Thank you to all Sponsors and Partners
Forum Sponsor
Exhibition Sponsor Global Partners
Africa IPP Partner
Sustainable Finance Partner
Lead Sponsors
Synergy Consulting
I would like to extend my thanks to the EnergyNet team for their exceptional organisation and support. As always, aef has proven to be an outstanding platform for fostering meaningful conversations and partnerships within the African energy sector. I look forward to the next Africa Energy Forum in Cape Town.
Aleem Tharani
Partner, Head of Projects, Energy & Infrastructure (Kenya), Co-Head: Infrastructure Sector Group, Bowmans
Thank you from EnergyNet
Dear Colleagues,
We were delighted to see so many of you joining us in Barcelona, Spain at the Fira de Montjuic for the 26th edition of the Africa Energy Forum (aef).
We are truly grateful for the diverse group of experts, stakeholders, and visionaries from across the energy sector globally that came together, creating a platform for meaningful dialogue and collaboration.
This year we brought together over 2,100 people, including H.E. Honourable Jeremiah Kpan Koung, Vice President of Liberia, 21 Honourable Ministers and over 100 participants from across Africa’s public sector and government organisations. Our participants’ insights, perspectives, and innovative ideas enriched our discussions that will hopefully go on to drive the future of energy in Africa.
We want to extend our sincere thanks to Sun Africa, AKSA, IFC, MIGA, Globeleq, Nedbank and to all our sponsors, exhibitors and partners who supported the forum this year. We would also like to express our gratitude to our 355 speakers for their insights, frankness and commitment to the discussions hosted across aef.
Running under the theme of Energy Systems of the Future – Balancing Africa’s Needs with Global Goals, we were particularly impressed by the engaging discussions and the spirit of cooperation that permeated the forum across sessions, meetings and networking. The commitment to advancing energy solutions that answer the continent’s pressing needs and the continent’s energy challenges is truly inspiring.
As we move forward, we hope to continue building on the connections and partnerships established during aef. Together, we can drive progress and make significant strides towards a brighter, sustainable energy future for Africa. Thank you once again for your invaluable participation. We look forward to seeing you at future events as we continue our critical journey together.
The aef Team
It was a valuable event with the right mix of participants, leading to productive meetings with strategic stakeholders. Key interactions included discussions with Nigeria’s Chief Technical Adviser to the Minister of Power on how Wartsila can support the country’s energy and decarbonization plans. I also had the privilege of moderating a session on advancing gas projects in Africa, where experts agreed on gas’s crucial role in Africa’s industrialization as we move toward carbon neutrality.
Wale Yusuff Managing Director, Wärtsilä Marine & Power Services Nigeria
2,102
Attendee Breakdown
Attendee Breakdown by Job Role
Attendance by Industry Sector
aef is special. You go there, you walk in through that door and you see industry leaders, you see investors, you see policy makers; and that tells us – we all have the same goals.
Hlatse Nkune Principal: Energy Finance, Nedbank CIB
Keeping it low
Delegate
Top 5 Job Functions
aef Networking App Highlights
8,436 CONNECTIONS MADE
15,677 MESSAGES EXCHANGED MEETINGS CONFIRMED
1,547 aef Networking App Sponsor: Allied Talent Partners
Homepage Pop-up Ad Performance:
26,502 IMPRESSIONS
1,749 APP USERS REACHED
1,485 CLICK-THROUGHS TO PROFILE
Exhibitor Engagement: Most-Viewed Exhibitor
1,525 profile views and bookmarks Allied Talent Partners Unique Readers
565 different people Profile Page Interaction:
Total of
4,812 push notifications for ATP Allied Talent Partner via the aef app
2024 Highlights
Announcements at aef 2024
Barcelona was the stage for notable announcements for the sector, as industry and government leaders united to discuss, strengthen and forge new partnerships to drive energy access across the continent.
Kenya hands over baton to South Africa as Cape Town confirmed as 2025 host city.
Honourable Alex Wachira CBS, Principal Secretary, State Department for Energy, Ministry of Energy & Petroleum, Kenya & Thabo Kekana, Deputy Director General, Department of Mineral Resources & Energy (DMRE), South Africa
“It is with great honour and excitement that we receive the handover. This represents a strengthening of our partnership which seeks to provide a platform for dialogue, sharing of ideas and a means to create actionable ideas.
“I am filled with optimism… South Africa is diversifying its energy mix and embracing renewable energy sources – it is about securing our energy security for future generations.
“Together, we can build a brighter and more sustainable energy future.”
Thabo Kekana, Deputy Director General of South Africa’s Department of Mineral Resources & Energy (DMRE).
ATIDI Supports Globeleq’s 35 MW Menengai Geothermal Project with RLSF Cover
African Trade & Investment Development Insurance (ATIDI) and Globeleq Africa Limited, jointly announced the former’s support for the 35 MW Globeleq Menengai Geothermal Project with liquidity cover via the Regional Liquidity Support Facility (RLSF). RLSF, a joint initiative of ATIDI, the KfW Development Bank and the Norwegian Agency for Development Cooperation (Norad), is a credit enhancement instrument available to renewable energy Independent Power Producers (IPPs) that sell the electricity generated by their projects to state-owned power utilities. RLSF is offered in ATIDI member countries that sign the RLSF Memorandum of Understanding.
The project, the first to be considered for RLSF cover in Kenya, is valued at USD117 million with financing provided by the African Development Bank (AfDB), the Eastern and Southern African Development Bank (TDB), the Finish Fund for Industrial Cooperation (Finnfund), and equity from the project owners, Globeleq.
“We are proud to collaborate with Globeleq, KPLC, GDC, and the Government of Kenya on this transformative project. Together, we are driving positive change and advancing Kenya’s energy transition.”
Manuel Moses, CEO, ATIDI
2024 Highlights
Announcements at aef 2024
Cross-border cooperation set to bolster energy development
WA-ECS and EA-ECS continue the Africa Energy Forum’s discussions, focusing on actionable solutions for West and East Africa by engaging regional stakeholders. EnergyNet’s new summits aim to enhance crossborder cooperation, fostering knowledge sharing, investment opportunities, and project delivery across both regions.
Tetra Tech announces continuation of Power Africa partnership to implement Empower West Africa activity.
Over the next five years, Tetra Tech’s energy experts will work with governments, development finance institutions, and the private sector to increase access to electricity and advance the transition to more sustainable, inclusive, and resilient energy sectors. This new contract continues Tetra Tech’s 10-year engagement with Power Africa and will introduce digital tools like smart power meters and AI-based data analytics, e-mobility solutions such as electric vehicles and boats, and capacity-building programs to upskill local workers for renewable energy careers.
Three innovative funding partnerships propel the IDC towards a sustainable vision
In a significant stride towards advancing renewable energy and empowerment initiatives, the Industrial Development Corporation concluded three landmark deals that underscored its commitment to driving sustainable development and empowerment initiatives in South Africa: Doornhoek Project, Pele Green Energy, and Meadows Energy, which have set new benchmarks in the IDC’s pursuit of a greener future.
“The IDC is actively transitioning and transforming the South African economy through continued funding of projects forming part of the REIPPP, supporting black and community participation in projects. We are also increasing our support to private sector industrial and commercial businesses to establish their own generation capacity and are promoting local manufacturing of components for the renewable industry,”
Christo Fourie, Head of Energy at the Industrial Development Corporation of South Africa
2024 Highlights
Announcements at aef 2024
RelyEZ and Veers Group announce strategic joint venture to address South Africa’s energy challenges
RelyEZ, a Bloomberg Tier 1 provider of innovative energy storage solutions, and Veers Group, a pioneer in South Africa’s renewable energy sector, announced the formation of a strategic joint venture to address the pressing energy challenges in Southern Africa .
“Our collaboration aims to revolutionize energy storage solutions in Southern Africa, promoting sustainability and fostering community development. This partnership marks a significant step towards a cleaner, greener future, and we are proud to be at the vanguard of this transformative initiative.”
