RENEWABLE ENERGY DEVELOPMENT IN AFRICA-CHALLENGES,

OPPORTUNITIES, WAY FORWARD

Mr. Babu RAM

Chief Power Engineer

South Africa Regional Office

African Development Bank

PART I – INTRODUCTION
Across the board, it is now accepted that climate change is no longer a fabrication.
Climate change is a globally occurring phenomenon caused by man-made greenhouse
gases (GHG), including carbon dioxide. Besides serious global ramifications, climate
change poses a special challenge to sustainable economic development and poverty
reduction in developing countries in general, and in Sub-Saharan Africa in particular.

Sub-Saharan Africa (SSA) has the world’s lowest electricity access rate at 26%, with a
rural electricity access rate of only 8%. Eighty five percent of the people in Sub-Saharan
Africa rely on biomass for energy. In a quest for modern energy, 70% of household
income is spent on energy (diesel, kerosene, charcoal); 0.4 million hectare forests are
cleared each year in Africa. The Sub-Saharan Africa largely depends on biomass and its
products (Charcoal), however; the production of charcoal is inefficient. The use of fuel
wood is inefficient as well. Exposure to indoor pollution is globally responsible for over
1 million premature deaths and a substantial portion of these deaths occur in sub-Saharan
Africa. The above numbers indicate a huge energy infrastructure gap and an urgent fix.

Deforestation in Africa is a cause of concern for every nation since the forests in Africa
serve as “sinks” for absorption of the CO2 produced across the world. Climate Change
offers opportunities for Africa to become a leader in the utilization of renewable energy,
in particular hydro, wind, solar, biomass, geothermal, etc for meeting energy
requirements and reducing deforestation. Like other nations, African nations have an
energy need that is met by the utilization of fossil fuels like coal, natural gas, and
Uranium. However, this paper calls for the development of Renewable Energy (RE)
resources for the reasons stated above. The renewable energy resources development and
use can significantly contribute to enhancing electricity and energy accessibility in
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Africa. However, the potential of renewable energy sources remains largely untapped as
of date.

Overall, unexploited potential of renewable energy resources can be traced back to

national energy policies. The energy policies mainly concentrate on the conventional
electricity sector. Conventional electricity is subsidized, while the support for renewable
sources remains on the fringes. The resources allocated for renewable energy are meager.
Furthermore, renewable energy strategies including the vision, institutions and
implementation plans are not well articulated in numerous countries. The benefits of RE
in the face of climate change are not well recognized in the energy policies. In addition,
there is a disconnect between national energy policies and the national communication to
the United Nations Framework Convention on Climate Change (UNFCC) with respect to
renewable energy in a number of African countries.

Therefore, this Paper is about reviewing public policies with respect to renewable energy
and climate change, identifying the disconnects that exist at the country level, presenting
the potential of renewable energy development amid constraints and suggesting way
forward to exploit the renewable energy resources for increasing electricity and energy
access rate in Africa.

The paper is divided into six parts: Part I, already covered, is introductory in nature. Part
II presents the renewable energy resources of Africa. Part III reviews the public policies
including the existing energy policies and the national communications of selected
countries to the UNFCC. The objective of the review is to assess if these policies are
leading to exploitation of RE resources; and if these policies are able to eliminate energy
poverty in Africa. Right policies, right institutions and human resource capacities are
important for Africa to harness renewable energy resources. Part IV presents the
harnessing of renewable energy resources to bridge the existing energy infrastructure gap.
Part V presents a way forward for scaling up the utilization of renewable energy
resources in Africa. The conclusions and recommendations are presented in part VI.

PART II - RENEWABLE ENERGY RESOURCES IN AFRICA

The potential and status of development of renewable energy resources are described
below:

Hydropower

Technically, exploitable hydropower potential of the African continent is estimated at

1,852 TWH/year (11% of the world’s total potential). About 93% of this potential
remains unexploited. This is the least cost option for meeting demand, as shown by
several hydropower projects in Ethiopia, Tanzania, Democratic Republic of Congo
(DRC) and Cameroon. The Congo River in DRC is the most significant renewable energy
resource of Africa with potential to contribute to economic renaissance of the continent

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(Appendix 1, Figure 1). It is well recognized that the development of hydropower is very
critical to improving access to electricity in Africa, improving energy security and
reliability of energy supplies, and reduction of environment damages from the use of
traditional fuels that have far-reaching effects on poor people’s health and livelihoods.

Geothermal Energy

The potential of geothermal energy is stated to be 14,000 MW in East Africa Rift Valley.
The geothermal potential for selected African countries is; Kenya 3GW, Ethiopia more
than 1GW, Djibouti approximates 850 MW, Uganda 450MW and Tanzania 150MW. To
date, only 129 MW has been exploited in Kenya and 7 MW in Ethiopia. Kenya has
planned to produce 1260 MW using geothermal energy by 2018. Olkaria III (Kenya)-35
MW IPP has been commissioned and started selling power to Kenya Power & Light
Company (KPLC). There are different types of constraints to geothermal development:
some of them are generic, while others are specific to individual countries. The generic
constraints cover the exploratory risks related to drilling and field development, while the
specific constraints are related to financial risks, and country-related commercial and
institutional risks. Removal of these risks together with the reduction of implementation
costs would promote the adoption of geothermal energy in the region. There is need to
develop a regional program to facilitate the exploitation of the geothermal energy in the
Rift Valley.

