Africa Energy Yearbook 2015/16 preview by EnergyNet

OPINION PIECES

from African Ministers of Energy & Infrastructure, utilities and regulators

Featured power projects and directories of power technology providers In assiciation with

2015 INDUSTRY LEADER ARTICLES

from OPIC, IFC, FMO, Norton Rose Fulbright & more

RECIPIENT OF THE ENERGYNET LIFETIME ACHIEVEMENT AWARD:

H.E. Hon. Dr Salvador Namburete, Former Minister of Energy, Mozambique

CONTENTS WELCOME WELCOME

INVESTING IN AFRICA NIGERIA’S ELECTRIC POWER SECTOR

– converting potential to reality ABIODUN AINA, SENIOR INVESTMENT OFFICER, IFC FEMI AKINREBIYO, PRINCIPAL INVESTMENT OFFICER, IFC 21

YEARBOOK PROFILE PIECE RUMUNDAKA WONODI, MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER, NIGERIAN BULK ELECTRICITY TRADING PLC 27

NAVIGATING THE CHALLENGES

USING DATA TO SUPPORT INVESTMENT STRATEGIES

of delivering IPPs in Africa ASHWIN WEST, MANAGER - TRANSACTIONS, AFRICAN INFRASTRUCTURE INVESTMENT MANAGERS (AIIM)

In The Africa Energy Sector MICHAEL HODGSON-HESS, HEAD OF BUSINESS DEVELOPMENT, AFRICAN FINANCIAL & ECONOMIC DATA

TAPPING AFRICA’S ENERGY LION SHARE ELIZABETH LITTLEFIELD, CEO, OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC)

PAUL FRANKISH, MANAGER - ASSET MANAGEMENT, AFRICAN INFRASTRUCTURE INVESTMENT MANAGERS 29 (AIIM)

THE CHANGING LANDSCAPE 13

– Moving the Power Sector Forward DAVID HUMPHREY, GLOBAL HEAD, POWER & INFRASTRUCTURE, STANDARD BANK

YEARBOOK PROFILE PIECE H.E. HON. DR SALVADOR NAMBURETE, FORMER MINISTER FOR ENERGY, REPUBLIC OF MOZAMBIQUE

YEARBOOK PROFILE PIECE 17

JUSTIN DEANGELIS, DIRECTOR, DENHAM CAPITAL

AFRICA ENERGY YEARBOOK – Volume 9, June 2015 Published by: Energynet Limited Fulham Green Bedford House 69-79 Fulham High Street London SW6 3JW

Editor: Articles, Directories & Project lists Amy Offord Amy.offord@energynet.co.uk +44 (0) 20 7384 8068 Artwork & Design: Catherine van Dyk Clear Impressions Publishing & Print Media Design clearimpressions@outlook.com +27 79 344 1649

Copyright c 2015 EnergyNet Limited ISBN 978-0-9551943-4-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of EnergyNet Limited.

www.energynet.co.uk 2015 Africa Energy Yearbook

CONTENTS

POLICIES AND BEST PRACTICES FOR AFRICA YEARBOOK PROFILE PIECE H.E. HON. JAMES MUSONI, MINISTER OF INFRASTRUCTURE, GOVERNMENT OF THE REPUBLIC OF RWANDA

RISKY BUSINESS?

Lower Oil Prices and Africa Energy Projects KEITH MARTIN, INITIATIVE FOR RISK MITIGATION IN AFRICA 43

INNOVATIVE FINANCING FOR THE “LAST MILE:”

Output-Based Aid Provides Power to the Poorest Households SAÚL E. GONZÁLEZ, COMMUNICATIONS, GLOBAL PARTNERSHIP ON OUTPUT-BASED AID, WORLD BANK

YEARBOOK PROFILE PIECE PAUL KUNERT, HEAD OF BUSINESS DEVELOPMENT, GLOBELEQ 59

ANTICORRUPTION, DUE DILIGENCE AND POWER INVESTMENTS:

getting more from the process WALTER COURAGE, DIRECTOR, THE RISK ADVISORY GROUP JONNY BRAY, HEAD OF BUSINESS INTELLIGENCE AFRICA, THE RISK ADVISORY GROUP

LESSONS LEARNED

In Implementing Off-Grid Electrification Projects in Africa- Ghana’s Example FRANK YEBOAH DADZIE, PLANNING ENGINEER, GHANA ENERGY DEVELOPMENT AND ACCESS PROJECT

THE ROAD AHEAD

YEARBOOK PROFILE PIECE

for power sector transformation in Africa

STEPHEN KARANGIZI, DIRECTOR, AFRICAN LEGAL SUPPORT FACILITY 101

ANGELI HOEKSTRA, PARTNER, AFRICA POWER & UTILITY LEADER, PWC JOHN GIBBS, ADVISORY PARTNER, PWC

POWERING AFRICA:

