Pay-As-You-Go solar power

In her thesis, Moncayo notes that harnessing solar energy and converting it to off-grid battery power is not a new idea in Africa. She reports that the United Nations Environment Program claims that off-grid lighting solutions are “a multi-billion-dollar market”. At present, reliable and cost-effective Solar Home Systems (SHS) with 20-50 W solar panels that can power LED bulbs and charge a battery are widely available in the region. How are these affordable to the poor Sub-Saharan African population? Moncayo notes that off-grid energy enterprises have adapted their business models to suit their customers. These include Pay-As-You-Go (PAYG) or rent-to-own schemes that allow flexible access to solar energy for as little as 50 US cents per day. Moncayo reports that one of the best-known providers is BBOXX, a start-up founded in 2010 that has now sold over 85,000 systems, reaching 425,000 people, in over 35 countries. Such access to Solar Home Systems has been welcomed as they enable the poorest to save both time and money. Moncayo states in her paper that before they had access to these systems, the typical customer had to spend more money on kerosene for less lighting quality and travel nearly twice a week to charge their phone.

Lack of initial finance

The problem with the schemes currently in place is that they need initial finance.  Moncayo reports payback periods of about 18 months for each system. For a company to achieve financial stability, they need to sell fast and grow fast. However, even when they are able to expand quickly, they have difficulties to pay back short-term loans with their business proceeds. According to Moncayo, philanthropy, public financing, banks, private equity and venture capital have proven unable or unwilling to match Sub-Saharan Africa’s demands to finance off-grid energy. She investigates how impact investments are stepping up to contribute to fill the gap and help to get off-grid power to the masses. Impact investments are investments made in companies, organizations or funds that intend to create positive social and/or environmental impacts, while also attaining a financial return. Moncayo reports that in 2015, from the $16.1 billion supplied by impact investors in West and East Africa, $4.2 billion were dedicated to energy. She notes that most of these did not invest in off-grid options, but those that did are largely multilateral development banks, Development Financial Institutions (DFIs), impact investing funds and corporate impact investors. The support offered by these actors is now also getting ordinary investors interested in off-grid opportunities.

Impact investments are more than finance

Moncayo is also keen to highlight the main non-monetary contributions of impact investors. The first is their obvious contribution to the development and availability of off-grid energy systems. They attract new investors and connect them with providers, including those that are social-neutral. As impact investing is a cooperative, rather than a competitive sector, capital can be aggregated for co-investment, cutting transaction costs. In addition, impact investors can provide off-grid companies with technical assistance and help them grow their networks. Investors get involved in the governance of companies to help preserve their social objectives. Through the impact assessment of their investments, they have the information at hand to further improve the value proposition of enterprises. Overall, the introduction of impact investor capital and management practices strengthens and endorses the entire off-grid sector.

Energy for all by 2030

To attain access to clean energy for all, globally, by 2030, the OECD and the EIA, Energy For All- Financing Access For The Poor report (2011) stated that $48 billion needs to be invested each year. Moncayo notes that, if Sub-Saharan Africa requires 80% of all off-grid electrification, it would need investments of $5.6 billion a year. Based on figures supplied by Bloomberg New Energy Finance, Moncayo estimated that $188 million in impact investments were made in the Sub-Saharan African off-grid energy sector in 2015. This is just 3.3% of that required by the OECD Energy for All Case for that year. Based on projections for the increase in impact investments in the coming years, she predicts that by 2030, the impact investments dedicated to the off-grid energy sector in Sub-Saharan Africa will have the potential to finance 44% of the OECD Energy For All Case annual budget. Moncayo concludes that this is likely to be less than 1% of the estimated multi trillion-dollar impact investments predicted for 2025 by the Global Impact Investing Network. However, she notes that her analysis highlights the power of impact investors, who are emerging as engine for the global economy and key players in tackling the challenges that the world faces today.

By Mónica Moncayo Escobar – “Role of impact investing in financing access to energy for off-grid populations in Sub-Saharan Africa.

Join His Excellency Dr. Bashir Ifo, President, ECOWAS Bank for Investment & Development, Ben Good, Chief Executive Officer, Energy4Impact and other impact investors to discuss how to deliver affordable, reliable and clean energy to over 600 million Africans, faster, at the 3rd Africa Impact Investing Leaders Forum taking place on 25th – 26th October, 2018 in London. Register interest here

Although small-scale solar providers focused on the rural off-grid market have been the darlings of the development world, they generate just enough electricity to power more than a few basic appliances such as light bulbs, fans, and televisions. These improvements are undoubtedly an important improvement, but the vision for energy access should embrace a more comprehensive and robust potential. Improvements in quality of life and productivity should be the centerpiece of the agenda for powering Africa. A sustainable vision is required to identify feasible, durable solutions. Unless government and industry stakeholders invest in larger renewable systems, we will continue to champion an unsustainable model of sustainable development.

