Included in this issue: Power Up: Delivering Renewable Energy in Africa (The Economist Report); Economic update shows SA as top renewable power producer on continent; Win a $7 million prize to fund African renewable energy projects and more...


The challenges facing Africa in its pursuit of a 650% increase in the output of renewable energy are considerable and multifaceted. In this edition of Addleshaw Goddard's Africa Business Group's June newsletter we focus on some specific instances of attempts to overcome the enormity of the challenge posed by the target to deploy 300 gigawatts of renewable energy in Africa by 2030 that was set by a coalition of African governments and the African Union at the COP21 meeting in Paris last December. Last month, The Economist Intelligence Unit published an in-depth report commissioned by IHS Towers on African renewable infrastructure, called "Power Up: Delivering Renewable Energy in Africa" (The Economist Report) which explores whether Africa can hit the 300GW target (News Article 1) and our newsletter selects some of the business news from the renewable energy sector in Africa over the last month.

The President of Zambia, Edgar Lungu, is reported as noting that Africa's key challenge is access to power, regardless of whether its source is renewable or carbon-intensive (News Article 8). The investment by Standard Chartered in partnership with the United States Agency for International Development (USAID) of $60 million in Zambia's Electricity Supply Corporation is a welcome affirmation of the commitment to the development of an energy supply network in a country that has embraced hydro-electric power generation.

South Africa is the largest producer of renewable energy on the continent, with renewables accounting for 5% of South Africa's installed capacity (News Article 2); Eskom's CEO is therefore well placed to highlight some of the problems associated with relying on renewable energy (News Article 7). For example, Zambia's power supply from large-scale hydro may increasingly be put in jeopardy as global warming makes drought more likely, as has happened in the last couple of years (News Article 1).

Hydro power aside, Africa is well-placed to harness the power that reaches the earth's surface from the sun and the wind. The Economist Report cites the Lake Turkana wind farm in Kenya as having one of the highest load factors in the world due to the powerful wind resources on the site. Power produced in abundance can be provided cheaply: Africa holds the record for the cheapest bid for electricity from wind power generation at $3c/kWh, although as The Economist Report points out, a bid does not guarantee that the project will actually be delivered at that cost (The Economist Report).

It is estimated that in Africa almost 645 million people lack access to electricity (News Article 8). Both solar and wind power can be generated and distributed off-grid and even on micro-grids; the results of innovative leapfrog technologies akin to those of Africa's mobile phone sector in the late 2000s (The Economist Report). Clearly, then, when renewable energy projects are being evaluated for investment, those for which a significant proportion of the projected cost is not large-scale infrastructure for energy distribution will look particularly attractive.

Overcoming the uncertainties about the tariffs that will be paid for the power generated and the reliability of the off-taker to purchase that power, is key to closing the agreements to finance and construct the large-scale projects that will be required if Africa is to meet its ambitious targets. Partnerships such as that between the US Overseas Private Investment Corporation (OPIC) and the Renewable Energy Performance Platform (REPP), reported in News Article 5, may help to mitigate some of those uncertainties, providing invaluable expertise and identifying at an early stage those projects that would qualify for OPIC financing.

We hope that you enjoy this month's edition of Africa news. The Energy team is always delighted to discuss investments in renewable technology both in Africa and beyond: please contact Guy Winter, Ellen Catherall or Richard Goodfellow in the first instance.

For a regular stream of business and legal news in Africa, please download our innovative "Doing Business in Africa" App, available for free for ipad users on the App Store or accessible from your browser here.

We are very pleased to be holding the next Africa Technology Business Forum in conjunction with Africa Technology Business Network at our Milton Gate offices on 22 June 2016.

The event, taking place during London Tech Week, is a one-day conference to showcase the most exciting technology opportunities unfolding across the African continent to the global business and investor community. Topics to be discussed at the event include:

  • Fintech and the future of financial services in Africa
  • Opportunities created by the Africa mobile economy
  • The rising African tech consumer market
  • Smart African cities – Building vision into reality
  • Cleantech energy opportunities and potential
  • Bridging the Africa technology funding gap
  • The future of Hardware in Africa

The Africa Technology Business Network is a bridge to enable collaboration, skills transfer and investment between the UK and Africa technology ecosystems. Its aim is to help unlock profitable opportunities for businesses in both economies and positively impact Africa's economic development.

For further information please contact Nick Ashcroft.

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Article One: Source: renewableenergyfocus.com

Power Up: Delivering Renewable Energy in Africa (The Economist Report)
Africa must increase renewable energy generation by 650% to achieve 2030 goal

Sub-Saharan Africa must dramatically increase annual renewable energy deployment by to reach the continent's ambitious targets established at COP21, according to a new report published by The Economist Intelligence Unit (EIU).