Naomi Zhang, CEO of RelyEZ
Off-Grid Energy Leader ENGIE Energy Access Launches 15 Solar Mini-Grids in Zambia, targets 60 by 2025
ENGIE Energy Access, Africa’s leading Pay-AsYou-Go (PAYGO) and mini-grid solutions provider, announced it had started the construction of 15 solar mini-grids in Zambia’s Eastern Province – an initiative that is part of the transformative Increase Access to Electricity and Renewable Energy Production (IAEREP) programme, funded by the 11th European Development Fund and the European Union.
“We are excited to announce this significant milestone, which brings ENGIE Energy Access closer to achieving its goal of operating 60 minigrids across five provinces in Zambia. This project supports several United Nations Sustainable Development Goals, particularly SDG 7, by delivering affordable, reliable, and sustainable clean energy to 40,000 people living in rural areas.
Gillian-Alexandre Huart, CEO of ENGIE Energy Access
Wärtsilä launches world’s first large-scale 100% hydrogen-ready engine power plant
Just nine days prior to aef 2024, Wärtsilä launched the world’s first large-scale 100% hydrogen-ready engine power plant.
Anders Lindberg, President, Wärtsilä Energy, said: “This is a major milestone for us as a company, and the energy transition more generally, as our hydrogen-ready engines will enable the 100% renewable power systems of tomorrow.”
2024 Highlights
Hosted Boardroom Highlights
Hosted Boardroom Highlights at aef 2024 sponsored by:
Effective Use of Credit Enhancement Instruments to Enable Project Financing
Hosted by:
ATIDI’s innovative credit instruments to derisk Africa’s investment landscape include a regional liquidity support facility (RLSF) and a Political Risk Insurance (PRI).
“The question that comes up constantly with lenders and even our own shareholders, though, is whether the country can access enough hard currency… enough dollars.” Brian Kelly, Founder and CEO of Anzana Electric Group
“The number one challenge, is definitely currency convertibility”, Rajesh Ramesh, Senior Manager, Business and Project Development, AMEA Power.
More innovation is needed around derisking credit instruments. Credit guarantees, liquidity extension guarantees, and the potential of improved donor coordination can further spread the allocation of risk and spark much-needed projects in challenging markets.
Making Independent Power Transmitters Work: Latest Developments in Private Transmission Models
Hosted by:
It’s estimated that $5 billion a year is needed to meet the transmission needs of the continent and keep up with demand.
“We’ve got to do something about this. And the only thing we can do is include the private sector much more than we are currently,” Richard Nelson, Coordinator, Power Africa.
The big question for the private sector is “how do I get paid?’’. As governments and regulators look to build models and confidence to attract investors, taking inspiration from the PPP space may be a good place to start, with structures that are as “boring as possible”, and everyone understands the risk share. There are funding models, and the door is open.
2024 Highlights
Hosted Boardroom Highlights
A New Mechanism for Mitigating Currency Risk to Support Africa’s Transition
Hosted by:
AfDB’s Wale Shonibare shared the bank’s preliminary analysis of a range of potential commodities and structuring options for a new financial mechanism, what he calls his “moonshot idea”.
“Africa needs institutions which serve its own challenges, and that means rethinking the way we finance our own infrastructure.
“Only 3% of private investment into energy comes to Africa, and that has to change. And the elephant in the room is local currency – it isn’t talked about enough. African countries need to grow their domestic savings and pool their resources in a manner that allows them to rely on such resources for investment in infrastructure development.”
Regional Grids: Addressing the Challenges & Creating Opportunities for Better Energy Access in Africa
Hosted by:
Regional grid development and cross-border connections have a crucial role to play in Africa’s energy landscape, If delivered effectively, they allow for more efficient power sharing, enhance energy security and create economies of scale that can attract investment.
With SAPP as the most mature example of a successful regional power pool, and progress in the West African Power Pool (WAPP), financing is a key challenge.
“Many countries are looking at how to adjust regulation to create an environment where investors can come in and speed up the delivery of these projects,” said Gridworks’ Associate Director Loïc Ehua. “How we create this enabling environment should be a major priority – we need to demonstrate that transmission is an investable asset class.”
The aef is a well thought out and organised conference. With the prevailing climatic change, it is encouraging for utilities to go green, as green energy is the future!
Douglas Katayi Senior Manager Transmission Operations, ZESCO, Zambia
Population: 450,145,917
Agenda at a Glance
Opening Day
Country Spotlights – From Announcements to Implementation
Shaping the Hydrogen Opportunity for Africa
Grid Management, Energy Storage & Distribution
Advancing Renewable Energy Projects for a Sustainable Value Chain Solution Provider Insights
Mining & Critical Minerals
Day 1 – Tuesday 25 June
Striking a Balance for Africa’s Gas Projects
Distributed Power & C&I Projects Accelerating Universal Access
Navigating Power Markets
Breakfast Briefings
Tech Innovation Theatre
Closed Door Roundtables
Closed Door: Ministerial Roundtable: Energy Systems of the Future – Balancing Africa’s Needs with Global Goals
Closed Door: Utilities Roundtable: Energy Systems of the Future – Balancing Africa’s Needs with Global Goals
Closed Door: Regulators Roundtable: Energy Systems of the Future – Balancing Africa’s Needs with Global Goals
Closed Door: DFI Roundtable: Energy Systems of the Future – Balancing Africa’s Needs with Global Goals
Closed Door: Corporate Leadership Roundtable: Energy Systems of the Future – Balancing Africa’s Needs with Global Goals
Welcome Lunch for Roundtable Participants – By Invitation Only
Closed Door: Joint Roundtable: Energy Systems of the Future – Balancing Africa’s Needs with Global Goals - Ministers, Utilities, Regulators, DFIs & Corporate Leaders
aef Opening Ceremony
EnergyNet Opening Remarks
Forum Sponsor Welcome Remarks
aef Handover: From Kenya to South Africa via Spain
I wanted to express my sincere gratitude for your professional support during the recent aef. As an LIA participant, I found the event to be incredibly valuable, and we had the opportunity to connect with several important companies.
LIA is considering to be an active part of the next forum, and we look forward to staying in touch. Your assistance and guidance have been instrumental, and we appreciate your continued collaboration.
Thank you once again, and I hope to connect with you soon.
Aymen Alfakhal Director of Oil, Gas & Energy Portfolio,
Libyan Investment Authority, Libya
Agenda at a Glance
Day 2 – Wednesday 26 June
Breakfast Briefing: Kipeto Wind – Sailing Through the Storm
Country Spotlight: Outcomes from the Closed Door Roundtables
Country Spotlight:
Republic of Kenya
Country Spotlight:
Tackling Grid Challenges to Improve Energy Systems
Industry Debate: The African Gas Conundrum: Is it a Transitional Enabler or Not?
Watt’s Up Africa: Electrifying the Continent
Hosted by:
Federal Republic of Nigeria Is Bolstering Transmission the Key to Releasing Capital for Generation?
Country Spotlight:
Republic of South Africa
Country Spotlight: Tunisia Advancements in Battery Storage: How Big is the Opportunity for Africa?
Advancing African Gas Projects
Keeping Gas Bankable for Africa
Effective Use of Credit Enhancement Instruments to Enable Project Financing
Hosted by:
Making Independent Power Transmitters Work: Latest Developments in Private Transmission Models
Hosted by:
Country Spotlight:
Democratic Republic of the Congo
Country Spotlight: Gabon The Growth of e-Mobility and Impact on the Power Sector
Building Cohesive Gas Value Chains and Developing Future Infrastructure A New Mechanism for Mitigating Currency Risk to Support Africa’s Transition
Hosted by:
Country Spotlight: Madagascar
Where are we Seeing the Biggest Technology Investments to Help the Future of the Sector?
The Rise of Energy Storage: Navigating Challenges, Market Dynamics, Financing and Regulatory Landscapes Presented by: Globeleq
Demand Driven Opportunities: Finding New Classes of Offtakers in the Tech Sector for Future Growth
Net Zero Power: Innovative & Scalable Energy Solutions for Industry Presented by: Konexa
Leveraging New Technologies to Lower Emissions and Promote Balance Across Energy Resources
Fireside Chat: Learnings from a Global Energy Portfolio: Which Technologies Will Best Support Africa’s Energy Transition & How Will They be Deployed Presented by: ENGIE
Empowering African Mining – Energy Cost Saving with Renewables and Battery Storage Solutions for Mining Companies
Hosted by:
What Factors are Behind the Boom in India’s Solar Module Manufacturing Sector?