While African governments have increasingly framed renewable energy as the linchpin of their climate change and development strategies, solar energy still remains largely dependent on public sector capital from sources like the World Bank and the African Development Bank. At present, Africa lacks sufficient investment to fund enough energy projects to achieve universal energy access by 2030. In 2015, the African Progress Panel found that current energy-sector investments in Africa are about US$8 billion a year—less than one-sixth of the US$55 billion per year required to meet electrification targets. And even those funds won’t meet the renewable energy sector’s financing needs.

According to a recent Power for All report, only 11 percent of World Bank energy access funding and 1 percent of African Development Bank funding went to decentralized renewables between 2011 and 2014. With climate mitigation funding in flux due to the U.S. withdrawal from the Paris Agreement, Africa’s solar industry must rapidly develop more capital-efficient ways to reach consumers outside of the grant-based or subsidized rural electrification model or risk future impediments to growth.

Solar companies providing subsistence-level energy to consumers with poor economic prospects have provided an important basis for the industry’s development. Investors betting on the off-grid rural market are right about the transformative impacts of models like M-KOPA, which enables customers to repay the cost of a $200 entry-level solar system over time. These systems provide the means for children to read at night, and they improve household health by reducing reliance on dirty fuels like kerosene. However, if these investors hope to generate long-term growth and improve economic livelihoods, solar systems must be able to generate enough output to power products like refrigeration, which improve food security, or irrigation and agricultural machinery, which enable productivity in the increasingly promising smallholder-led agricultural industry in sub-Saharan Africa.

Likewise, water heating is a staple and important aspect of daily urban living. Enhanced access to electricity shouldn’t just be a stop-gap solution: it should provide a means of reducing poverty and create better conditions for healthier, more financially stable lives in the long-term. As governments and development partners work to catalyze Africa’s green revolution, energy generation must play an essential part of the story. In Kenya, for example, energy accounts for nearly 15 percent of agricultural input costs. Harnessing enough energy to enable customers to expand their discretionary income is a critical path to improving the customer experience while also helping the energy industry’s profit margins—everybody wins. Electrification efforts that focus solely on basic solutions will not uplift the continent as a whole.

For renewable energy to create scaled impact, greater focus is needed on urban and peri-urban locales, which are often neglected in the race to power Africa. The sheer number of customers in urban areas means that efforts to improve electrification among all residents will reduce marketing and distribution costs. Although the electricity deficit is most stark in rural villages, the continent’s most developed cities from Nairobi to Johannesburg also confront irregular power, which, given the rapid urbanization trends in Africa, will become an ever-greater problem as more slums spring up on the urban periphery.

According to the Honourable Akinwumi Ambode, Governor of Lagos State, nearly 86 people enter Lagos every minute of the day—a rate 10 times that of New York. As new settlements crop up, the grid has yet to keep pace with the scale of development. Because the cost of solar power has gone down by 80 percent since 2010, renewable energy solutions have become an increasingly appealing option to expand access to energy in urban environments, the primary drivers for Africa’s economic growth. In these environments, community-level mini-grids and individual solar home systems are models that can deliver higher returns for customers and solar providers alike. Expansion of solar provision in urban areas can subsidize the costs of expansion of solar power in rural communities, and translate into a more commercially sustainable approach to achieve universal and, equally as important, reliable electricity access for more Africans.

As hubs of innovation, urban areas also offer more opportunities to experiment with various types of solar solutions on a large scale. It is hard to imagine testing a scalable power system in a small village—distribution and maintenance would be expensive due to infrastructural and access issues, and piloting a scalable system in a population-limited area is difficult.

Urban settings are ideal testing grounds because research shows that innovation in urban areas grows at the same rate as populations because it increases more opportunities for personal interaction and leads to exposure to new ideas. Directing more investment towards urban energy solutions can improve local resilience by helping balance the over-stretched power grids found in most African countries, and facilitating nationwide energy efficiency.

Expanding electrification in rural Africa is an important step towards building an inclusive future, but the solar industry’s preoccupation with last-mile off-grid solutions will not deliver transformative growth for the continent. Empowering entrepreneurs at a scale that enables them to grow their businesses and generate more economic employment will require firms and investors alike to balance urban with rural concerns, and immediate energy access with a longer-term, sustainable vision.

By Ademola Adesina is the Founder and CEO of Rensource, a West Africa-focused distributed energy services company.

However, an assessment of the continent’s progress in combating climate change brings to mind a popular African proverb: “A large chair does not make a king”—in other words, huge implementation challenges remain. Africa’s policy makers, however, are eager to meet these challenges, believing that achieving the objectives of the climate change deal could unlock the continent’s socio-economic potential.