Small Steps, Giant Leaps NIAMH KENNY, ASSOCIATE CONSULTANT, GAS & POWER, CITAC

YEARBOOK PROFILE PIECE SIMON CURRIE, GLOBAL HEAD OF ENERGY, NORTON ROSE FULBRIGHT

103

65 YEARBOOK PROFILE PIECE FRANÇOIS BANGAZONI, CHIEF EXECUTIVE OFFICER, ENERCA

STREAMLINING POWER PROJECT DEVELOPMENT IN AFRICA

109

by Promoting Standardized Power Purchase Agreements DR. MIMA S. NEDELCOVYCH, CEO, INITIATIVE FOR GLOBAL DEVELOPMENT

YEARBOOK PROFILE PIECE DR MIMA S. NEDELCOVYCH, PRESIDENT & CEO, INITIATIVE FOR GLOBAL DEVELOPMENT

TRANSITIONAL ELECTRICITY MARKET (TEM)

and investor and stakeholder expectations for the Nigerian Electricity Supply Industry (NESI) DOLAPO KUKOYI, PARTNER, DETAIL

75 2015 Africa Energy Yearbook

CONTENTS

SUSTAINABLE SOLUTIONS FOR AFRICA SCALING SOLAR:

Making the Sun Work for Africa JAMIE FERGUSSON, PRINCIPAL INVESTMENT OFFICER, GLOBAL RENEWABLE ENERGY, IFC

POWERING AFRICA’S FUTURE BY WIND

DAN CROFT, SENIOR INVESTMENT OFFICER, ADVISORY SERVICES, IFC

KASPER DALSTEN, DIRECTOR – GLOBAL BUSINESS DEVELOPMENT, VESTAS WIND SYSTEMS

YASSER CHARAFI, PRINCIPAL INVESTMENT OFFICER, 113 AFRICA INFRASTRUCTURE, IFC

133

POWERING AFRICA’S FUTURE BY WIND VINOD KUMAR KHARE, CHIEF EXECUTIVE OFFICER, ETHIOPIAN ELECTRIC UTILITY, ETHIOPIA 137

YEARBOOK PROFILE PIECE H.E. AMBASSADOR HENRY MACAULEY, MINISTER OF ENERGY, SIERRA LEONE

119

CAN RENEWABLE ENERGY

help to address South Africa’s energy crisis? A YEAR OF SOLAR PV IN EAST AFRICA LAURA KIWELU, SENIOR ASSOCIATE, NORTON ROSE FULBRIGHT TANZANIA 121

ALASTAIR CAMPBELL, MANAGING DIRECTOR VANTAGE GREEN X

139

YEARBOOK PROFILE PIECE A STEP AHEAD OF THE GAME –

JOSHUA CHOGE, CHAIRMAN, KENGEN

Site Selection and Constraints Mapping through Geographical Information Systems (GIS)

MOZAMBIQUE:

A Future in Renewable Energy?

ALAN COCHRAN, SENIOR CONSULTANT: IMPACT ASSESSMENT & PLANNING PRACTICE, ERM ANDREW BRADBURY, PARTNER AND COMMERCIAL DIRECTOR: SUB SAHARAN AFRICA DIVISION, ERM

143

PAULA DUARTE ROCHA, PARTNER, MOZAMBIQUE LEGAL CIRCLE

147

125 YEARBOOK PROFILE PIECE

YEARBOOK PROFILE PIECE

ARJAN VISSER, FOUNDER, ELECTRICITY4ALL

ELVIRA EURLINGS, DIRECTOR OF ENERGY DEPARTMENT, FMO BERNHARD VAN MEETEREN, SENIOR INVESTMENT OFFICER, STRUCTURED FINANCE ENERGY, FMO 131

149

YEARBOOK PROFILE PIECE REDA EL CHAAR, CHAIRMAN, ACCESS

153

Advertisers AFRICA FINANCE CORPORATION

AFRICAN REVIEW

ANDRITZ HYDRO

OUTSIDE BACK COVER

GLOBELEQ

GROUPE JEUNE AFRIQUE

HERBERT SMITH FREEHILLS

BLOOMBERG NEW ENERGY FINANCE

112

IC PUBLICATIONS

108

CONSTRUCTION REVIEW

168

LOUIS BERGER

118

ENERGYNET’S COMMITMENT TO EAST AFRICA

122

ENERGYNET AFRICA INVESTOR’S PORTFOLIO Inside Front and INSIDE back Cover ENERGYNET POWERING AFRICA: HUB 80 ENGERATI

150

ENERGYNET STUDENT ENGAGEMENT INITIATIVE (ESEI) ESI AFRICA 2015 Africa Energy Yearbook

