Renewable energy could be the solution for Africa

In its Global Energy Architecture Performance Index Report 2014, WEF said policymakers and businesses are having to come to terms with new dynamics and it sees major emerging economies as holding the key for the future. The report said: “Major emerging economies will be responsible for the majority share of future energy consumption and are critical for the development of global energy markets and solving the sustainability challenges facing the world. Their success is critical not only for their own citizens, but for the entire energy system.” Within the report, WEF has published a case study looking at the Nigerian market. It examines the ambitious power sector reforms being pushed through by the federal government. The report said: “In contrast to past reforms, continued leadership from the head of government and ownership of a detailed roadmap of reform have so far signalled to investors that this government is committed to reform in the long run. But only the future will tell whether these reformers have truly learned from past mistakes.”hideIt concluded: “This case study illustrates how visible leadership with reform backed at the highest levels, as well as commitment to a clear implementation plan along a defined roadmap, can support progress with reform at an acceptable speed. Although many other factors will play a role in defining investment decisions, the local regulatory and institutional landscape constitutes one of the most important.” Meanwhile, Clean Energy Pipeline has produced a finance guide for Africa in 2015, exploring the growing renewable energy opportunities across the continent. Douglas Lloyd, Founder and CEO, Clean Energy Pipeline, said that for at least two years the firm has been looking at the renewable options in Africa but until recently interest was very much focused on South Africa and Morocco. “It’s very hard to pinpoint when we reached a tipping point,” he said. “But if I was to pick a date it was very early this year. What changed? South Africa’s growing commitment to the sector has certainly helped. Since August 2011, the REIPP Procurement Programme has attracted more than $10bn of foreign investment in respect of approximately 4,000 MW of new renewable electricity generation capacity.” However, Mr Lloyd said: “It’s the irrefutable combination of a fast-growing population, severe electricity shortages, the long construction lead time for traditional power plants and the exorbitant cost of diesel as a replacement energy source during outages, that has forced renewables to the forefront as one of the most obvious energy solutions available to Africa today. The abundance of high quality renewable energy resource—solar, wind, geothermal and hydro—makes the argument for renewables even more compelling.” David Donnelly, Director, Project Finance—Renewable Energy at Mazars, added: “The scale of the opportunity for developers and investors in renewables in Sub Saharan Africa is great. “The opportunity is far wider than developing and operating discrete grid-connected generation projects—in many cases the project or concession scope will have to be expanded to cover more of the power supply chain to the end consumer, to include distribution and commercial management, as well as off-grid and minigrid solutions. “To realise this,” he warned, “developers and investors need to spend considerable time in understanding the wider context of their projects and in engaging with governments and DFIs to ensure that project preparation is comprehensive. As a result, sponsors’ business models will have to be more flexible, to give them the capability and credibility to promote, develop and attract capital to these economically and socially vital projects.”

Renewable energy could be the solution for Africa

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