Hosted By:
Agenda at a Glance
Day 3 – Thursday 27 June
Breakfast Briefing: Effective Tendering for Renewable Energy IPP Development Closed-Door Roundtable: Regional Collaboration to Streamline Energy Integration, Access & Transition Across the Continent STREAM 1
Country Spotlight:
Sierra Leone
Fostering Sustainable Energy Infrastructure in Africa – “A Catalyst for Africa’s Economic Advancement.”
Country Spotlight:
United Republic of Tanzania
Country Spotlight:
Republic of Zimbabwe
Regulation Fostering New Investment Across Africa
Country Spotlight:
Republic of Mozambique
Country Spotlight: Republic of Ghana
Country Spotlight:
2
Renewable Projects Update
Progressing Solar Projects on the Continent to Meet Rising Demand
Energy Off-takers: Meeting the Growing Green Energy Needs of the Mining Sector
Power Trip: The Case for Private Sector in Distribution Hosted by:
Hydrogen Gaining Traction: What’s Tangible in 2024?
Closing the Green Energy Finance Gap
Emerging Mechanisms for Accelerating the Energy Transition
Critical Minerals Mining for the Global Energy Transition
Energy Aggregators: Powering Sustainable Mining Operations
Overcoming Investment Challenges in Mining
Solution Innovation is Changing Africa’s Investment Landscape: Linking Capital and Mitigating Risk for Optimal Project Returns Hosted by:
Power Security & Energy Transition - The Critical Roles of Utilities, Power Pools, Governments & DFIs
Hosted by:
Regional Grids: Addressing the Challenges & Creating Opportunities for Better Energy Access in Africa Hosted by:
Making Hydrogen Bankable: Investment Conditions & Off-taker Agreements
Creating Booming Hydrogen Economies: Current Workable Business Models & Value Creation
African Hydrogen in the Global Arena: Establishing Trade Corridors
Republic of Malawi STREAM 1
Day 4 – Friday 28 June
Country Spotlight:
Arab Republic of Egypt
Country Spotlight: Uganda
2
Progressing Projects in a High-Cost Environment
Attracting and Retaining Private Investment in the Sector for Continued Growth
3
Are Mini Grids and Metro Grids the Most Feasible Solution for Accelerating Universal Access?
Capitalising on the Growth of C&I
4
The Africa Energy Technical Assistance Program (AESTAP): Mobilizing Technical Assistance for Africa’s Energy Sector
Hosted by:
Financing & De-risking Investment in African Clean Energy Infrastructure
Hosted by:
Supported by:
2024 Session Highlights
Day Two: Wednesday 26 June
Industry Debate: The African Gas Conundrum: Is it a Transitional Enabler or Not?
The focus for Stream 3 at aef 2024 was Striking a Balance for Africa’s Gas Projects, with the first interactive boardroom centering around what has been termed ‘The African Gas Conundrum’, and whether gas really is the energy transition enabling fuel the continent needs to invest in.
The speakers addressed a simple yet extremely pertinent question: Is gas a strategic and transitional solution to addressing energy challenges across the continent, or should we be more aggressive about the shift to renewables to answer energy needs?
It was acknowledged by the panel that natural gas presents a complex dilemma for Africa. While cleaner than coal, it still involves the emission of greenhouse gases. On one side of the debate, gas is a necessary bridge fuel, providing reliable energy to fuel socioeconomic development and serving as a transitional fuel as part of a more gradual journey towards a decarbonised Africa.
Meanwhile, the counterargument contends that Africa should leapfrog to renewables, avoiding fossil fuel lock-in.
The answer, as was discussed during the session, is not straightforward. Whatever strategic decision is taken by governments and intergovernmental bodies across the region, it involves balancing the immediate energy needs with long-term climate goals and economic considerations.
As the conversation proceeded, it became clear that a mix of views exist as to the role gas should play – it was noted, for example, that some nations with vast reserves, such as Nigeria, can utilise gas to build up competitive baseload power which can buttress renewable capacity development.
The panel also touched on a longer-term question around how Africa can reach ‘full renewables’, and the merits of a nation-by-nation approach versus regional collaboration and strategy making. While each country will need to develop and invest based on the needs of its own communities, the panel said critical infrastructure such as transmission networks and grids requires deep cooperation between nations.
All sessions conducted under the Chatham House Rule must maintain confidentiality and not disclose the identities or affiliations of speakers and other participants during all sessions.
I just came back to the office today after very good and fruitful conference last week. I am grateful to have had the opportunity to attend. I want to thank you very much for having me as a guest to this important conference. Hope to see you next time.
Bangaly Maty Energy & Infrastructure Adviser to the Prime Minister, Government of Guinea
2024 Session Highlights
Day Two: Wednesday 26 June
Country Spotlight: Policy, Partnerships and Prospects in South Africa’s Energy Landscape
Chairperson: Maduna Ngobeni, Managing Director, A-Hub Energy
Key Participants:
• Titus Mathe, CEO, South African National Energy Development Institute (SANEDI), South Africa
• Elsa Strydom, Head of Infrastructure Finance, IPP Office, South Africa
• Mathapelo Malao, Head of Energy, Environment and ICT, DBSA
• Rentia van Tonder, Head of Power, Energy & Infrastructure, Standard Bank
• Gqi Raoleka, CEO, Pele Green Energy
South Africa’s energy sector is undergoing a significant transformation, balancing its coal-dependent past with a sustainable future. At this year’s Country Spotlight session, key stakeholders discussed the nation’s progress and challenges in this transition.
Elsa Strydom from the IPP Office highlighted the success of South Africa’s IPP program: “Over the past 13 or so years we have procured nearly 11GW of new generation capacity and currently have 95 projects in operation, which input 7.3GW into the grid. Meanwhile, there are another 70 projects in construction with 11 in the pipeline. There is a lot happening!
“The certainty of policy and regulation such as Section 34 is key to the success of the program. We have brought together a centre of excellence with a clear focus and mandate, and have ensured the right expertise is in the right place. It is a recipe which can be replicated, not only in other countries but into other sectors of the economy.”
Titus Mathe, CEO of SANEDI, noted recent improvements in power supply: “We are now three months without load shedding being implemented. South Africa is a very resilient country, and we have managed to resolve these challenges which have occurred over the past two years.”
The rest of the panel, which included representatives from DBSA, Standard Bank, and Pele Green Energy, explored various aspects of South Africa’s energy landscape, including project funding, investment attraction, and market liberalization. As South Africa prepares to host the 2025 Africa Energy Forum in Cape Town, the spotlight on its energy sector intensifies, with both progresses to celebrate and ongoing challenges to navigate in its journey towards a sustainable energy future.
2024 Session Highlights
Day Two: Wednesday 26 June
Country Spotlight: Towards Nigeria’s Sustainable Energy Future
Nigeria, Africa’s largest economy and most populous nation, stands at a critical juncture in its energy development. With vast oil and gas reserves alongside significant renewable potential, the country faces complex choices in charting its path towards a sustainable energy future.
Indeed, balancing the need for reliable power to drive economic growth with commitments to reduce carbon emissions presents both challenges and opportunities.
Several key stakeholders joined the Country Spotlight session to discuss Nigeria’s path towards a sustainable energy future, and how it can fully exploit its energy producing potential.
They included the country’s Minister of Power, H.E. Honourable Adebayo Adelabu, who opened proceedings by delivering a keynote presentation containing several headline statistics and insights.
In June 2023, a series of legislation was enacted which is designed to unlock the industrial potential of the country, including the regulation and management of the energy value chain. The Minister also recognised the urgent need to develop transmission and grid infrastructure, and the importance of collaborating with investment communities and other global partners in overcoming transmission challenges.
H.E. Honourable Adebayo Adelabu said: “We are seeking to foster an enabling environment in Nigeria… our aim is to create a clear line of sight for investors where they can see how they can recoup their investments. We are streamlining policy processes and reducing bureaucratic red tape. Three of our 36 regions now have powers to shape their regulations.
