Solar Energy: Opportunity in Africacdn.solarmedia.co.uk/assets/documents/Solar_Energy... · The...
Transcript of Solar Energy: Opportunity in Africacdn.solarmedia.co.uk/assets/documents/Solar_Energy... · The...
1AFRICA.SOLARENERGYEVENTS.COM
Solar Energy:
Opportunity in Africa
By Ben Willis, head of content, Solar Media Ltd.
Over the past year a number of Afri-
can countries have found their way
on to the solar world map. Under
South Africa’s national renewable energy
programme, almost 2GW of projects are now
either complete, under construction or in the
pipeline. Meanwhile, countries including Ethiopia, Uganda and Ghana
have signalled their intention to join the large-scale club by unveiling
plans for 100MW-plus projects.
The African continent arguably has the most to gain from the
deployment of PV. A combination of huge solar resources, limited
grid capacity and growing demand for power driven by some of the
world’s fastest growing economies provides all the right ingredients
for an African solar explosion. In the same way that mobile phones
have taken off in Africa, so solar, with its potential for off-grid and
decentralised deployment, offer similar opportunities for propelling
forward the continent’s development.
But realising Africa’s vast potential will mean the negotiation of
some significant hurdles – not just technological, but political, finan-
cial and logistical too. Here, we have gathered together some of
the Africa features, news and product coverage from our network
of websites and journals. Together they give a detailed insight the
issues facing solar as it begins to gain a toehold in Africa and the
possible solutions that will help that develop into something more
substantial.
Many of these themes will be developed further at Solar and Off-Grid Renewables Africa taking place in Nairobi, Kenya on 4-5 March 2014. Featuring a high-profile line up of industry and gov-ernment figures, the two-day event will offer expert intelligence on the business environment for solar and off-grid renewables in East Africa. Full information on the event is available at africa.solarenergyevents.com
2
Kenya
3 MoU agreed for 50MW Kenya PV project
3 Kenya Power injects US$6.5 million into
off-grid renewable projects
4 JinkoSolar supplying modules for 50MW
solar power project in Kenya
4 Joju Solar develops 2.2kW off grid PV
system in Kenya
Tanzania
5 Camco and Rex announce tender
to install small scale solar projects in
rural Tanzania
5 Canadian Solar supplies more modules
for off-grid PV projects in Tanzania
Ethiopia
6 US companies awarded 300MW PV
project in Ethiopia
6 Ethiopia to get first PV module assembly
plant courtesy of Spire
7 Where’s the sun gone in Obama’s US$7
billion Power Africa project?
8 Ethiopia health centres receive 100 SMA
standalone systems
Rwanda
9 Rwanda in line for first grid-connected
solar park
9 Isofoton brings power to the people in
Rwanda
9 Israel’s Arava founders launch solar
company to focus on developing world
projects
Uganda
10 Ugandan government signs deal for
500MW of solar power
10 Frost & Sullivan expects Sub-Saharan
Africa’s off-grid PV sector to expand by
10% by 2015
Policy Update
11 Policy Update
11 Feed-in tariffs could bring renewable
energy to Africa
Feature
12 Interview with Ryan Levinson
13 African solar goes mainstream
16 ‘What South Africa has achieved is a
landmark’
18 Electrifying Africa: solar’s next frontier
20 Four African Countries to watch
Solar and Off-Grid Renewables Africa
21 About & Contact
Contents
03
05
07
09
13
18
3
A consortium of companies that
includes tier one manufacturer Cana-
dian Solar has signed a memorandum
of understanding with local Kenyan authori-
ties to develop a 50MW PV in western Kenya.
Lakeside Solar, which also includes the
Africa Energy Development Corporation and
Eaton Cooper Solar, signed the agreement
last week with the government of Homa Bay
County next to Lake Victoria.
The MoU specified a KES12.6 billion
(US$145 million) deal for a 50MW project
to be built in the area, which is said to be
attractive to foreign investors.
The 50MW project is scheduled for com-
pletion by the end of 2014 and will generate
120 million kWh a year to be sold to the
Kenya Power Company, at an initial minimum
tariff rate of US$0.16 per kWh for ten years.
Lakeside Solar will develop the project
and provide engineering, procurement and
construction (EPC) services and commission
with the Rural Electrification Authority, which
was set up as part of Kenya’s Energy Act
(2006) to improve access to electricity.
Zohrab Mawani, part of the consortium,
and CEO of Caldera Geothermal based in
Ontario, said: “Lakeside Solar is ready to
work with the county to explore optimal
terms and options for financing the construc-
tion of the plant to enhance [and] demystify
obstacles in the area’s energy sector.”
Mawani also said that a loan for solar
development will be paid off in 12 years –
the Homa Bay County will then benefit from
the solar project for the estimated remaining
13-23 year lifespan of the project.
The plant’s expected gross income is
reportedly US$9.6 million a year, and thereaf-
ter US$4.8 million a year.
“We have enough land which we are going
to provide for construction of this project to
enhance the lives of our people,” the gover-
nor of Hama Bay, Cyprian Awiti, said.
Homa Bay was reportedly chosen
because of a good overseas reputation as
an “investor friendly region”.
Read more on the importance of site
selection in Photovoltaics International:
Optimizing site selection decisions in a
changing solar marketplace.
Kenya Power & Lighting, Kenya’s state-
owned utility company, has announced
its intention to invest KES560 million
(US$6.5 million) in the development of off-grid
renewable energy projects in Kenya.
As part of its plans, the company will
develop solar and wind projects in the
country’s North Eastern and Rift Valley prov-
inces in areas that are not connected to the
national grid and, instead, rely on diesel to
generate electricity.
When operational, the renewable energy
projects will help these areas to reduce their
diesel fuel consumption, helping to save
around KES50 million every year.
Kenya Power has already commissioned
eight solar and wind projects which have a
combined capacity of 1MW. These projects are
already benefiting electricity customers in Merti,
Habaswein, Lodwar, Elwak, Mandera, Marsabit
in the Eastern and North Eastern provinces, as
well as Hola in the province of Coast.
Kenya Power’s Deputy Manager, Henry
Gichungi, said that plans are underway to
increase the company’s off-grid renewable
energy capacity and he expects the com-
pany to install a further 2.3MW. The small
town of Wajir in the North Eastern Province
of Kenya will be the biggest beneficiary with
projects totalling 1.3MW.
The renewable energy projects will be fund-
ed entirely by the state and are in line with the
government’s as well as the company’s strat-
egy to increase electricity access in all parts of
the country including off-grid areas.
Commenting on the attractiveness of
the Kenyan solar market, Gichungi said:
“Kenya’s geographical location astride the
equator gives it a unique advantage for a
solar energy market. The country receives
good solar insolation all year round coupled
with moderate to high temperatures which
makes it a conducive market for solar”.
MoU agreed for 50MW Kenya PV project
Kenya Power injects US$6.5 million into off-grid renewable projects
By Lucy Woods, Solar Media - 30 September 2013
By Julia Chan, Solar Media - 08 March 2013
The Kenyan project is expected to generate up to 120
million kWh of electricity a year. Picture: Flickr/teach-
andlearn
In total, Kenya Power plans to install 3.3MW of off-
grid renewable energy capacity. Image: Wikimedia
Commons.
KENYA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
4
Efforts by the Chinese government to
provide support to its struggling PV
manufacturing sector have surfaced in
Kenya, Africa, in the form of a government-
approved business. Known for its municipal
public works, Jiangxi Corporation for Interna-
tional Economic & Technical Co, Ltd. (CJIC),
is planning to build a 50MW solar power proj-
ect near the country’s northwest-located city
of Garissa.
The power plant, the biggest conven-
tional c-Si module-based groundmounted
project yet planned in Africa will use mod-
ules supplied by China-based manufacturer,
JinkoSolar, believed to be on a rumoured list
of between 15 and 20 module suppliers the
government intends to support through a
period of consolidation.
“We are pleased to be a part of Kenya’s
push towards clean-tech development and
commitment to renewable energy,” said
Kangping Chen, chief executive officer of
JinkoSolar. “As a market leader in the solar
energy business, JinkoSolar will play a key
role in supply Kenya’s growing demand for
solar energy. By cooperating with CJIC, we
expect this project will provide JinkoSolar
with future opportunities in Kenya’s solar
power plant industry.”
The planned power plant is said to occu-
py an 81 hectare site, situated in an arid but
extremely constant region of high daylight
temperatures. The plant has an expected
output of approximately 76,473MWh per
year and be grid-connected.
However, timelines for planning, con-
struction and connection were not initially
disclosed. Financial details were unknown.
Under a partnership with Sindicatum
Climate Change, solar installer Joju
Solar has completed a 2.2kW off grid
PV system at a hospital clinic in Kenya.
The solar installation works in conjunc-
tion with a solar/battery system that supplies
power to the clinic. Aside from powering the
building’s lighting, the energy allows a fridge
with vaccines and medicines to be stored on
site. Facilitated by Joju Solar, which assisted
with the project for free, the installation uses
245W solar panels along with thermally effi-
cient water heaters.