39, 151, 158

MANITOBA HYDRO

METKA

NEDBANK

POWERING AFRICA: MOZAMBIQUE

146

POWERING AFRICA: SUMMIT

102

RAND MERCHANT BANK

SIEMENS

TCQ POWER

142 5

INVESTING IN AFRICA

TAPPING AFRICA’S ENERGY LION SHARE Elizabeth Littlefield, CEO, Overseas Private Investment Corporation (OPIC) Since 2010, Elizabeth L. Littlefield has served as President and CEO of the Overseas Private Investment Corporation, the U.S. Government’s Development Finance Institution. OPIC mobilizes private capital to help address critical development challenges and in doing so, advances U.S. foreign policy and national security priorities. Prior to OPIC, she was CEO of the Consultative Group to Assist the Poor, a policy and research center dedicated to advancing poor people’s access to financial services housed at the World Bank. Ms. Littlefield has also served as JP Morgan’s Managing Director in charge of capital markets and financing in emerging Europe, Middle East and Africa and as well as the Boards and Executive Committees of the MasterCard Foundation, Calvert Foundation and Women’s World Banking, among others. She also spent 1989 – 1990 in West and Central Africa providing banking consultancy to several start-up microfinance institutions. Ms Littlefield is a graduate of Brown University and also attended Ecole Nationale de Sciences Politiques in Paris.

These are extraordinary times for Africa and for Africa’s power sector. We’re seeing unprecedented international commitment and collaboration to address the energy poverty that has long constrained business activity, quality of life, food production and overall economic growth. On a continent of nearly one billion people that is expected to add one billion more by 2050, access to electricity is quite literally the key to a brighter, more prosperous, more secure and more connected future.

onsider that last year, Africa added more renewable energy than it has in the previous 14 years combined. From Kenya to Rwanda to Ghana, countries are increasingly tapping the earth’s resources to generate more power. And this progress pales in comparison to the potential that remains untapped. Africa is one of the sunniest places on the planet and also has abundant resources of wind power, geothermal power, oil and gas. In fact, Africa’s proven reserves of natural gas have grown to 509 trillion cubic feet since 1980, representing growth of over 140%. The U.S. Government has pledged $7 billion through President Obama’s Power Africa Initiative, which aims to

2015 Africa Energy Yearbook

double access to electricity on the continent. As the U.S. Government’s development finance institution, the Overseas Private Investment Corporation (OPIC) is playing a key role in this effort. OPIC has a long history of supporting investment in emerging economies including those of Sub-Saharan Africa. And our commitment to Africa is growing. OPIC now commits about $1 billion a year in projects supporting healthcare, education, agriculture, clean water and financial services. We understand that at the core of all these development challenges is power. If we want to address poverty, food insecurity, insufficient healthcare and limited access to financial services, we must increase access to electricity.

INVESTING IN AFRICA

Bruce Onobrakpeya | Gala Day Under The River I | 2006 | Plastograph on paper | 107 x 79 cm For price contact Aabru Art / art@aabru.co.uk/ +44 7847 244 217

2015 Africa Energy Yearbook

INVESTING IN AFRICA

YEARBOOK PROFILE PIECE H.E. HON. DR SALVADOR NAMBURETE, FORMER MINISTER FOR ENERGY, REPUBLIC OF MOZAMBIQUE Born in the southern Mozambican province of Inhambane, Salvador Namburete speaks Portuguese, English, French (fair), as well as some national languages. Salvador Namburete holds a Master´s Degree in International Trade and Finance from Lancaster University, UK, and a Master´s Degree in Corporate Finance from American University, Washington, DC, United States of America. He holds a “Licenciado” Degree in Economics from Eduardo Mondlane Univesity, in Maputo, Mozambique, where he later taught International Economics, including a module in Trade Policy in the Master´s in International Trade Law Programme, at the Faculty of Law. He also holds a Bachelor´s Degree in Economics from the same University. He was Minister of Energy from 2005- 2015. Before his appointment as Minister of Energy he held the position of Deputy Minister of Industry and Trade.

QUESTION. How has Mozambique’s power sector changed over the past 20 years? Which of these developments have made the biggest impact on the population as a whole? ANSWER. The power sector was basically dominated by off-grid systems fuelled by diesel generation sets with a few exceptions, namely the Maputo City (Country’s Capital), and a few provincial capitals, especially in the southern part of the country - despite the fact that Cahora Bassa, a 2075MW hydropower plant, already existed in Mozambique. It generated hardly any power because the transmission lines had been knocked down during the war. The rate of access to electricity was around 2% to 3% at that time. The tremendous national reconstruction efforts after the war made it possible to rapidly improve the situation. By 2004 the rate of access to electricity had risen to around 7%. It was indeed over the past decade, between 2005 and 2014, that an exponential growth was witnessed. In 2004, only 51 of 141 District headquarters had access to power. Today, 134 District headquarters have access to electrical power. The rate of access to electricity rose rapidly from 7% in 2004 to 45.3% in 2014. 5.700km of power lines, 12 large substations and other associated infrastructures were erected in the country. The share of renewable energies in rural electrification rose from nearly 0% in 2005 to 18.5% in 2014. The rapid expansion in the use of 2015 Africa Energy Yearbook