Signed in late 2015, the Paris Agreement entered into force on 5 October 2016. One month later, at the COP22 (Conference of the Parties to the United Nations Framework Convention on Climate Change UNFCCC) in Marrakech, Morocco, world leaders formally adopted the Marrakech Action Proclamation, which recommitted parties to full implementation of the Paris Agreement. And implementation has since started.

As of April 2017, of the 143 countries that have so far ratified the agreement, 33 are in Africa, including Benin, Burkina Faso, Cameroon, Chad, Ethiopia, Gabon, Gambia, Kenya, Nigeria, Somalia, Tunisia, Uganda and Zambia. That is 60% of the total number of African countries.

Beyond the ratifications, many countries have also fulfilled a key requirement in the agreement by formulating their Nationally Determined Contributions (NDCs). The NDCs are the countries’ individual efforts to achieve climate change goals. In their NDCs, the majority of African countries indicated plans to prioritize climate proofing development activities, especially in economic sectors such as agriculture and energy.

An example of climate proofing in the agriculture and energy sectors is the restoration of ecosystems, a development that is already gathering steam on the continent. Agenda 2063—a set of aspirations formulated by the African Union (AU) to point the way to prosperity on the continent—also highlights ecosystem restoration as a way to catalyze socio-economic development.

The AU maintains that by applying ecosystem-based adaptation in the agriculture sector in combination with clean energy, countries can add agro-value chains, spur food security and increase economic opportunities along the value chain, while simultaneously lowering carbon emissions and conserving ecosystems.

Currently, Africa’s development challenges are many. One serious disadvantage is that more than half of its 1.2 billion population lives on less than $1.25 per day—the standard threshold for absolute poverty. Also, about 60% of Africa’s unemployed are youth. Food security is also a problem: a quarter of Africa’s population goes to bed hungry, while more than 200 million Africans suffer from severe malnutrition.

Africa’s strengths

To respond to these challenges while implementing the Paris Agreement, experts say African countries should maximize the potential of key sectors capable of boosting socio-economic development. In other words, the focus should be on agriculture, food production and clean energy, among other sectors.

Africa’s strengths lie in its immense natural resource potential and other ‘sweet spots’, including having 65% of the world’s arable land and 10% of its inland freshwater resources. The continent’s renewable energy potential can be realized through hydro as well as solar power. Harnessing these resources in a sustainable way will boost Africa’s development.

Agro-value chains in Africa, if properly harnessed, can reduce poverty two to four times faster than any other sector, according to the World Bank. The agricultural sector’s projected value by 2030 is $1 trillion, and this sector could potentially provide 17 million jobs, says the Bank.

The Paris Agreement accentuates the opportunities in Africa’s economic sectors; what remains is for countries to implement the agreement with full attention to domestic development needs.

Ecosystem-based adaptation

The UN Environment, which promotes sustainable environment through sound policies and practices, is providing technical and other forms of assistance to African countries implementing the Paris Agreement to enable them to adequately address socio-economic challenges, particularly food insecurity and unemployment, as well as macroeconomic growth.

The Ecosystems Based Adaptation for Food Security Assembly (EBAFOSA) is one of the initiatives to power sustainable agro-industrialization. EBAFOSA is facilitated by the UN Environment supported by the AU and state and non-state actors, including private-sector partners. Ecosystems-based adaptation for food security consists of methods of agricultural production that promote conservation and sustainability through integrated management of land, water and living resources.

Many of the 40 African countries implementing EBAFOSA are successfully using a combination of policies and other operational interventions to address socioeconomic priorities, offset carbon emissions and protect ecosystems.

In the Democratic Republic of Congo, for example, a group of young agri-preneurs (agricultural entrepreneurs) are using clean energy to process cassava (an indigenous climate resilient crop) into flour. They then package and standardize the flour before selling it. An agri-preneur can rake in up to $4,000 weekly. This business model reinforces the overarching argument for green initiatives, which is that it can be a win-win: protecting the environment can also benefit the bottom line.

A boost for SDGs

A green initiative such as that of the Congolese agri-preneurs will contribute to Sustainable Development Goal (SDG) 13 (combating climate change), SDG 7 (affordable and clean energy), and SDGs 1 and 2 (tackling poverty and boosting food security).

In Kenya, the use of information and communications technology to garner pertinent information for financing purposes is increasing agricultural production and promoting a clean energy value addition. Through EdenSys, an end-to-end agri-business management app for mobile phones and computers, enterprises engaging in EBA and clean energy agro-business activities can post their financial records online and use them to apply for loans. A number of microfinance institutions are providing these loans, which indirectly contributes to the SDGs pertaining to climate change, clean energy, the elimination of poverty and food security.

In Makueni County in eastern Kenya, the UN Environment is helping local authorities create a climate change fund. The plan is to make the fund a financing pool for climate resilience activities, particularly those focusing on ecosystems-based adaptation for food security. The fund will be the first of its kind in Africa.

