South Africa: Renewable Energy in Africa

Last Updated: 1 July 2019
Article by Natasha Luther-Jones and Grant W. Henderson WS

The African continent, with a population exceeding one billion people and an estimated combined economy of USD1.5 trillion1, presents huge opportunities for investors, developers and operators across the renewable energy sector.

Renewable energy is already giving millions of people in Africa access to electricity for the first time. However, across the continent over 640 million Africans still have no access to electricity. This equates to approximately 40% of the population having access to electricity. Per capita consumption of electricity in sub-Saharan Africa (excluding South Africa) is 180 kWh, compared to 13,000 kWh per capita in the United States and 6,500 kWh in Europe2.

Request a copy of the Renewable Energy in Africa report

Generation and distribution of electricity is fundamental to unlocking economic potential, with the development of renewable energy projects and innovative electricity distribution strategies of central importance to the delivery of the economic and socio-political objectives of central governments.

As we reported in our previous edition, activity in the sector has and continues to grow rapidly, with countries such as Ghana and Kenya each adding hundreds of MW of increased production through recent or soon-to-be operational wind and solar plants. Ethiopia, with the support of the International Finance Corporation, recently initiated Round 2 of Scaling Solar seeking to cover 6 new projects with a total capacity of up to 750MW. Ethiopia is the fourth country in Africa to join the IFC’s Scaling Solar programme. Uganda and Zambia, like the more established programmes in Ethiopia and Kenya, are encouraging the development of geothermal energy projects.

The recent implementation of legal reforms to energy markets in Angola and Botswana highlights the drive of central governments to provide legislative support for ambitious renewable energy development initiatives.

There is the potential for significant further growth – the African continent is rich with the resources needed to produce renewable energy, including solar, there is an estimated 10 terawatts of potential capacity or more. It is therefore unsurprising that many investors, developers and entrepreneurs continue to prioritize African markets and the vast and diverse opportunities which they represent for the renewable energy sector.

The Guide

DLA Piper is proud to release the second edition of Renewable Energy in Africa, updating the many changes that have occurred since our last edition This publication remains an ambitious task, seeking to summarise each country's regulatory environment for renewable energy, highlight the key policy objectives for national governments and provide insight into the projects which are expected to deliver these goals. The guide showcases the diverse approach to renewable energy being adopted across the African continent, and the legal, economic and technological developments being implemented in the following countries:

Angola

The Angolan government's proposals to facilitate USD18 billion of investment in renewable energy by 2025 are an ambitious vision for addressing the impact felt from the rebalancing of the global oil market. A program of hydroelectric generation projects supported by interconnectors for the country's existing distribution networks are intended to enhance capacity over the coming years.
 

Botswana

Legislative changes introduced in 2016 have opened the country's energy market to independent producers. However, the development of renewable energy projects backed by private investors in a country historically dependent on state production remains challenging for the recently formed Botswana Energy Regulatory Authority.
     

Burundi

A landlocked country at the heart of Africa's Great Lakes Region, Burundi holds significant potential for the development of renewable energy which the Government's "Burundi Vision 2025" framework seeks to utilize in order to develop sustainable ecological growth. A number of national and regional hydro and solar power projects currently under construction are anticipated to increase capacity by 300MW by 2020, helping to boost access to electricity from levels which are currently amongst the lowest globally.
 

Ethiopia

Although the dominant energy source in Ethiopia is hydropower, which represents 90% of the installed generation capacity, the Ethiopian government is seeking to diversify with increased investment in wind and geothermal production technologies which is recognised as crucial to support the government's National Electrification Programme that aims to attain universal access to electricity through a combination of on-grid and off-grid systems.
     

Ghana

Despite established renewable energy production facilities and a widespread distribution network providing 82.5% of the population with access to electricity, Ghana's power demands continue to outstrip supply, however installed capacity had increased as at the end of 2018 to 4,562MWTo help meet the growing requirement, proposals to develop a number of wind and solar farms are being implemented with a 225MW wind farm under development and a 100MW solar project proposed for the Upper West Region of the country. In September 2018, a further 20MW solar plant was commissioned at Gomoa Onyadze in the Central Region of Ghana.
 

Kenya

The enactment of the Energy Act, 2019, will see KPLC’s monopoly broken as electricity distribution and retail supply may be carried out by other players. This move is expected to result in an increase in competition in the distribution and retail supply of electricity and improve the quality of service in the power sector. Additionally the Kenyan government in partnership with the World Bank, launched the Kenya National Electrification Strategy (KNES) in December 2018, which provides a roadmap for universal access by 2022.
     

Mauritius

Formation of the Mauritius Renewable Energy Agency in 2016 has provided a focus point for the further development of renewable energy sources to support the country's stable, investor-friendly economy. The home solar project was launched in May 2018. This project aims at installing solar photovoltaic systems on rooftops of 10 000 households in Social Category tariff 110A as part of the Mauritian government’s efforts to alleviate poverty whilst contributing to the national target of achieving 35% of renewable electricity in the energy mix by 2025.
 