Chairperson: Rachel Moré-Oshodi, CEO, ARM-Harith Infrastructure Investment
Speakers:
• H.E. Honourable Adebayo Adelabu, Minister of Power, Ministry of Power, Nigeria
• Sule Ahmed Abdulaziz, MD/CEO, Transmission Company of Nigeria (TCN), Nigeria
• Musiliu Oseni, Vice Chairman, Nigerian Electricity Regulatory Commission (NERC), Nigeria
• Wale Shonibare, Director Energy Financial Solutions, Policy & Regulations, AfDB
2024 Session Highlights
Day Two: Wednesday 26 June
Country Spotlight: Towards Nigeria’s Sustainable Energy Future, continued
“At the moment, less than 10% of power consumed is generated via the grid. Our aim is to stabilise the sector and build trust with investors, and stimulate demand and appetite to invest in our national grid… We are already receiving offers of investment into renewable energy projects… and these are creating opportunities to build out a network of mini grids.”
During the ensuing conversation on stage, the Minister was joined by bosses of organisations at the frontline of energy production and delivery in Nigeria, including Sule Ahmed Abdulaziz, MD/CEO of TCN.
Here, the need to create a reliable baseload was discussed, especially in the context of the country’s target for renewables to make up 30% of the energy mix by 2030.
There was also regulatory representation in the form of Musiliu Oseni, Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC). Tariffs were identified as a key policy area which could unlock investment, with Oseni outlining how NERC is working with partners such as the World Bank on a new approach to transition to cost-reflective tariffs.
The final member of the panel, AfDB’s Wale Shonibare, also offered his insight into Nigeria’s energy landscape and how he sees it evolving.
“The solar market is already growing fast and has the most active private sector participation. We need to complete this work and get more liquidity into the market, and that requires ensuring tariffs are more competitive. Whether it’s regulators or state governments, a holistic approach with proper coordination is needed.”
2024 Session Highlights
Day Three: Thursday 27 June
Energy Offtakers: Meeting the Growing Green Energy Needs of the Mining Sector
The African mining sector, a cornerstone of many national economies, faces mounting pressure to reduce its carbon footprint.
This presents a significant opportunity for Africa’s renewable energy sector to expand and innovate – as global demand for minerals grows, so does the need for sustainable energy solutions. However, challenges remain, including infrastructure limitations and regulatory hurdles.
Day 3 of aef 2024 commenced with a discussion exploring this emerging partnership between mining companies and the green energy sector in Africa.
Hosted by Josefin Berg, Associate Director of Solar and Clean Energy Technology at S&P Global, the panel included ministerial representation, with Madagascar’s Minister of Mines, H.E. Honourable Olivier Rakotomalala, and Nigeria’s Permanent Secretary to the Ministry of Solid Minerals Development, Mary Ada Ogbe, taking part in the session.
They were joined by representatives from independent power producer Red Rocket and solar PV panel producer Astronergy, with the discussion exploring the key opportunities and challenges associated for the region’s energy sector in regard to mining offtakers.
Specifically, the panel explored the complex balance between energy security and decarbonisation goals in the mining sector, identifying potential areas for collaboration between energy and mining industries in decarbonising their value chains.
The rapid advancement of cost-effective solar technology, coupled with ambitious targets set by mining houses to reduce Scopes 1 and 2 emissions, presents a clear business case that participants agreed was compelling.
Madagascar, as a relatively nascent mining nation, has two large mines in operation. One is managed by Rio Tinto, which inaugurated the Ehoala Solar Park in April to supply its ilmenite mine in Fort-Dauphin.
We would like to warmly thank the organizers for the opportunity to participate in the 26th African Energy Forum last month. It was an enriching experience, full of opportunities to establish new relationships and partnerships. We also enjoyed our stay in Barcelona and hope to be present for the 27th African Energy Forum.
Olivier Mazaba Ntondele Head of Administration, Agence de Régulation du Secteur de l’Electricité (ARSEL), Congo
2024 Session Highlights
Day Three: Thursday 27 June
Energy Off-takers: Meeting the Growing Green Energy Needs of the Mining Sector, continued
Nigeria is also a relative newcomer in terms of advancing its mineral sector with several small and mid-scale operations underway. Much of these rely on diesel and petrol supplies as a backup to grid-based power, creating an opportunity for off-grid solar installations, with some operators already establishing their own small-scale PV farms.
There are also opportunities for grid-based renewables to power mines, with South Africa highlighted as an example of where wheeling is proving effective, with operators turning to a mix of renewable power sources that do not necessarily need to be located close to their sites.
However, the pace at which this transition has occurred, both grid-based and off-grid, has not reflected the optimism around the concept.
The intermittent nature of renewable energy sources, for example, poses a significant challenge for mines which require consistent baseload power to maintain operations. Whilst solar and wind offer cleaner alternatives, their variability can disrupt crucial mining processes. This necessitates innovative energy storage solutions or hybrid systems to ensure reliable power supply, adding an additional element of complexity (and cost) to the transition to renewables for many mining operations.
Dear aef team, Thanks for all the facilities you provided us during the event, especially the meeting room for his Excellency. This was really appreciated. We enjoyed our time in Barcelona and had great conversations with current and potential partners. Looking forward to meeting you again soon. Best regards,
Philippe
Jr. Ossoucah
Directeur Général, Gabon Power Company, Gabon
The panel largely agreed that, for the time being, transitioning to 100% renewables is not immediately viable for most mine operators. Here, several audience members involved in building off-grid installations for mines outlined their experiences, citing challenges around integrating renewables into existing mini-grids, as well as uncertainty among the mining sector regarding the commercial model (IPP vs owner operated).
Additionally, the discussion explored the concept of a just energy transition, with panellists emphasising the need for local communities to be engaged with and benefit from mining projects as the sector undergoes this green transition.
This, the panel agreed, also presents an opportunity to drive positive change. If mine developments can provide surrounding communities with clean power as part of their agreements, this opens up a clear opportunity to address the energy gap and catalyse socioeconomic enhancement, especially in remote areas.
All sessions conducted under the Chatham House Rule must maintain confidentiality and not disclose the identities or affiliations of speakers and other participants during all sessions.
2024 Session Highlights
Day Three: Thursday 27 June
Making Hydrogen Bankable: Investment Conditions & Offtaker Agreements
Around 100 million tonnes of hydrogen are produced and used every year and it has been for decades. The issue is, of course, that this 100 million is produced by burning fossil fuels. In a context where the world is trying to embrace renewables and where it is abundantly clear that the cost of producing green hydrogen is more favourable, Africa – much like the rest of the world – is in a race to leverage this huge opportunity. The issue, however, remains bankability of green hydrogen-based projects.
Producing green hydrogen using electrolysis has sparked much hype and discussion, but somewhere in the middle of this prospective activity, is confusion, misunderstanding and often, disappointment. Given the cost and impact benefits of embracing this exciting resource, the private sector is keen to see projects initiate tomorrow, but the structures are not yet ready to facilitate this interest.
The frustration in an African context comes from the fact that there is such a different road to bankability for projects that would have such a significant impact on the continent. This potential is why government, DFIs, investors, regulators, the private sector and everyone in between are pursuing solutions, and they won’t give up. But it’s not easy.
The landscape in South Africa serves as a perfect example of how transformative green hydrogen could be and, indeed, why there is a need for green hydrogen at all amid a matrix that already has a host of renewable resources on the agenda. In the 1940s, South Africa’s steel sector exploded, and in the 1950s, the chemical space. Both still exist as key spaces for the country but are also huge contributors to the carbon footprint.
What I love about coming to aef is that everyone comes here. Everyone who’s interested in power in Africa is here. And what that allows us to do is to have really frank discussions with one another, to hear varying viewpoints and perspectives on what the solutions are.
Richard Nelson Coordinator, Power Africa
2024 Session Highlights
Day Three: Thursday 27 June
Making Hydrogen Bankable: Investment Conditions & Offtaker Agreements, continued
I would like to extend thanks for the warm reception of the participating Egyptian delegation in the Africa Energy Forum, as well as for the wonderful organization of the aforementioned forum.
Mohamed Abdullah Director of Administration, Ministry of Electricity & Renewable Energy, Egypt
Green hydrogen holds the key to decarbonising both areas, setting the tone for an industrialisation opportunity that showcases green hydrogen’s overall worth. With one hand it will maintain industries while simultaneously decarbonising them, and with the other it will form another strand of the access solution for populations across the continent.