Makueni County’s climate fund goal is to set aside 50% of its portfolio as collateral for loans of up to 10 times the security sum. Enterprises engaging in ecosystems-based, adaptation-driven agriculture and clean energy value addition could benefit from such loans.

While Africa may have lagged in development in the past decades, the Paris Agreement provides an opportunity to accelerate socioeconomic development. Instruments such as the global SDGs, the AU’s Agenda 2063 and the Paris Agreement are creating the policy framework and operational paths to sustainable development, experts say.

So far Africa’s climate change implementation activities are encouraging. The questions are how much longer countries can maintain the momentum and how much support, especially financial, will come from abroad. On these, the jury is still out.

By: Richard Munang and Robert Mgendi

Many African countries are struggling badly to finance their energy requirements. For example, virtually no African electricity utilities have an “investment-grade” rating which prevents them from raising debt at reasonable rates in order to finance their energy projects.

Projects backed by publicly-owned energy providers also encounter certain limits. Long development lead times together with uncertainty over government commitments to purchase volumes produced – key to any financing project – have led some African countries to entrust energy production to the private sector.

Developing IPPs in Africa

In a bid to leverage the Continent’s vast solar capacities, wind and water resources, many corporations are turning to IPP-type private projects (“Independent power projects”, in industry jargon), primarily to meet their own needs, before transferring any energy left over to the grid. As the authorised production threshold has been raised, the number of such independent projects to produce energy for own-use has grown.

Although the situation varies by country, Africa has enacted a series of sector-based legislation over the past few years, such as Law 13-09 in Morocco 1. This allows programmes to produce energy with an installed capacity of up to 50MW to apply for authorisation from the Moroccan Energy Ministry. Any surplus must be sold exclusively to ONEE (the national electricity and water agency), with whom the independent producer must negotiate a transport agreement and a connection agreement (for the transfer of any surplus energy produced).

Other factors have also contributed to the success of IPPs in Africa: deregulation (albeit partial) of the energy sector, increasing demand for energy and the availability of special purpose financing, all supported by government guarantees to purchase power produced.

Development finance institutions (DFIs) have also played a key role alongside financing from foreign backers, especially Chinese concessional lenders and private investors. It is estimated that energy projects attracted USD 14 billion worth of financing in 2014, the bulk of which came from concessional loans put up by China Exim Bank.

Very welcome structural reforms

Participation in private sector financing is therefore an opportunity not to be missed. However, most African governments continue to regulate their national energy sectors via a single publicly-owned utility. This is still the case in Benin, Burkina Faso, Congo, Gabon, Equatorial Guinea, Mali and Niger, to mention but the countries belonging to the CFA franc zone. Nevertheless, beginning in the 1990s, a number of countries began to introduce structural reforms designed to partially deregulate their vertically-integrated monopolistic utilities. South Africa was the first to do so, followed by Ghana, Nigeria, Uganda and then Kenya. A third category of countries – comprising Angola, Cameroon, Côte d’Ivoire, Madagascar, Morocco, Mauritius, Senegal and Togo – have continued with their monopolies but adopted legislation conducive to IPP-type structures. Indeed, within this category of countries, publicly-owned agencies frequently acquire stakes in dedicated IPP project companies, generating a hybrid market with all sorts of complex governance-related issues. While the existence of an independent regulator may be seen as a safeguard for reassuring investors it does not appear to be an absolute imperative.

Although structural reform has undoubtedly resulted in better governance in the energy sector and an environment that is more conducive to IPPs, widespread financial mismanagement of publicly-owned bodies means that private electricity buyers are becoming more and more common in the industry. Nevertheless, there has to be sufficient industrial demand. Madagascar is a case in point. A number of hydroelectricity projects have been launched by JIRAMA, the public water and electricity utility, however, firm credible commitments to purchase power could not currently be secured for the total cumulative installed capacity of the projects due to the serious financial difficulties of the public energy body. Even by trying to sell to the private sector, there is no guarantee that the shortfall in demand could be made up. Thence the African paradox: a lack of creditworthy customers alongside massive energy requirements!

Adopting and complying with best practices

Nevertheless, the success of IPPs is down to a number of best practices that include more effective coordination between the assessment of requirements and power purchase agreements (or PPAs), setting up a clear, predictable and transparent framework for transferring procurement documentation – even for private initiatives, and coherent decisions regarding project structure and power purchase tariffs.

As regards the first point, too many African countries still suffer from inadequate public policy planning tools in spite of loud media declarations concerning plans or strategies that are supposed to last for a generation. Apart from South Africa, very few governments have actually linked their energy planning requirements to energy procurement strictu sensu. Fragmented structures frequently hamper a coherent public policy capable of ensuring diversity in the energy mix, a network capable of absorbing new projects and consistent arrangements for organising and awarding tenders and concessions.

