Storage & Hybrid

A landmark initiative that brings together public, private, and development capital from UAE institutions, is providing $4.5 billion in funding to boost Africa’s energy transition efforts as the continent looks to close an energy deficit that has left 600 million people without access to electricity. The UAE finance initiative is drawing its support from the Abu Dhabi Fund for Development (ADFD), Etihad Credit Insurance (ECI), Masdar, and AMEA Power – all UAE based institutions with experience funding and developing renewable energy projects in emerging markets. Africa50, an investment platform formed by African governments and the Africa Development Bank (AfDB), is also part of the UAE finance initiative. The COP28 President-Designate, H.E. Dr. Sultan Al Jaber, announced the launch of the initiative during a keynote address at the inaugural African Climate Summit last week in the Kenyan capital, Nairobi. “This initiative builds on the UAE’s track record of commercially driven, innovative blended finance solutions that can be deployed to promote the adoption of clean energy in emerging and developing nations,” President-Designate Dr. Sultan Al Jaber said in an official statement, adding the multi-stakeholder partnership approach will accelerate sustainable economic progress, address the challenge of climate change and stimulate low carbon growth. The initiative comes amid calls for the global tripling of renewable energy by 2030, while pushing to make finance more available, accessible and affordable, especially in Africa where an abundance of renewable energy potential remains largely untapped. Unlocking Africa’s clean energy potential with reforms According to findings from the International Energy Agency (IEA), Africa is home to 60% of the world’s best solar resources, yet has only 1% of installed solar generation capacity. For the continent to unlock its clean energy potential, African countries will need to improve policy and regulatory frameworks to attract the long-term investments needed to speed up the deployment of clean and renewable energy. “The initiative will prioritize investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks and a master plan for developing grid infrastructure that integrates supply and demand,” Al Jaber said, noting the initiative is designed to work with Africa and for Africa. “It aims to clearly demonstrate the commercial case for clean investment across this continent. And it will act as a scalable model that can be replicated to help put Africa on a superhighway to low carbon growth.” While delivering greater access to clean energy has been known to drive social and economic development, the COP 28 President-Designate adds that current investment in African renewables represents only 2 percent of the global total, and less than a quarter of the US$60 billion a year the continent needs by 2030. The initiative seeks to correct this imbalance by bringing key stakeholders together to speed up the delivery of relevant measures, including that of infrastructure, to close the gap in universal clean energy access. Unlocking capital for clean power The initiative will form part of Etihad 7, a development platform launched by the UAE to raise 20GW in renewable energy capacity and provide 100 million people across the African continent with clean electricity by 2035. To catalyze private sector action, ADFD is funding the initial investment with US$1 billion of financial assistance to address basic infrastructure needs, offer innovative finance solutions and increase mobilization of private investments. The ECI is providing US$ 500 million of credit insurance to de-risk and unlock private capital. Masdar, one of the world’s largest clean energy companies, active in 22 countries in Africa, is committing an additional US$2 billion of equity as part of the new initiative. Masdar has been moving into the renewable energy sector in Africa as part of the Etihad 7 programme. In January, the company announced it signed an agreement with Angola, Uganda and Zambia to develop renewable energy projects with a combined capacity of up to 5 gigawatts (GW) as part of the programme. With the UAE finance initiative, the company aims to mobilize an additional US$8 billion in project finance through its Infinity Power platform, targeting the delivery of 10 gigawatts (GW) of clean energy capacity in Africa by 2030. AMEA Power looks to install 5GW of renewable energy capacity in the continent by 2030, mobilizing US$5 billion, of which US$1 billion will come from equity commitment, and US$4 billion from project finance. The company has been active in Africa for several years already. Earlier this year, it notably executed a 25-year Power Purchase Agreement (PPA) with GreenCo Power Services (GreenCo) for an 85MW solar PV power plant in South Africa as an energy crisis pushes more demand for alternative sources of power in one of Africa’s biggest economies. The initiative is also pursuing pathways for other multilateral development banks, governments, and philanthropies to catalyze additional private sector investment. At the inaugural African Climate Summit in Nairobi, the COP28 Presidency called for others including international financial institutions (IFIs) and foundations to join the effort to convert words into actions.

CrossBoundary Energy Access Nigeria (CBEA) and ENGIE Energy Access Nigeria have announced a new project finance agreement to build $60m worth of mini-grids in Nigeria. Undea the deal, both companies target the connection of 150,000 Nigerians to electricity. CBEA will finance the development and construction activities and own the projects, while ENGIE will provide long-term operations & maintenance (O&M) services for the mini-grids.  

