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Macron makes renewable energy push in power-starved Africa

Macron makes renewable energy push in power-starved Africa


* Macron inaugurates 33 MW solar plant in Burkina Faso

* 600 mln people live without power in sub-Saharan Africa

* Finance for new power projects tough to obtain

By Marine Pennetier

ZAGTOULI, Burkina Faso – French President Emmanuel Macron on Wednesday inaugurated West Africa’s largest solar energy plant in Burkina Faso and pushed for French companies to be the preferred partners to develop future renewable power projects on the continent.

The 33 megawatt (MW) plant, built on scrubland outside the capital Ouagadougou by a subsidiary of France’s Vinci SA , will generate power to supply 110,000 households.

Despite the deal, power-starved Africa remains a laggard in renewable energy. The electrification rate only outpaced population growth for the first time in 2014, though in some countries the power deficit continues to grow wider, according to the International Energy Agency (IEA).

Corruption, red tape and the grip of often-poorly financed national power companies lead investors to tread warily.

Macron, in Africa to try to turn a page in France’s relations with the continent, said it was time to convert commitments agreed at the Paris climate accord two years ago into concrete actions on the ground.

“I hope that France, its companies, its project operators, will be your preferred partner in renewable energies,” Macron said at the ceremony.

Beside him, Burkina Faso’s President Roch Marc Kabore announced that a solar energy plan dubbed “Light” would add an additional 50 MW of capacity in 2018, in a country where fewer than one in five have electricity at home.

Across sub-Saharan Africa, more than 600 million people live without electricity. Power shortages stunt industry and make it difficult to sustain economic growth.

The region, with a population of around 1 billion, has an installed power capacity of 122 GW, according to the IEA. That’s roughly equivalent to Spain, whose population is 46 million.

The IEA forecasts this will double to 253GW by 2030, with hydropower and solar overtaking oil to become the leading power sources. Yet there could be a four-fold increase in demand during the three decades from 2010 to 2040, consultancy group Mckinsey and Company estimates.

In recent years, Chinese companies have driven the expansion of Africa’s power sector, responsible for 30 percent of new capacity. Even so, progress can be slow.


Two years ago, the Africa Renewable Energy Initiative (AREI) was launched to much fanfare during the Paris climate summit, promising to accelerate electricity generation in a continent that was “tired of being in the dark”.

The initiative announced it would aim to unlock $10 billion in financing to add 10 GW of renewable power to Africa’s power grids by 2020 and a further 300 GW a decade later.

Yet with the first deadline fast approaching, the initiative has made scant progress. Nineteen projects with a combined proposed output of 1.8 GW were shortlisted in March and there remain large financing holes, AREI documents on its website showed, making the initial target seem a stretch.

Christophe Fleurence, Vice-President Business Development Africa at French firm EREN Renewable Energy, said the financial weakness of many national power companies deterred investors.

“Power generators need to make sure they have solid guarantees that they will be paid,” said Fleurence, whose company is part-owned by Total SA and developing projects totalling 350 MW in Africa.

“They will ask for state guarantees or insurance against defaults. This means projects become very complex and take a long time to put together.”

Reinsurers too can be unwilling to take on the risk for what are often relatively small and local projects, said Fabian Jochem, managing director of SMA Sunbelt Energy GmbH, a unit of SMA Solar, Germany’s largest solar firm.

“Many customers in Africa are not ‘bankable’, which means that they won’t get insurance for potential credit defaults,” Jochem said. “For reinsurers the transaction costs with regard to the small size of the projects are simply too high.”

Source: Reuters
Anand Gupta Editor - EQ Int'l Media Network


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