Procedures for awarding IPPs, even within a private framework, must be clear, comply with  principles of equal treatment of candidates and remain constant over time. This does not mean that they have to be rigid! In a rapidly changing market where technical advances and competitive pressures are tending to push down the cost of equipment and material, investors should be able to enjoy contractual stability and the gains generated from lower market prices should also be split among the different parties. This will ultimately result in lower prices for end consumers, particularly in projects where surplus power is purchased by the national utility.

Lastly, “feed-in tariff ” arrangements (FiT) do not have to be a dogma. While FiTs are attractive because they reassure investors and because they have been successfully used in countries like Kenya, Ghana and Senegal, they curb competition significantly.

The financial strength of “off-takers” (i.e., power buyers), the scalability of their industrial plan and the reliability of their power purchase commitments will all be key to the success of an IPP venture in Africa, especially where the public utility is insufficiently creditworthy to be able to purchase the energy produced over the long term.

By Hugues de La Forge, Partner – Holman Fenwick Willan

“To prosper, Africa needs a massive, concerted, ambitious effort to transform our economies,” Akinwumi Adesina, President of the African Development Bank Group, said. “We need growth that benefits everyone. The High 5 priorities will get us there more quickly.”

The High 5s and the Bank’s recent progress are highlighted in the Annual Development Effectiveness Review 2016 — the latest edition of the Bank’s key monitoring and tracking tool — which was released Monday, June 27, 2016.

This year, the Bank has revamped the review to give greater attention to Africa’s fundamental challenges and how the Bank is addressing them.

The Bank is also reorganising itself to become more agile and responsive to the continent’s needs. A new business model has been adopted and three new vice presidencies established: on power, energy and green growth; on agriculture, human and social development; and on the private sector, infrastructure and industrialisation.

To increase its efficiency and carry out its work more quickly, the Bank is moving closer to its clients by establishing five regional integration and business delivery offices.

All these changes will help achieve the structural transformation outlined in the Bank’s Ten Year Strategy. The High 5 priorities are an integral part of that effort:

Light up and power Africa — About 635 million Africans still live without electricity and demand for energy is rising rapidly. Through the New Deal on Energy for Africa, the AfDB is working to unify efforts to achieve universal access to energy. Its new Energy Strategy aims to increase energy production and access, and improve affordability, reliability and energy efficiency.

Feed Africa — More than 70% of Africans depend for their livelihoods on agriculture. If its full potential were unlocked, agriculture could vastly improve the lives of millions. The Bank is framing its agricultural operations within a business-oriented approach, based on a deeper understanding of the obstacles, potential and investment opportunities.

Industrialise Africa — A persistent lack of industrialisation is holding back Africa’s economies. Over the next 10 years, the Bank will invest US $3.5 billion per year through direct financing and leveraging to implement six flagship industrialisation programmes in areas where the AfDB can best leverage its experience, capabilities and finances.

Integrate Africa — Through its Regional Integration Policy and Strategy, the Bank is focusing its integration efforts not just on movement of goods and services but also on mobility of people and investment.

Improve the quality of life for the people of Africa — Africa’s economic growth has not been rapid or inclusive enough to create enough jobs and improve quality of life. The Bank is committed to building up the availability of technical skills so that African economies can realise their full potential in high-technology sectors. Acknowledging the urgent need to address climate change, the Bank will nearly triple its annual climate financing to reach $5 billion a year by 2020.

By AfDB

Africa’s power sector needs far exceed most countries’ already stretched public finances, making it crucial for governments to attract greater levels of private investment to scale up generation capacity. To reach the scale required, governments must provide a sound investment climate and enabling environment, the report finds.

 “Independent Power Projects in Sub-Saharan Africa – Lessons from Five Key Countries” draws on case studies carried out in Kenya, Nigeria, South Africa, Tanzania and Uganda – countries that have the most experience with IPPs in the region.

“Independent power projects now constitute the primary vehicle for private investment in the African power sector,” said Makhtar Diop, the World Bank’s Vice President for Africa. “The objective of this report is to identify key lessons that can help African countries attract more and better private investment.”

Currently, there are 126 IPPs in 18 Sub-Saharan countries, accounting for an installed capacity of 11 GW and $25.6 billion in investments. But to benefit more countries the report recommends these IPPs should be much larger and spread across the region.

