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UNDP’s innovative small-scale solar funding competition closes for applicants

15 September 2022 Comments (0) Featured, Politics

As part of the UN’s Sustainable Development Goals, the Climate Aggregation Platform is running a competition for off-grid solar financing in Africa. The results will provide a range of development benefits, especially for remote communities.

New financing models to tackle the lack of electricity for Africa

As part of the UN’s Sustainable Development Goal of universal access to clean, affordable, reliable energy for all by 2030, the United Nations Development Program (UNDP), through the Climate Aggregation Platform (CAP) is running a competition for off-grid solar financing in Africa. Applications have now closed for the first edition of the CAP Financial Innovation Challenge, which will cover East Africa. Aggregate funding projects like this are aimed at countering investment barriers and unlocking new financing for small-scale renewable energy projects, and the increased access to electricity will provide a range of development benefits, from giving farmers access to solar-powered irrigation to health facilities in villages no longer relying solely on diesel generators, to better-lit streets and roads for remote communities.

Aggregate funding reduces risk and encourages investment

Financing solar initiatives in Africa is not without risk or problems, and new sources of funding and new financing mechanisms are required if the necessary investment to meet the Sustainable Development Goal by 2030 is to be reached. In this case, the CAP is using financial aggregation, a process in which multiple energy assets, projects, and companies are compiled into investment portfolios. Investors choose to put money into these portfolios, rather than into specific initiatives.

This aggregation of projects reduces the risk to investors, as well as the transaction costs of investing in multiple projects, and can help counter investment barriers that would prevent these projects from being financed. A recent report from the UNDP and Climate Bonds has shown that financial aggregation has untapped potential in bringing financing to small-scale clean energy projects. Eduardo Appleyard, CAP project coordinator says, “while the market is still nascent, financial aggregation could one day be a game-changer for distributed renewable energy companies…through this process we want to spark a conversation about financial aggregation grounded in real-life examples to help demonstrate its potential and better understand market barriers and opportunities.”

The CAP Financial Innovation Challenge is open to solutions that involve financial aggregation at different levels, such as bundling individual assets, projects, or companies together, and also to other innovative aggregate models, such as carbon credit solutions, renewable energy certificates, innovative models for receivables financing, and digital aggregation platforms.

First initiative to choose five projects across East Africa

The CAP Financial Innovation Challenge will aid in the transfer of hands-on knowledge of solar energy applications that will help overcome energy-related challenges in East African countries. According to the UNDP, off-grid solar and mini-grids are the key to providing reliable electricity to under-served communities without access to electricity and to those that are in regions where the national grid is not reliable.

Off-grid solutions are standalone solar power collection systems operating independently of the main power grid. They are typically sufficient for phone charging and lighting but do not normally provide enough power for larger electricity loads such as powering machinery or agricultural equipment. Mini-grids are larger systems that provide an independent network for communities where the population is too small or remote to make a national grid extension feasible.

The first initiative is exclusively for projects in East Africa, and funding from the Global Environment Facility (GEF) will be given for up to five projects, with at least one project in Rwanda and Uganda each. Each winning company or organization will then receive $40,000 to develop their innovations.

Buy and sell-side actors welcome to enter

The competition was open to both buy-side actors such as banks, impact investors and financial intermediaries, as well as sell-side entities like project originators, developers, and energy companies. The competition was not open to individuals, but was open to almost any groups including governmental agencies, development banks, private sector entities, NGOs, academia, associations, and joint venture applications, in order to encourage maximum participation.

Both first-of-a-kind solutions that have not yet been attempted anywhere before and proven approaches adapted to a new market sector, geography, or context will be considered. Entries were originally to be stopped on the 31st of August 2022, however the deadline was extended to the 9th September.

No dates have yet been given for when the winners will be announced, but should the competition prove successful it is likely that further competitions to win aggregate funding opportunities will open up both on the African Continent and elsewhere in the world.

Photos : undp.org

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Tanzanian entrepreneur aims to light up his country with green energy

6 August 2016 Comments (0) Africa, Featured, Leaders

sunsweet solar

George Mtemahanji’s Tanzanian startup, Sunsweet Solar, looks to bring clean energy to its nation’s poorest people.

For 70% of Tanzanians, the only way to light up their homes after sundown is with a small kerosene-powered lamp. This shortage of electricity does not only affect people in their homes, but businesses and schools too. It was something that 22 year old George Mtemahanji understood well, as he had grown up in the small, rural town of Ifakara where kerosene was the only option for light after dusk.

Mtemahanji left his home in 2003 at only 9 years of age, as his mother took him to Italy in search of new opportunities. However, 8 years later he returned home, and upon seeing that the same energy problems still afflicted his hometown, he decided to find a solution.

The spark that can change lives

Mtemahanji was not only struck by how little things had changed in his place of birth, but also by how significant a lack of electricity was to the prospects for development. Mtemahanji explained, “Electricity supply is really important for the development of a country. Without electricity, New York or Johannesburg would just be villages – they’d be like Ifakara.”

At the time of his return, Mtemahanji was studying to be a technician in renewable energy, and the power situation within his home town immediately struck him as a problem that his training could help to solve. Mtemahanji said, “We have a lot of sun and it was really very strange that no one was doing something with solar energy.” The inspiration for Sunsweet Solar had been created, so Mtemahanji returned to Italy to discuss his ideas with a fellow student, Manuel Rolando.

By 2013, extensive research into solar energy in Tanzania had revealed that many locals simply did not trust solar energy as a reliable source due to poor quality installations that had proved inconsistent. However, Mtemahanji was confident that Rolando and he were capable of designing efficient, cost effective solar powered systems. The duo began approaching companies for funding, and found a Swiss company planning to build a photovoltaic plant (solar power plant) right in Mtemhanji’s hometown of Ifakara. The two young entrepreneurs offered to design and construct all the technical components of the plant for free, and their pitch was accepted.