JinkoSolar supplying modules for 50MW solar power project in Kenya
Joju Solar develops 2.2kW off grid PV system in Kenya
By Mark Osborne, Solar Media - 27 September 2012
By Syanne Olson, Solar Media - 19 November 2012
The power plant, the biggest conventional c-Si module-based ground mounted project yet planned in Africa and
Kenya will use modules supplied by China-based manufacturer, JinkoSolar
Joju Solar assisted with the solar installation free of charge. Image: Joju Solar
KENYA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
5
The recently formed joint venture
between Camco International and
Rex Investment Ltd. (RIL) has been
awarded a tender to distribute and install
solar power systems in rural Tanzania.
In a country where only 15% of the pop-
ulation have access to electricity, the Kigoma
project aims to install PV systems at 45
schools, 10 health centres, 120 dispensaries
as well as local municipal buildings and busi-
nesses.
The tender is issued by the Millennium
Challenge Corporation, a US foreign aid
agency, working in Tanzania and is worth
US$4.7 million; Camco and RIL proved to
be the only bidders able to implement the
required import and distribution of materi-
als.
Camco will further encourage house-
holds in communities to buy and install
solar home systems (SHS) collectively to
reduce the overall cost by buying in bulk.
Camco has already introduced this “PV
cluster” format to other Tanzanian commu-
nities.
Jeff Felten, managing director of Camco
Tanzania, said: “We are delighted that the
MCC has recognized the positive impact
small-scale solar installations can have
on rural off-grid communities in Tanzania.
While industrialized countries are trying to
rethink or refit their old coal-fired plants,
much of Africa could potentially leapfrog
that stage and move straight to renewable
energy generation. The MCC’s award of the
Kigoma Solar Project to the joint venture
partnership between Camco and RIL is an
important validation of our unrivalled exper-
tise and experience developing off-grid rural
energy projects in Tanzania. In RIL we are
pleased to have identified a strong con-
tractor with which to partner and Camco
looks forward to working together to further
expand the market for solar energy use in
Tanzania.”
Module manufacturer Canadian Solar
has announced it has signed an-
other module supply agreement with
Zara Solar, a provider of PV systems based
in Tanzania.
Under the agreement, Canadian Solar
will deliver an additional 85kW of mod-
ules to Zara Solar for off-grid PV projects
in Tanzania. Including this latest order,
Canadian Solar will have supplied more than
350kW of PV modules to Zara Solar.
The modules vary in size, from 15 watts to
90 watts, and are ideal for off-grid projects
as well as for the local environmental condi-
tions in Tanzania, Canadian Solar states.
Camco and Rex announce tender to install small scale solar projects in rural Tanzania
Canadian Solar supplies more modules for off-grid PV projects in Tanzania
By Anne Zimmermann, Solar Media - 21 March 2012
By Julia Chan, Solar Media - 27 February 2013
The joint venture between Camco and Rex has
received the Millenium Challenge Corporation’s tender
to install PV systems throughout rural Tanzania. Image:
Camco
Canadian Solar will supply an additional 85kW of modules to Zara Solar for off-grid PV projects in Tanzania. Image:
Canadian Solar.
TANZANIA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
6
Three solar power stations totalling
300MW will be built and operated in
Ethiopia by two US companies, Global
Trade and Development Consulting (GTDC)
and Energy Ventures.
The Ethiopian Ministry of Water and Energy
and directors at the Ethiopian Electric Power
Corporation awarded the two Maryland com-
panies the contracts for the three photovoltaic
(PV) plants, each 100MW capacity in size.
The three projects in Ethiopia, located in
the eastern region of the country, were site
selected and due diligence performed before
receiving technical and financial approval from
the two Ethiopian government bodies.
The thee 100MW facilities, referred to col-
lectively as the 300MW Solar Project, will
create around 2,000 construction jobs.
According to Energy Ventures, the project will
inject “several million dollars into the Ethiopian
economy”. The company claims that ongoing
operations will also contribute several hun-
dred jobs.
GTDC, which describes its company objec-
tives as helping to “integrate the emerging
and frontier markets to the global economy
by promoting trade, creating relationships and
transferring knowledge”, appointed Energy
Ventures as project development partner. In
addition to its US headquarters, GTDC has
offices in Italy, Ethiopia, Saudi Arabia, South
Africa and South Sudan. Similarly, Energy
Ventures was created to “specifically address
the utility-scale energy needs of developing
nations around the world”. Along with mega-
watt scale solar projects, Energy Ventures is
also involved with areas including utility micro-
grids and advanced biofuels.
Ethiopian water and energy minister
Alemayehu Tegenu said: “This project repre-
sents a significant advance in our Ethiopian
energy initiative and is now part of our com-
prehensive Energy Plan. Given Ethiopia’s large
hydro-electric generation capacity and now
wind and geothermal power generation com-
ing on-line, large scale solar fits nicely into our
energy portfolio and will provide significant
power generation capacity much faster than
the other renewable technologies. We wel-
come this project with open arms.”
Included in US president Barack Obama’s
‘Power Africa’ initiative to improve access to
electricity in sub-Saharan Africa, renewable
energy generation capacity installed in the
east African country has to date mostly con-
sisted of hydro-electric, wind and geothermal
power. In January of this year Ethiopia cele-
brated the first ever solar panels to be made
in the country.
Spire Corporation has been selected to
provide a 20MW turnkey module as-
sembly line to a partnership between
renewable energy project developer, SKY
Energy International and Metals and Engi-
neering Corporation and an Ethiopian state
enterprise, Metals and Engineering Corpora-
tion (METEC) that will be the first module plant
in Ethiopia.
“We are pleased to support SKY and
METEC to bring solar to Ethiopia. Ethiopia is
a nation where 80% of the population pres-
ently does not have access to electricity,”
said Roger G. Little, Chairman and CEO of
Spire Corporation. “Solar energy can deliver
clean electricity to remote areas of Ethiopia
thus improving the quality of life and ability to
further their agricultural pursuits.”
Spire said that the Ethiopian government
had a stated goal of having 20% of its power
capacity coming from solar energy within the
next five years.
The module assembly line will be estab-
lished in Addis Ababa, Ethiopia.
US companies awarded 300MW PV project in Ethiopia
Ethiopia to get first PV module assembly plant courtesy of Spire
By Andy Colthorpe, Solar Media - 08 November 2013
By Mark Osborne, Solar Media - 13 April 2012
Workers at a 1,870MW hydroelectric project in
Ethiopia. The new 300MW solar project has been
“welcomed with open arms” by the Ministry for
Water and Energy. Image: Ethiopian Electric Power
Corporation.
Spire said that the Ethiopian Government had a stated
goal of having 20% of its power capacity coming from
solar energy within the next 5 years.
ETHIOPIA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
7
President Barack Obama’s US$7 billion
initiative to bring power to the African
people was launched in celebratory
mood at the end of last month.
Power Africa aims to add more than
10,000MW of cleaner, more efficient elec-
tricity generation capacity over five years. At
least 20 million more households and com-
mercial entities will be electrified from the
grid, distributed generation or mini-grids.
Ethiopia, Ghana, Kenya, Liberia, Nigeria and
Tanzania are the first to participate in the initi-
ative, which has already levered US$9 billion
from private industry.
The roll call of companies already recruited
to the cause is impressive. General Electric
has committed to help bring online 5MW
of “new, affordable energy” in Tanzania and
Ghana. Symbion Power will invest US$1.8
billion to develop 1,500MW of new energy
projects in Africa over five years. GE and
Symbion have signed a joint agreement to
develop a 400MW natural gas power plant in
Tanzania that will take a small amount of the
country’s as yet untapped reserves.
Although the White House says the aim
is to power Africa with “cleaner energy” it
would seem from the list of named projects
that the focus is indeed natural gas, hydro
and some wind. That’s a good strategy if all
you want to achieve is a reduction in coal-
fired electricity. South Africa, the continent’s
most advanced economy, after all, is 93%
powered by coal, though the government
has sent a strong signal to the market to
build 1.45GW of solar in the country by the
end of next year. [http://www.pv-tech.org/
friday_focus/friday_focus_is_south_africa_a_
solar_hotspot_or_long_shot]
Africa is in desperate need of power to
grow its economy, keep water sources clean
and medicines cool, to educate children and
reduce deaths from cooking over burning dung
and other solid fuels. More than two-thirds of
the population of Sub-Saharan Africa have
no access to electricity – a figure that rises to
more than 85% of those living in rural areas.
No one could dispute the cause, but there
doesn’t seem to be much in Obama’s plan
for solar, it would seem, even though distrib-
uted generation seems a natural choice for
sunbelt countries that see the sun around
325 days a year with no grid infrastructure to
speak of outside major cities.
African countries certainly need the work-
horses of electric power generation, and plenty
of utility-scale projects will be built under this
programme. But distributed generation doesn’t
really get much support under the plan.
Only US$2 million has been chipped off
the budget for the US African Development
Foundation (USADF) to launch the Off-Grid
Energy Challenge to provide grants of up to
US$100,000 to African-owned and oper-
ated enterprises to develop or expand the
use of proven technologies for off-grid elec-
tricity in rural areas. Even the International
Energy Agency estimates that universal ener-
gy access by 2030 can only be achieved if
more than half of new connections are from
distributed sources.
In some ways, Power Africa seems
like a Trojan horse to get fossil fuel energy
embedded in the grid infrastructure before
the natural choice, solar, starts to gain real
traction. Some of the project developments
listed seemed well under way before Power
Africa was even announced.
SKYei, based in Sunrise, Florida, devel-
Where’s the sun gone in Obama’s US$7 billion Power Africa project?By Felicity Carus, Solar Media - 16 July 2013
Is Obama’s US7 billion plan for powering missing a
trick by overlooking solar. Image: Nathalie Bertrams.
Solar radiation map of Africa: the continent has vast potential to tap the sun’s energy.
ETHIOPIA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
8
ops renewables in Africa, the Caribbean and
Latin America. Founded in 2009 by Roland
“Mack” McLean, SKYei recently completed a
solar panel manufacturing facility in Ethiopia
and is currently developing a major hydro-
electric project in Tanzania.
Development of the 20MW capacity PV
manufacturing facility - Ethiopia’s first - was
fraught with difficulty, says McLean, the son
of an oilman and former Navy pilot.
“Procurement was challenging because
of the component logistics – Addis Ababa is
not on the ocean and it was really difficult to
get the stuff,” he says.
The facility ran out of financing for the sec-
ond phase to bring in raw materials so the
plant is barely operating and has suffered, of
all things, from inconsistent electrical supply.
After an invitation to look at hydro projects
in Tanzania, the company has quoted for
another PV facility and is looking at mini-
grids powered by a hybrid of solar and gas
for villages that don’t have power.
Only 14% of Tanzania’s population has
access to electricity and in rural areas that
small percentage plummets to 6%.
“Companies can do large hydro and gas
fired turbines but they can’t get it across to
the grid,” McLean says. “The major cities
will get it but the little towns won’t. So we’re
looking at mini-grids that can be profitable
for independent power producers.
“The cell phone industry in Africa has
boomed partly because landlines aren’t
available – there are 110,000 landlines in
Tanzania and 23 million cell phones. The
same thing can happen with mini-grids of
electricity.”
The mini-grids will be sized around 10kW
to 50kW to meet basic needs such as light-
ing, cooking and mobile phone charging. With
its hydro project in Tanzania, the company
agreed to microfinance electric-based enter-
prise projects as well as provide water for any
of the villagers anywhere near the project.
“You have to be a good corporate part-
ner,” says McLean. But McLean is an
investor who expects to make an impact in
Africa and on his balance sheet.
“We believe that for alternative energy to be
sustainable and scalable you need to make
a profit. But there’s still a responsibility for the
companies to take care of the people also: it
has to be a win-win. If we’re involved in getting
paid based on the production of electricity then
we’re going to maintain the facilities.
“If we make money on it we can contin-
ue to do more and more. The challenge for
NGOs is that they get money for one and
they often don’t have the money to maintain
it and money to go on to the next one until
they’ve raise some more money.”
Sunfunder, a US-based non-profit, has
succeeded in breaking apart this old NGO
“business model” by re-investing returns to
invest in new projects.
But McClean even goes as far to say that
doing business is easier in Tanzania than in
the United States.
“I find Tanzania easier to work in than the
US – the only better country would be Panama
which has good laws for small energy projects.
Tanzania is very open to developing and we
don’t pay kick backs, we’re very serious about
that. We’re bringing funds into Tanzania and
the rule of law applies.”
With the money he’s invested so far, some
of it his own personal wealth, McClean has
seen the impact private business can have
without help from the State Department
or World Bank. He worries that such a big
ticket as the Power Africa initiative will see
money wasted.
“My question would be how are they going
to administer it? Often with these funds, I
wonder if they’re going to leave Washington.
There will be consultants in Washington who
will get a piece of it. How much of the money
is filtered off before it gets to a project?”
But the appeal of investing in Africa is real
since returns can be robust, says McLean,
who estimates that one of the company’s
Tanzania hydro projects has a 60% return on
investment.
“In a stable country like Tanzania it’s fantas-
tic,” he says. “I haven’t seen a power company
in any country that has rule of law go broke
– electricity is pretty fundamental and people
need to buy it to make money. The opportuni-
ties for investors are terrific – it’s a real win-win.
“There is r isk, but i t ’s worth th is
tremendous opportunity. When 85% of Sub-
Saharan Africa doesn’t have electricity, some
day they’re going to be buying it from some-
one, so they might as well buy it from us.”
SMA Solar Technology has delivered
100 of its standalone inverter systems,
the Sunny Island and Sunny Boy, to
healthcare centres in Ethiopia. The supply of
these systems is under an agreement with
the Deutsche Gesellschaft für Technische
Zusammenarbeit (GTZ) GmbH.
GTZ’s project, entitled “Access to Modern
Energy Services Ethiopia” (AMES-E), is aim-
ing to improve the electricity supply situation
in the country. GTZ is a federally owned
organization for international cooperation
and sustainable development
SMA delivered 50 systems during the
first phase of the project last year, and
has recently delivered the remaining 50
AC-coupled Sunny Island and Sunny Boy
inverters to the remote and rural parts of
Ethiopia. The standalone plants have a
capacity of 1.5kWp and will be used to
power such vital equipment as microscopes,
centrifuges, refrigerators and sterilizers.
“With a project of this scale, we can sig-
nificantly contribute to a better power supply
situation in the mountainous regions of
Ethiopia,” said Volker Wachenfeld, SMA’s
vice president of off-grid systems. “Especially
the connection to a stand-alone solar power
supply of the medical clinics finally ensures
access to medical care. A sufficient health
care is essential to achieve on a long-term
more quality of life. This is where the off-grid
systems make a contribution to the future.”
Ethiopia health centres receive 100 SMA standalone systems By Síle Mc Mahon, Solar Media - 10 August 2010
ETHIOPIA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
9
Rwanda’s government has signed a power
purchase agreement for the country’s
first grid-connected solar project.
The project will be in built with GigaWatt
Global Rwanda in Agahozo Shalom Youth
Vi l lage, Rwamagana Distr ict, Eastern
Province and is said to be the first of its kind
in East Africa.
Gigawatt Global, a Dutch co-op that was
established by the same American found-
ers of Arava Power Company, will design,
finance, maintain and operate the plant. The
plant is expected to be operating by June
2014 and is valued at an estimated US$23
million. The signing ceremony was held at
Rwanda’s Ministry of Infrastructure.
Energy min is te r Emma Franco ise
Isumbingabo said: “Generation and provi-
sion of electricity to all Rwandans is a priority
for the Government of Rwanda. This initia-
tive to produce 8.5MW of clean energy is an
important addition towards closing our cur-
rent energy gap.”
Rawanda Development Board acting
chief operating officer Tony Nsanganira said:
“Energy is key in driving Rwanda’s economic
development” and welcomed investors such
as GigaWatt Global in benefiting Rwandans
directly as well as contributing to Rwanda’s
competitiveness.
Only 8% of households in Rwanda currently
have access to grid electricity, with shortag-
es and blackouts regularly occurring. But the
country has high solar irradiation levels.
Spanish solar panel manufacturer, Isofo-
ton, has revealed plans to install solar
power units at 300 schools in Rwanda,
Africa. The project will cost the Málaga-based
company an approximate cost of €5.8 million
(US$7.5 million), reports Bloomberg.
The project, which will be jointly funded by
the Rwandan government and the European
Union, is aimed at connecting schools that
are to yet receive electricity to the national
power grid, the Infrastructure Ministry said in
an e-mailed statement today from Kigali, the
capital.
Rwanda currently provides electricity to
just 6% of its population. The ministry plans
to increase this amount to 50% by 2017.
Projects such as Isofoton’s will work towards
realising this goal. The East African nation
is also increasing power to 1,000MW from
80MW over the same period.
The founders of Israeli solar provider
Arava Power Company have estab-
lished a new business to develop solar
projects in emerging markets outside Israel.
Backed with US$800 million of condi-
tional financing, Energiya Global Capital will
focus primarily on developing countries, with
projects already in the pipeline in Rwanda,
Romania and the Galapagos Islands and due
to break ground in 2013.
Yosef Abramowitz, Energiya’s President
and co-founder, said the company’s goal
was to spend $20 billion by 2020 on building
10,000MW of solar capacity and supplying
green energy to 50 million people.
“We have a moral and strategic interest to
end the burning of oil for electricity produc-
tion worldwide by harnessing solar energy
while also improving the lives of tens of mil-
lions of people,” he said.