Enabling factors for attracting more and better IPPs include:

1. More competitive procurement efforts from countries in Sub-Saharan Africa, which includes encouraging long-term contracts through a competitive bidding process. This can help secure reduced prices and help avert other issues, such as the possibility of a problematic contract. If direct negotiations are conducted, they should be done transparently.
2. Clear and conducive energy sector policies, structures and regulatory environment.
3. Systematic and dynamic power sector planning, including the ability to accurately project future electricity demand, determine best supply or demand management options and anticipate how long it will take to procure, finance, and build the required electricity generation capacity.
4. Financial viability of the public utilities is vital as they remain the principal off-takers of power produced by IPPs. Given the high-risk environment of most countries in Sub-Saharan Africa, it will be important to provide proper mitigation through financial guarantees and security measures to attract new investors.

The report also finds that renewable energy IPPs are becoming more promising and can be viable if procured competitively.

The report concludes that all sources of investment need to be encouraged and for IPPs to flourish, countries in Sub-Saharan Africa need dynamic, least-cost planning linked to the timely, competitive procurement of new power generation capacity. This must be accompanied by effective regulations that encourage distribution utilities that purchase power to improve their performance and prospects for financial sustainability, thereby widening access to electricity.

By the World Bank

Click on image to submit your project on energy or other sectos for financing and scaling up.

The experience inspired Nyankamawu to create Volta, a company that builds solar power projects for health clinics, schools and farms across Ghana.

Volta’s customers pay for 25% of the capital costs upfront, and the rest via monthly payments over two years. None of Nyankamawu’s customers have ever missed a payment, Nyankamawu said.

“Our model works best when it’s a substitute for people who are already using diesel generators,” he added. “They’re saving up to 45% on their costs by switching to solar.”

I met Nyankamawu at the Clean Energy Ministerial in San Francisco earlier this month, an annual gathering of energy leaders from 23 countries and the European Union. The meeting marked the first time the ministers met since more than 170 countries signed the Paris climate agreement to limit the global temperature rise to under 2C, a goal that won’t be met without strong domestic policies that give the businesses incentives to invest in a low-carbon future.

I often hear criticisms that businesses, which account for most of the manmade emissions that are causing global warming, aren’t doing their part to keep the rising temperatures in check. Surveys and anecdotal evidence show that many corporate leaders don’t see their role in this global effort.

But that’s not what I have seen. A growing number of companies are turning to renewable energy to reduce their carbon footprint. I am impressed with entrepreneurs like Nyankamawu and other business leaders who work on making renewable energy affordable and accessible. And they represent progress. Putting money in renewable energy, whether through power purchase agreements with big solar and wind farms in the US, or tiny household-sized solar projects in Africa, was a rarity even just five years ago.

Many Fortune 500 companies recognize a direct connection between climate change and their financial wellbeing. Earlier this month, a half-dozen major companies, including TD Bank and Interface, joined RE100, a coalition of businesses that are switching to 100% renewable electricity. The shift has been especially strong in the US, where large corporate buyers contracted a record 3.2 gigawatts of renewable energy last year, nearly 20% of the 16.4 gigawatts of renewables added to the US electric grid overall. That means tens of thousands of workers rely on solar and wind power to do their jobs, and that number will only go up.

One of the most impressive efforts I heard at the San Francisco meeting came from Lisa Jackson, who leads Apple’s environmental and social initiatives. Jackson talked about the company’s effort to use solar and wind energy to run its own global operations and the factories in China that make its iPhones and iPads, including a plan to bring online 2,000 megawatts of green energy there. The company would work with its suppliers there to build those projects.

Some of the most compelling stories came from Africa. Home to the world’sfastest growing population, the continent is a key front in the Paris climate agreement’s quest. In Tanzania, Off-Grid Electric allows homes and small businesses to install solar systems and pay for them via mobile phone payments. Off-Grid says it’s currently installing more than 10,000 solar units every month in Tanzania and Rwanda, and recently raised $70m from San Francisco-based DBL Partners and other investors to help hire more staff and expand operations.

More businesses will switch to renewable energy if they are able to finance it. We saw a record $329bn in global clean energy investment last year, but that falls short of the estimated $1tn that will be needed every year through 2050 to help achieve the 2C goal. A major emission producing country such as India, which aims to install 175 gigawatts of wind and solar power by 2022, will need anestimated $200bn to reach that milestone. The country attracted $10.9bn in clean energy investments last year, according to Bloomberg New Energy Finance.

There is one group of investors who could help fill that gap, but they have yet to value renewable energy investments: institutional investors. They manage public pension, insurance and other funds that are worth trillions of dollars. These investors are dipping their toes in clean energy in US and Europe but remain on the sidelines in emerging markets, which they consider particularly risky.

Michael Liebreich, founder of Bloomberg New Energy Finance, likened the challenge of fighting climate change to climbing Mount Everest: “We’ve just reached base camp.”

No doubt, getting to the top of the mountain will require huge participation from the business community globally.

The window of time to summit is now – and they’ll need to move quickly.

