Africa: The Future Looks Bright for African Solar Power

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Surge in investment and implementation of solar power projects is hoped to address developmental needs.

On January 25th the World Bank introduced ‘Scaling Solar’, an initiative aimed at creating favourable market conditions for private solar projects across Africa, increasing the energy supply to both residential and commercial customers. This is one of a number of projects that have become operationalised in recent months.

Africa provides huge scope for solar projects, with abundant sunlight and open-space, solar power could provide novel solutions to development needs.

Scaling Solar is combining resources from the World Bank, the Multilateral Investment Guarantee Agency (MIGA) and finance from the International Financing Corporation (IFC). The IFC website quotes Vice President for Global Client Services, Jean Philippe Prosper, explaining that “by quickly delivering affordable electricity to previously un-reached populations, significant progress can be made on other development goals”.

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According to the IFC a number of obstacles have constrained the development of solar energy in Africa including:

  • A lack of utility-scale projects due to unique structures and features of African markets
  • A lack of competition and inexperienced investors
  • High transaction costs that constrain smaller projects
  • Perceived risks and costs of capital
  • The limited institutional capacity of African governments

The Scaling Solar initiative seeks to overcome these hurdles by providing access to solar technology, increased participation and risk management and credit enhancement products.  The World Bank hopes to build upon its experience of large and small scale solar power, particularly the Renewable Energy Independent Power Producer Program (REIPPP) in South Africa.

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Under the REIPPP in South Africa a number of successes have been highlighted; on March 6th 2015 Abengoa and the Industrial Development Corporation (IDC) announced the operationalisation of Africa’s first concentrated solar power project (CSP), the 100 Megawatt (MW) KaXu Solar One Project. Abengoa and IDC are also implementing the 100 MW CSP Xina Solar Project expected to be commissioned in 2017 and the Khi Solar One Project, a 50 MW CSP project.

In Rwanda, Gigawatt Global Ltd have implemented East Africa’s first utility-scale energy project, a 8.5 MW solar field at Rwamagana, 60km from Kigali. The solar field consists of 28,360 PV panels across a 20 hectare plot of land and is expected to provide 6 % of Rwanda’s energy needs.  Chaim Motzen, Managing Director and Co-founder of Gigawatt Global Ltd, told Ventures Africa that the project was testament to the viability of financing and building large utility-scale solar in Africa.

In Ghana, plans are under-way for the Sankana project; Home Energy Africa Ltd are hoping to construct a 100 MW project in the Nadowli-Kaleo district by 2016. Ghana has already seen huge investments in utility-scale solar projects including the Nzema Solar Power Plant expected to be one of the largest in the world, report Ventures Africa.

The increased positivity around African solar power is due largely to rapidly improving technology and cost efficiency. The International Energy Agency predict a huge increase in African solar projects, for both residential and commercial uses, and the World Energy Outlook 2014 states that by 2040 renewable energy is expected to account for 45% of power generation capacity across the continent.

Find out more in the Africa Research Bulletin

Power: Cameroon
Economic, Financial & Technical Series
Vol. 52, Issue 1, Pp.20722-20725

Power: Egypt
Economic, Financial & Technical Series
Vol.51, Issue 12, Pp.20686A- 20689C

World Energy Outlook 2014 – Energy in Sub-Saharan Africa Today
Economic, Financial & Technical Series
Vol.51, Issue 10, Pp.20615A-20615B

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