Financing for the company has come from
various sources, including the US govern-
ment and commercial banks. All financing
commitments are conditional, meaning they
will only be activated once individual projects
are given the go-ahead.
The company has 59MW of projects
already under development, 250MW at an
intermediate stage of development and
memorandums of understanding for a further
1,500MW.
Rwanda in line for first grid-connected solar park
Isofoton brings power to the people in Rwanda
Israel’s Arava founders launch solar company to focus on developing world projects
By Lucy Woods, Solar Media - 23 July 2013
By Emma Hughes, Solar Media - 12 January 2011
By Emma Hughes, Solar Media - 12 January 2011
PPA Signing ceremony at Rwanda’s ministry of infra-
structure.
Energiya will focus on building solar projects in the
developing world.
RWANDA
10
The Ugandan government has signed
an MoU to build 500MW of utility-scale
solar power.
Under the terms of the agreement with
Taiwanese-US partnership, Ergon Solair, four
125MW power plants will be built for the
Ugandan Development Corporation.
Construction on the first plant is scheduled
to begin in 2014 with the full capacity to be
installed by October 2016, according to the
document seen by PV Tech.
Ergon Sola i r has proposed us ing
Jinko Solar modules and is working with
Portuguese firm Martifer Solar on the techni-
cal development of the projects.
The government of Uganda has commit-
ted to purchase the power from the four solar
farms, according to the deal.
Ergon Solair has also signed a 2000MW
agreement with the East African Chamber
of Commerce, Industry and Agriculture
(EACCIA).
Under the terms of that deal Ergon Solair
will look to develop competitively price solar
power for rural communities and small busi-
nesses.
“Many of these communities are pay-
ing enormous sums for their energy. They
are using diesel generators and kerosene.
Solar can be competitive and help them save
between 30 and 50% of their energy bill,”
Lorenzo L. Colacicchi, CEO and chairman of
Ergon Solair told PV Tech.
“We’re going to be working on micro-grids.
We have proposed creating small local-
ised grids for the communities so they don’t
have to rely on transmission [networks]. We’ll
be integrating some storage too,” added
Colacicchi adding that they will look to use
existing tried and tested technology, rather
than experimenting with new ones.
Business research and consulting firm
Frost and Sullivan has claimed that
Sub-Saharan Africa’s off-grid PV sec-
tor is set to expand by 10% between 2009
and 2015. The news is a boon to the con-
tinent’s renewable energy sector, which is
experiencing increasing governmental de-
mand for small scale projects.
“South Africa and Kenya, leaders in the RE
(renewable energy) industry, have announced
feed-in tariffs for RE projects along with
other regional governments that are cur-
rently investigating opportunities for RE
projects,” said Frost and Sullivan’s Cornelis
van der Waal. “Many developmental agen-
cies consider small-scale RE projects as the
most feasible solution for accelerated rural
electrification and therefore are increasingly
investing in medium-sized projects, especial-
ly wind and solar projects.”
Due to the increased importance of ener-
gy diversification, the Sub-Saharan African
renewable energy market as a whole is
expected to triple in investment value
between 2010 and 2015. And despite the
slow pace of regulatory reform and the
monopolies held by state utilities, countries
such as South Africa, Kenya, Nigeria and
Uganda are all seriously exploring the pos-
sibility of establishing solar power systems.
“South Africa is expected to approve the
renewable energy feed-in tariff for grid-con-
nected solar power in 2010,” added Van der
Waal. “This will allow companies with local
manufacturing capacity to capitalise on the
feed-in tariff laws.”
Ugandan government signs deal for 500MW of solar power
Frost & Sullivan expects Sub-Saharan Africa’s off-grid PV sector to expand by 10% by 2015
By John Parnell, Solar Media - 13 November 2013
By Chris Whitmore, Solar Media - 07 March 2011
The agreement will see work start on the first power
plant next year. Source: Neil Palmer/CIAT.
UGANDA
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
11
Rwanda
Rwanda’s government has signed a power
purchase agreement for the country’s first
grid-connected solar project as part of a new
government focus on energy. The PPA sign-
ing is part of the government’s new initiative
for producing 8.5MW of clean energy to aid
closing the country’s energy gap and further-
ing economic development.
Nigeria
Nigeria has set renewable energy targets of
5% by 2016 and 10.5% by 2025, of which
solar PV is expected to reach 500MW by
2016. However as one of the biggest oil
exporters in the world it remains to be seen
how successfully the country will reach its
goals even though it has implemented a
feed-in tariff. Investors have concerns over
conflicting policy documents and the legal pro-
cedure for distributors to purchase renewable
energy. Unfortunately, ambiguity continues to
pervade through the country with the loss of
the FiT programme’s biggest supporter with
the unexplained resignation in August 2012
of the minister of power. Projects have not
yet been approved, although the Nigerian
Electricity Regulatory Commission has indi-
cated that some developers have applied for
generation licences based on solar PV.
Namibia
Namibia currently has no legal framework in
place to support renewables, with existing
policies supporting all technologies. In mid-
2012, an eight-month solar home system was
developed, the details of which are yet to be
released. The World Future Council states that
although no official purchasing arrangement
exists, two of Namibia’s regional electricity
distributers are already buying electricity from
small producers at the average annual price
charged by NamPower. However, private sec-
tor stakeholders complain that this price is not
high enough to encourage a wider uptake of
net metering. Unfortunately, although a FiT
programme is currently being developed it is
not likely to include solar power.
Botswana
The introduction of a FiT programme follow-
ing Botswana’s National Development Plan
(2009-2016) promoted the development of
a range of small-scale renewable energy
projects by the end of 2016. But the policy
has not been approved as the government
is concerned about whether renewable
energy would increase the existing cost of
electricity for consumers, the effect this tech-
nology would have on the country’s wallet
and whether the installations will exceed
domestic land demand.
Ghana
Ghana’s 2011 Renewable Energy Act aims
to increase energy from renewable energy
to 10% by 2020, of which solar will account
for 20MW. The Ministry of Energy has indi-
cated that Ghana aims to invest revenue
from its fossil fuel exports into upgrading and
building additional renewable energy infra-
structure.
Renewable energy feed-in tariffs in Af-
rica could boost its economy whilst
combating climate change, finds a new
study developed for the World Future Council.
Kenya-based Renewable Energy Ventures,
German Heinrich-Böll-Foundation and UK
environmental association Friends of the
Earth produced a joint report for the World
Future Council, an independent climate
security charity, examining the socio-eco-
nomic impact on 13 African countries if the
German FiT model was implemented.
The repor t conc luded renewab le
energy feed-in tariff policies (FiT) are a prom-
ising mechanism to unlock renewable energy
development in Africa. REFiTs encourage
investment in the generation of renewable
energy – from individual home owners and
communities as well as big companies –
by guaranteeing to buy and pay for all the
electricity that is produced from renewable
sources at a fixed price.
Aimed at African policy makers, civil socie-
ty and the private sector, the report provides
an in-depth analysis of existing and drafted
FiT policies in 13 African countries: Algeria,
Botswana, Egypt, Ethiopia, Ghana, Kenya,
Mauritius, Namibia, Nigeria, Rwanda, South
Africa, Tanzania and Uganda.
FiT policies successfully increase the
overall energy production of both on and
off-grid regions, the report said. Moreover,
the decentralised nature of FiTs provides the
opportunity to empower communities and
to revitalise local democracy and self-gov-
ernance by allowing for alternative models of
ownership and governance.
Ansgar Kiene, director of the WFC Africa
Office, commented: “Several African countries
have already opened up their electricity market
to independent renewable energy power pro-
ducers. However, these countries have even
more potential for local economic development
if their policies are amended, by including a
more streamlined and transparent administra-
tive process and a lower entry threshold.”
The report identifies a variety of national
and international measures to shift financial
resources towards renewable energy uptake.
These include levies on fossil fuels and con-
tributions from the United Nation’s Green
Climate Fund.
FiTs have been successful at increas-
ing the use of renewable technologies
worldwide, the WFC said. As of 2012, 65
countries have implemented some form of
a REFiT, driving 87% of global PV capac-
ity. While the majority of these installations
have occurred in industrialised countries,
particularly Europe, the African continent still
has significant untapped renewable energy
potential.
Kulthoum Omari, sustainable development
programme manager of the Heinrich Böll
Foundation Southern Africa, stressed: “FiTs
are most successful when they are an integral
part of a country’s wider development strategy.
Thus, high-level political support and strong
buy-ins from civil society and the private sector
are crucial factors for the successful develop-
ment and implementation of a FiT.”
Other programmes such as the United
Nations Environment Programme (UNEP)
are also looking to improve Africa’s renew-
able energy development. In February, UNEP
entered into a partnership with the Global
Off-Grid Lighting Association and Germany’s
Federal Ministry for Economic Co-operation
and Development to launch a new initiative
which aims to help West African countries
shift to energy-efficient, off-grid lighting.