By Peyton Fleming

Having recently moved into their new house built on a stand acquired in the new settlement of Budiriro 5B Extension — neighbouring thousands of houses built by banking institution CABS under the Budiriro Housing Scheme — life would have been most unpleasant without any source of power supply, as Zesa-powered electricity is yet to reach the area because getting connected to the utility’s power lines is proving to be a cumbersome process filled with hurdles.

But power problems are slowly becoming a thing of the past as people in the area have been left with no choice but to turn to solar power.

While the investment in a solar panel and battery was initially made sulkily, the Chirayas were soon to realise turning to solar energy was one of the best decisions they could have ever made. While it might have taken sacrifice to fund the initial setting up of the solar connection in their home, the return on investment that immediately followed has left them without any hint of regret.

“I have to admit that before we connected to solar power, I wished Zesa would hasten to connect the area so we would avoid the costs, but I have since changed my mind,” said Chiraya with a beaming smile.

“With our solar panel and battery, we are able to power lighting for the whole house, the entertainment set [television, home theatre system, DStv] and to charge all our cellphones. We use gas to cook and we are planning to invest in another battery so we can also power the fridge and other electrical gadgets.

“The best part is that since we installed solar energy, there has not been a day we have gone without power supply. My kids are happy too; they get to do their homework uninterrupted and the TV can be switched on all day without us worrying about any extra costs. All we need is the sun, but even without as much sun, the battery still manages to charge.”

For Chiraya, the best part about using solar energy is not having to constantly worry about electricity bills, or the power cuts that have characterised Zimbabwe for years. High electricity bills and going without power and fumbling in the dark trying to locate a candle, are now things of the past for her family.

Back in the day — when Zimbabwe’s economy was still strong and Zesa could be counted on to provide an adequate power supply — solar energy was viewed by many as a preserve for those in very remote areas. It seemed solar panels had been manufactured specifically for marginalised rural areas located far from civilisation. But the crumbling of the economy and the subsequent power shortages that saw Zimbabwe having to import electricity from other countries was, however, to see a shift in the way people perceived solar energy. For the first time, solar energy became an appealing alternative even for the urban folk.

That for the first time, the Kariba Dam — that had for years been a major source of power generation in Zimbabwe — is experiencing the lowest water levels and has been generating less and less electricity, might have also been the wake-up call many needed to eventually decide to look to solar as a real option. This is especially so for those who are moving into houses in newly established suburbs that have spouted all over, but are not yet connected to Zesa’s power supply such areas include, parts of Damofalls, Southlea Park, Caledonia and Glaudina, among many other areas.

Today, the only regret that many that were forced by the power problems to resort to solar energy have, is that they did not realise solar power’s benefits much sooner. Those that are harnessing it couldn’t be happier as it has proven to be the most reliable source of power they can access. As long as the sun is still shining, they will never have to worry about running out of energy — and Zimbabwe has a lot of sunshine, the intensity of which may only get worse as the full effects of climate change continue to be felt. But even when there are a lot of clouds, solar energy continues to replenish itself.

Turning to solar does not only present a win-win situation for those that harness the energy, which comes in abundance; it is a great stride in the country’s push towards green energy, as the traditional method of getting energy harms the environment because fossil fuels have been proven to highly pollute the areas we live in. Solar energy does not contaminate the homes or anything outdoors. If the whole of Zimbabwe goes solar, it would be a monumental achievement along the way to going green.

The environment is enabling for Zimbabwe to become a solar nation!

lFor feedback, email at
cmasara@standard.co.zw

The upward trajectory in the economy has seen the construction of iconic commercial buildings as investors, local and international, seek to tap into limited office space and take advantage of the robust retail market. This competition in the property market is being driven by Nairobi’s status as an investment hub for the East and Central African region.

Devolution has also spurred more activity in the construction sector as counties seek to erect mega structures that will positively impact development in their respective areas. New buildings going up include county offices, hospitals, schools and agricultural facilities such as factories and processing plants.

The 2016 City Momentum Index (CMI) report by Jones Lang LaSalle, an investment management company specialising in real estate, points out Kenya’s booming economy as the driving force behind the development of new infrastructure and the country’s booming real estate sector. These activities, according to the report, have enabled Nairobi’s expansion as it registers among the highest levels of office and retail construction of any city globally at the moment.

FAST-GROWING DEMAND FOR POWER

All of this new construction amounts to a fast-growing demand for power, with current grid capacity sometimes struggling to meet this demand, which results in power rationing or blackouts. This interruption to business operations stifles efficiency, and therefore, profits.

Never in the country’s history has the need for new energy solutions been more evident than now. Only 25 per cent of the Kenyan population is connected to the national electricity grid, with rural grid access at about 5 per cent. It is also estimated that there is a 300MW electricity shortfall at peak hours (6.30pm to 10.30pm), when most domestic consumers switch on electricity from the country’s total 2,282 MW capacity.