Morocco

Morocco is highly dependent on imported hydrocarbon energy to generate electricity, with approximately 96% of its energy needs being sourced externally. To meet the increasing local demand, Morocco implemented a new energy strategy in 2009, aiming to secure its supply, to ensure power was priced competitively and to protect the environment by using local energy resources, including renewables. Morocco has committed to increasing the share of renewables in its energy mix to 42% by 2020, then rising to 52% by 2030.
     

Mozambique

The country's objective of enabling access to electricity for 50% of the population by 2023 and universal electricity access by 2030 is coupled with its strategic policy of developing the renewable energy sector. The government has commissioned a Renewable Energy of Mozambique Atlas and an accompanying portfolio of potential development sites, which highlight the potential of the country's renewable sector. Tariff regimes, tax benefits and regulatory measures are currently under development to provide a legal and economic framework to attract investment.
 

Namibia

Namibia's vast potential to support solar and wind power electricity generation is seen to be an effective means of limiting the impact of climate change and providing a platform for the country's socio-economic development. Completion of the country's first wind plant will complement the solar and hydro schemes already in operation, improving the diversity of renewable technologies being utilized in Namibia.

     

Nigeria

The Nigerian government's execution of Power Purchase Agreements with a total value of US$1.76 billion will facilitate the generation of an additional 1,125MW of solar power. The program gives a clear indication of the government's intention to tap into the country's renewable energy potential in order to achieve its objective of generating 20% of national electricity supplied from renewable sources by 2030. Noteworthy is the recently consummated debt financing transaction wherein North South Power Company Limited, raised over N8.50 billion from a green infrastructure bond. This is the first certified green corporate bond and the longest tenured (15 years) corporate bond issued in the Nigeria debt capital markets.
 

Senegal

Economic growth in Senegal has recently accelerated, reaching about 6.5% in the past two years making Senegal one of the best performing economies in Sub-Saharan Africa. Government policy has set the objective of achieving a non-biomass commercial energy independence rate of at least 15% by 2025, due to the contribution of renewable energies and biofuels.
     

South Africa

Although it provides a regulatory and economic framework which is attractive to private investment, South Africa's electricity market remains highly concentrated, with the state-owned Eskom responsible for the generation and transmission of 95% of the country's electricity consumption. Recent attempts to implement the government's Renewable Energy Independent Power Producer Procurement Programme have brought Eskom's role in the market under increased political and judicial focus, the full consequences of which are yet to be determined.
 

Tanzania

With access to electricity currently standing at 36% of the population, the Tanzanian government's Power Systems Master Plan seeks to improve generation and transmission infrastructure in a manner that utilizes the country's significant renewable energy resources. In order to support this objective, the country's regulatory system allows and encourages private investment, helping to stimulate the market for hydro and solar schemes.

     
     

Uganda

Uganda's renewable energy resources are estimated to provide the potential for 5,300MW of additional capacity. Despite a range of operational biomass, hydro, solar and geothermal production plants, this potential remains largely unexploited, putting pressure on efforts to keep pace with growing electricity demand and the government's target of achieving a rural electrification rate of 22% by 2022. Uganda has developed standardised power purchase agreements and is developing a renewable energy feed-in-tariff as instruments to help promote privates sector participation in the generation of electricity from renewable sources.
 

Zambia

This year saw ZESCO apply to the Energy Regulation Board for an upward adjustment of its electricity tariffs citing prevailing economic conditions, system customer base expansion, and the rising cost of power from its new infrastructure and independent power producers (IPPs) as the underlying factors. The application is yet to be determined by the ERB. The outcome of the "cost of service" survey into electricity tariffs in Zambia is still awaited, it is unclear when this will be available.
     

Zimbabwe

Zimbabwe faces electricity supply challenges as a result of aging generation infrastructure and increasing demand. The country's strong potential for hydro and solar schemes is seen as key to the successful development of a diversified electricity generation which enables Zimbabwe to meet its target of reducing emissions by 33% (relative to a business as usual baseline) by 2030.

Conclusion

No publication can fully capture the breadth and diversity of the opportunities which the African continent offers for the renewable energy sector. However, we hope this guide provides an introduction to the key aspects of the legal framework and commercial activity in the 17 countries presented. We would welcome any feedback on this publication and we would be happy to discuss the changing landscape of these countries at any time. If you have a specific query concerning renewable energy in Africa, we would be very pleased to discuss it with you; we have experienced teams in each jurisdiction, spanning all aspects of the renewable energy sector.

Footnotes

1.Statistics from the World Bank Databank, May 2018 (figures relate to Sub-Saharan Africa)

2. Statistics from the Africa Development Bank, May 2018

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Werksmans Incorporated
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Werksmans Incorporated
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions