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OFF-GRID | INTERVIEW
Supporting Africa’s energy needs Fabrice Mpollo, investment manager, Norfund, discusses with African Review the prospects of off-grid and renewable energy projects on the continent.
AR: What are the challenges which stand in the way of delivering these? FM: Like all energy projects, there are numerous challenges. Most of these relate to unclear regulation, as the segment is new and there is a potential impact on the existing power system and its stakeholders. In our view, regulation should promote development and adoption of new solutions, but this needs to be done while taking into consideration the potential impact of grid deflection. Utilities have a wider mandate and cannot, for example, be left to serve only the last customer at the end of the grid.
A solar installation for Miniplast Ltd. in Ghana.
Image Credit: Norfund
Image Credit: Empower New Energy
African Review: How important are off-grid energy projects to supporting Africa’s various industries? Fabrice Mpollo: Inefficiencies in most of Africa’s centralised power systems (with generation and transmission) lead to load shedding affecting both industries and households. Access to clean and reliable power is fundamental in developing industries such as manufacturing, food processing, financial services, ITC, and others. We expect off-grid or captive energy projects to increasingly support Africa’s industries and businesses’ needs. These projects may be quicker to develop and may be able to meet reliability, sustainability, and economic demands of customers better than the existing solutions.
depending on the energy mix of a particular country. Though driven by high electricity tariffs, falling solar PV prices and grid unreliability, the C&I market remains at its infancy on the continent with strong potential of growth. Outside of renewable solutions destined for mining companies, renewable energy captive power solutions are yet to be implemented on a larger scale to demonstrate full operational reliability as a standalone. Also, in the African context, businesses will tend to opt
AR: How accessible are renewable solutions for large companies on the continent? FM: Renewable energy sources used by large companies are mostly accessed through the grid
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AFRICAN REVIEW OF BUSINESS AND TECHNOLOGY | JUNE 2022
for a hybrid system to cover potential failure of one source of power. One solution out of many is to democratise net-metering as it has been done in other markets to serve both commercial as well as grid capacity need. AR: How can more investment be encouraged on the continent, especially relating to renewables? FM: A number of ways including: • Ensuring solvency of the power sector by reducing leakages in
We expect off-grid or captive energy projects to increasingly support Africa’s industries and businesses’ needs.” FABRICE MPOLLO, INVESTMENT MANAGER, NORFUND
Fabrice Mpollo, investment manager at Norfund.
power distribution and widen collection rate. • At project level, increasing investors’ appetite through first loss or non-payment guarantees instruments. • Transitioning into a regulatory system which is supportive, instead of rigid towards IPP, for example avoiding restrictions on selling electricity to commercial clients even in instances where the government cannot fulfill their obligations. ■
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