Yesterday, PPC Zimbabwe broke ground on two solar PV plants in Bulawayo and Gwanda in southwestern Zimbabwe. The facilities will have a combined generation capacity of 30 MWac and were awarded to a consortium of the African Transmission Corporation (ATC) and Sinohydro Corporation following a competitive tender. The consortium’s project company, CentraWest, is mandated to develop, finance, construct, maintain, operate, and own the project. Construction includes the associated transmission integration infrastructure to supply PPC’s cement manufacturing operations in Coleen Bawn and Bulawayo. “To ensure reliable and quality supply of electricity to PPC Zimbabwe, a 9MW/18MWh battery energy storage system will be installed at the Gwanda site. This is one of the largest grid scale electricity storage systems to be built in Africa,” ATC Managing Director Victor Utedzi said. Construction works will generate 500 local jobs and are expected to be completed at the end of this year.   ATC is steadily establishing its leadership within Zimbabwe’s solar industry. In 2019, it already developed the 2 MW Centragrid solar PV plant at Nyabira, which it is now expanding to 25 MW. Details on the project are available within the Hawilti+ research terminal.

by Hage G. Geingob, President of Namibia, Office of the President of Namibia for the World Economic Forum Namibia launched its Second Harambee Prosperity Plan (HPPII) in March 2021. The country is on course to develop a green and blue economy as articulated under the economic advancement pillar of the plan. By electrifying key parts of its economy, the Namibian government will spur unprecedented economic activity and growth for citizens. In March 2021, as I launched Namibia’s Second Harambee Prosperity Plan (HPPII), I reflected on the need to emphasize the importance of multilateralism in our efforts to foster an enduring economic recovery. Namibia’s policy on international relations and cooperation is anchored in multilateralism because our very independence was a product of international solidarity. We are a nation that was midwifed by the United Nations. It is for this reason that as we crafted our green economic recovery plan; we knew that it had to build a more sustainable future for our children and their children. Namibia is a small, open economy that is impacted by independent intervening variables, including climate change and its disruptive consequences. Our economy is heavily reliant on the agricultural sector, which employs more than 20% of our labor force. Namibia experiences recurrent droughts, the most recent of which have been recorded as the worst in history. These droughts can be linked to climate change, which according to the 2021 Intergovernmental Panel on Climate Change (IPCC) report, is unequivocally a man-made phenomenon. Therefore, Namibians must play a role in crafting climate-change solutions, not just for the sake of our citizens, but indeed for the global community at large. Accordingly, Namibia is poised to tackle climate change, by establishing a green economy that will drive our economic recovery as envisioned for African countries by African Heads of State during the launch of the African Union Continental Green Recovery Action Plan. In this context, we have ambitious plans to develop green and blue economies as articulated under the economic advancement pillar of our HPPII. The feasibility of these plans is underscored by the abundant availability of sunlight throughout the year and proximity to billions of cubic meters of seawater and vast marine resources in the Atlantic Ocean. We have the potential to capture around 10 hours of strong sunlight per day for 300 days per year. As a result, Namibia has some of the highest solar irradiance potential of any country in Africa, which is sufficient to provide power for our people and our neighbours. It is with this potential in mind that we have entered into a partnership with the Government of Botswana and the United States – under the auspices of USAID’s Power Africa – which culminated in the signing of a Memorandum of Intent in April 2021. With support from the global community, we intend to utilize the abundance of sunlight to produce solar power for our own benefit and for our neighbours. The generation of solar power will complement Namibia’s available green energy portfolio, such as hydro-electricity, which already constitutes more than two-thirds of our installed power capacity. Electrifying key parts of our economy and of our neighbours will spur unprecedented economic activity and growth for Namibia and Southern Africa. A Green Hydrogen Economy It is well known that clean electricity is not available in sufficient quantities to adequately supply global demand. This challenge was underlined in the Net Zero by 2050 report published by the International Energy Association (IEA), which noted that hard-to-abate sectors – like cement, steel and chemicals, road trucking, container shipping, and aviation – will need green hydrogen if the world is to remain on course to achieve climate neutrality by 2050. Namibia is better-positioned resource-wise, as well as having the political will to answer that clarion call. To produce green hydrogen competitively a country would need world-class transmission infrastructure, international port facilities, world-class wind and solar resources, access to sustainable sources of clean water (without displacing existing consumers), lots of land and a conducive legislative environment. These are all ingredients that Namibia has. Already, our country is home to the largest desalination plant in Southern Africa, meaning that the conditions for producing abundant clean water in a desert country are conducive. Once Namibia has successfully incubated the green hydrogen economy, it will enable the country to become a supplier of energy, rather than an importer. Judging from the scale of the initial proposals submitted to Namibia by interested investors, these renewable