This, yet heat from the earth’s core, the wind, water, and the sun are all freely available and sustainable; harnessing them can supply an endless source of energy. Kenya has long daylight hours, making it particularly well suited to solar technology, which generates electricity even in cloudy conditions.

Recognising this, a growing number of businesses throughout East Africa are installing solar systems to generate solar electricity for powering facilities in buildings such as lights, air con and machinery.

Solar roof systems are particularly well suited to dense urban environments, where land is at a premium, and power demand is high. Solar is highly scalable and flexible, which enables it to be integrated in innovative ways. A great example is the solar carport that was constructed on the roof of the carpark at Garden City Mall in Nairobi last year. There is no better illustration to show how planning at the initial design stage of a new mega structure can easily incorporate solar, which provides a source of electricity to power the building during daylight hours, thereby reducing reliance on grid energy.

SOLAR HYBRID

Such systems, known as solar hybrid, are dispelling the common perception that solar is the preserve of households and communities with no access to grid energy. In fact, there are examples around the world of structures with solar integrated in clever ways, such is the global opportunity for solar PV.

For example, Blackfriars Bridge spans the River Thames that flows through the heart of London, England. The bridge functions as a train station and busy commuter rail link into the city. The panels meet nearly half of the train station’s annual energy needs.

The solar system at Garden City Mall comprises 3,364 solar panels; the structure not only provides 454 parking spaces and 6,000 square metres of car park shade, but also generates 1,450mWh of clean electricity annually, equivalent to powering 550 urban homes in Nairobi every year. By using solar electricity rather than grid energy, the mall will reduce carbon emissions by around 18,750 tonnes over the lifetime of the solar system.

Solar hybrid technology is a highly innovative energy solution that works alongside the power from the grid, and in combination with a diesel generator. During daylight hours, the solar panels generate solar electricity, and if the grid goes down, the system generates solar electricity alongside the diesel generator.

According to MasterCard’s African Cities Growth Index (ACGI) 2015, Nairobi is one of the cities with the highest growth potential globally, and it is expected to grow rapidly in the next five years. As a continental financial and investment hub, its commercial property sector is as robust as ever. It is commendable for new buildings to adopt environmentally friendly technologies, such as solar, in order to generate clean energy, which reduces reliance on fossil fuels.

Businesses need to take a long-term view of their energy needs – Garden City’s carport will, for instance, generate free electricity for at least the next 25 years, possibly up to 40 years. If all the shopping centres and buildings with unused roof spaces in Nairobi and other towns and cities installed solar, there would be far less need to rely on grid power and diesel energy. The amount of additional solar electricity generated by the panels could help meet the energy demand of the new and existing businesses, many of which need a secure, reliable source of energy around the clock.

By Guy Lawrence, Director, SolarCentury

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Cabeólica is the first privately-financed sustainable wind farm on a commercial scale in sub-Saharan Africa. Operating across four of Cape Verde’s islands (Boa Vista, Sao Vincente, Sal and Santiago) and consisting of over 30 wind turbines, it has a total installed capacity of 25.5MW, equivalent to around 20% of Cape Verde’s energy needs. To date, Cabeólica has generated over 300,000 MWh of clean wind power.

The project has transformed Cape Verde’s access to electricity. Prior to becoming operational, the islands suffered from chronic power shortages and were heavily dependent on imported oil, with only 2% of the country’s energy needs being sourced from wind power. Today, Cape Verde benefits from a reliable and extended electricity grid.

Andrew Alli, President & CEO of Africa Finance Corporation said:

“We are very excited to take a larger part in this ground-breaking project. Cabeólica provides access to electricity for 360,000 people, which is about 72% of the Cape Verde population. The project is staffed entirely by skilled Cape Verdean employees and with sustainability at its core; it has avoided an estimated 55,000 tonnes of carbon emissions a year and averted the need to import 15 million litres of diesel a year. The additional share purchase will allow further expansion and other uses of wind energy in Cape Verde. We are very proud of our growing work in addressing Cape Verde’s energy needs though sustainable measures, all the while seeking a competitive return on investment for our shareholders.”

Notes to Editors

About AFC – www.africafc.org
AFC, an international investment grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private sector infrastructure investment across Africa. With a current balance sheet size of approximately US$3.2 billion, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. In May 2015, AFC successfully concluded a debut US$750 million Eurobond issue which was 7 times oversubscribed and attracted investors from Asia, Europe and the USA.

AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.

AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.

AFC has become the benchmark institution for private sector power project development and investment in Africa.

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For more information contact:
Lucy Savage
Vice President, Communications
Tel: + 234 1 279 9600
Email: lucy.savage@africafc.org

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Victoria Geoghegan / Nick Lambert / David Bass / Philip Peck
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Email: afc@bellpottinger.com

By African Media Agency (AMA) on behalf of AFC.