renewable sources of energy (especially solar photovoltaic) has allowed access to electricity for more than 5 million Mozambicans in the rural areas over the past 8 years; 201 small villages and towns were electrified along with 669 rural schools and 623 rural clinics. 77 rural public administration buildings also benefitted. In 2013, the first solar panel assembly plant was commissioned with the aim of expanding access to these sources of clean energy in rural areas given their lower prices, and to replace the unhealthy wood fuels. The first mapping of renewable energy sources in the country was performed and the first Mozambique Renewable Energy Atlas was published. The aim was to determine the renewable energy potential of the country and facilitate the decision-making process

of the investors. The first three solar photovoltaic power plants were commissioned in the country, and are currently generating 1.3MW. The first large scale gas fired power plants were commissioned in the country, currently generating 418MW. In the power distribution segment, the prepaid power metering system was expanded from around 15% to 85% of domestic power consumers in the same period, and it’s operating online throughout the country. In the fuel sector, 48 new gas stations were built by the public sector in areas which the private sector find unattractive, and the fuel storage capacity was expanded from 430 to 830 billion litres between 2005 and 2014. The first infrastructure to receive imported LPG by sea was built, including a 3.5km pipeline and a 3.000

In 2013, the first solar panel assembly plant was commissioned with the aim of expanding access to these sources of clean energy...” 17

Nigeriaâ&#x20AC;&#x2122;s electricity market is still the hot topic because of its huge potential. Teething issues were expected but investors have confidence they will be resolved.â&#x20AC;?

INVESTING IN AFRICA

YEARBOOK PROFILE PIECE RUMUNDAKA WONODI, MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER, NIGERIAN BULK ELECTRICITY TRADING PLC

Rumundaka Wonodi is the pioneer Managing Director/Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc (NBET), aka the Bulk Trader. Prior to his appointment, in August 2011, he led the Regulatory & Transactions Monitoring team of the Presidential Task Force on Power (PTFP), mandated with driving the power sector reform roadmap of the Federal Government of Nigeria (FGN). He led the team of Bureau of Public Enterprises (BPE) and PTFP experts in establishing the Bulk Trader. Under Rumundaka’s leadership, NBET has received N104 billion capitalisation from the FGN. NBET has executed Vesting Contracts with the 11 privatized successor Distribution Companies for the onward sale of purchased electricity. NBET has also executed nine Power Purchase Agreements. Six are with the privatized successor Generation Companies; with Egbin Power Plc – Nigeria’s largest power plant with an installed capacity of 1320MW; with Olorunsogo Power Plc, which was sold in a Debt-Equity swap deal with the FGN; and with Azura-Edo IPP, which is NBET’s first greenfield project. NBET is in negotiations with multiple Independent Power Producers (IPPs) for new generation capacity valued in excess of $6 billion. These are projects with a variety of energy sources: natural gas, coal, wind and solar. For the creation and development of an effective transaction environment for power investors, Rumundaka steers NBET with the core values of integrity, transparency, professionalism and teamwork. Rumundaka is the current and inaugural Chairman of the Initial Stakeholder Advisory Panel of the Nigeria Electricity Market; the highest ranking consultative panel in the industry. Rumundaka has an MBA from Yale University School of Management, USA and was a J. Olin Research Fellow at Yale University.

QUESTION: Why is Nigeria’s electricity market still the hot topic in Africa considering all the challenges being faced in privatising the sector? It is still the hot topic because of its huge market potential. Teething issues were expected but investors have confidence they will be resolved. Recently, Nigeria has taken over from South Africa as the largest economy in Africa even with its poor electricity supply. Nigeria with its population of over 160 million generates only 4,000 MW of electricity and South Africa with a population of 52 million generates 40,000MW. This capacity gap demonstrates the investment potential in the next ten years for instance. Nigeria’s government has an economic transformation agenda that seeks to create more opportunities for local and international investors. Privatization of the sector has opened it up for foreign investment, and further the recent peaceful conclusion of the elections has also boosted investors’ confidence in the stability in the nation and the market. QUESTION: What is today’s average electricity price in Nigeria and what does it need be in order to make IPPs

2015 Africa Energy Yearbook

and GENCOs bankable – how is the gap going to be bridged? The current wholesale tariff for hydro plants are N6.35 per kwh while thermal plants are ₦9.86 per kwh but this is subject to change as the new gas price has not taken effect. The energy component that makes up the wholesale price for thermal plants will change when the new gas price is effected. New Independent Power Projects (IPPs) and Generation Companies (GENCOs) have the option of accepting the benchmark tariffs or can choose to go through an open book tariff setting process. QUESTION: Having just entered the ‘transitional electricity market’ in Nigeria, how does this change the near term bankability of the sector? Active contracts provide comfort to investors that the flow of funds will be as expected and not arbitrary as contractual obligations are legal and binding. The framework for the market provides for a tight coupling of contracts and an alignment of incentives that is expected to yield positive results at every step of the value chain in the power sector.

