African renewable installations receive financing

  • Market: Metals
  • 01/15/21

Investors are tapping into the potential for installing renewable energy capacity in African countries, with a slew of projects lined up for 2021.

In sub-Saharan Africa, fossil fuel sources dominate electricity supply. But with the overall cost of wind and solar installations having fallen sharply on lower raw material prices, governments and utilities are turning to renewables to increase electricity access.

Nigeria-based Daystar Power, which supplies solar energy to businesses in west Africa, has raised $38mn in funding to expand its operations in Nigeria and Ghana and increase its presence in the Ivory Coast, Senegal and Togo. The company plans to expand its installed capacity to over 100MW from 23MW. Investors include STOA, a French impact infrastructure fund, which aims to invest more than 50pc of its capital in Africa and in renewable energies. The financing round comes after the company raised $10mn in March 2019.

Nigerian solar power provider Starsight has received a second $10mn financing injection from Scandinavian investment funds Finnfund and Norfund to supply solar energy to businesses in Nigeria and Ghana. Since the first round in June 2019, Starsight has expanded its portfolio to over 500 sites, with 36MW of installed generation capacity and 28MWh of storage capacity.

Wind power

Spain-headquartered wind turbine supplier Siemens Gamesa is expanding in Africa with its first project in Ethiopia.

The company has signed a deal to supply 29 wind turbines to state-owned Ethiopian Electric Power for its 100MW Assela wind farm, which is expected to be commissioned by the start of 2023.

Ethiopia has set an ambitious target to meet 100pc of its domestic energy demand with renewables by 2030. The country has the potential to expand its installed wind capacity to 10GW from 324MW, according to the African Development Bank (ADB).

The ADB is working with industry association Irena on joint initiatives that support investments in low-carbon energy projects across Africa. A recent Irena report shows that the fall in the price of solar panels and wind turbines has brought the weighted average levelised cost of electricity in sub-Saharan Africa to 30pc below average electricity prices.

Driving demand

The potential to reduce electricity prices in developing economies is expected to drive demand for renewable energy equipment in a region where two-thirds of the population lack electricity access.

Total renewable generation in the region, at an estimated 975TWh, represents just 1pc of the overall potential for renewable capacity, Irena said.

Italian renewable firm Enel Green Power (EGP) has signed a joint venture partnership with a Qatar Investment Authority (QIA) subsidiary to build and operating renewable plants. QIA will acquire 50pc of EGP's stake in around 800MW of projects in operation and under construction in South Africa and Zambia. Four wind projects in South Africa with a combined capacity of 587MW are expected to start operating in 2021.

UK-based gold mining firm Pan African Resources has signed an engineering, procurement and construction agreement with renewable energy firm Juwi South Africa to install a 9.975MW solar photovoltaic plant at its Evander Mines site. Construction will begin in the first quarter of 2021, with first power expected in the third quarter. Juwi has built six utility-scale solar plants totalling 207MW of capacity under the South African government's renewable energy independent power producers' programme.

UK-based ARC Power, which opened its first solar business park in Rwanda in November, has announced plans to open another 20 by the end of 2021 and 45 over the long term.

In North Africa, the Moroccan agency for solar energy has issued a tender for the design, financing, and construction of 400MW of solar capacity across six sites in the second phase of its Noor PV project. The 400MW first phase was tendered last year. The deadline for the new tender is 31 January.


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