Africa requires up to US$90 billion of investment annually to meet its current energy shortfall according to a new report commissioned by IHS Towers.
The report dubbed “Power Up, Delivering Renewable Energy in Africa,” written by the Economist Intelligence Unit and published today to coincide with the World Economic Forum on Africa, also asks the energy firms to copy the telco secto to succeed.
The key findings include the case for building renewable energy infrastructure in Sub-Saharan Africa is stronger than ever and positive experiences in lead markets such as South Africa and Kenya highlight successful strategies and best practices.
According to the report, the African renewables sector resembles the mobile phone sector of a decade ago. It has the capacity to leapfrog heavy infrastructure with a larger-than-assumed market, the emergence of smart business models and improved technology. However, long-term renewable procurement programmes are needed to build the greenfield infrastructure necessary.
The report also adds that there has been huge growth in technology sales and financing innovation. The market for pico-solar units has grown from almost zero in 2009, to 4.5 million in 2014 and, in January 2016, Africa saw its first solar bonds, a securitisation financial product for small scale off-grid solar projects.
The report finds that a 680% increase in net renewables capacity deployment is needed if Africa is to achieve the African Renewable Energy Initiative’s ambitious goal of 300 GW of renewable capacity by 2030, agreed by the Africa Union and member governments at the recent Paris climate talks. Innovative tools and projects are helping to bring green energy to people beyond the traditional grid. However, there is no substitute for larger infrastructure programmes such as wind and solar farms.
In conclusion, Issam Darwish, Executive Vice Chairman and IHS Towers Group CEO, says, “This report reaffirms that Sub-Saharan Africa has the raw ingredients for a vibrant renewables energy market: resource abundance, falling costs of wind turbines and solar panels, smart innovations in end-user equipment and political commitment – by governments and international donors alike.
The report recognises the scale of the opportunity facing the continent – from geothermal power in Kenya and Ethiopia to solar power in Zambia and Uganda – and will help governments, businesses and investors to understand how to support renewable energy projects and provide the best conditions for success.