QUESTION: Your role as [effectively] Nigeria’s off-taker is critical for both public and private sectors; what are the biggest hurdles you’ve had to overcome, and what challenges lie ahead for the bulk trader? The biggest hurdle the bulk trader has had to overcome are: • Communicating that NBET’s working capital is NOT a subsidy for the industry and is only a temporary bridge which it expects to fully recoup from the distribution companies. • Streamlining the process for the evaluation and engagement of viable potential IPP projects. • Financing - NBET will do more with public and private financing to enhance our ability to meet our obligations in the market as a critical off-taker. • Continued investment in the grid to enhance better transmission and reduce loss. • With the privatised distribution companies, the DISCOs’ lack of investment in power infrastructure for electric power distribution to increase performance and payment settlement which the CBN intervention fund has encouraged. 27

POLICIES AND BEST PRACTICES FOR AFRICA

We are seeing a focus on developing low cost LNG projects globally.â&#x20AC;?

POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE SIMON CURRIE, GLOBAL HEAD OF ENERGY, Simon Currie is the Global Head of Energy at Norton Rose Fulbright. He advises clients across the globe on strategy and the development, acquisition and financing of assets in the energy, natural resources and infrastructure sectors. Simon has worked on ground breaking and innovative transactions in over 50 countries. Over the last 15 years he has advised clients on the development of energy projects across Africa. He has worked on several “first in country” projects in Africa and understands the changing dynamics and opportunities in the energy sector. He has experience across the entire value chain, ranging from upstream oil and gas to electricity and gas transmission and distribution. Simon is a keen supporter of AEF and, in particular, the local content and the student engagement programmes.

QUESTION: I notice you’ve recently moved to Australia. Surely the move can’t purely be a personal one? ANSWER: I was very fortunate to live in London for 17 years. At the beginning of 2015 I relocated to our Sydney office to help drive our Asia-Pacific (APAC) practice. The energy markets in the APAC region are of critical importance to the global economy from a supply and demand perspective. I am working with our global clients and our network supporting the growth of inbound and outbound investment for the region. I continue to be the global head of our energy team and I will also continue focus on the development of the energy industry across Africa. Over the next decade we are going to see APAC-Africa trade grow exponentially. We believe it is critical to have our leadership team sitting across the globe and enabling clients to look east and

west and north and south, wherever the client is located. Australia has recently reduced the number of LNG projects under development- what led to this decision?

the opportunity to develop several more LNG projects in the future. For now, the producers are focusing on getting megaprojects like the 3 Gladstone projects and the Gorgon project in Western Australia into full production.

Australia will soon be the No.1 exporter of LNG globally. When I left New Zealand in 1997 for London this wasn’t just optimistic but completely unthinkable. It shows to me the ability of countries to harness their resources and swing towards new markets and customers.

We are seeing a focus on developing low cost LNG projects globally at the moment where field development and liquefaction plant costs will be controlled. The best example right now is Papua New Guinea which is continuing to see the development of new projects, on the back of the success of PNG LNG.

However, Australia is now in the position where new projects don’t make sense to develop straight away at current gas prices and due to the high construction costs for the existing projects. As many international companies have said about Australia, you can ruin the resources story if you don’t control labour costs and labour market flexibility. Australia is lucky to have conventional and unconventional gas resources and has

Australia is competing with these countries as an investment destination. This competition is also facing other new LNG producers like Mozambique and Tanzania. Another interesting trend is focusing on what can be done with existing LNG plants which are not running at capacity. The push to utilise the almost idle Egyptian LNG plants with gas from offshore Israeli and Cypriot fields is a good example.

Australia is now in the position where new projects don’t make sense to develop straight away at current gas prices and due to the high construction costs for the existing projects.” 2015 Africa Energy Yearbook

PROJECTS

Featured Power Projects

This selection of projects are taken from the Powering Africa: Hub, EnergyNet’s online community where delegates can access all content from our investment meetings such as presentations, live session recordings and interviews with industry leaders. The Power Projects portal allows members to add and amend their own projects and keep up to date on what developments are taking place elsewhere in Africa. Continue the conversation beyond the conference by engaging with other participants in a private members area. Register for the hub for free by visiting http://www.engerati.com/hubs/powering-africa-hub