Policy Update
POLICY UPDATE
Feed-in tariffs could bring renewable energy to AfricaBy Nilima Choudhury, Solar Media - 20 March 2013
12
Where did you get the idea for crowd-
funding for solar?
I’d been working on the solar finance team at
Wells Fargo, helping to transact on smaller-
scale commercial projects. I left Wells Fargo
in 2011 and went travelling in Southeast
Asia and India. Volunteering on the Burma-
Thailand border I saw the value of distributed
solar in remote locations. In the developing
world, solar often competes against kero-
sene – which sometimes can be as much as
US$1/kWh. That makes solar economically
competitive in these locations, but sources of
capital are hard to come by; who is going to
finance this transformation of a market where
1.5 billion people have limited or no access
to electricity?
In the 1990s, about 1% of Africans had
mobile phones, today more than 60% of
Africans have mobile phones, that’s over 650
million people. Today, only 1% of Africans
have solar energy; we believe that just as
mobile phones leapfrogged landlines, solar
is going to leapfrog non-existent electricity all
over the world. But it’s going to require a lot
of capital – hundreds of billions of dollars –
and there doesn’t seem to be any company
that specialises in this emerging sector.
We launched SunFunder.com on a boot-
strap without outside funding in July 2012
and we have already raised more than
US$100,000, have 500 investors in 33 coun-
tries and returned principals to investors on a
project within nine months.
What did you learn from your time at
Wells Fargo that has helped you estab-
lish SunFunder?
In the US, tax equity financing for commer-
cial scale projects from 100kW to a couple
of megawatts can’t be done as one-off trans-
actions. At Wells Fargo we would fund
50 projects under one agreement and we
wouldn’t have to start from scratch on how
the deal was structured. That’s what we’re
trying to do with SunFunder, but with projects
that are even smaller.
We’re not looking to finance a transaction
but build a relationship. That may sound like
a finance cliché but I believe that is a really
important aspect of mitigating risk – to really
understand your borrowers. For us, it’s not
about providing seed money, it’s about pro-
viding scale money.
What are the limitations to crowdfunding?
We have a goal to finance US$1 billion of solar
deals by 2020, but we’ll need other sources of
capital to get there. We don’t define ourselves
as a crowdfunding company. We define our-
selves as a solar finance business that raises
money from multiple sources. A big part of
scale is looking beyond the crowd for sources
of capital from institutions, government enti-
ties and foundations.
What can large financial institutions
learn from SunFunder?
We can help prove that this market is real and
bankable, and that solar energy companies
working in developing countries are worthy
of getting loans and can repay them. We can
help prove that projects can be profitable by
doing what some of the larger banking institu-
tions aren’t ready to do. And we hope others
will follow. If a large bank enters this space we
view this as a success.
Is it a barrier that investors can’t earn a
return from crowdfunding?
Investors can have their principal returned
and the interest reinvested at the moment
because of Securities Exchange Commission
regulations. Regulatory barriers are definitely
limiting to some degree because our inves-
tors can only make zero interest loans, but
they can do so from anywhere in the world.
There are certainly people out there who
would participate to a greater extent if it earns
some of that interest back.
What are SunFunder’s main achieve-
ments to date?
In May, our first project loan was 100% re-
paid within nine months. This project, done
in partnership with Hybrid Social Solu-
tions, provides affordable solar energy for
100 families in Palawan in the Philippines.
We’ve also just launched a new partner-
ship with Fenix International, a Silicon Valley
renewable energy company that produces
income-generating energy solutions for
mobile telecoms in emerging markets. In
March, we won the Facebook Cleantech
Goes Social contest and a $25,000 prize to
develop an app that will connect investors
with end users.
We’re happy with what we’ve achieved, but
we’re just getting started.
Interview with Ryan Levinson
Ryan Levinson is co-founder of SunFunder, a California-based online investment platform that raises capital for solar projects in Africa and Asia. He tells Felicity Carus why he believes solar in the developing world is a bankable investment
Ryan Levinson is co-founder of SunFunder, a
California-based online investment platform
FEATURE
By Felicity Carus, Freelance Journalist - July 2013
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
13
While rooftop and off-grid applications
of solar photovoltaics are widely
recognised, the generation of bulk
power is still relatively new. Yet this sector has
become the main driver of growth in the global
solar business, especially as other segments
have subsided in recent years.
The worldwide installed capacity of 10MW-
plus PV plants is likely to reach 20GWp by the
end of the year. This represents a compound
annual growth rate of over 75% since 2008.
With an additional 40GWp of projects in the
development pipeline, we can expect this ex-
pansion to continue.
Europe was in the vanguard of these devel-
opments up until to 2011, since when North
America and Asia have made giant strides.
Wiki-Solar’s analysis of the global utility-scale
solar market shows that the majority of the
current global capacity of 17.5GWp is divided
between these three continents.
However, if you also include projects in de-
velopment, (see Figure 2b), it looks as though
South America and Africa are preparing to
join the first division.
Drivers for utility-scale solar power
Much of the early deployment of megawatt-
scale solar was stimulated by national and
international incentives such as feed-in tariffs,
Renewable Portfolio Standards and the Clean
Development Mechanism. These succeeded in
increasing global volumes, so solar manufactur-
ers were able to drive prices down. This in turn
has made solar electricity more cost-effective in
relation to traditional sources of generation, and
subsidy levels have been progressively reduced
While incentives are still important in some
markets, PV is now becoming a commercially
competitive option, especially in locations with
good sunlight levels, high electricity costs, and
traditional power shortages. In some regions
solar power can compete without subsidy; in
others it is the key to a reliable electricity supply
to meet growing energy demands.
In key South American markets, for exam-
ple, solar has reached what the industry calls
‘grid parity’ and utility-scale solar projects are
being developed without subsidies. At the
same time, rapidly developing regions in India
and other countries are turning to solar power
to meet their growing energy requirement and
improve security of supply. There are indi-
African solar goes mainstream
In the last five years, deployment of utility-scale PV power stations has increased explosively, to become the fastest-growing sector of the solar industry. Wiki-Solar founder Philip Wolfe explains how Africa is starting to emerge as a player in the generation of mainstream solar power
Figure 1. The global annual deployment of utility-scale
(10MW+) solar
Figure 2. World market by continent; installed and total pipeline
By Philip Wolfe, Founder, Wiki-Solar, October 2013
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
14
cations that similar drivers apply to markets
throughout Africa.
Utility-scale solar installed in Africa
The first utility-scale solar plants in the con-
tinent were installed in Réunion and Cape
Verde in 2010 with an overall capacity of about
20MWp. The first commissioned project on the
mainland was the 15MWp installation by Abu
Dhabi’s Masdar in Mauritania in April 2013.
Because of the relatively early stage of devel-
opment of the African market, regional figures
in this report include projects of 5MWp and
over, as distinct from the 10MWp threshold
used in Wiki-Solar’s global figures in Figure 1.
The largest system completed to date is
the 75MWp system, commissioned in Sep-
tember by Scatec at Kalkbult in South Africa’s
Northern Cape. This project is the first large-
scale installation to be completed under the
under South Africa’s catchily named Renew-
able Energy Independent Power Producers
Procurement Programme (REIPPP).
Projects in development in Africa
Several other plants within round one of the
REIPPP are under construction; expected to
contribute a further 450MWp of capacity by
mid-2014. When all projects are completed
this round should deliver 632MW AC (equiva-
lent to maybe 728MWp, the rated DC capacity
of the arrays). REIPPP round two approved a
further 417MW (around 487MWp) of capacity,
and 450MW is reported to have been recently
selected from bids for round three, which
closed in August. These figures are not includ-
ed in any of the charts in this article.
While South Africa leads the continent in
installed hardware on the ground, many other
countries have solar capacity in development.
Most of the leading East African countries
have announced plans to develop projects on
a scale between 30MW and 120MWp.
In West Africa a 155MWp project has been
consented in Ghana for British developers Blue
Energy. It will feed power into the transmission
line between Ghana and Côte d’Ivoire. A bilat-
eral programme between Nigeria and Germany
intends to develop initially 420MW of capacity
divided between nine northern Nigerian states.
In North Africa, projects are in development
in Libya and Egypt. Projects in north-west Af-
rica had mainly been linked to the Desertec
project, which appears to have stalled at the
moment.
The latest development to be announced in
the continent is Swaziland’s 100MW project
near Manzini. This could substantially enhance
the country’s security of supply, contributing
up to 15% of its energy, according to recent
reports (some of which said 50%, though this
figure is probably wrong based on Swaziland’s
published electricity consumption).
Solar power station technology
Hardware solutions adopted in African solar
power stations mirror those in the leading
Asian markets. Polycrystalline silicon technol-
ogy is most widely used. Apart from the plant
in Mauritania, thin-film cells have yet to enter
the utility-scale market, though they are com-
monly used in off grid systems in East Africa,
for example.
Free-field projects typically adopt a
North-South fixed tilt mounting structure.
Theoretically, the solar regime and proximity
to the equator would favour single-axis track-
ing. After the first projects are completed, and
operations and maintenance expertise has
built up, I would expect to see some develop-
ers move towards one-axis trackers.