projects, relative to the size of Namibia’s economy, will be greatly transformative to the Namibian economy. Currently, at its peak, the economy consumes about 640 megawatts of power per annum whereas the proposals presented to government entail investments that could produce 10 times that amount of peak generation capacity in the next 10 years. But Namibians will not have to wait until 2030 to start enjoying the benefits of our green revolution because construction of the pilot plants will begin within the next 12 months. A New Frontier The required infrastructure for power trading already exists. About 40% of Namibia’s power currently comes from South Africa and is primarily driven by coal-fired power plants. We imagine a reality where Namibia exports clean energy to South Africa thereby assisting the Southern African region to decarbonize. Namibia also boasts world-class port infrastructure in the cities of Luderitz to the south, and Walvis Bay to the east. Renewable electricity, and green hydrogen and its derivatives, provide Namibia with a real opportunity to attract meaningful foreign direct investment, create well-paying jobs, further diversify its export basket, and improve its terms of trade. Therefore, the development of a green and blue economy, as well as a green hydrogen industry, are some of the cornerstones of the HPPII. As Namibia embarks on this new frontier, it is imperative that its vision of shared prosperity on the national, regional and global levels is realized. Meaning that we do not neglect those without access to political and economic power today nor exclude those who currently rely on carbon fuels. COVID-19 has already widened the existing chasm of inequality, a scourge Namibia is all too familiar with.

While Africa constitutes 17% of the world’s population, it only accounts for 6% of global primary energy consumption, according to 2018 data from the International Energy Agency (IEA). However, the continent is recording an ever-greater demand for energy, to support continued growth for more than two decades, interrupted only by the Covid-19 pandemic. To date, nearly 600 million Africans do not have access to electricity and one billion of them have no other alternative than traditional fuels such as wood and charcoal for cooking. In the G5 Sahel countries (Mali, Burkina Faso, Niger, Chad and Mauritania), of the 80 million inhabitants, 60 million live without electricity and are lit with kerosene or dry batteries. The Sahel is one of the regions in the world with one of the lowest energy access rates at 26%, compared to 47% in sub-Saharan Africa, according to the World Bank. Energy inequalities can be measured at the global, regional and local levels. In fact, African rural areas remains plunged into darkness. In the “land of upright men”, only 5% of the rural population have access to electricity (compared to 18% nationally). The Sahel Alliance, which was created in 2017,to support regional development and stability through several projects (particularly energy), aims to double the rate of access to energy between 2017 and 2022. To support this objective, Burkina Faso can rely on its institutional partners. The country also uses public-private partnerships (PPP), investors and manufacturers, as is now the case with the long-standing agro-industrial partner Advens Géocoton, which has been present in Burkina Faso for seven decades … A French-British Deal “We are already supporting 65,000 farms which support nearly 650,000 Burkinabes”, explains Karim Ait Talb, Deputy CEO of Advens Géocoton. The country has become the strategic center of the group’s activities in the sub-region. It will also open a new cotton ginning plant, for an amount of 15 million euros by the end of the year, in Ouargaye in the province of Koulpélogo. To go further, the joint venture announced at the end of July by Bboxx and Advens Geocoton (at 50% each) has set itself the objective of providing clean energy to 2 million Burkinabes, at competitive prices. This project will create 500 local jobs. “These will not be precarious contracts. These will be contracts for salespeople, technicians, marketing specialists, call-center agents and logisticians,” explains Karim Ait Talb. The partnership between Advens and Bboxx is based on a French joint venture (JV) which will own a Burkinabè company. The JV will offer 3 kit formulas including a solar panel, a battery, a management device connected to the cellular network, light bulbs, a telephone charger, a radio (or even a television and a fan, in addition). Eventually, additional services such as liquefied petroleum gas (LPG) cooking equipment or solar-powered water pumps will be available. “We offer ‘pay as you go’ formulas in urban and peri-urban areas, and monthly flat rates of around $5 per user in rural areas,” explains Karim Ait Talb. The solution is not revolutionary, but it is the after-sales service offered by Bboxx that makes all the difference in the eyes of Advens Geocoton. “We supervise a fragile population of agricultural producers and we have been looking for a solution for a while to improve their access to energy. However, it is not enough to install kits, it is still necessary to ensure their maintenance. This is precisely what Bboxx offers us through its Pulse platform, which offers real customer support,” he explains. Bboxx, the supplier of solar kits already operating in Rwanda, the Democratic Republic of Congo (DRC), Kenya, but also in Togo (through a partnership with EDF), will benefit from the establishment of the French agro-industrial operator in the sub-region, to develop its activities there. “This market entry is the first in a series, and we have before us a pipeline of exciting activities as part of our mission to transform lives through access to energy,” said Mansoor Hamayun, CEO and co-founder of Bboxx. Finally, solutions supported by the joint venture should be deployed in rural areas of other countries in West and Central Africa.