Regarding the bankability challenge, there is no one model being put forward that different sector protagonists have a consensus on, but with huge market appetite off the back of its undeniable cost appeal, there is also an eagerness to be first to the punch. Initially at least, this may require thinking beyond traditional off-taker contracts to come up with different mechanisms that are more flexible and dynamic. Then, once precedents are in place, there could be the opportunity to revert to more familiar and traditional IPP contract models.
For anyone doubting whether green hydrogen is worth going through all these conversations and false starts, they need only to look in the direction of Saudi Arabia. Despite being the oil capital of the world, they are pioneering green hydrogen, and will be the first to introduce a project of scale in 2026 following financial close in 2023. It will produce more green hydrogen through this project than is done so around the entire world at present. All courtesy of a country who has unlimited access to oil.
The reason for their determination with green hydrogen? A cost that will only become more and more favourable in the years to come, and the versatility of its use and dispersion. Africa wants to be next in line.
All sessions conducted under the Chatham House Rule must maintain confidentiality and not disclose the identities or affiliations of speakers and other participants during all sessions.
2024 Session Highlights
Day Four: Friday 28 June
The Africa Energy Technical Assistance Program (AESTAP): Mobilizing Technical Assistance for Africa’s Energy Sector, hosted by AfDB
As the 2024 Africa Energy Forum entered into its final day in Barcelona, a session hosted by the African Development Bank (AfDB) was dedicated to discussing its Africa Energy Technical Assistance Program (AESTAP).
AESTEP was established to provide support to African countries in developing sustainable energy solutions and attracting investments for universal access to modern, affordable and reliable energy.
The program, which is focused on four key areas (knowledge and policy dialogue, power sector regulation, utility transformation and regional integration) seeks to address persistent challenges in Africa’s energy sector, including inadequate policy frameworks, limited institutional capacity, financially unstable utilities and underdeveloped regional markets.
Despite seeing some progress in energy access across the region, these issues have historically increased risks and limited investments. While governments have attempted reforms, efforts are often fragmented and not embedded in national plans, limiting their impact. AESTAP’s targeted technical assistance aims to overcome these obstacles, supporting sustainable energy transitions across the continent.
AfDB’s Wale Shonibare chaired the boardroom, explaining the ethos behind launching the program and setting the scene for the discussion. The session was well attended by a panel of seven speakers, including H.E. Honourable Dr Kandeh K. Yumkella, Chairman of Sierra Leone’s Presidential Initiative for Climate Change, Renewable Energy & Food Security, who led efforts to create the UN’s Sustainable Development Goal 7.
“We have always believed that energy is the ultimate enabler of development, including Africa’s ambition to industrialise,” he said during his opening remarks. “We need power for job creation… to drive change and to light up our countries.
“We are very excited that AfDB launched this initiative, which is not just about providing power but also clean cooking solutions…Regimes change, tactics might change, but programs and visions need to be consistent. This is why the knowledge system and data capacity generated by this program is so important.”
Dr Yumkella was referring to the Africa Energy Portal, a centralised database and information hub designed to remove friction by providing a single source of important data – data which can be leveraged by numerous stakeholders, from governments to private investors, to underpin key decisions.
Chairperson: Wale Shonibare, Director Energy Financial Solutions, Policy & Regulations, AfDB
• Opening Remarks: H.E. Honourable Dr. Kandeh K. Yumkella, Chairman, Presidential Initiative for Climate Change, Renewable Energy & Food Security, Sierra Leone
Speakers
• Mohamedain Seif Elnasr, CEO, Regional Association of Energy Regulators for Eastern & Southern Africa (RAERESA)
• Ishmael Ackah, Executive Secretary, Public Utilities Regulatory Commission (PURC), Ghana
• Gissima Nyamo-Hanga, Managing Director, TANESCO, Tanzania
• Stephen Dihwa, Executive Director, Southern African Power Pool (SAPP)
• Callixte Kambanda, Manager for Energy Policy, Regulation & Statistics Division, AfDB
• Ene Sandra Macharm, Head of Global Partnerships, GET.transform
2024 Session Highlights
Day Four: Friday 28 June
The Africa Energy Technical Assistance Program (AESTAP): Mobilizing Technical Assistance for Africa’s Energy Sector, hosted by AfDB, continued
Joining Dr Yumkella were several partners and beneficiaries of the program, including AfDB’s Callixte Kambanda and representatives from the Southern Africa Power Pool (SAPP), GET.transform, TANESCO, Ghana’s Public Utilities Regulatory Commission (PURC) and the Regional Association of Energy Regulators for Eastern & Southern Africa (RAERESA).
The session proceeded to a discussion about the impact of AESTAP to date, with panellists sharing their experiences and project highlights.
From battery energy storage systems in Nigeria to database management systems in Liberia, Tanzania, Uganda and Ghana, and regional harmonisation of regulatory frameworks in Botswana and Namibia, AESTAP has provided millions of dollars’ worth of technical assistance across the continent
“The program has helped us in many ways,” explained Ishmael Ackah, Executive Secretary at PURC. “It has supported us to decentralise… and digitise our documentation processes, which is making us function more efficiently. We have also created a media fellowship and trained local journalists across Ghana to analyse the data so they can use credible information in their
Mohamedain Seif Elnasr also outlined several benefits being realised by RAERESA, the CEO detailing enhancements around the adoption of best practices, including data collection and analysis, in addition to assistance in building a framework to harmonise regulatory and tariff structures.
“This framework building is really important, and clarity between countries at a regional level is what investors are looking for,” Shonibare added.
Ene Sandra Macharm also explained how GET.transform, a technical assistance program funded by the European Union which is active across much of Africa, has leveraged and aligned with what AfDB has developed through AESTAP to roll out its peer review initiative. This involves leaders from several countries coming together to share best practices on developing regulatory and policy frameworks.
“We cannot advance on our climate and energy goals by working in silos,” Macharm said. “Providing access to power to an additional 300 million people by 2030 is extremely ambitious goal, and it will not be achievable without real cooperation between key players such as utilities, regulators and governments.”
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2024 Press Highlights
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African
Review
A call to action issued at Africa Energy Forum
03 July 2024
Africa Energy Forum (aef) returned for its 26th year from 25-28 June in Barcelona with key African stakeholders convening to identify, debate and lay the groundwork for overcoming the continent’s pressing energy challenges and capitalise on the numerous opportunities.
Adam Cortese, CEO of forum sponsor Sun Africa, took to the stage to kick off the 2024 edition of the conference with an impassioned speech around this year’s theme: ‘Energy Systems of the Future – Balancing Africa’s Needs with Global Goals’. This subject, he began, “is not just a discussion topic, but a call to action. It challenges us to innovate, collaborate and commit to a path that ensures Africa’s energy future is secure yet sustainable.”
Pursuing this line of thought, Cortese explained that chief among the continent’s development aspirations is, of course, the need to close the energy deficit. More than 600 million people in sub-Saharan Africa remain without access to reliable energy today; a key hurdle that stifles economic growth, limits educational opportunities and restricts healthcare delivery. Such a test, Cortese added, is exacerbated by the prevalence of climate change, creating a scenario where increasing access to reliable, affordable energy must be achieved in conjunction with transitioning to cleaner, more sustainable power systems.
“This dual challenge requires innovative solutions and collaborative efforts,” Cortese said. “Africa has a unique opportunity to leapfrog traditional fossil fuel-based energy systems. But make no mistake about it, expanding energy access while reducing the reliance on less environmentally friendly resources will take incredible investment. We must realise that it is incumbent upon those countries that have primarily driven climate change through their development to help the continent achieve industrialisation through investments in clean energy. It would be hypocritical to expect emerging markets to spurn fossil fuels without offering concrete and expeditious solutions.”
Continuing, the CEO remarked that to achieve the collective goal of renewable power in an industrialised Africa, “innovation is necessary, and a degree of risk is unavoidable.” Moreover, to achieve this in a diverse continent, stakeholders must think outside the box as one size will not fit all. At Sun Africa, this belief has driven executives to abandon conventional approaches and develop its own business model tailored to the specific needs of each market as well as taking on significant financial risks. “Why, you may ask. Because it is a moral imperative. We can no longer tolerate seven-year development cycles, we can no longer tolerate project announcements that do not come to bear. Closing the energy gap in Africa requires action and commitment, not endless bureaucracy and
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platitudes. Governments, international organisations, private enterprises and civil society must unite to prioritise sustainable energy access by aligning our efforts, sharing best practices and learning from each other’s successes and failures.”