Most project designs have adopted cen-
tralised inverters of 500kW-plus, and there is
no reason to expect a move towards string
inverters.
Leading market participants
It appears that much of the project definition
is undertaken by partnerships between local
enterprises and experienced developers from
more established markets. International play-
ers with the largest pipelines include Norway’s
Scatec, SunEdison of the USA, Ireland’s
Mainstream Renewables, Thompson Cole
and Blue Energy from the UK.
Engineering, procurement and construction
(EPC) contracts, similarly, are being awarded
mainly to participants from Germany, Spain,
Ireland and India with an established inter-
national track record. South Africa’s Aveng,
WBHO and Kensani are also active. In most
other cases, local companies are used as
subcontractors; and this will nurture an ex-
perience base capable of assuming full EPC
responsibilities in the future.
There is no sign that the established elec-
tricity utilities have yet become involved in
developing their own solar projects. Eskom
and others are, however, playing an active
Figure 4. Regional distribution of utility-scale solar
projects
Figure 3: League table of African countries with utility-scale 5MW+ solar projects (Source: Wiki-Solar.org 2013)
Operating Total inc developing
Country Plants MWp Projects MWp
South Africa 2 86.4 32 1,479.3
Nigeria 570.0
Uganda 500
Ethiopia 3 300
Zimbabwe 2 192.6
Kenya 4 189.8
Ghana 1 155.0
Swaziland 1 117.6
Egypt 1 20.0
Reunion 2 15.6 2 15.6
Mauritania 1 15.0 1 15.0
Mauritius 1 15.0
Libya 1 14.0
Rwanda 1 8.5
Tanzania 1 6.5
Cape Verde 1 5.0 1 5.0
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
15
and supportive role through their collabora-
tion over grid connections.
In common with most world markets,
the majority of crystalline solar modules are
sourced from China and the Far East. Inverter
supply, too, favours established producers,
mostly in Europe.
Project financing
Information on the financial structure of proj-
ects remains sketchy, but seems to be similar
to other free-market economies. The eventual
plant owner or independent power producer
(IPP) provides the equity, typically around 30%
of the project costs. Local IPPs often seek to
spread the equity investment; so overseas in-
vestors are already active with, for example,
Google investing US$10 million in one of the
REIPPP round two projects.
The balance of capital required comes from
debt financing, sometimes supplemented by
grants from the host country. National and
international development banks, notably the
Development Bank of Southern Africa, have
been involved in providing debt. The region’s
leading commercial banks, including Stan-
dard, FirstRand, Old Mutual, Investec and
NedBank, have also been active participants.
Incentive mechanisms also enhance the
financial returns of solar power projects in
Africa. Most existing projects are participants
in the UNFCCC’s Clean Development Mecha-
nism, allowing them to sell the benefit of their
emissions savings. Feed-in tariffs are being
adopted in Ghana, for example, while South
Africa supports the power price through the
bidding mechanism under the REIPPP.
The potential for utility-scale solar in Africa
Much of Africa enjoys an environment that is
particularly favourable to solar power genera-
tion: good sunlight levels, unreliable electricity
supplies and high energy costs. The continent
has the opportunity to leapfrog directly to a
reliable and renewable energy system; miss-
ing out the interim fossil-fuel step that is now
such a millstone for other parts of the world.
It is crucial that the pioneering projects now
being installed provide good service, and
adequate returns to their investors. That will
ensure that more capital will be available, so
Africa can achieve its rightful place amongst
the top adopters of mainstream solar power
generation.
Solar & Off-Grid Renewables Africa
With some of the world’s fastest growing
economies but lowest electrification rates, the
African continent has huge potential for renew-
able energy forms such as solar. Indeed, some
countries are already beginning to take notice of
the opportunities renewable energy offers, with
Kenya setting a target of almost 19GW of PV
capacity by 2030. Organised by Solar Business
Focus publisher Solar Media, Africa Solar & Off-
Grid Renewables is a two-day event aimed at
showcasing the exciting East Africa region of-
fering top-class networking opportunities for
existing and prospective industry players. The
programme will feature contributions from lead-
ing figures, including Davis Chirchir, Kenya’s
cabinet secretary for energy, Isaac Kiva, director
of renewable energy at Kenya’s Ministry of En-
ergy and Guy Lawrence, chief executive of East
Africa Solar. Topics under discussion include the
policy environment for solar and other renew-
ables in East Africa and methods for accessing
project finance.
Solar & Off-Grid Renewables Africa, 4-5 March
2014, Sarova Panafric Hotel, Nairobi, Kenya.
Planned and operational large-scale projects in Africa, where site has been defined. Source: Wiki-Solar.
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
16
On 19 August, bidding for contracts under the
third round of South Africa’s state-backed re-
newable energy programme closed. It would
be going too far to say the day registered as
an international event, but for those in the
know it was a date loaded with some an-
ticipation. From almost nothing, the first two
rounds of South Africa’s uninspiringly entitled
‘Renewable Energy Independent Power Pro-
ducers Procurement Programme’ (REIPPPP)
have kick-started a 1GW solar industry. Now,
with round three bids in, and a further 400MW
of PV up for grabs, there is a tangible air of
excitement within the industry.
“With round three, there is a sense of huge
competition, and everyone knows they will
need to sharpen their pencils if they want to
win a project,” says Nuno Gil, deputy man-
aging director of Kensani Eaglestone.
Kensani Eaglestone is a partnership
between the two investment houses Kensani
Capital and Eaglestone, of which Gil is a
founding partner. It has acted as investment
adviser for a number of the big REIPPPP
projects – the round one Letsatsi and Lesedi
projects, each 75MW (DC), and the 96MW
(DC) round two Jasper project. The com-
pany has been working on another six PV
projects for round three, and Gil is expect-
ing it to attract a massive amount of interest.
“There is around 400MW of solar available in
round three, but we have heard there may
be 2-3GW of projects ready to be put in,” he
says. “What the programme has achieved is
quite a landmark.”
On paper at least, the progress of the
REIPPPP has indeed been explosive. Under
round one, 631MW of PV capacity across 19
separate projects was awarded; under the
smaller second round, eight further projects
were chosen, collectively totalling 417MW.
Investment in solar through the REIPPPP
has so far reached around US$2.83 billion,
and it has brought a swathe of leading mar-
ket players into the country, with most of the
big-name US, European and Chinese devel-
opers and manufacturers jostling for a slice
of the action. Even internet giant Google
has entered the fray, investing a stake in the
Jasper project.
“The decision makers should be very
proud of what they’ve achieved with the pro-
gramme,” Gil says. “They’ve been able to
attract a large amount of international atten-
tion and a large number of international
investors.”
The level of interest in the REIPPPP is testa-
ment to what Gil believes has, despite a few
glitches along the way, been an extremely well
run programme. Of particular note, he says,
is the fact that projects have reached finan-
cial close in such a short space of time. “If
you look at round one, most of the projects’
preferred bidders were closing in a matter of
weeks. It was a bit of a shock for all the peo-
ple on the ground. Some of the advisers and
lawyers were used to doing one project a year
in South Africa; now they were closing 28 in
the same time period.”
Of course, having become so popular,
the REIPPPP has also become far more
competitive. This is likely to be thrown into
sharp relief in round three, which Gil says will
require bidders to price projects extremely
aggressively if they are to be successful.
Some analysts believe that with the tar-
iffs for project power purchase agreements
(PPAs) under rounds one and two of the
REIPPPP having already been driven down
significantly for PV – 40% on average – there
is little further room for manoeuvre here.
Instead, says Gil, project bidders will have
to look for other ways of squeezing costs to
make their bids competitive.
“You saw tariffs reduce quite considerably
in round two, which is a measure of some
development in the industry, but most of it is
down to people knowing they needed to be
competitive if they want to win,” Gil explains.
“A number of players were caught by sur-
prise [in round two] because they were still
looking for large development premiums –
trying to extract very big value from those
projects – and some of them didn’t get the
projects as a result.
“In round three, bidders need to do some
very good homework regarding their cost
structure. They need to be as competi-
tive as possible; there is no room for you
to have lots of contingencies. If they want
to be successful development premiums
should be kept to the minimum level pos-
sible. Otherwise the likelihood of not winning
is huge.”
Another area where increased competi-
‘What South Africa has achieved is a landmark’
FEATURE
Nuno Gil has been involved in putting together some of South Africa’s biggest solar investment deals, including one with internet giant Google. He talks to Ben Willis about what the rest of the continent could learn from South Africa’s experi-ences
“In countries where government can provide leader-
ship, then people can take some of the lessons of South Africa”
Nuno Gil, deputy managing director of Kensani Eaglestone
By Ben Willis, Solar Media - September 2013
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
17
tion in the programme is having an impact
is in the cost of capital to fund projects,
according to Gil. “We’ve seen quite a step
down in requirements in the equity return for
shareholders,” he says. In round one, inves-
tors were looking for a 17-18% return in real
terms, or 22-23% in nominal terms. In round
two this had fallen to 15-16% and 20-21%
respectively. “When you come to round three,
you’ll see something in the 11-12% region, or
17-18% nominal,” says Gil. “So from round
one to three, equity returns may have a drop
of 5-6%, which is huge.”