ANGOLA Project Name: Lomaum Dam Hydroelectric Power Plant Angola Type of project: Renewable Power Description: Lomaum Dam Hydroelectric Power Plant Angola is located at Ganda, Benguela, Angola. This infrastructure is of TYPE Hydro Power Plant with a design capacity of 35 MWe. It has 3 unit(s). The first unit was commissioned in 1964. It is operated by Empresa Nacional de Electricidade de Angola (E.N.E.). Source: http://globalenergyobservatory.org/geoid/4066 Fuel Source: Hydro | Generation Capacity (MGW): 35 | Offtaker: Utility | Project Status: Completed

Project Name: Futila Thermal Power Plant Type of project: Conventional Power Description: Consists of two 35 MW gas turbines. The project scope also included the refurbishment of a substation in the city of Cabinda as part of the double circuit 60 kV and 30 kV distribution lines needed to transport the electricity to end users. Source: http://www.isoluxcorsan.com/en/project/thermalpower-plant-in-futila-angola.html Fuel Source: Gas | Generation Capacity (MGW): 70 | Offtaker: Utility | Project Status: Completed Project Name: Luachimo dam Type of project: Renewable Power Description: Contract signed in 2014 for Dam’s rehabilitation, increasing its capacity to 24 MW. This will be the first refurbishment to take place on the dam in all its decades of operation. Source: http://www.efacec.pt/PresentationLayer/efacec_press_01.aspx?tipo=4&area=1&idioma=2&id=496 Fuel Source: Hydro | Generation Capacity (MGW): 9 | Offtaker: Utility | Project Status: Completed

BOTSWANA Project Name: Morupule B power station Type of project: Conventional Power Description: In October 2009 the World Bank’s Board of Executive Directors approved a US$136.4 million loan for the the Morupule B project and also approved a Partial Credit Guarantee of US$242.7 million of commercial bank financing for the project. In a media release the World Bank stated that “the financing will help secure a reliable electricity supply for the country’s economic growth and poverty reduction programs. Financing will also help Botswana prepare a robust low-carbon growth strategy (consistent with the current Tenth National Development Plan: 2009-2016), strengthen management skills in the power sector, and establish a new, independent electricity regulator. Source: http://www.sourcewatch.org/index.php/Morupule_B_ Power_Station Budget Size (USD): 100 - 500m | Fuel Source: Coal | Generation Capacity (MGW): 600 | Investors & Development Partners: World Bank Offtaker: Utility | Project Status: Completed

CONGO (KINSHASA) Project Name: Inga 3 Type of project: Renewable Power Description: With support from the World Bank, the Democratic Republic of Congo (DRC) has proposed to develop Inga 3 on the Congo River. The project will consist of a dam and a 4,500MW hydroelectric plant at Inga Falls. Inga 3 comes as the first phase of the construction of the Grand Inga hydropower project, located 225 km from Kinshasa, and 60 km upstream of the mouth of the Congo into the Atlantic Ocean. Once completed, the final project would have a generation capacity of 40,000 MW. Source: http://www.internationalrivers.org/campaigns/the-inga-3-hydropower-project Budget Size (USD): 1Bn+ | Fuel Source: Hydro | Generation Capacity (MGW): 40 000 | Investors & Development Partners: World Bank Offtaker: Utility | Project Status: Out to Tender

2015 Africa Energy Yearbook

SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE HIS EXCELLENCY AMBASSADOR HENRY MACAULEY, MINISTER OF ENERGY, SIERRA LEONE

H.E. Hon Henry Olufumi Macauley is the Minister for Energy, Sierra Leone. He also serves as Sierra Leone High Commissioner to Nigeria, accredited also to Republic of Angola, Republic of Benin, Republic of Cameroun, Democratic Republic of Congo, Republic of Equitorial Guinea, Central Africa Republic and ECOWAS. He holds a Masters in Business Administration from Knightsbridge University (2005), an Introduction to the Oil Industry Certificate from Oxford, Princeton (2003), a Certificate of French Language from Alliance Francaise Paris, France (1985), a Bachelors of Engineering Electrical (Hons) from Fourah Bay College, University of Sierra Leone (1984) and a WAEC School Certificate from Prince of Wales School, Freetown, Sierra Leone (1979). Previous positions include the Chairman of the Ecowater and Energy Services Company Ltd, Chairman of Staco Insurance Company Sierra Leone Ltd, President of the National Association for Indigenous Businesses, Senior Trader at Partenaire Service a L’Industerie in France and a Commodities Trader for Intraco Consultants Inc. During his career he has visibly achieved a strengthening of the relationship between Nigeria and Sierra Leone. He was responsible for creating the Sierra Leone Nigeria Economic Commission (SLENIG) and the NIGERIA SIERRA LEONE CHAMBER OF COMMERCE. In addition, he has worked tirelessly and successfully to take Nigerian Companies to Sierra Leone, fostering trade and economic development between the two countries. This includes the Leading of Business Club Ikeja to Sierra Leone on a Business visit. He has also participated in various Government/Private Sector negotiations and programs.