A tale of transmission
Enhanced collaboration, Cortese stressed in his final notes, would not only help to deliver more generating assets but would facilitate investments in infrastructure. In noting this, Cortese touched on a key theme that would emerge throughout the four days – colouring speeches and delegate discussions alike – in the critical need to expand and upgrade existing grids and bolster cross-border transmission. According to Synergy Consulting, transmission remains a critically neglected segment of Africa’s energy network and received a mere 0.5% of continental energy investment over the last decade. Indeed, the aef exhibitor has noted this problem will remain a bottleneck for African countries, stifling project developments elsewhere and restricting energy access unless significant investment is committed –around US$45bn over the next eight years
This vital aspect of Africa’s energy puzzle was also reflected in the speech of Richard Nelson, coordinator at Power Africa, in which he encouraged participants of aef 2024 to “think differently” as they engaged with other stakeholders during the week and beyond. He cited how the Africa Union has recently led by example here by finalising their Continental Master Plan. “This plan reflects African ingenuity, creativity and leadership toward an African single electricity market and ultimately universal electrification,” he remarked. “Integral to this master plan are stronger, reliable and interconnected transmission networks and the governance of regional power pools. The Continental Master Plan shows us that by enhancing transmission networks and integrating power pools, the cost of universal electrification could be cut by a third, saving in energy financing and reaching home to businesses faster than if each country were to strive for universal access independently.”
Opportunities abundant
Despite the hurdles to universal sustainable power access in Africa appearing high, so were the spirits across the conference. Jonathan Hoffman, interim CEO of Globeleq, epitomised this sentiment well by reflecting that it is currently “perhaps the most challenging time” to get deals done in Africa over the last 30 years due to high interest rates, the post-pandemic hangover, and construction for projects remaining a major issue. Yet, despite some big players looking to exit the market, he held a contrarian and positive outlook, stating, “I think it’s a great time to look to be a potential buyer in this market. It’s a time for the brave to hold their nerve to remain in the market and deliver, and that’s what we intend on doing at Globeleq.”
Certainly, positive attitudes were found in abundance across the extensive exhibitor floor, where a myriad of companies representing the full range of the energy industry were in attendance. Participants this year included the likes of leading green technology company Envision. In Barcelona it used the stage to promote its innovative solutions such as its digital twin technology, designed to deliver optimal collaboration to improve wind farm performance through real-time response and risk aversion.
For those not aware of the company’s capabilities – which has seen it undertake projects across the continent in the Gambia, Ghana, Guinea, Côte D’Ivoire, and more – aef also provided the opportunity to reconnect with Karpowership. Ready to discuss the organisation’s primary offering in the form of its ‘plug-and-play’ Powership fleet (comprised of ship or barge-mounted, fully integrated floating power plants with flexible capacities ranging from 30MW to 470MW and utilising the latest multi-fuel engine technology), company representatives expressed their preparedness for addressing energy demands for any size and duration, while maximising the utilisation of local resources.
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Ansaldo Energia was also flexing its muscles, drawing attention to its ability to meet the diverse needs of customers across the continent through its integrated model which includes the construction of turnkey power plants, gas turbines, steam turbines, generators, microturbines, support services and activities in renewable and nuclear power. This includes one of its most requested turbines on the continent – according to the stand attendants – in the form of the gas turbine AE94.2 (which shared the spotlight alongside the AE94.3A). With high cycling capability, fast start up and high ramp rates, it is suitable for peak plants, grid support and dead power grid energisation and can burn non-conventional fuels such as naphtha, crude and heavy fuel oil, hydrogen rich fuels and coal gases, alongside liquid green fuels including HVO, methanol and ethanol.
Later explaining how its sponsorship of the conference underscores its commitment to supporting sustainable energy development across the continent, Trina Solar promoted its comprehensive solar solutions designed to meet Africa’s challenges head-on. This includes Vertex N modules with n-type i-TOPCon technology and 210mm product technology platform, the TrinaTracker system, and additional energy storage solutions.
There was also room for a number of first-time exhibitors at the conference. Drawing particular attention from this segment was Ryse Energy, an impact-driven, decentralised renewable energy company. At aef, the company was keen to promote its diverse range of robust, efficient and variable horizontal axis wind turbines covering the main three classifications of wind speeds. Ryse Energy has suggested that it has the most diverse range of technologies in the micro and small wind sector, ranging from 200W up to 60kW turbines. These, coupled with its solar and energy storage solutions, allow the company to offer ‘truly decentralised’ hybrid systems which are particularly suited to remote locations where diesel generators have traditionally been recognised as the only outlet. So far, the company has recorded 180,000 installations across all seven continents which have proven themselves in a range of applications from providing power in remote Ghanaian communities to functioning in a wind-to-water capacity in Kenya.
Breaking in Barcelona
Of course, no aef would be complete without a healthy amount of new deals being agreed upon and announced. Fortunately, 2024 lived up to expectations in this regard, as a number of high-level deals were confirmed with a hand clasp in the Fira de Montjuïc conference centre.
This list included a strategic joint venture formed between RelyEZ and Veers Group to address the pressing energy challenges in southern Africa. The collaboration will see the two leverage their expertise, resources and technologies to develop and deploy innovative renewable energy solutions across the region, while fostering and developing local talent.
Meanwhile, Globeleq and African Trade & Investment Development Insurance (ATIDI) announced the latter’s support for the 35MW Globeleq Menengai Geothermal Project in Kenya with liquidity cover via the Regional Liquidity Support Facility (RLSF). The proposed RLSF policy will cover the risk of payment default by Kenya Power & Lighting Company and Geothermal Development Corporation for the US$117mn project that is critical to the country’s efforts to becoming 100% clean energy-dependent by 2030.
In a bid to support the expansion of energy access in West Africa, U.S. Agency for International Development (USAID) announced a US$73mn contract award to Tetra Tech, a leading provider of high-end consulting and engineering services. Through the Power Africa Empower West Africa activity, Tetra Tech experts will work with governments, development finance institutions and the private sector in order to advance the transition to more sustainable, inclusive and resilient energy sectors. In a continuation of the 10-year engagement between the two entities, the contract will
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see the introduction of digital tools, e-mobility solutions and capacity-building programmes to upskill local workers for renewable energy careers. Efforts will be made to design and implement national electrification programmes, modernise transmission and distribution utilities, deploy clean energy technologies and clean energy investments within the region.
At the conference, ENGIE Energy Access also used the elevated platform to announce the official start of construction for 15 solar mini grids in Zambia’s Eastern province. Funded by the 11th European Development Fund and the European Union, the project is seen as an important step towards the realisation of the national electrification plans and is a milestone in the organisation’s target to operate 60 mini-grids across the country by 2025.
Returning home
Next year, the show returns once again to African soil, arriving in Cape Town, South Africa. This handover was officially marked at the conference by Alex Wachira, principal secretary, state department for energy, ministry of energy & petroleum, Kenya, and Thabo Kekana, deputy director general, department of mineral resources & energy (DMRE), South Africa.
“It is a great pleasure for us in Kenya to hand over the baton to South Africa,” commented the former in his speech, before noting his pleasure at seeing delegates from all corners of the African continent present at the conference and working together to ensure Africa’s enormous energy potential is realised. “We are hoping after South Africa we shall not drop this baton, and that we ensure that the convention remains on African soil and make our words count.”
For his part, Kekana added, “As we look forward to hosting aef in South Africa next year I am filled with optimism and excitement. This event will not only showcase the potential of our natural country but highlight the significant strides we are making in transforming our energy landscape. The opportunities that [South Africa’s] energy transition presents are vast. Hosting aef and the Youth Energy Summit will provide an opportunity for us to share our experiences, learn from global best practices and obviously forge new partnerships. It will allow us to inspire and empower the next generation energy leaders who will drive Africa’s energy future. We are committed to continue with the legacy of excellence and innovation that aef represents. Together, we can build a brighter and more sustainable energy future for the Motherland.”
