he annual Africa Energy Forum (AEF) had something for all of its 2,000 delegates. It encouraged female entrepreneurs towards greater participation at all levels of the industry, heard the perennial calls for cost-reflective tariffs to help insolvent utilities balance their books and developers bring projects to fruition, and stimulated larger investors’ appetite for off-grid distributed solutions. The event, held in Copenhagen on 7-9 June, suggested chronic lack of access to sustainable energy could be overcome with the mobilisation of huge funding (much of which is available if conditions are right), innovative investment and technologies (both of which are emerging) and the enthusiastic participation of existing and new players.
A well-attended session on Mozambique heard Scatec Solar’s Roberto Berardo declare that the 41MW Mocuba solar project had reached financial close – a first for a country whose project delivery has often flattered to deceive. Electricidade de Moçambique chairman and chief executive Mateus Magala felt confident Mozambique could move from emergency power dependency to become a regional supply hub within five to ten years. He expected another 41MW solar scheme, at Metoro, to close this year.
Progress is being made by governments who have come to understand better how global markets work, but many AEF participants observed that, while generation projects have progressed, transmission systems require huge investment. Power Africa’s Kate Steel described transmission as “one of the greatest bottlenecks”. A country might find importing electricity, or sending power across country, its cheapest and most efficient option, but mobilising private and public investment in transmission remains elusive, although multilaterals are now focusing on the issue.
Neither is there a rush of generation projects, as South Africa’s renewables programme and many other of the highest-profile schemes move slowly. Kenya’s Lake Turkana Wind Power, a benchmark scheme for several years now, is a project that “raises the bar for what is possible in Africa today”, Vestas group president and chief executive Anders Runevad said. But it still faces a number of problems and has not been followed by many similar schemes.
In a more mature industry, pioneer projects should by now have served as models for a flow of business. But a senior executive with a major Johannesburg bank said her institution had no active new projects on its books. A prominent project finance lawyer said: “Last year [at AEF] there were three or four IPPs in the works, which was an advance. This year there’s perhaps two”. Winston & Strawn counsel Jason Parker was bullish about the policy moves that have drawn companies into the Moroccan renewable energy boom, but admitted “clients are fighting to get into Morocco”, where a few companies – notably the local Nareva Holding and Saudi-owned Acwa Power – have dominated major contracts. “We find we lose a lot of bids,” Parker said.
Several big markets that could drive continental change remain mired in political and other problems. Nigeria’s privatised generation and distribution companies (discos) are heavily in debt and undermined by lack of gas and sclerotic transmission infrastructure. Azura Power managing director David Lapido said the government’s target of adding 10GW by 2020 was unrealistic. “Even if this target is met, there won’t be the transmission infrastructure to wheel it across the grid. Discos need to restructure and refinance to improve service delivery, but need the higher tariffs they can’t charge while delivery is so poor,” Lapido said.
AEF organiser EnergyNet gave a lifetime achievement award to former African Union Commission (AUC) chair and South African presidential candidate Nkosazana Dlamini-Zuma, recognising her work at the AUC and contribution to women’s rights. She donated her prize to an access project in Guinea-Bissau – “one of the poorest countries, but also one of the most neglected”, said Dlamini-Zuma, paying tribute to revolutionary hero Amílcar Cabral. It was a reminder that, much as developers would like to take politics out of the industry, those with power continue to wield the real influence.
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