QUESTION: Please provide the readers of the Africa Energy Yearbook with an overview of Sierra Leone’s power sector in 2015. ANSWER: There has been significant improvement in electricity supply over the last few years. However, the demand for energy far exceeds supply and the sector is faced with the following challenges: • Outdated transmission and distribution system resulting in high line losses, estimated at about 40% of units generated. • Insufficient generation capacity: Only about 10% of the population has access to electricity from the national power grid. • High seasonal variability in hydroelectric power production • The Governance structure of the entire energy sectors is being overhauled and reformed with: - A recently unbundled utility (December 2014) A. Electricity Distribution and Supply Authority, EDSA B. Electricity Generation and Transmission Agency - A recently formed (December 2014) Regulatory Commission 2015 Africa Energy Yearbook

• Our Energy Sector Strategy defines our expected installed electricity capacity growth to 1000MW by 2017/2018, with its associated improvement in transmission. This is to provide for the anticipated domestic and demand growth. QUESTION: My understanding is that Sierra Leone has huge potential to boost its economy through the tourism sector. If this is still the case, what opportunities are there for investors in the power sector considering this approach and other targeted growth areas in the country? ANSWER: Sierra Leone’s energy sector offers a number of investment opportunities in terms of direct investments and public-private partnerships. • Harnessing Untapped Hydro Potentials of up to 2,000MW. • Renewable energy potentials, with solar power generation. The country boasts significant solar power potential with 2, 187 hours of sunshine a year with generation potentials estimated at between 1,46018/1,800 GWH per annum.

• With ongoing industrial and manufacturing investments in the extraction of iron ore, the processing of ore into steel as well as agroprocessing businesses come on stream, there is need for complementary thermal power generation. Mediumterm estimates for thermal power are projected at about 850MW to meet these requirements, with expectations of increased demand thereafter. • The production of bio-diesel and ethanol from palm oil and sugar cane are investments that the Government offers additional incentives over and above general scope of incentives in the country. The production of bio-diesel may be integrated with state-owned oil palm plantations at Kambia and Mattru in the Bonthe District, which are available for private sector participation. • Sierra Leone has ready access to export markets for energy in the West African market through the West African Power Pool, an energy market created through a regional infrastructure protocol of ECOWAS. Favourable incentives in place for private sector participation in the development of the country’s segment. Potential external demand in 119

We have investments in more than 85 developing countries, offering our clients a variety of financial products.â&#x20AC;? Elvira Eurlings

SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE ELVIRA EURLINGS, DIRECTOR OF THE ENERGY DEPARTMENT, FMO Elvira graduated as an economist at Tilburg University in 1999 in the Netherlands. After having worked at the Ministry of Finance in the Netherlands for five years, Elvira joined the International Monetary Fund in Washington D.C. where she worked as a senior advisor to the governments of the Balkan and CIS countries. In 2007, she started her career at FMO as an investment officer in the Europe and Central Asia division, focusing on corporate clients and financial institutions. In 2010, Elvira was appointed manager of the credit analysis team and chairwoman of FMO’s investment committee. In 2013 Elvira became manager of the Energy team, responsible for transactions in Latin America and South and East Africa, and in December 2014 was appointed as Director of the Energy department.

BERNHARD VAN MEETEREN, SENIOR INVESTMENT OFFICER, STRUCTURED FINANCE ENERGY, FMO Bernhard van Meeteren works with The Netherlands Entrepreneurial Development Bank FMO (‘Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.’). Within FMO he and his team focus on providing financing for energy projects with an emphasis on the Least Developed Countries and on Renewable Energy. The team is considered to be one of the main players in arranging and providing financing for energy and infrastructure projects in Sub-Saharan Africa. In 2010 the FMO team received the Africa Energy Award for Best Financial Support to the Power Industry in Africa, while Bernhard was runner-up for the 2010 Award for Leading Africa Energy Personality. Mr. van Meeteren joined FMO in 2002 after working 16 years with ABN Amro Bank and ING Bank, mainly in Project Finance and Global Relationship Management. He holds a MSc degree in Civil Engineering from Delft University of Technology in The Netherlands.

