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.

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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

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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.

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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: Gug

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By Nilima Choudhury, Solar Media - April 2013

FEATURE

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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

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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

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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

spowell@solarmedia.co.uk

Office: +44 (0)20 7871 0122

Emmanuel Anolue

eanolue@solarmedia.co.uk

Office: +44 (0)20 7871 0122

OPERATIONS & GENERAL ENQUIRIES:

Sue Bradshaw

sbradshaw@solarmedia.co.uk

Office: +44 (0)20 7871 0122

Hilda Ho

hho@solarmedia.co.uk

Office: +44 (0)20 7871 0122

PROGRAMME, PARTNERSHIP &

SPEAKER OPPORTUNITIES:

Maire McGuire

mmcguire@solarmedia.co.uk

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