Solar Energy

Africa’s solar energy potential is huge (Appendix 2, Figure 2) and equivalent to 90-100
million tons of oil per annum. The solar insolation in the West Africa varies from 3-4
kWh/m2/day in Cotonou to 6.2 kWh/m2/day in Agadez (Niger). In North Africa, Morocco
receives an average of 4.7 to 5.6 kWh/m2/day. In the Southern Algeria, overall radiation
reaches average levels of 6.1 kWh/m2/day. In Southern Africa, the overall average
radiation varies 5-6 kWh/m2/day.

African nations have made notable progress in the use of solar photovoltaic power.
Kenya, Ghana, Namibia, South Africa, Morocco, Tunisia, and Senegal have promoted
solar home systems but to high-income households.

With regard to potential for solar power production, it is estimated that with adequate
investment in the Concentrated Solar Power (CSP) technology, Africa can produce
enough electricity to meet its own needs and export surplus electricity to Europe.

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Wind Energy

The wind energy potential is greatly located in the coastal areas. Tentatively, it is planned
to add about 8,500 MW by 2020 (Appendix 3, Figure 3). About 150 MW of wind power
has been installed in Africa (Egypt, Morocco, Tunisia, South Africa, and Cape Verde).
This is a very low penetration rate compared to other markets in the world. The low
capacity of installed wind generation is not because the resource does not exist, but for
other reasons, including the fact that a number of countries do not have the appropriate
regulatory framework in place to encourage private investment in the development of
wind energy. This constitutes an important barrier impeding the development of wind
energy in Africa. The African Development Bank has prepared a pipeline of wind energy
projects corresponding to about 900 MW. The Bank is also promoting private investment
in the wind energy projects.

Cogeneration

The potential of cogeneration is attractive for industries which need to utilize it for
processing heat and power. These industries are sugar, rice mills, pulp & paper,
chemicals, and cement. Africa Energy Policy Research Network (AFREPREN) has
estimated the potential of cogeneration at about 732 MW in sugar industries in selected
African countries, namely Ethiopia, Kenya, Malawi, Sudan, Swaziland, Tanzania and
Uganda. Moreover, South Africa has also programmed to install 900 MW capacities.
Sizable start–up costs and regulatory issues pose major barriers to the exploitation of
cogeneration. Some of the costs could be reduced by taking opportunities provided under
the CDM of Kyoto Protocol.

Biomass

The potential of biomass can be sub-divided into four categories (i) Agricultural waste
(ii) Animal waste (iii) Wood waste and (iv) Energy producing crops. The potential of the
first three items is 131,000 Tons of Oil Equivalent (TOE). Some studies show that the
potential of bio methane production is 6 million TOES. These biomass potentials need to
be exploited to generate electricity through a variety of technologies, such as biomass
gasifiers, cogeneration/combined heat and power, and biogas.

The energy producing crops are utilized for production of the combustible liquids (i)
ethanol from sugar cane, manioc or maize and (ii) methanol from wood by gasification
and gas synthesis. The bio fuel production is being explored in countries such as Ghana,
Mozambique, and Zambia. The possibility of producing bio fuel is great using pourghere
almonds –a plant which grows in both equatorial and semi-arid zone and Jathropa. The
bio-fuel can be substituted for gas oil in specially adapted engines.

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In summary, it is noted that Africa’s renewable energy resources are considerable but
unevenly distributed. However, these resources have not been assessed and evaluated.
Multilateral and bilateral donors have funded few projects in selected countries, leading
to resource assessment but many more evaluations are needed to give the precise idea of
the potential of various renewable energy resources in the SSA.

PART III-REVIEW OF PUBLIC POLICIES

National Communications to the United Nations Framework Convention on Climate
Change (UNFCC)
The non-Annex 1 African countries to the Kyoto Protocol that have submitted initial
national communications to UNFCC (http://unfcc.int/national_reports/items/1408.php)
are given below:

Algeria, Botswana, Burkina Faso, Cape Verde, Chad, Cameroon, Cote d’Ivoire, Egypt,
Ethiopia, Kenya, Lesotho, Mauritius, Mauritania, Madagascar, Morocco, Mozambique,
Malawi, Niger, Nigeria, Democratic Republic of Congo, Rwanda, Senegal, Seychelles,
Sao Tome Principe, Sudan, Swaziland, Tanzania, Tunisia, Uganda, Zambia and
Zimbabwe.

Of the above, Botswana, Congo, Ethiopia, Madagascar, Morocco, Sierra Leone, and
South Africa have updated and submitted their mitigation strategies to the Climate
Change Secretariat following the Copenhagen Summit

http://unfcc.int/home/items/5265.php).

The National Communications to the UNFCC describe the sectors, the policies and
measures that are important for reducing greenhouse gases as well as adapting to negative
effects of the Climate Change by 2020. This paper concentrates on the energy sector. All
the national communications underscore the importance of the energy sector; in
particular, its huge potential to reduce greenhouse gases as the sector is well positioned to
conveniently deploy zero carbon and/or low carbon technologies. While the depth of
measures varies from one party to another, all the mitigation measures are coincident on
the following themes that need to be addressed while taking actions to limit greenhouse
gases.

