Sub-SaharanAfrica’s solar eclipse


the world over. It is a large-scale state utility project providing 1.5GW to the national electricity grid. Across the Sahara desert, solar


energy has begun to package itself as the mirror inverse: small-scale pro-

jects on off-grid distribution networks. The off-grid solar sector has grown tremen-

dously over the past 10 years into a $1.75bn annual market, serving 420 million users, according to a 2020 World Bank report. From 2017 to 2019, revenues grew rapidly by an annual 30%, while sales volumes grew at 10% With one of the highest solar potentials in

the world, the case for implementing solar power in Africa requires little persuasion. Touted as a real solution to energy poverty in a region where the rural access to electricity remains low, off-grid solar services — whether industrial, commercial or residential — are gaining traction. Many foreign energy companies, investors

and start-ups have pegged this as a growing market ripe for experimentation, while other investors still hold fast to utility-scale projects, despite the perceived risk.

‘Opposite’ toEurope Benjamin Attia, senior research analyst at Wood Mackenzie, tells fDi that, unlike other markets, the grid is often controlled by a single state-owned utility and the development time- line can easily take twice what is needed else- where in the renewables space. “We seemanymore projectsannouncedthat

go through the development process and don’t end up being built,” he says. “Most sub-Saharan markets have single-buyer state utilities, and all but three are loss-making on every kWh they sell. Most are in fiscal distress. All this to say that they typically don’t make very good counterpar- ties to power purchase agreements,” he adds. The result of this is that the centre of activ-

ity in the renewable energy sector in sub-Saha- ran Africa is off-grid, with many donor and multinational organisations flooding in to sup- port this. In March, the World Bank approved $22.5m in additional financing to support the development of the off-grid solar market in western and central Africa. Mr Attia remarks that there has been a lot

of strategic investment froma “very broad cast of characters”, from oil giants such as Shell to


frica’s largest solar park, Benban, in Egypt, is in line with many solar projects seen

the Mitsubishi Corporation, pointing to a trans- formation of the utility business. The largest distributor of solarhomesystemsinwest Africa, he says, is TotalEnergies. “This is inevitable,” says Prashant Khorana,

a director in the power and renewables consult- ing armofWood Mackenzie’s energy transition team. He expects there will be more gigawatts of production capacity added away from the utility: “There is demand and scalable demand will come fromsomeof these private operators. This is the opposite to Europe, [where] it’s a buy- ers’ market. That’s not necessarily the case [in sub-Saharan Africa].”

Leapfrogging traditionalpower Karl Boyce, chief executive of UK-based Arc Power, says that it is this quality that gives the region its edge over other markets. “I think there’s an advantage leapfrogging that tradi- tional grid structure with distributed power, and that’swhat we’re addressing,” he says. Arc Power has set up 75% of the AC solar

mini-grid connections in Rwanda to date, where their primary focus is, with plans to expand into Malawi and Uganda this year. “We originally looked at utility scale renew-

ables, but actually if you look at a lot of coun- tries in Africa, just the grid infrastructure wouldn’t cope with it. That’s why there’s been this realisation that decentralised power is the only way to go,” Mr Boyce says. Norman Moyo, chief executive of

Distributed Power Africa, a developer of solar energy projects on the continent and subsidi- ary of Mauritius-based Econet Global, says “the biggest challenge in renewable energy adop- tion is access to affordable capital”. “Although the pace of change does not

match the power crisis, we are seeing very encouraging progress and engagements with regulators and governments,” MrMoyo says.

Sticking with utility But sub-Saharan Africa is far frommonolithic, and there are still several foreign investors bet- ting on utility projects elsewhere in the region. In March 2020, French independent power

producer Akuo Energy brought the country’s first large-scale solar park inMali online,which now powers the equivalent of 91,000 homes every year. “With the commissioning of [the Kita solar

plant, we have reached the] first milestone that shows that it is indeed possible to develop pro- jects in the country,” Akuo’s chief executive June/July 2021

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