For now, it is up to the aef 2024 attendees to make use of the learnings and partnerships forged in Barcelona in the year ahead to build the foundations for a more promising future for the continent. Time will tell whether this has been successfully pursued and will certainly be under scrutiny when the delegates reconvene for the 27th edition of the show in South Africa next year.
News source: https://africanreview.com/energy/a-call-to-action-issued-at-africa-energy-forum
This was my first Africa Energy Forum. I was really surprised by the diversity and impressed by the energy. I’ve seen different stakeholders participating, bringing solutions on how to address the energy trilemma. I leave the event with the high hope that we will achieve the goals of decarbonisation by putting these efforts together and collaborating more between all the stakeholders.
Otmane Benamar Chief Technology Officer, EMEA, Gas Power, GE Vernova
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African Energy Newsletter
New thinking on Africa’s electricity problems demands commitment and faith
By John Hamilton
With African electricity supply industries in a state of flux, everyone agrees the infrastructure needed for economic development can only come from the private sector, but the existing financial and commercial models are inadequate – and a desperate need for investment in transmission only makes this financing challenge harder. Some new thinking about how to crack these problems was presented at the African Energy Forum in Barcelona, but the boldest ideas require a leap of faith, writes John Hamilton*
Electricity supply industries (ESIs) are in flux across the African continent. As demand for clean affordable electricity mounts, policymakers, utilities and regulators are confronting the challenge of adding more renewable energy (RE) to constrained grids, while private sector developers remain starved of finance and commercial financiers and multilateral development banks complain of a lack of bankable projects.
These competing conundrums are forcing participants back to the drawing board and some pockets of ambitious new thinking were evident at the Africa Energy Forum (aef), held in Barcelona on 25-28 June – even as many of the usual themes dominated discussions.
There is much to do. It was notable that most of the participants canvassed by African Energy expressed a pessimistic outlook over the amount of private sector development under way across the continent.
Industry stakeholders said more national-level reforms and improved implementation are essential if significantly more private investment is to flow into African ESIs. A huge effort is needed to give clean sustainable energy to 300m more Africans – and to improve services for many more still. Even then, at least another 300m will remain without access into the 2030s and beyond.
Making the great leap forward involves making the boldest plans work, which requires commitment, co-ordination, time and a leap into the unknown.
African Energy heard arguments for some of the most striking new ideas – starting with efforts to confront the urgent, but often intractable, problem of reconciling hard currency procurement and financing with revenue flows denominated in weak domestic currencies.
Introducing the African unit of account
Independent power producers (IPPs) and other investors remain acutely vulnerable to currency risk and what Autonomi Capital managing director Jonathan Berman called “the original sin of lending in dollars for local currency payments”.
The veteran banker observed: “As a financing community as a whole we haven’t responded well to this issue.” Most other regions, such as Asia and Latin America, have done much better.
The African Development Bank (AfDB) has proposed a revolutionary scheme for overcoming this, with a plan to create a pan-African currency backed by natural resources.
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AfDB energy financial solutions, policy and regulation director Wale Shonibare first presented the idea at the AfDB’s end-May annual meeting in Nairobi. At aef he led a session which discussed the proposal in detail.
The way resources are traded in Africa means countries are “leaving a lot of money on the table”, Shonibare said; an entirely new structure – geared to African needs – was required.
The Bretton Woods institutions created after the Second World War were designed to solve Europe’s problems rather than Africa’s, Shoibare argued. They “are not serving Africa’s needs… and, as we develop, we have to think about institutions which serve Africa’s priorities.”
The problem is that Africa attracts just 3% of global energy investment. This, said Shonibare, “is a tiny fraction of what we need”. Referring to global climate finance schemes such as the Glasgow Financial Alliance for Net Zero (Gfanz) and other commitments to increase financial flows, he noted: “When people talk about the amount of money available, that money is not for us in Africa. Fund managers don’t have interest in projects in Lagos or Kinshasa.”
The problem is only getting worse. As currencies have depreciated against the dollar, authorities are less able to provide the sovereign guarantees required by international lenders. “Many countries are reaching debt sustainability limits and the IPP market is slowing down because these guarantees are no longer available,” said Shonibare.
African Energy’s own reporting bears this out. Even when power purchase agreements (PPAs) are fixed in dollars, problems of convertibility emerge. As developers in countries from Egypt through to Nigeria, Malawi, and Zimbabwe (which has recently experimented with a gold-backed currency) have learned to their cost, lack of dollars in domestic financial markets reintroduces currency risk via the back door.
By contrast, South Africa – for all its problems – has shown what can be achieved when projects can rely on domestic finance, which is available in the deeper rand market.
Shonibare’s solution is to create a basket of commodities with a low volatility index that will not depreciate – and might even appreciate – against the dollar. This would back a new currency, managed by a settlement agent: the African unit of account (AUA) – not to be confused with the AfDB’s existing unit of account, or UA, which is equivalent to one International Monetary Fund special drawing right.
Under this proposed system, an IPP developer would take local currency earnings to the settlement agent, which would settle in dollars. Participating countries would pledge a percentage of their known proven resources to trade through the agent.
While this would represent a major shift, Shonibare pointed out that precedents already exist. Global examples include the gold standard and the Bank for International Settlements. In Africa, 14 countries already take part in the CFA franc zone, depositing 50% of their currency reserves with the French treasury. This could eventually be replaced by a new West African currency – the eco.
Shonibare also argued that countries already carried out a version of the scheme, but without the benefits. “They are pledging forward revenues to China, and to companies such as Vitol and Glencore. These deals are unregulated. They are done under the table. People don’t know what has been agreed,” he said. Both the United States and the European Union have tried to push back against this trend in recent years.
Berman highlighted the critical role played in Africa by development finance institutions and multilaterals. He was “disappointed commercial banks don’t find more solutions… They almost fear the credit risk”. When it comes to financing newer technologies, like solar PV and batteries, “it is not beyond local banks to build up that skills base”.
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Renewable IPP procurement reforms
Currency risk is one of the main factors that undermined earlier models for getting more cheap, clean power onto the grid – notably the World Bank Group (WBG)’s Scaling Solar scheme, which ran into irresolvable difficulties in Ethiopia in 2021. But the fate of this scheme has not undermined the necessity for well-designed auction processes. The African continent now has plenty of experience from multiple jurisdictions showing what is likely to work and what will fail.
At aef, University of Cape Town Power Futures Lab director Wikus Kruger presented a detailed analysis on the design and implementation of RE auctions in a report published by GET.transform, a platform funded by German development agency GIZ. The report, Driving Growth: Effective Renewable Energy Tendering in Africa, sets out a series of country, programme and project level factors that must be implemented if auctions are to succeed.
Driving Growth also shows how decisions at one level interact with those taken at other levels, with its findings illustrated with case studies from South Africa, Mauritius, Botswana, Ethiopia and Morocco. The paper offers a series of recommendations to improve forward planning, increase institutional capacity, secure trust from the markets and prioritise the requirements of lenders.
Kruger argued that, if developers and governments spend a lengthy period of negotiations between an auction’s conclusion and financial close, the winning price is unlikely to be competitive by the time the project goes ahead.
It’s all about transmission
While just a couple of sessions focused on grid, storage and energy trading at aef 2023 in Nairobi last year, more than eight panels discussed these topics in Barcelona – an indication of how much has changed in the past 12 months.
Industry participants are ever more engaged with the need to bring private finance into transmission infrastructure. As one session participant put it: “Who is going to fill the gap? The only answer is the private sector.”
South Africa is likely to lead the way with its plans to set up an Independent Transmission Projects Office (ITPO) to sit alongside its established IPP Office. However, plans to launch the first ITP tender by October may be optimistic.
ITP projects may be built and financed by the private sector, but should always be owned and operated by the state, said Development Bank of South Africa (DBSA) group executive Mpho Mokwele. “From an ownership point of view, it is important that the transmission infrastructure is inside the state-owned transmission company. As soon as you build the infrastructure you need to transfer it to the transmission company so that they own it,” he said.
Mokwele added that it is “important that transmission companies are part of the decision-making and policy-making process”. He expressed strong interest in DBSA’s participation in ITPO’s project management side.
