Africa Renewable Energy Push ï¿½Not Workingï¿½ Due to Risks
By Anthony DiPaola - Jan 17, 2013 4:37 AM PT
Africa is lagging the rest of the world in obtaining funds for
renewable energy projects because development banks arenï¿½t assuming
enough of the political risk of working there, United Nations
Investors need more guarantees that their projects wonï¿½t suffer losses
from political or legal changes in Africaï¿½s poorest nations, said
Mohamed El-Ashry, a senior fellow at the United Nations Foundation.
International institutions should shoulder more of those risks, said
Achim Steiner, executive director of the UN Environment Program.
ï¿½Funding for renewable energy in parts of Africa is not working,ï¿½
Steiner said at the World Future Energy Summit in Abu Dhabi. ï¿½Public
private partnerships are not working because of too much risk on the
The comments at the conference this week show why African nations are
struggling to attract investors for projects that would meet UN goals
for supplying electricity to poor communities while limiting fossil-
Africa had about $4.3 billion of the $268.7 billion invested worldwide
in renewable energy last year, according to data from Bloomberg New
The continent had about 36 projects, all except eight of which were in
South Africa, with Kenya, Nigeria, Ethiopia and Zimbabwe accounting
for the rest. China by contrast lured $67.7 billion in investment and
the U.S. $44.2 billion.
The UN is pushing countries and companies to provide energy to the
roughly 1 billion people who donï¿½t have access to constant and safe
electricity and water by 2030. In sub-Saharan Africa, many villages
not connected to electrical power grids could be powered with wind and
solar because theyï¿½re far enough from the national electric grid that
renewables are competivie, according to participants at the conference
that ends today.
Investors need ï¿½top lineï¿½ guarantees, said Paul Kloppenborg, chief
executive of Amsterdam-based Global Cleantech Fund. Providing
insurance for investors against government or regulatory changes
wouldnï¿½t guarantee profit, Kloppenborg said in an interview. Instead,
it would add the confidence needed for investors to embark on projects
that would then turn a profit depending on the operatorï¿½s efficiency,
Multilateral agencies investing along with private companies in
renewable energy projects in developing countries can improve the
chances of securing financing, El-Ashry said.
Africa Set To Necessary Renewable Energy Growth
A new report to come from the International Renewable Energy Agency
(IRENA) has detailed its belief that Africa has not only the potential
but the ability as well to fuel the majority of its future growth by
using renewable energy.
The report, ï¿½Africaï¿½s Renewable Future: The Path To Sustainable
Growthï¿½, can be found here (PDF) and is one of many announcements made
by IRENA during the World Future Energy Summit (15-17 January), part
of Abu Dhabi Sustainability Week.
Countries throughout Africa are experiencing massive economic and
demographic growth, with six of the worldï¿½s ten fastest rising
economies coming from Africa, and a population that is expected to
burst through 2 billion by 2050.
Subsequently, policy makers in Africa, and dealing with Africa, are
facing a decision: where is the energy going to come from to sustain
such a population and economic increase?
The IRENA report shows that a combination of solar and hydropower
resources, when complemented by bioenergy, wind, geothermal, and
marine resources in select regions, could help Africa continue its
ï¿½Africa is undergoing a transformation, and has an unparalleled
opportunity to use renewable energy to promote growth and improve
millions of lives across the continent,ï¿½ says Adnan Z. Amin, IRENA
Director-General. ï¿½Itï¿½s an exciting moment, and IRENA is ready to play
its role in assisting Africa on its path to a renewable energy future.ï¿½
All of this comes on the heels of a GTM Reserach report which listed
the Middle East and North Africa as having the capacity to reach 3.5
gigawatts of solar capacity by 2015.
ï¿½In terms of solar energy, it is clear that the MENA [Middle East
North Africa] region is set to experience significant change over the
next five years,ï¿½ said Scott Burger, GTM Research analyst and the
reportï¿½s author. ï¿½While Saudi Arabia will likely be the largest market
in the long-term, there will be significant opportunities throughout
the region. With strategic planning and a solid development of local
partners and supply chains, savvy companies will be able to capitalize
on all of the opportunities in the region.ï¿½
Clean Technica (http://s.tt/1yz2L)
Read more at http://cleantechnica.com/2013/01/16/africa-set-to-necessary-renewable-energy-growth/#KqGtoTIgW4VtfIwW.99
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