Cooking Energy

Fuel wood, charcoal and agriculture waste consumption constitute about 85% of energy
use in Sub-Saharan Africa except for South Africa whose consumption of fuel wood is
limited to about 15% of the national energy consumption. It is recognized that both the
fuel wood and charcoal stoves are inefficient. Moreover, the charcoal kilns are also

5
inefficient. Funding is required to expand the programs of efficient cooking stoves for
both charcoal and fuel wood.

Moreover, charcoal business-production and sale is in the hands of small and medium
enterprises under the private sector. The charcoal business is largely unregulated.
Without public policy to set efficiency standards and regulatory measures, the private
sector cannot be motivated to invest in the measures to raise efficiency of charcoal kilns.
The governments need to take actions in respect to the above. At the same time, the
financing agencies need to open a line of credit to lend to private entrepreneurs for
investment in the improved charcoal kilns.

To substitute charcoal and fuel wood, some countries have significantly achieved the
penetration of electricity and butane in semi-urban and urban areas. Others have
expressed desirability to promote wider use of LPG/butane/kerosene/alternative fuels and
solar cookers in the rural areas to avoid deforestation. This suggests that the fossil fuels
are still required to reduce deforestation until alternative fuels and devices become
available. Still others have suggested undertaking forestation programs/social forestry in
the rural areas. All of the above are necessary in every country of Sub-Saharan Africa.

Energy Conservation in Household, Industry and Transport sectors

A number of countries have expressed intentions for improving efficiency of end users
(lighting, cooling and refrigeration) of the household, industrial and transport sectors but
only few (Algeria, Tunisia, Morocco and South Africa) have established targets to the
above effect. Furthermore, in regard to the industrial sector, most of the countries have
proposed to improve the efficiency of boilers, and to substitute the use of fuel oil with
natural gas/coal/biomass. Most of the countries in Maghreb (North Africa) have proposed
mandatory energy audits, and technology upgrades for industrial sector.

For electricity generation, proposals have been made to utilize natural gas in place of
petroleum products. Similarly, utilization of hydropower has been recommended to
reduce greenhouse gases by others. The countries like Rwanda and Tanzania have also
considered the regional integration to reduce greenhouse gases.

Utilization of New and Renewable Energy Resources for Energy Access

Notably, Algeria, Cape Verde, Egypt, Mali, Morocco, Nigeria, Tunisia, and South Africa
have considered the application of Renewable Energy, in particular solar and wind
energy, to produce electricity to meet national electricity demand. While Algeria, Egypt,
Morocco, and Tunisia focused on reducing the consumption of fossil fuels, others
envisaged the utilization of renewable energy for increasing the electricity access rates of
the population. Geothermal energy utilization is limited to Kenya though the potential
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exists in all countries of the Eastern Rift Valley. Still others have recognized the
application of renewable energy (solar photovoltaic and wind) for water lifting, and
lighting. The countries like Tanzania, Ethiopia, and Kenya have proposed to utilize
biogas for cooking, lighting in rural areas. Numerous countries are keen to exploit the
potential of small hydropower, land fill gas, etc. Most of the East African countries have
considered the cogeneration to mitigate greenhouse gases.

The National Communications do not lay as much thrust as is required on increasing

investment for improving energy access in Sub-Saharan Africa.

Review of National Energy Policies

Review of national energy policies helps us in understanding the national priorities and
the review will guide the countries having less successful policies in updating their
policies to facilitate investment in the sector. The highest common priorities are: (i)
increasing investment (ii) increasing energy access rate (iii) promoting sustainable energy
supply options (Renewable energy and energy efficiency) and (iv) capacity building.

Without increasing investment, the energy infrastructure gap cannot be minimized.

However, the energy policies in many Sub-Saharan African countries do not contain
strategies for facilitating investment in the renewable energy resources. The strategies
need to address the investor perceived risks: The investors need a long-term off-take
guarantee (PPA), predictable price and open access to the grid, all of which together with
the Feed-in-Tariff policy go a long way to address risks. The Feed-in-Tariffs are quite
popular to facilitate investment in the new and renewable energy projects; over 60
countries worldwide have introduced such instruments for various renewable energy
technologies. Of the above countries only five, namely Algeria, Kenya, Mauritius,
Uganda, and South Africa are situated in Africa. These countries provide investors a
predictable price, guaranteed off-take arrangements and arrangement for interfacing with
the grid for different Renewable energy technologies. As a result, the investment is
increasing in Renewable Energy Technologies in these countries. Investment in
harnessing the renewable energy resources is lacking in other Sub-Saharan African
countries. Thus, the penetration of the renewable energy technologies in other Sub-
Saharan countries is blocked by the lack of appropriate public policies and regulatory
instruments to promote investment in the Renewable Energy Technologies and not by the
technical considerations. Thus, there exist the energy policy gaps. What is needed now is
new and composite energy policy consisting of renewable energy policy and elements of
national communication to UNFCC to steer investment to develop renewable energy
resources in order to enhance energy access for people in Sub-Saharan Africa.

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PART IV- HARNESSING RENEWABLE ENERGY RESOURCES TO MINIMISE
ENERGY INFRASTRUCTURE GAP
To better understand the renewable energy resources presented in part II, it is necessary
to understand the situation at the country level (www.ren21.net/maps). It is also
necessary to review the steps taken to harness renewable energy resources. The objective
of this part of the paper is to briefly scan renewable energy development activities at the
country level for selected countries and underline potentials and pitfalls on the road to
development of renewable energy in Africa.