Other panellists noted that transmission lines are some of the hardest projects to advance under private finance structures, because of the difficulties in securing wayleaves and the need for extensive environmental and social impact studies.
Substations, storage and digital transmission technology may be the place for private investors to start in many countries.
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Among many elements needed to make the scaling-up of transmission possible will be more rigorous and forwardlooking regulation.
Having chaired the aef’s regulator session, Energy for Growth Hub’s Mohamed Rali Badissy concluded this was “an incredibly dynamic time in the market for regulators” who, with a lot of unbundling under way, were “being asked to structure transmission, battery and other tariffs for the first time.” C&I and embedded generation have emerged, “whereas before it was all about grid stability” he added.
Regulators are now “having discussions that happened in generation 10 or 15 years ago, but are now happening in the transmission space,” Badissy said. “Not least to prepare the public for how private transmission will work”.
Wheeling and cross-border trade
As the shift towards utility-scale commercial and industrial (C&I) IPPs continues in several countries – again led by South Africa – the need for power systems and regulatory frameworks that permit wheeling both within and across borders is becoming ever more urgent.
This goes beyond the business of building infrastructure into the area of harmonising regulations and building regional markets.
With both the West Africa Power Pool (Wapp) and Eastern Africa Power Pool (EAPP) about to open early-stage dayahead markets this year, there are positive indications that attitudes towards market structures and operations are evolving at both national and regional levels.
There are even some suggestions the Southern Africa Power Pool (Sapp) – for many years the undisputed leader of the regional groupings – may be forced to raise its game and consider more sophisticated structures under development elsewhere, including in a resurgent Wapp. Sapp has already launched its regional fund for financing interconnections.
Further innovations could follow. Speaking in an aef session on bolstering transmission to release capital for generation, Sapp secretary-general Stephen Dhiwa anticipated potential developments in the Southern African market.
“Some transmission projects will move power from areas of high renewable energy to areas of high demand. We can create a dedicated renewable energy market as a way of increasing investment in renewable energy and allowing those customers who need renewable energy to buy it from such a market,” he said.
At the aef’s opening session, AfDB vice president for power, energy, climate and green growth Kevin Kariuki pointed to the need for big initiatives to overcome Africa’s huge energy deficits and gaping social and economic inequality.
The ‘Mission 300m’ initiative – to gain energy access for 300m more people by 2030, unveiled in April by the WBG and AfDB – was one example. Along with SE4All and the Global Energy Alliance for People and Planet, the AfDB and WGB were “burning the midnight oil” to launch Mission 300m, which would be accompanied by country-level reforms.
* With additional reporting by Jon Marks.
News Source: https://www.linkedin.com/pulse/new-thinking-africas-electricity-problems-demands-ykoac
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ESI Africa
New thinking on Africa’s electricity problems demands commitment and faith
By Theresa Smith, ESI Africa’s news editor
Despite the enthusiasm for a green hydrogen economy in Africa, most proposed projects are still in the conceptual phase without binding offtake agreements, remaining very far from financial investment decisions.
A discussion on opportunities to shape the hydrogen opportunities in Africa at the Africa Energy Forum (aef) in Barcelona last week saw energy experts look at the risks and benefits of clean hydrogen enthusiasm on the continent.
Publicly available data suggests more than 60 hydrogen-related projects announced across 17 African countries.
And just as renewable energy projects in Africa face specific challenges related to financial instruments and inflation, hydrogen projects raise their own questions.
Risk and uncertainty in this space, because hydrogen is still an emerging product with unproven technology, means there are a lot of complex layers to decipher.
Green hydrogen for local use or export?
Most of the proposed projects in Africa target export as a key market. While this could eventually be lucrative, it brings along much competition from developing technologies in advanced countries.
Another big issue is the cost of infrastructure to deliver the product. This is the cost to make and transport hydrogen.
Right now, the world consumes around 95 million tonnes of hydrogen, but this is all produced and consumed in close proximity. So, there is essentially no trading of hydrogen to speak of just yet.
What does this then mean for African countries’ path to creating clean hydrogen?
Going too fast creates a risk of high technology costs and getting locked into a market path that doesn’t turn out to be viable. But what if you wait too long to join the conversation and miss the boat that gets us to the muchneeded energy transition?
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In North Africa
Egypt wants to get 42% renewables in the country mix by 2035. It is rich in renewable energy sources and well-located to become a gateway of green energy from Africa to Europe.
The North African country has created incentives to attract investment into its nascent green hydrogen sector, but country officials acknowledge the challenges of securing an offtaker outweigh any speculation around pricing and cost of eventual green hydrogen production.
Another significant hurdle is standardising green hydrogen certification. With only the EU agreeing on a certification process, the world has yet to buy into and sign up for a common green hydrogen certification process. So, at this point, even agreeing on the exact definition of green hydrogen is still up in the air.
Morocco wants to produce green hydrogen for both domestic use and export. The country plans to produce around a million tonnes of ammonia by 2027 alongside 200 kilotonnes of hydrogen.
A big advantage is that the country would use ammonia as a feedstock for its phosphate industry. It used to get the bulk of its imported ammonia from Ukraine but now spends billions sourcing it elsewhere.
Still, they acknowledge that the whole industry needs infrastructure development on a global scale.
How do you cost the financing?
The conflict between Russia and Ukraine is a game-changer for energy and electricity security.
Germany, in particular, is making a big push to support the nascent hydrogen industry through the H2Global Fund, which seeks to secure long-term offtake by helping to make projects bankable.
Then there’s a PtX Development Fund, which provides non-reimbursable grants to industrial-scale projects at various stages along the green hydrogen value chain, and a $380m envelope Germany provided to the EIB for grant funding for viable projects.
And it’s not the only country throwing money at the problem.
However, the big banks seek evidence of long-term offtake, not countries’ desperation for a new energy source.
They already understand that driving down the cost of funding makes the renewable energy project competitive. So long-term tenors for projects really help. This becomes even more true of green hydrogen projects.
Solutions include finding projects that incorporate a large proportion of local use. Then, as projects scale up and export opportunities are found, they can grow that market.
Large multilateral banks want to finance projects, but there is still a lot of technological research they need to wrap their head around, and more and more, they are asking – what is the local use case?
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What’s the effect of a green hydrogen economy for people on the ground?
A positive aspect of green hydrogen projects raised in proposed plans in emerging markets is the socio-economic effect of the project on local communities.
The idea is to oversize the project and create excess green energy to power a local community. Or provide potable water.
Building carbon credits or green certification into the project is another proposal to measure a project’s effect on a community.
But without a use case, it’s hard to tell whether the proposed effect will become reality.
Phasing out fossil fuel subsidies and putting a price on emissions/pollution (even symbolically at first) is another prickly discussion that is starting to be bandied about.
Policy, regulation, frameworks, risk
Specific industries, such as nitrogen-based fertiliser and creating green hydrogen for refineries, are all good and well, but transporting the green hydrogen creates storage and transport logistics problems that have not yet been explored or solved.
One piece of advice offered to regulators at the talk was that the energy experts who help to develop projects in any given country should also look at the due diligence of foreign investment.
Making all aspects of the investment clear and transparent and setting up the framework for not only regulatory policies but also how to handle technical risk and other challenges would help.
But all panel participants agreed that while regulation is important, that is not the driver that gets a project to reach financial close – the offtake security, feasibility and bankability of the actual project is all-important.
If the risk to the project can be sufficiently mitigated and the project revenue secured, it stands a better chance of getting off the ground. And then, we have the test case that proves green hydrogen is an energy carrier and feedstock that will lead to the much-vaunted energy transition.
News Source: https://www.esi-africa.com/business-and-markets/developing-green-hydrogen-economy-in-africa-still-way-off/
Africa has always had a deficit in energy and infrastructure. And what I am seeing now, with all the people I am meeting and the conversations that we are having, is that this deficit is turning into an opportunity – an opportunity for all of us to take the call and lead and do whatever work is required in order to fix that deficit
Ronald Chindeka Head - Investment and Funding, Pele Green Energy
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We were able to have great meetings which led us to conclude a partnership agreement on behalf of Congo Brazzaville.
Olivier MAZABA Economist-Financier,
Responsable de l’administration à l’Agence de régulation du secteur de l’électricité au Congo (ARSEL)
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