, but close ties with Europe and relatively developed economies mean that renewables financing can be obtained more readily than in other parts of the continent. 
Morocco, which has to import virtually all of its energy needs, has been in the vanguard of the clean energy drive. Renewable energy accounted for 35% of the kingdom’s generating capacity at the end of 2018, according to government data.  The country already plays host to the world largest concentrated solar power complex, the multi-billion-dollar Noor project at Ouarzazate in the Sahara desert. The first 160MW phase became operational in 2016. When Noor is completed in around 2020, it will have a capacity of around 580MW, providing power to more than 1m people.    

Backed by the World Bank and other DFIs the project, which is led by the Moroccan Agency for Sustainable Energy (MASEN), has been developed on a public-private partnership basis, successfully mobilising private investment. MASEN has also pioneered the issue of green bonds to international investors to support its renewable energy ambitions.  

Morocco plans to add some 10.1GW of renewable power capacity between 2016 and 2030, as it seeks to boost the renewable share of the power mix to 52% by 2030. The government foresees 4.56GW of this coming from solar, 4.2GW from wind and 1.30GW from hydropower. It expects to meet its 2020 target of 42% share of the mix for renewables.

On the other side of North Africa, Egypt has also been breaking records. The Benban solar PV park in southeastern Aswan province was inaugurated in March 2018 and will generate up to around 1.8GW from more than 30 linked farms, with completion scheduled within the next two years. 

That would make the $2.8bn project one of the largest PV parks in the world, with a capacity rivalling the nearby Aswan dam hydro plant, one of the long-time mainstays of Egyptian power production with a 2.1GW capacity. Benban is being built by several contractors, with the early stages supported by financing from the European Bank for Reconstruction and Development, Dutch development bank FMO and the Green Climate Fund.

According to IRENA, Egypt’s installed renewables capacity totals some 3.7GW, including 2.8GW of hydro, and a total of 900MW of solar and wind power. The agency suggested in October 2018 that Egypt had the resources to raise renewable energy to more than half of the energy mix by 2030 if it raised its investment targets for the sector to $6.5bn a year from the $2.5bn/y in its prevailing policy. Egypt has been targeting a 20% share of the mix for renewables by 2022 and 42% by 2035. 

This article is an extract from the Africa Energy Yearbook 2019, a partnership between African Business and EnergyNet.