Scan of Renewable Energy Development

Southern Africa

The governments in general recognize the role of renewable energy resources in meeting
energy demands of dispersed homesteads. The initiatives to harness Renewable Energy
basically cover: biomass, biogas and bio fuel (ii) wind energy (iii) utilization of solar
energy (iv) small and mini/micro hydro and (vi) waste-to-energy. Under the first theme,
steps taken by the countries encompass the promotion, production and marketing of
portable and fixed stoves. To improve efficiency of charcoal production, Tanzania has
got a project to train producers by promoting the Improved Basic Earth mound Kilns.
Biogas for meeting cooking energy and lighting is under promotion in numerous
countries, namely, Tanzania, Zambia, and Zimbabwe. However, lack of end user funding
and limited number of trained masons compared to demand is the main constraint. A bio-
gas to electricity plant of 4.2 MW located at Mosel bay is first the Clean Development
Mechanism (CDM) project in South Africa, championed by PETROSA, NGO-Ikamva-
Labntu and the Independent Power Producers (IPP). Cogeneration plants (200 MW) are
under operation in Zimbabwe, Swaziland and South Africa. Notably, Mauritius generates
about 40% of the national demand from the bagasse based power generation system.
Countries are carrying out the scoping studies as to the production of bio fuel, mainly bio
diesel using Maringu and Jathropha feedstock. A Zambian entrepreneur has prepared a
blue print to produce bio diesel, which is constrained by the lack of funding to start
production of bio-diesel.

Wind energy resource mapping studies have been carried out in Lesotho, Mauritius,
Namibia, and South Africa. Wind applications include mechanical wind pumps, battery
charging and grid connected wind farms. A large number of mechanical wind pumps
(2,780,000) have been installed in South Africa. 40 MW wind electricity production has
been constrained by the protracted negotiation between the authorities and IPPs in
Namibia. Eskom of South Africa will be implementing 100 MW wind farm using the
concessionary funding from the Clean Technology Fund and the MDBs. However, the
wind energy equipment manufacturing capability in the country is limited to 10-300 kW.

The projects to utilize solar energy include the electrification of the administrative posts
in Nampula, Cabo Delgado, and Niassa provinces of Mozambique, among others. In

8
South Africa, installation of 1 million solar water heaters has been planned by 2013.
Expected market expansions over the next 15 years is estimated at more than 150 MWp
(15,000 schools, 1,700 clinic and up to 2 million households). However, the factor
limiting the adoption of the solar technology is the high upfront investment cost required.
Developing a manufacturing hub for the Southern Africa Region will reduce the cost and
alleviate barriers arising out of high upfront costs.

As to the production of solar thermal power, Botswana is to prepare a feasibility study of

200 MW solar power plants based on the parabolic trough technology. Eskom has
planned to produce 100 MW solar electricity using Central Tower/Receiver technology at
Upington. The project is expected to be funded by the CTF and the MDBs.

The piloting of micro/mini hydro has been successful in Zambia and Tanzania with the
assistance of development partners and involvement of local communities. These
schemes transferred know-how and knowledge to local communities with regard to
operation and maintenance of technology.

Moreover, the waste-to-energy projects are being conceived in Mauritius, Seychelles, and
South Africa. 20 MW incineration plant in Mauritius is expected to be developed by an
Independent Power Producer.

East Africa

The Renewable Energy resources of the Eastern Africa region are known in terms of
geothermal energy, cogeneration, wind, small hydro, and solar energy. Renewable
Energy development has been at low level. Kenya is the leader in exploiting the
geothermal energy. Geothermal production capacity stands to 128 MW and its further
expansion is being supported by bilateral donors. The geothermal energy potentials of
Ethiopia (>100MW), Uganda (450MW), Djibouti (300-800MW) are yet to be exploited.
The potentials of cogeneration of electricity and process steam remain to be exploited in
Kenya (430 MW), Ethiopia (450MW), Sudan (750 MW) and Tanzania (300MW). With
appropriate feed-in policy and tariff, and credit extension to entrepreneurs, the
cogeneration potentials can be exploited at relatively low investment costs. Kenya is
building 300 MW wind farm in Lake Turkana. KenGen is to secure another 14 sites for
wind energy production. Ethiopia is developing the 120 MW Ashegoda wind energy
project, which is estimated to produce about 400 to 450 GWh per annum. Hydropower is
available in all countries except Djibouti. The micro/mini/small hydro projects in the East
Africa region need to be developed to increase electricity access rate in rural areas. A
cluster approach and community involvement will reduce production costs. Furthermore,
IPPs are implementing mini hydro schemes in Uganda, thanks to the smart subsidy being
offered to producers on a competitive basis. The solar radiations of about5 kWh/m2/day
are recorded in most countries. The application of solar energy is limited to pilot scale for
9
electric lighting, and water heating except for Kenya where 220,000 solar home systems
have been installed without the government subsidy. The knowledge base to exploit solar
thermal power needs to be developed. The institutional structures to handle renewable
energy are weak in order to support the utility scale renewable energy projects in view of
Climate Change. In general, there is lack of sustainable incentives and feed-in policies
except for Uganda and Kenya, which have established the feed-in-tariffs for selective
technologies.