In more ways than one, the concept of energy transition makes no sense for African countries. The energy transition model by which fossil fuels were going to be replaced with renewable energy emerged out of developed countries, where low population growth and few incremental energy needs have paved the way for new planning strategies to reorganise the energy mix towards cleaner sources of electricity generation. For the same reason, the energy transition is mostly happening in countries where total energy supply and energy consumption has stabilised for over a decade. However, African countries are still under development and the continent counts over 600m people without access to electricity. Because of Africa’s continued demographic growth, the number of people without access to power is likely to rise. Lack of industrialisation along with uneven economic development means that Africa is also one of the world’s smallest carbon emitter. From a policy and development perspective, the priority will very much remain on adding as much power generation capacity as possible along with expanding electricity transmission and distribution infrastructure to lift people out of poverty. Before Africa can transition its energy mix, it needs to significantly expand and transform it. In doing so, renewable energy capacity will be growing, but not to the extent where it can replace existing electricity generation facilities. South Africa is the exception to the story. First, because its energy supply has remained more or less the same for a decade; its electricity consumption, for instance, has averaged 230 TWh a year for about ten years now, according to IEA data. South Africa is part of the G20, has started its demographic transition and has a relatively easy access to finance. Second, because well over 80% of the country’s electricity still comes from coal facilities, many of which are aging. A relatively stable electricity supply along with a heavy carbon-emitting electricity mix naturally paved the way for South Africa to transition its energy mix. South Africa’s energy transition strategy The country’s strategy is very much targeted at relying less on coal and more on solar, wind and gas. In fact, its 2019 Integrated Resource Plan (IRP) provides for the decommissioning of over 24 GW of coal power sources within the next 10-30 years. Natural gas will become an energy fuel for the country, especially when it comes to converting some of its diesel and coal facilities. The country notably commissioned several power plants expected to run on gas but currently running on diesel: Ankerling (1,327 MW), Gourikwa (740 MW), Avon (670 MW), and Dedisa (335 MW). In the IRP of 2019, South Africa reiterated a long-standing commitment to natural gas, by reaffirming its ambition to convert the four stations to LNG or natural gas, and commission an additional 3,000 MW of greenfield gas-to-power capacity by 2030. Several such projects are already well advanced, including the conversion of the Ankerling and Gourikwa stations. But the real story of the past few years has been that of wind and solar. South Africa has become an undisputed renewable energy leader on the continent, attracting local and global investors from Europe, China, the Middle East and the Americas into its now famous Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). From 2012 to 2015, South Africa awarded 6.3 GW of renewable energy capacity via windows 1, 2, 3, 3.5 and 4. Thousands of jobs were created, while attracting billions on foreign direct investment. While the projects from Window 4 are just reaching commissioning stage, South Africa just closed its Risk Mitigation IPP Procurement Programme (RMIPPPP), awarding another 2 GW of projects in March 2021. And this is only the beginning for the country’s clean energy sector. The need to ensure reliable and affordable energy supply post Covid-19 has accelerated the timeline of the future REIPPPP windows. Window 5 is currently underway with winners expected to be announced by the end of the year. Meanwhile, Window 6 is expected to be launched this year to announce the winners in May 2022, while Window 7 would be launched in 2022 to that winners are awarded in Q3 of the same year. Finally, South Africa is also planning a storage and gas-specific windows, with the former launched in November this year while the latter would see its request for proposal issued in Q1 2022.