Solar Revolution Taking Place in Morocco, Burkina Faso, and Senegal

Published on: 17 June 2022
by KnowESG
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On the continent, the race to design and build solar power facilities is heating up. The fight between investors is taking place on numerous fronts, from strategic alliances to fundraising.

The solar energy sector as a whole was holding its breath! A rumour has been circulating for weeks that Bboxx, a British off-grid service provider, is about to purchase Ghana's cleantech PEG Africa. The deal is estimated to be worth roughly $200 million, according to reports in the specialist press that both firms have refuted.

This is an unusually high figure for the type of operation in this industry. Sun King, a US firm selling solar kits for home use, set a new record in early May when it closed a $260 million round of financing to accelerate its development and expand its operations in Asia and, particularly, Africa.

The solar industry is developing everywhere, from Egypt to South Africa, Morocco, Senegal, Burkina Faso, Togo, and Kenya. On the continent, where the sun is nearly inexhaustible, grid-connected solar PV installations and off-grid systems are springing up in clusters.

Morocco, for example, has a mixed performance due to the complex administration of the massive Noor Ouarzazate solar project (580 MW), but the Moroccan Agency for Sustainable Energy (Masen) nevertheless anticipates that renewable energy will account for 52 per cent of its energy mix by 2030.

Under the Noor PV II programme, seven concessions were granted to four independent power producers (IPPs) to accomplish this. Taqa of Morocco, Voltalia of France, Amea Power of the United Arab Emirates, and Enel Green Power, a subsidiary of Enel, will be entrusted with creating 333 MW of solar photovoltaic capacity.

Siemens Financial Services (SFS) of Germany and Huawei Digital Power Technologies of China have formed strategic collaborations to develop a portfolio of 1,000 megawatts of solar energy and smart infrastructure.

Capton Energy, a joint venture between the former and Saudi Arabia's Desert Technologies, plans to acquire and construct solar power installations throughout Africa and Asia.

The second has picked Meinergy, a photovoltaics leader in West Africa, to supply Ghana with megaprojects with 500 MWh of electricity storage capacity as a bonus.

Christopher Knowles, an independent financial investment advisor who has worked with the European Investment Bank (EIB) and Meridiam Infrastructure Africa Fund (MIAF), said: "several private initiatives, led by players such as Meridiam and impact fund manager Camco, are also helping to accelerate the process and bring more megawatts onto the continent."

In 2021, it dominated new renewable energy capacity globally, with wind power (88 per cent). The International Renewable Energy Agency (IRENA) noted a 3.9 per cent rise in Africa in its 'Renewable Capacity Statistics 2022' report, which was released in April. According to the World Bank, about half of Africa's population (548 million people) did not have access to electricity in 2018.

In the current setting, IRENA expects clean energy to account for about 67 per cent of electricity production in Sub-Saharan Africa by 2030, driven by solar energy, which has the largest potential.

As a result, the predicted expansion in energy consumption, combined with the intensification of global decarbonisation efforts, is expected to spur the development of renewable energies, particularly solar energy, especially as the cost of this energy continues to fall due to technological progress.

"It's a low-risk investment with assets that provide predictable long-term profits in the form of power purchase agreements," explains green energy consultant Rim Berahab. Investors are drawn to "these projects' profitability, which is substantially higher, even double that found in other worldwide markets," according to Christopher Knowles, an independent financial investment counsellor.

Apart from entrepreneurs' enthusiasm for this solar manna, which is yet underutilised on the continent, there is also the dedication shown by development funding organisations. The International Finance Corporation (IFC), a World Bank affiliate in charge of private-sector finance, has established a technical and financial platform for governments and investors.

Scaling Solar is a solution for rapidly developing large-scale solar power systems at a cheaper cost. Due to this effort, two solar power plants with capacities of 35 and 25 MW will be built in Senegal by the end of 2020.

In Côte d'Ivoire, two additional facilities with a combined capacity of 60 MW are now under development. This complete system is also being used in Zambia, Togo, Niger, Madagascar, and Mali, with customised documentation, pre-approved finance, and guarantee instruments.

In early May, the UN launched a $600 billion plan to expedite the transition to renewables and assure access to clean power and cooking in the least developed nations, particularly in Africa, by 2025, confirming that multilateral institutions are mobilising in favour of sustainable energy. The African Development Bank (AfDB) is likewise dedicated to assisting Africa's energy transition.

Desert to Power, a $380 million project to make the Sahel region the world's greatest solar-producing area by mobilising 10,000 MW of installed capacity, is the most recent project supported by the pan-African institution.

According to Nsangou, the growth in funding from international donors, particularly the World Bank, is "of paramount importance" for the development of solar projects in Africa.

"In light of the current economic situation, which prevents African states from launching large-scale projects, this dynamic is a good omen," says Bboxx EDF Togo's managing director, who believes that these investments will allow the solar industry to develop and respond not only to the continent's electrification needs but also to the climate emergency.

However, to tackle these problems and expedite the transition to clean energy, Rim Berahab, an economist and renewable energy expert, believes that "significant reforms are required to enhance the sector's institutional and regulatory structure."

Source: The Africa Report

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