West Africa

The Renewable Energy resources of the Western Africa region include large hydropower,
small hydro, biomass/biogas/bio fuel, wind energy, and solar energy. The electricity
supply in Ghana comes from hydro power; government is developing 400 MW Bui
hydroelectric power plants. Similarly, the development of massive hydropower potential
of Nigeria needs to be encouraged for national use in the context of mitigating
greenhouse gases. The micro/mini hydropower potential of Togo and Benin is
respectively 224 MW and 34 MW, which could be developed for electrification of rural
areas through public-private partnerships as noted in the case of Uganda.

The energy balances indicate prominent use of biomass including fuel wood and charcoal
by rural population and low income urban households. Despite an oil exporting country,
fuel wood is widely used in Nigeria in both rural and urban areas for cooking and
heating. The overall impact is that the country witnesses a high rate of deforestation. In
Ghana, 80% of charcoal production is through using fuel wood from the ecologically
fragile transitional zone between the rain forest and northern Savanna. Besides increasing
efficiency of charcoal making, the government of Senegal has made serious efforts to
substitute biomass and charcoal with LPG/butane. The consumption of LPG has been
growing, despite the withdrawal of subsidy. The problem in biomass and charcoal use
can be solved by (i) increasing the use of alternative fuels and devices such as
LPG/butane and (ii) reforming the renewable energy and biomass sector.

Ghana is using the biogas technology for cooking, direct lighting, small power generation
and bio-sanitation. Cogeneration of steam and power has been utilized in Oil Palm
industries. The production of bio-diesel from Jatropha plant has been pursued in Ghana to
reduce consumption of diesel and field tested in Ghana. Multi Purpose Energy Platform
based on bio diesel could be promoted to help rural folks in flour milling, oil seed
pressing, etc.

In general, the wind energy utilization is found favorable on the coast line of the West
African states. A private investor is expected to install a 50 MW wind energy park in
Ghana.

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Some countries in the Western Africa have set up targets to increase the percentage share
of renewable energy in the supply matrix: Senegal intends to increase the share of RE to
15% by 2015 and Nigeria to 70% by 2025. To upscale the RET applications,
interventions are needed to deal with the high initial cost of the RET such as (i) solar
photovoltaic (ii) mini/micro hydro (iii) biogas.

Central Africa

The renewable energy resources are highly under-developed except in Cameroon which
has published energy plans and there are on-going efforts to reform the sector. Cameroon
is endowed with enormous renewable energy resources, namely biomass, hydropower,
solar, geothermal and wind. The country intends to meet 80% of its energy requirement
through renewable energy by 2020. Besides hydropower, 100 MW from solar
photovoltaic and bio-digesters have been envisaged. The government policy suggests
progressive introduction of bio-fuels in the energy supply mix for consumption by
productive activities. Reforms in the biomass and renewable energy sub-sectors need to
be addressed.

The hydropower potential of the Democratic Republic of Congo is estimated at 100,000

MW including 40,000 MW of Grand Inga (Appendix 1-Figure 1). The techno-economics
of Grand Inga appears attractive with the cost of installed kW ranging from US$ 339 kW
to 671 US$/KW and the cost of electricity production from USc 1.44/kWh to USc
1.88/kWh. Exceptionally regular River flow is the main characteristic of Inga. The
historical minimum flow rate is 21, 400 cubic meters per second and maximum flow rate
83,400 cubic meters per second. The energy production per annum is estimated at 320
TWH.

Grand Inga offers DRC great opportunity of exporting power from Grand Inga to other
regions, namely West Africa (Nigeria), Southern Africa and to North Africa (Egypt). To
evacuate the electricity from Inga hydropower sites, construction of three power
interconnection highways is required. (i) Northern Highway involving DRC-Congo-
Chad-Sudan-Egypt power interconnector (ii) Western Highway involving DRC-Congo-
Gabon-Cameroon-Nigeria power interconnector and (iii) Southern Highway involving
the power interconnections concerning DRC-Angola-Namibia (Botswana)-RSA and
DRC-Zambia-Zimbabwe- Botswana and RSA.

Other Central African countries though they are rich in renewable energy resources, lack
in institutional, financial and technical capacities to fully utilize the potential of
resources.

North Africa

The North Africa region posses significant potential of solar and wind energy. It is
estimated that about 200,000 households can be electrified using solar PV technology in
Morocco and Tunisia. The potential of solar pumps and other applications is estimated at
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5 MW. The potential solar collectors to supply hot water are estimated at 1 million square
meters. Globally, wind energy potential is estimated at 20,000 MW, of which 1000-2000
can be developed by 2012. The North African countries are actively participating in
preparing the Mediterranean Solar Plan of 20,000 MW.

Algeria, despite abundant fossil fuels, has decided to harness solar energy to substitute
natural gas. The target is to raise the renewable energy share to 6% in the electricity
supply matrix by 2015 through establishing 100 MW wind; 170 MW solar thermal, 51
MW solar photovoltaic; 450 MW cogeneration; and 500 MW Concentrating Solar
Power. Algeria has also developed the feed-in-tariffs to promote private production of
solar and wind energy projects.

Egypt’s energy policy envisages reducing dependence on fossil fuels. Egypt considers a
range of renewable energy technologies from cogeneration in industries to wind energy to
concentrating solar power besides promoting energy efficiency of end users. RE share in
general will be raised to 10% by 2020. RE targets cover 2500 MW in the blocks of 250
MW; hydro -300 MW; and 140 MW Integrated Solar Combined Cycle Power Plant with
a 20 MW parabolic trough solar field. Its policy instrument is public competitive bidding
for 250 MW wind form projects.