Power up: Delivering renewable energy in Africa, commissioned by IHS Towers, interviewed 28 experts including developers, technology companies, banks and energy analysts, supported by fieldwork in Nigeria, Zambia and Uganda. It seeks to examine current trends and future prospects, in the context of the African Renewable Energy Initiative's goal of deploying 330 gigawatts to the region by 2030, an increase of over 650% from current rates.

Read more…

Article Two: Source: renewableenergyfocus.com

Economic update shows SA as top renewable power producer on continent

On Thursday, the Oxford Business Group, a publishing, research and consultancy firm, released an economic update on the state of South Africa's renewable energy sector, saying that the country is already the continent’s largest producer of renewable energy.

With an increase in independent power producers (IPPs), especially within the renewables market, the country has pulled in an estimated ZAR194 billion ($12.3 billion) since 2011, the business group said in a statement.

Read more…

Article Three: Source Engineering News

Swiss, French agencies establish €3m programme to help finance South African renewable-energy projects 

The Swiss State Secretariat for Economic Affairs (Seco) and Agence Française de Développement (AFD) have agreed on a €3-million technical assistance programme to assist banks in financing small-scale renewable-energy and energy efficiency projects in South Africa.

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Article Four: Blue & Green Tomorrow

Win a $7 million prize to fund African renewable energy projects

Access Power, a developer, owner and operator of power projects in emerging markets, has begun the countdown for applications to the Access Co-Development Facility (ACF) 2016, the second edition of its successful ACF for renewable energy projects in Africa. The 2016 ACF competition will see developers across the continent compete for funding and expertise. The deadline for applications is May 20.

Renewable energy developers have less than one month left to submit their applications for a chance to win US$7million in ACF prize funding. ACF 2016 is a competition dedicated to finding local power project developers with credible renewable energy projects in Africa who need access to funding, technical experience, and expertise to bring their plans to life.

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Article Five: Source: renews

Partners eye sub-Saharan Africa

OPIC and REPP sign MoU to help renewables projects gain finance

The US' Overseas Private Investment Corporation (OPIC) and the Renewable Energy Performance Platform (REPP) are partnering to provide support for renewable energy projects in sub-Saharan Africa.

Under the terms of the memorandum of understanding, OPIC and REPP plan to identify projects that would be "eligible for OPIC financing at an early stage so that with REPP assistance, the projects have a higher likelihood of being financed and achieving the intended development impact".

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Article Six: Source: Energy Digital

Senegal has received a US $40 million loan to build the largest solar plant in West Africa

The Senegalese government has recently had to reassess the way it delivers energy to its people in the face of large-scale power outages, and the country's sunny climate makes it an obvious candidate for solar energy. Proparco, a French development agency, provided the loan - which is to be repaid over the course of 18 years.

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Article Seven: Source: ESI Africa's Power Journal

South Africa: Eskom's Molefe disappointed by renewables

In South Africa, Brian Molefe, CEO of the state-owned power utility, Eskom, has stated that the power generated by renewable energy technology has not helped the utility.

Speaking at the quarterly state of the system briefing hosted last week in Cape Town, Molefe said renewable energy has failed to provide the required energy when Eskom needed it the most, reports Moneyweb.

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Article Eight: Source: ESI Africa's Power Journal

Africa to collaborate efforts to tackle energy crisis, says AfDB roundtable

African nations can expand their power generation and achieve universal access to energy by leapfrogging to new technologies that are transforming energy systems throughout the world. This was the general consensus during the high level panel for African leaders on Energy and Climate Change hosted by the African Development Bank on Tuesday.

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Article Nine: Source: ESI Africa's Power Journal

Standard Chartered reaffirms commitment to Zambia's power grid

On Monday, Standard Chartered, a British multinational banking and financial services company headquartered in London, announced its partnership with the United States Agency for International Development (USAID) to deliver a term loan worth $60 million to Zambia's Electricity Supply Corporation (ZESCO).

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Article Ten: Source: The World Bank

Empowering a greener future

This is Morocco's Noor 1 concentrated solar power plant, the first phase of what will eventually be the largest concentrated solar power plant in the world. It is an impressive sight—visible even from space–and it holds the promise of supplying over 500 megawatts of power to over a million Moroccans by 2018. It also embodies the power of well-placed concessional financing to stimulate climate action. Low cost, long term financing totaling $435 million provided by the Climate Investment Funds (CIF) has served as a spark to attract the public and private investments needed to build this massive facility, and it is just one example of how the CIF is empowering a greener, more resilient future.

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Guy Winter

Guy Winter

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Ellen Catherall

Ellen Catherall

Associate, Corporate
London, UK

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