QUESTION: What has been the most rewarding energy project you have been involved with in your career? ANSWER – BERNHARD: Probably the most rewarding project has been Bujagali. I remember the first meetings on the PPA, a diner in a hotel where we were the only guests, in the dark as the electricity grid went down. Thereafter more than 18 months of intensive meetings to get the financing documents agreed, with tough and difficult negotiations. Since the start of construction there were monitoring trips with a large lender group which was always a nice way of meeting colleagues from other institutions. Meanwhile construction progressed, there were cost-overruns, additional financing was needed and the project took 14 months longer than expected to complete. When I visited the Bujagali project two weeks ago, it was a smooth operation, the soft humming of hydroturbines in a clean power house. You could hardly imagine that it had cost such an effort to move that project to where it is now. 2015 Africa Energy Yearbook

QUESTION: In your opinion, what are the cornerstones of a successful public-private partnership in Africa? Can you share with us an example of one? ANSWER – ELVIRA: Tremendous efforts are under way to address Africa’s overall infrastructure challenges. But the needs on the ground are still immense. Infrastructure is one of the key challenges facing policymakers in the region, and when well organized and tackled, the benefits to the economy and growth of the countries concerned are clear. Resources from governments and donors are insufficient to meet the overall challenges in this area. Hence, smart and well-designed Public Private Partnerships (PPPs) can make a significant contribution to Africa’s growth momentum. Many examples in our portfolio, constituting energy transactions in Africa, illustrate the successful workings of PPPs in Africa. Although every transaction and environment requires a tailor-made approach, some features are eminent for

its success. Let me mention three of those critical features. It first of all starts with a government supported sector program in which a priority and clear vision is presented to boost the infrastructure- energy agenda of a country. Such a program would include clear regulatory frameworks and transparent practices, dealing for example with concessions. The roles and responsibilities for public and private players should be clear, whereas the public bodies in this framework need to be financially well equipped or supported by the government to fulfil its obligations. Cost reflective tariffs are important to allow these bodies to act in a sustainable manner. Secondly, in order for financiers to play their role in the funding of any project, they need strong and knowledgeable partners; sponsors that have a solid track record and are familiar with the local context. Thirdly, financiers such as development finance organisations like FMO should aim to provide tailor-made financing solutions, remaining innovative 131

The biggest challenge is demonstrating to host countries and off-takers that there is no tradeoff between developing sustainable power projects and making sure that the electricity generated can be afforded by the 152 communities.â&#x20AC;?

2015 Africa Energy Yearbook

SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE REDA EL CHAAR, CHAIRMAN, Reda is a Chartered Alternative Investment Analyst, before founding Access, Reda worked for ACWA Power where he established and led the implementation of the renewable energy strategy. Reda led many precedent setting projects that eventually served as a guiding platforms for the wider adoption and implementation of renewable energy projects in several countries. He has been involved in over 6,000 MW of power projects. Reda is passionate about bringing renewable energy projects into new unsaturated markets where renewable energy is an economical alternative to conventional power. Prior to joining ACWA Power Reda held various positions at Unilever and Price Waterhouse Coopers.

QUESTION: Please tell the readers of the Africa Energy Yearbook more about your professional background and experience of Africa’s energy sector. What aspect of your role do you most enjoy?

development process by avoiding costly mistakes. By doing so, we are able to achieve our goal of bringing projects to successful completion and ensure that we become a reliable long term power producer in the host nation.

ANSWER: Prior to founding Access three years ago, I worked for ACWA Power where I was responsible for developing and implementing ACWA Power’s renewable energy strategy. My first experience within the renewable energy sector in Africa was the landmark Ouarzazate 1 solar concentrated power plant in Morocco. The most exhilarating aspect of my role is the continuous pursuit of innovative development approaches (such as the Access Co-development Fund) that enable the realization of precedent setting projects which eventually serve as a guide for the wider adoption and implementation of renewable energy projects.

QUESTION: Access is based in Dubai, where the Africa Energy Forum is taking place this year. What do UAEbased companies have to offer Africa?

QUESTION: What are the main challenges you frequently encounter across with regards to developing sustainable and affordable power assets in Africa? ANSWER: The biggest challenge is demonstrating to host countries and offtakers that there is no tradeoff between developing sustainable power projects and making sure that the electricity generated can be afforded by the communities, businesses and the country in general. It is no longer true that power 2015 Africa Energy Yearbook

We chose Dubai as our head office due to its superior connectivity to Africa.”

ANSWER: We chose Dubai as our head office due to its superior connectivity to Africa. From Dubai we are able to provide quick and reliable functional support to our on the ground development teams. QUESTION: What will be your key message to the delegates who attend this year’s Forum?

generated through renewable energy sources (especially solar power) comes at a premium to conventional power. Today, renewable energy (including hybrid power) is the most economical and timely alternative for most African countries. QUESTION: How does Access work with local partners to achieve its goal? ANSWER: In every step of the development process we seek to align ourselves with the appropriate local partners and stakeholders that are able to demonstrate a deep understanding of the market and allow us to de-risk our

ANSWER: Africa’s power sector and wider economy could be transformed by the billions of dollars of financing available for Africa. However, this funding cannot have an impact without well-resourced and experienced developers willing to take earlystage project risk and turn good concepts into bankable projects. As such, investment into the early stage development of projects forms the corner stone for the realization of the African growth opportunity. Access Infra Africa has designed the ACF to serve as a unique platform to bridge the gap between local, early stage project developers/originators and the expertise/ funding required to bring such projects to fruition. 153