Gil ascribes this decrease in invest-
ment return expectation partly to the
financial community’s growing confidence in
and understanding of what was a relatively
untried asset class in South Africa. But the
main factor he says is increased competi-
tion, with more aggressive pricing of bids
and more players coming into the market,
targeting South Africa as one of their long-
term strategic opportunities.
Investment model for Africa
The REIPPPP’s ability to attract such a
high level of attention, Gil says, could make
it a useful blueprint for other countries in
Sub-Saharan Africa and other parts of the
developing world looking to embrace re-
newable energy. He identifies a number of
central attributes that he believes have made
the programme so successful in exciting the
market. Apart from its scale, he says two key
elements of the initiative have been the politi-
cal support it has enjoyed and the manner in
which it has been run.
“You always have doubts about poli-
ticians changing their minds, but at the
moment there is a strong support for the
programme, so people expect this to be a
long-term strategy that will be implemented,”
he says. “Also the people who are running
the process are doing it in a very efficient
and transparent way. And so you can see
there is someone driving the process; it’s not
just some random 100MW in the middle of
nowhere. It’s a programme run centrally by
the government, which has set up a team
just to run the process.”
Another important factor Gil says is the
PPA framework developed by the South
African government to underpin the pro-
gramme. Rather than leaving bidders to
negotiate separate PPAs for individual
projects, the REIPPPP sets out a draft PPA
with the national utility Eskom, a draft imple-
mentation agreement, tender rules and so
on. “People may not like some bits and piec-
es, but overall the documentation sets out
the rules clearly and there is a sense that the
awarding of the projects is not something
very obscure,” Gil says.
A further attraction is the fact that the
PPA is guaranteed by the government of
South Africa – a country that Gil points out
has better credit worthiness than many of its
European counterparts: “So you have that
perfect mix: a country that is quite developed
compared to its neighbours, strong PPAs
and politicians who support the programme.
And that altogether, with the size, makes this
a huge success and in lots of ways.”
Looking to other parts of Sub-Saharan
Africa, Gil believes there is both the appetite
and opportunity for programmes of simi-
lar scale and approach to the REIPPPP. He
picks out countries that have strong econ-
omies and are investor-friendly, particularly
Ghana and Nigeria, as those that could ben-
efit most from an REIPPPP-type venture.
Of course, the scale of programmes in
these countries will depend on circumstances
particular to each case, such as credit wor-
thiness, grid connection issues and so on,
meaning they are unlikely to follow the South
Africa model to the letter. But the core princi-
ples of South Africa’s programme Gil believes
could have a lot to offer other countries.
“If you have a good centralised structure
in the government, and a standardised PPA
framework that can entice the private sector,
that will be a huge step forward,” he says.
“In some other countries in sub-Saharan
Africa, you sometimes see a willingness to
do renewables and solar, but then you have
the difficulties of which steps you need to
take to get the right PPA. And then each
project you need to negotiate PPAs on a
standalone basis, which makes things dif-
ficult; it’s impossible to do a large-scale
programme on that basis. But in some of the
countries where government can provide a
bit of a central leadership, then people can
take some of the lessons of South Africa.
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
18
More than a century after the inven-
tion of the light bulb, a quarter of
the global community remains
without access to electricity with most of
these people in developing countries. The
situation is particularly acute in Sub-Saharan
Africa. According to the International Energy
Agency, lack of access to national electricity
grids for rural populations in East Africa is
98% in Tanzania, 95% in Kenya and 96% in
Uganda.
To turn this situation around, poor com-
munities in rural areas need access to
different energy options, including con-
ventional and non-conventional sources.
As traditional fuel prices augment, and PV
module prices plummet, solar energy gen-
eration is increasingly becoming a more
effective and efficient solution for rural elec-
trification.
As non-conventional energy options go,
off-grid decentralised solar power can pro-
vide a long-term solution as an alternative to
inefficient, polluting and costly fuels such as
kerosene to meet basic energy services such
as lighting.
Solar may not be developing as rapidly
in Africa as in Western countries, but with
uncertainty hanging over the European and
Chinese solar markets and the US and India
embroiled in a trade dispute, this is the time
for solar companies to scale up their opera-
tions in Africa to cash in on the expanding
off-grid market.
“Africa is on a good trajectory,” says John
Keane, managing director of SunnyMoney, a
social enterprise run by international devel-
opment charity SolarAid. “Yes there are a lot
of risks, yes there’s bureaucracy, yes there is
corruption, but there are also huge opportu-
nities.”
Iris Meyer, spokeswoman for PV system
integrator IBC Solar concurs: “Africa’s infra-
structure, growth rate of population and
increasing energy demand are the main rea-
sons for a promising market development of
PV off-grid solutions.”
Accessing finance: start small
One major barrier for project developers is
access to the affordable financing options
needed to ensure their forays into African
territory prove lucrative given the relatively
high costs of developing solar in some parts
of Africa. This requires national governments
to implement an attractive regulatory frame-
work to woo developers, but as Michael
Deaves, research analyst at renewable en-
ergy consultancy ClearSky Advisors notes,
“these governments aren’t flushed with
cash”, so there is only so much they can
provide.
One way to counter the problem of financ-
ing is to start on a small scale. The World
Future Council (WFC), a charity made up of
governments and commercial enterprises
from all five continents, says off-grid solar is
the perfect solution to keeping down costs
and electrifying populations cut off from the
grid.
Johan Cilliers, regional director of busi-
ness development for Sub-Saharan Africa
at First Solar says numerous countries in
Africa are already using this model to elec-
trify rural communities. “If you look at Kenya,
if you look at what’s happening in Tanzania,
Ghana, Namibia – all these countries now
have regulations in place and they are pur-
Electrifying Africa: solar’s next frontier
Despite enjoying rapid economic growth, many parts of Sub-Saharan Africa are inadequately electrified. This makes them ripe for solar deployment, particularly off-grid, says Nilima Choudhury
Sou
rces
: Gug
uple
x Te
ch, I
BC
Sol
ar, M
artif
er S
olar
, Wor
ld F
utur
e C
ounc
il
By Nilima Choudhury, Solar Media - April 2013
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
19
suing renewable energy there. Countries
that are still getting there are the Democratic
Republic of Congo, central Africa, the Ivory
Coast, but it is changing.”
The WFC notes that some countries
in Africa provide low-interest credit lines
for renewable projects through multilat-
eral development banks and international
donors. However, the WFC points out that
local banks often add interest to these
loans, resulting in higher borrowing for the
developer. “Governments and international
financial institutions need to ensure the low
rates of borrowing are passed on to project
developers,” advises the WFC.
Feed-in tariffs
According to a WFC report, policies such as
feed-in tariffs (FiTs) could serve as an alter-
native to getting financing for projects from
international and domestic banks. “When
tailored to the local context, [FiTs] can suc-
cessfully increase overall energy production
both on and off the grid,” the report says.
Opinion among developers on the mer-
its of FiTs for off-grid solar in Africa is
mixed. “Subsidies are not going to last
forever,” says Bertrand Belben, director
of international business development at
Solarcentury.
Fabian Jochen, head of German PV
developer juwi’s off-grid section believes
stable FiTs, as in Europe, could encourage
developers to dip their toes into the African
market.
And Deaves believes FiTs could be par-
ticularly well suited to distributed or off-grid
solar: “In lots of places in Africa where infra-
structure isn’t built yet, it might be possible
to finance a FiT programme through the cost
that they would have had to spend on trans-
mission and infrastructure. A FiT would
incentivise distributed solar which needs less
of that infrastructure so instead of spending
the money that they could pay for the FiT
programme.”
Local help
For manufacturers and suppliers, financing is
not the only concern. In markets that greatly
value face-to-face introductions it is often
difficult getting to key decision makers and
building contacts.
A local skills base needs either to be
in place or developed for the initial design,
installation and maintenance of solar power
plants, bringing the concept of a solar indus-
try without the help of international support
closer to reality.
Jochen believes the best way to pen-
etrate a market is with local people at the
helm. “When it comes to off-grid turnover
per project is quite small so often it doesn’t
make sense to go with a company’s own
subsidiary. This is the main reason why we
work with partners,” he says.
Smaller companies like SolarAid and
retailer One Degree Solar have found well-
connected local partners also help reinforce
their credibility.
Africa: a force to be reckoned with?
Despite these challenges the opportunities
in Africa are huge. According to the World
Bank, out of the 20 fastest-growing global
economies today, 14 are in Africa. Fuelled by
the mobile phone and the internet, demand
for self-generation and more secure energy
supplies is growing, even in the most remote
areas.
