Southern Africa’s renewable energy market

Despite the considerable potential that exists to produce electricity using renewable energy (RE) in southern Africa, RE projects have been largely limited to off-grid, small-scale applications. However, the renewable energy market in South Africa is expected to grow exponentially in the next few years, owing to the announcement of the renewable energy feed-in tariff made in March 2009.

New analysis from Frost & Sullivan ( finds that the market for renewable energy equipment in southern Africa earned revenues of $28,4 million in 2008 and estimates this to increase nearly tenfold by 2015, to reach $262,3 million. This will include projects to develop energy from solar photovoltaic, solar thermal, wind power and biomass sources.

“The growth of the wind power market and large-scale solar concentrating projects will be driven by an increasing number of joint ventures," notes Frost & Sullivan energy analyst Sipha Ndawonde. “Such ventures will be between project developers with local knowledge and private equity investment firms, backed by the support of international original equipment manufacturers.

With tightening sources of global credit and more countries reporting negative economic growth rates, private equity investment companies have become more selective and strategic about the sectors into which they invest. Sustainable energy project portfolios have however bulged to more than $1 billion, dedicated to financing RE projects in southern Africa.

“This is an indication that investors view RE and energy efficiency projects in southern Africa as having favourable returns and representing a solid investment decision," Ndawonde says. “An abundance of natural resources combined with a stable political environment, reasonable economic growth rates and growing interest from private equity firms means that large-scale RE projects are set to penetrate into the southern African countries of South Africa, Botswana and Namibia."

Southern African Renewable Energy Equipment Market is part of the Energy & Power Growth Partnership Service programme.

Lake Turkana Wind Power (LTWP), a firm planning to build a 300 MW windfarm in Kenya, said it had signed an deal with Denmark’s Vestas and would be signing a final agreement in October. LTWP intends to erect at least 353 wind turbines, each with a capacity of 850 KW, which will be procured from the world’s biggest maker of wind turbines, Vestas Wind Systems A/S. 

LTWP plans to use Vestas V52 turbines and expects initial production to start in June 2011 and to have full production of 300 MW a year later. It has already advertised for construction tenders to put up a 428 km (266 mile) power line and four substations to link the wind farm in a remote corner of Kenya to the national grid.

The total project cost is estimated at about $760 million, LTWP director Chris Staubo told Reuters in January. The African Development Bank had shown willingness to finance 30 percent of that, he had said. Once completed, the project could meet about a quarter of Kenya’s current energy demand. Most of Kenya’s power is generated by hydro-electric plants. The country hopes to add 2,000 MW of environmentally-friendly energy sources by 2013.

Ethiopia signs windfarm deal with China

Ethiopia has agreed deals with two Chinese firms to develop two huge hydropower projects and signed a preliminary agreement with another to construct two wind power farms, the country’s power utility said.

EEPCo has signed a preliminary agreement with the Hydrochina company for the construction of two wind farms, the spokesman said, adding that they would be reserved for emergencies and would be wholly financed by the Chinese government.

China has displaced many western countries as the major investor in Africa, where it has pumped billions of dollars to secure access to Africa’s commodities which it needs for its industries. Ethiopia’s government says it will spend $12 billion over 25 years to improve its power-generating capabilities.