Tunisia and Morocco have got a very articulated energy strategy, focusing on wind
energy: 550 MW (Morocco) and 300 MW (Tunisia) and also on the improvement of the
energy efficiency of household, commercial and industrial sectors.

To sum up, the utility scale wind power plants are being developed by several countries
on the continent. As regards solar power, most of the African electric utilities do not have
much experience in the CSP technology, nor do they have plans to tap solar energy for
power production. Therefore there is need to prepare Sub-Saharan Africa Solar Power
similar to the Mediterranean Solar Plan of 20,000 MW. Furthermore, several actions are
required to expedite the exploitation of solar energy for power production (i) Energy
policy needs to be streamlined to embrace CSP technology (ii) concessionary funding is
needed since the technology is still developing (iii) capacity building is needed to make
up the lack of experience (iv) local manufacturing capacity needs to be promoted and (vi)
negative environmental impacts of the CSP technology need to be addressed.

Renewable hydropower potential can be developed as multi-purpose projects and as

multi-national projects through sharing of costs and benefits, by following the model of
Manantali project-jointly developed by Senegal, Mali and Mauritania with the financial
support provided by the multilateral and bilateral donors. The production cost of
mini/micro hydropower can be reduced by using a cluster approach and involving local
communities in the operation and maintenance of such facilities. A regional initiative
with financial support is needed to facilitate the exploitation of geothermal energy in the
East Africa Rift Valley.
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A list of prospective utility scale renewable energy projects totaling 8500 MW in Africa
is given in Appendix IV. High up-front costs of the renewable energy systems can be
reduced by concessionary resources. Concessionary financial resources are needed to
implement both generation and associated transmission projects (Ram Babu 1995 &
2007).

PART V-WAY FORWARD FOR SCALING UP THE UTILISATION OF

RENEWABLE ENERGY RESOURCES IN AFRICA

Energy for Cooking and Lighting Homesteads

Energy for cooking food and lighting homesteads remains the essential requirement. The
SSA predominantly uses biomass (70%) for cooking except for South Africa which
consumes only 15%. The predominant use of fuel wood is one of the causes of the
deforestation and the resulting deforestation has been reducing the carbon sinks which
Africa offers to the World. With regard to lighting, about 75% of the households do not
have electricity access and those with electricity access use inefficient lighting bulbs. To
tackle the problem of cooking energy, Niger and Ethiopia have prepared strategies for
supplying cooking energy at household level including the extension of efficient cooking
stoves, efficient charcoal kilns and charcoal burning stoves. LPG/Kerosene to substitute
fuel wood has also been proposed. Limited availability of funds impedes the
implementation of rural energy supply initiatives in SSA. The international community
needs to recognize this problem in the context of the Climate Change and revisit their
priorities and commitments to enhance their contribution of financial resources to solve
the problem of the supply of energy for cooking, lighting, etc in rural Sub-Saharan
Africa.

Utilization of Renewable Energy Resources

The national polices and strategies should be refined/updated/prepared with respect to the
following. The suggestions made below could be expanded by taking into consideration
local conditions:

(i) Removing the Energy Policy Gaps and Constraints: The Renewable Energy
Policy gaps as mentioned above lead to the undesirable outcome, that is, little
or negligible investment in the development of renewable energy resources.
The countries have a prominent role to play in order to close the policy gaps.
MDBs should assist the countries in this regard.

(ii) The institutional arrangements including the regulatory frameworks in support

of renewable energy are required to facilitate the utility scale renewable
energy projects. The institutional arrangements should cover the market rules,
model PPA, grid codes, technical standards, interconnection permits, etc.
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 Generally, there has been lack of sustainable incentive/ subsidy and
predictable feed-in policies to encourage uptake of grid connected renewable
energy systems. In Sub-Saharan African, only few countries have established
the Renewable Energy Feed-in Tariffs to promote the grid connected systems.
Furthermore, such challenges as off-taking arrangements and grid codes
including the technical interconnection requirements and standards for private
renewable energy projects need to be addressed. Independent System Operator
and market rules are needed to provide the open access to transmission system
for private sponsors on non-discriminatory basis.

(iii) Lack of capacity is a generic constraint to the development of renewable

energy across Sub-Saharan Africa: it is required for all types of projects’
sponsors. Capacity building is needed for financial institutions to let sponsors
avail soft credits; and it is as well needed for government officials so that they
are able to assess technological choices, formulate incentives, and negotiate
the terms of sale and purchase of renewable energy with private sponsors.

(iv) Geothermal and Solar Homes (Kenya) and Cogeneration (Mauritius), wind
(Egypt, Morocco, Tunisia and Cape Verde) are success stories. Lack of
Information System prevents the dissemination of best practices between
agents and entities in a country and among the countries. For each region, the
information system should be established for exchanging information about
renewable energy potentials, penetration of technologies, success stories,
renewable energy experts and enterprises, which will assist in the
development of renewable energy in the countries.

(v) Manufacture of RE Equipment: Inadequate local manufacturing capacity is an

obstacle for RET penetration. There are numerous sellers in Africa for
vending RE equipment and devices. Manufacturing capacity is negligible to
produce PV modules or its components, wind turbines, wind generators,
components of the concentrating solar power, etc. For example: a wind
equipment manufacturer produces only 600-800 Watt wind turbine; with
respect to PV, only a couple of components are manufactured in South Africa.
The Solar Water Heaters though manufactured in a number of countries are
expensive. As a result, most of the RE equipment are imported from China,
Korea, Europe, etc.

(vi) Because of limited capacity of individual nation states, manufacturing

facilities for wind, solar and other equipment should be established on a
regional basis as hubs for production and supply of RE equipment and

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 devices. Leading manufactures should be motivated to establish facilities in
the SSA.

(vii) Due to abundance of renewable energy resources, Africa offers vast markets
for the RETS. There is need to have rational policies to develop the market.
The leading manufacturers of RE equipment and devices should help develop
this market in Africa. Development of the RE market can prove to be a win-
win situation for nations and manufacturers.

(viii) Regional Program for Exploiting the Geothermal: The potentials of these
resources exist in numerous countries. For example, geothermal which is
found in Kenya, Uganda, Tanzania in the East African countries and in
Zambia and Mozambique in Southern Africa can be developed through a
regional program. But the policy gaps need to be removed by the concerned
nations themselves.

(ix) Sub-Saharan Africa Solar Plan should be prepared similar to the

Mediterranean Solar Plan.

(x) Madagascar, Ghana, Tanzania, Mozambique, and Zambia are pursuing the
production of biodiesel from Jathropa plant. The experiences gained by these
countries should be shared with others. A homogeneous public policy is
needed to guide the production of bio-fuels in the SSA.

(xi) Rationalizing Tariff, introducing peak load pricing (World Bank Technical
Paper No.240), and removing fossil fuel subsidies will go a long way in
promoting the RET on the continent.

(xii) Mobilizing Concessionary resources to finance investment to implement the

renewable energy projects in Africa (Ram Babu, 2006).

Financing of the Investment to Develop and Utilize Renewable Energy

The initial upfront cost of the RE equipment and technologies can be reduced by taking
advantage of the Clean Development Mechanism which facilitates clean energy
development/renewable energy technologies in developing countries. CDM allows
Annex I countries to develop projects in non-Annex I countries, which are signatory to
the Kyoto Protocol. The CDM project results in reduction of greenhouse gases. While
countries like China, India and Brazil have been able to benefit from CDM, Africa’s
share is only about 2.69% of the total approved CDM projects. Morocco, Tunisia, Egypt,
Algeria, and South Africa are trying to take advantage of CDM Window. As noted by the
Clean Energy Investment Framework of the African Development Bank (2008), several

15
constraints prevent African countries from utilizing opportunities offered by Carbon
Market. The ethos of CDM needs to be spread out as much as possible across the length
and breadth of the continent. Donors should consider providing the technical assistance to
assist nations in preparing a climate change policy and in developing bankable projects.
Furthermore, UNFCC needs to simplify the certification procedures to make them more
user-friendly to African countries. Large hydro power projects need to be included in the
CDM. Furthermore, uncertainty with respect to the CDM in the period beyond 2012
should be removed.

Clean Technology Fund (CTF)

The Clean Technology Fund assists the countries which are ODA eligible and have an
active country program, prepare and implement development programs and strategies
with low carbon objectives. Such countries should have national strategies, such as for
renewable energy, energy efficiency, energy security, climate change, or sector
development. Government, in collaboration with the MDBs, takes the lead in
coordinating the preparation of the investment across sectors, as well as with bilateral and
multilateral agencies at the country level during the joint mission. CTF provides grants
and/or concessionary loans to renewable energy projects/programs for scaled-up
development of the resources. Due to not having the right policies and strategies for
renewable energy sector, many countries in Sub-Saharan Africa do not become eligible
for CTF resources. The World Bank and the African Development Bank are assisting a
number of countries to prepare business plans to reduce greenhouse gases. These
countries are Morocco, Tunisia, Egypt, South Africa and Nigeria. The Clean Technology
Fund’s Concessionary Financial support combined with the Feed-in-policies reduces the
payback period of the renewable energy projects by 50%.

Public-Private Partnerships

According to conventional wisdom, governments need to spearhead power sector

reforms through consulting users, employees, legislators on the reform objectives, and
soliciting their opinions and advice on reducing subsidies to fossil fuels, providing level
play field to private investors to develop renewable energy resources, and providing
predictable price and market for renewable energy generators. The public-private
partnership leads to private investment to develop renewable energy resources.

To assist the Independent Power Production, the Feed-in-Tariffs and the law granting the
“Open Access” to transmission system is needed. The other instrument is the Renewable
Energy Portfolio including the incentives such as the “Production Tax Credit”, given to
producers according to renewable electricity produced annually. Furthermore, to reduce
the price of renewable electricity, the government needs to preset mandatory targets to
produce energy from renewable energy sources over a given period. Global Energy

16
Network Institute (2004) reports, when combined with appropriate grid feed-in-laws, the
above policies increase the cost competitiveness and share of renewable energy sources.
Argued by Favian et al (2005), support to renewable energy is justified since it assists the
countries in achieving the Millennium Development Goals.

Furthermore, Ram (2006) highlighted that innovating financial model and structures are
required to reduce capital costs of IPP projects and the electricity price at customer end.
These include, among others, a Supplier’s credit to an entrepreneur underwritten by a
local commercial bank and zero interest funding from overseas investors which are given
right to undertake Carbon Trading in the overseas market, in return for zero interest rate
funding. The public sector has a definite role in instituting reforms to promote investment
in the renewable energy sector.

Assisting Consumers to Acquire RETS

Experience suggests that the better-off households capable of mobilizing large monies
could easily become the consumers of RETS. The penetration of the Solar Water Heaters
and Solar PV is the case in point. Local communities and cooperatives which manage to
mobilize some funds could become customers for owning and operating RETS. However,
subsidies are required in support of renewable energy technologies. Effective and smart
subsidies are desirable. A successful example is Nepal’s Biogas Support Program, which
supports a biogas subsidy according to the size of the plant and remoteness of the region.
The program is recognized for its cost-effective design.

((www.nepalbiogas.org/biogas_designing.htm))

Nepal’s experience in managing and operating the mini/micro hydro and biogas units is
also worth considering for replicating in Sub-Saharan Africa. Nepal’s success is linked to
subsidies and easy credits made available to beneficiaries to construct and build biogas
plants to use gas for cooking to replace the use of fuel wood and for lighting. The Sub-
Saharan Africa should consider establishing energy special banking facilities or dedicated
structures within existing institutions to support funding of RET.

Part VI - CONCLUSIONS AND RECOMMENDATIONS

To conclude, the Renewable Energy resources development and use can significantly
contribute to enhancing electricity and energy accessibility in Sub-Saharan Africa. What
is required is establishment of the right policies and strategies to attract investment from
all sources, in order to exploit these resources. Reviews of existing energy policies
suggest that the current policies in numerous countries are unable to accelerate the
development of renewable energy resources and are not positioned to eliminate energy
poverty and unlock the entrepreneurial capabilities of African people.

17
The pre-requisite for scaled-up renewable energy program is to establish investor friendly
policies which provide a leveled playing field for investors interested in the renewable
energy resources. This calls for phasing out of subsidies to fossil fuels and setting
parameters to address the investor perceived risks such as predictable market and price
over the long-terms. The rationalization of electricity tariffs towards phasing out of fossil
fuel subsidies and introducing peak load pricing will assist in accelerating the
exploitation of renewable energy resources. .

The Sub-Saharan Africa largely depends on biomass and its products (Charcoal).
However, the production of charcoal is not efficient. The use of charcoal and fuel wood is
not efficient either. As a result, deforestation is rampant. Concerted actions are required
to reform biomass sector. The international community should assist the countries
because such reforms will reduce deforestation and reduce climate change risks.

In view of the existing energy infrastructure gap, harnessing of renewable energy

resources to bridge the gap is presented. Estimates indicate that 8,500 MW worth
renewable energy projects could be developed in Africa in the Short-Term. In this regard,
the funding mechanisms and instruments (for example-Clean Technology Fund)
reviewed above are important. Moreover, suggestions included in the Way Forward,
should be considered and converted into actionable strategies by the concerned countries,
donors, manufacturers and suppliers of renewable energy technologies, devices and
systems.

WORKS CITED

African Development Bank, December 2007, Come Rain or Shine-Integrating Climate

Risk Management into Operation, Working Paper No. 89.
African Development Bank, March 2008, Proposal for Clean Energy Investment
Framework.

Global Energy Network Institute (GENI), Fall Quarter 2004, Enlightened Policy
Accelerate the renewable energy commercialization.
Intergovernmental Panel on Climate Change IV Assessment Report-Climate Change
2007-Working Group II-Impact, Adaptation and Vulnerability, November 2007, Geneva,
IPCC.
World Energy Council, June 2007, Energy and Climate Change Study Report.

Flavin C. and Aeck M., 2005, “Energy for Development”, REN 21 Network.
Panzu, V, 2006, Grand Inga Power Project, Power Point Presentation, Regional
Electricity Investment Conference, Windhoek, September 2006.

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Ram, Babu., 1995, Investigating Energy Transition and Strategies for Sustainable Energy
Supply and Use in India with a Focus on Delhi and Calcutta, 16th World Energy
Congress, Tokyo.
Ram, Babu,2007, Africa’s Intra-regional, Inter-regional and Inter-continental Electricity
Trade-Techno-politico-economic Considerations and Future Prospect, 20th World Energy
Congress, Rome.
Ram Babu, 2006, Financing Investments in Liberalized Energy Markets, World Energy
Council Regional Seminar on Energy Market Reforms, 24-25 April, Algiers, Algeria.
REN21- Renewable Energy Maps
World Bank Technical Paper No. 240, 1994, Renewable Energy Technologies
Appendix 1:

Figure 1: The Congo River: A Renewable Energy Resource of Africa- with potential
to contributing to the Economic Renaissance of the African continent

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Appendix-2- Figure 2-Solar Map of Africa Appendix 3-Figure 3-Wind Energy Map
of Africa

Appendix 4: A List of Renewable Energy Projects in Africa (2010-2015)

 Concentrating Solar Power Plants in Algeria, Botswana, and South Africa (800
MW);
 Small Hydropower projects in Sub-Saharan Africa (400-500 MW);
 Wind Energy Projects in Kenya, Morocco, Tunisia, Egypt, Cape Verde (900
MW);
 Large Hydropower Projects (4000 MW) in Ethiopia, OMVG, Tanzania, Namibia,
Zambia, Mozambique, and Cameroon
 Geothermal Energy Projects (300 MW) in Kenya and Djibouti
 Development of cogeneration utilizing bagasse from sugar factories as a fuel
(2000 MW) in Algeria, Ethiopia, Kenya, Malawi, Sudan, Swaziland, Tanzania
and Uganda and South Africa.

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