Michael Franz is project manager for the
EU Energy Initiative – Partnership Dialogue
Facility, a European body set up to promote
access to sustainable energy in emerging
economies.
Franz identifies the solar home systems
market in Afirca as one which holds vast
potential for business development. While
it used to suffer from quality and mainte-
nance issues, this sector is being given fresh
momentum through initiatives that link solar
installations with remote monitoring systems
for maintenance and billing.
To encourage market growth, Franz says
governments need to put in place policies
and regulatory frameworks that can pro-
vide a stable and attractive environment for
private investment. Access to financing at
the various stages of project development
is an area that still requires a lot of work,
he says.
“My impression is that since many of these
markets are relatively young, experience in
both private and public sector is low and risk
perception is high, which translates straight
into costs. There is a catalytic role here that
could be played by public money and devel-
opment partners on a value-added basis,
that is to say where it actually makes sense,”
Franz says.
“Any external support should be tailored
well to the actual needs of all market players
and it should be oriented towards promoting
sustainable solutions and market develop-
ment.”
Another perennial concern for solar com-
panies looking to do business in Africa is the
fear of corruption. But First Solar’s Johan
Cilliers believes this to be a “perceived” risk:
“Yes there are a lot of problems in Africa –
like many other countries in the world – but
if you manage it correctly, if you approach it
correctly, if you have a proper plan, you can
mitigate your risks.”
In many countries, producing solar power
has, or will in the near future, become
cheaper than grid-electricity. This could
bring down power costs, increase grid sta-
bility, generate local value-addition and
employment, and substitute more polluting
electricity sources.
IBC Solar’s Iris Meyer says: “The growth
and size of the African renewable energy
market strongly depends on political stabil-
ity. We have seen in the North African states
how fast this can change. It is always a
question of how the government spends its
money and how willing the upper class soci-
ety is to share their wealth.”
Rural electrification through mini-grids has
been done for decades; however, the addi-
tion of PV components or replacing diesel
generators altogether through a combination
of renewable energy and batteries is gaining
momentum.
Franz believes that a substantial potential
is now materialising in both on- and off-grid
self-consumption: “In many countries, solar
PV costs are now reaching parity with grid
electricity tariffs. For off-grid, PV is cheaper
than diesel in all but the most extreme sce-
narios.
“I believe we’re currently only seeing the
tip of the iceberg in terms of market poten-
tial. New regulatory instruments, such as
net-metering, could integrate the self-con-
sumption markets with grid development
and make it a viable and complementary
source in the energy mix.”
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
20
Kenya
Kenya is the
most ad-
vanced in
terms of ener-
gy strategy out
of all the coun-
tries in Africa. Growth of solar energy will be
mostly come from off-grid projects. Overall
electrification doubled in just eight years,
reaching 30% in 2011, although only 4% of
rural areas are connected.
Tariffs: Kenya has a FiT, implemented in
2008, but it is too low to give a major boost
to solar on its own. The FiT is only applicable
for grid-connected projects except solar PV
which is eligible for isolated mini-grids.
Difficulties: Procuring project financing for
small projects; lack of local expertise and
technical capacity; high costs of connecting
new plants to the grid; accessing land for
projects.
Outlook: Kenya boasts the first East African
manufacturer and supplier of solar modules,
Ubink.
Projects: Kenya Power & Lighting, Kenya’s
state-owned utility, has announced plans to
invest US$6.5 million in the development of
off-grid renewable energy projects in Kenya.
Solar installer Joju Solar has completed a
2.2kW off grid PV system at a hospital clinic
in Kenya.
Tanzania
Tanzania is only
just beginning
to develop a
renewable en-
ergy strategy
and, according
to the UK Trade
and Investment government body, now is
the time for businesses to explore Tanzania
as there is little competition.
Tariffs: There is no differentiation based
on technology or size. Grid-connected:
US$0.094; mini-grid: US$0.297
Difficulties: The lack of long-term, low-in-
terest financing has been a key challenge for
developers. Despite a US$23 million credit
line from the World Bank for renewable en-
ergy projects, loan interest rates remain high
and have short payback periods of only 7-10
years.
Outlook: In 2012 Tanzania’s utility company
TANESCO announced a surplus of over US$3
million and stated that government subsidies
are no longer needed. If this trend contin-
ues, WFC believes TANESCO will regain its
credit worthiness, which will encourage more
investment in the country’s FiT.
Projects: Module manufacturer Canadian
Solar signed a module supply agreement with
Tanzania’s Zara Solar to deliver 85kW of mod-
ules to Zara Solar for off-grid PV projects in
Tanzania.
Rwanda
A combination
of high elec-
tricity and fuel
prices, and a
growing econ-
omy, as well as
export opportunities into the Democratic Re-
public of the Congo (DRC), should increase
the overall demand for solar PV in Rwanda.
Tariffs: Currently only hydropower is avail-
able under the country’s feed-in tariff policy
although tax breaks are available for PV.
Difficulties: A lengthy application process,
complicated by a lack of standardised PPAs
as well as frequent management changes
between institutions, causes long and often
costly delays.
Outlook: The government’s rural electrifica-
tion drive, which is focused on micro-hydro,
solar and wind, is likely to boost demand and
encourage growth in the sector.
Projects: Rwanda is home to the “Kigali
Solair” solar power plant that generates
250kW and feeds into the national electric-
ity grid. The plant was installed by Juwi in
2008.
Uganda
Uganda aims
to increase the
use of new
renewable en-
ergy from the
current 4% to
61% of total energy consumption by 2017.
In March 2013 the Ugandan government
removed solar PV from its feed-in tariff pro-
gramme stating PV module prices had fallen
enough to not need further government sup-
port.
Tariffs: PV was removed from Uganda’s re-
newable energy FiT programme.
Difficulties: High interest rates and short
repayment periods make financing small- to
medium-sized projects difficult.
Four African countries to watch
FEATURE
Sarova Panafric Hotel, Nairobi, Kenya4 - 5 March 2014http://africa.solarenergyevents.com
21
Solar and Off-Grid Renewables Africa
The organiser: Solar Media
Contacts
Sarova Panafric Hotel, Nairobi, Kenya
4 - 5 March 2014
SPONSORSHIP OPPORTUNITIES:
Sylvia Powell
Office: +44 (0)20 7871 0122
Emmanuel Anolue
Office: +44 (0)20 7871 0122
OPERATIONS & GENERAL ENQUIRIES:
Sue Bradshaw
Office: +44 (0)20 7871 0122
Hilda Ho
Office: +44 (0)20 7871 0122
PROGRAMME, PARTNERSHIP &
SPEAKER OPPORTUNITIES:
Maire McGuire
Office: +44 (0)20 7871 0122
Solar Media Ltd.
5 Prescot Street, London E1 8PA, United Kingdom
+44 (0)20 7871 0122 | www.solarmedia.co.uk
Solar Off-Grid Renewables Africa is organised by Solar Media Limited, a diversified publishing and events business, servicing the global solar
energy supply chain. Solar Media owns and operates five websites, international events and print titles dedicated to producing the highest
quality technical and news content for the PV industry. Headquartered in London and with offices in the USA, China and Greece, Solar Media
publishes in English and Chinese (Mandarin).
What is it and who will you meet?
Solar and Off-Grid Renewables Africa is a major new international,
top-level conference and networking event.
Solar and Off-Grid Renewables Africa aims to support and accelerate
the deployment of solar and off-grid renewable energy in Africa, and
break down the barriers to development - financial, political, techno-
logical - by bringing together key stakeholders, including investors,
policy makers, developers, energy companies, financiers, NGOs,
manufacturers and suppliers.
By attending, you will:
• learn about major project opportunities in the African solar and
off-grid renewable energy markets – some of the most exciting
anywhere in the world with huge potential
• meet key national & regional government officials plus economic
and technical experts
• debate with policy makers, investors, developers, manufactur-
ers and NGOs
• hear about successful off-grid projects from around the world
• discover the opportunities for solar and renewable manufactur-
ing investment in Africa
At the end of November Bloomberg ran a misleading article suggesting the Kenyan government had placed a moratorium on any licences for
solar or wind projects development being awarded. Subsequent research by PV-Tech.org (a subsidiary of Solar Media), based on numerous
interviews with senior government and regulatory officials, has demonstrated this not to be the case. Kenya has received applications for more
PV capacity than its grid can currently handle, meaning it is having to control how much it actually approves. However, we understand that the
government remains on track to kick start a market for large-scale PV in the country and is currently considering a number of applications for
projects that will qualify for its feed-in tariff. These projects will contribute towards the 5,000MW of new electricity capacity the Kenyan govern-
ment is planning to build by 2017.
Although Kenya is the host country and a focus for our Solar & Off-Grid Renewables Africa event in March 2014, the event will also be looking
at neighbouring countries in East Africa, including Ethiopia, Uganda, Djibouti, Rwanda, Tanzania and Burundi.
Kenya update
Discover growth opportunities in Africa's emerging solar and off-grid renewable energy markets