Sunsweet Solar rises in the east

Mtemahanji’s voluntary work on the Swiss photovoltaic plant was a huge success; the plant is the largest of its kind in the Kilombero district, and it powers 200 lights, dozens of computers and can store 3 days’ worth of power. Moreover, it now proved to any other investor that Mtemahanji and Rolando had the requisite skills to complete their grand plans.

Mtemahanji was committed to ensuring that his home in East Africa would begin to finally see a rise in solar power, which would drive forward development, and would save money for the poorest people of his country. Sunsweet Solar was registered within days of the completed project in Ifakara, and they quickly established a partnership with a German company, Fosera, to provide household kits to rural districts.

Sunsweet Solar aims to not only build energy solutions for much of Tanzania, but to do so in a way that is cheaper than the current alternative of using kerosene lamps.

Mtemahanji discussed the 70% of the country that have no reliable electricity, remarking, “We can give them electricity for 25 years for only $79… It costs less than $0.30 per month; today a liter of kerosene costs $1.10. That means the people in rural areas spent 73% more with kerosene per month than with our solar system.”

Access to electricity can bring greater productivity in the workplace, and the ability to improve education. Since Sunsweet Solar installed solar power to Benignis Girls Secondary School, the school has seen exam performances increase from 18% to 83% in just 1 year. Something as simple as being able to study during the evening is a part of life that many people will have never had to consider.

In 2015, George Mtemahanji won the Anzisha Price, an award for young African entrepreneurs, and despite his success he is still only 22 years of age. With plans to roll out a loan system, so that customers can buy installations in installments, the future for both his company and Tanzania looks increasingly bright.

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South Africa to add 100 MW solar power to national grid in 2018

10 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – French group Engie has signed a 20-year power purchase deal with South Africa’s state-owned utility Eskom to connect 100 megawatts (MW) of solar power onto the national grid in 2018 from its Kathu Solar plant.

Eskom, which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online.

With year-round sunshine and thousands of miles of windswept coast in South Africa, investors are warming to the renewable energy potential, with 66 projects completed or underway since the government launched a first bid round four years ago.

Construction of the Kathu Solar Park, situated in the Northern Cape Province, is expected to begin shortly, Engie said in a statement.

Other investors include South Africa’s Investec Bank, state pension fund Public Investment Corporation, SIOC Community Development Trust and Lereko Metier.

The project is funded by a mix of debt and equity. The debt is funded from a club of South African banks, namely Rand Merchant Bank, Nedbank Capital, ABSA Capital, Investec and the Development Bank of South Africa.

Engie owns and operates two thermal power peaking plants, the 670 MW Avon plant, which is under construction, and the 335 MW Dedisa plant that is already in operation.

 

(Reporting by Nqobile Dludla; Editing by James Macharia and Susan Thomas)

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Ivory Coast president calls for break-up of power, water monopolies

2 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Ivory Coast will break up its long-standing electricity and water monopolies and introduce competition to reduce prices amid growing public concern over price increases, President Alassane Ouattara said.

The government decided in June last year to increase electricity prices by 16 percent over three years to keep pace with production costs.

Under the arrangement electricity prices were scheduled to increase by 5 percent in January. But some customers saw rates rise by as much as 40 percent, according to a government investigation, prompting Ouattara to cancel the January increases and call for a more competitive industry.

“This situation reminds us of the need to open up the water and electricity sectors to competition,” Ouattara, a former senior International Monetary Fund official, said in a Labour Day speech on national television on Sunday.

“It is competition that will lower the price of electricity. I appeal to all those who wish to invest in that sector,” he said.

The West African nation has emerged from a decade of political turmoil and civil war as one of the continent’s rising stars economically, with growth averaging around 9 percent for the past four years.

However, critics of the government complain that most Ivorians have not benefited from the new-found prosperity.

During his re-election campaign last year Ouattara promised to make economic growth more inclusive.

The Companie Ivoirienne d’Electricite (CIE), majority owned by Africa-focused public utilities manager Eranove Group, has supplied electricity to the Ivory Coast since 1990 under an agreement with the government. The deal, which puts CIE in charge of the distribution of power to homes and businesses, is not due to expire until 2020.

It is unclear how the utility markets will be liberalised or if it can be done before the agreement between CIE and the government ends in 2020.

But it is likely to be a major issue in French-speaking West Africa’s biggest economy where power producers are struggling to keep pace with growing consumption.

Demand for electricity is rising by some 10 percent a year, and the energy minister said last year that $20 billion of investment is needed in the industry over the next 15 years.

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Japan, South Korea firms win contract to build $800 mil Botswana power plant

8 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

GABORONE (Reuters) – A joint venture by Japan’s Marubeni Corporation and South Korea’s Posco Energy has won an $800 million tender to expand Botswana’s Morupule B power plant by an extra 300 megawatt (MW), a government notice said on Tuesday.

The new coal-fired plant would be an extension of the troubled Chinese built 600 MW power plant.

The firms will recover their costs by selling the power to the Botswana Power Corporation (BPC) through a 30-year power purchase agreement at a cost of 812.56 pula per MegaWatt hour.

Construction of the new plant is expected to start late this year with the first power produced added to the national grid by May 2020, lifting power generation to more than 1,000 MW. Current national power demand stands at 610 MW.

 

(Writing by Zandi Shabalala; Editing by James Macharia)

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South Africa guarantees Eskom’s power purchase agreements

24 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

CAPE TOWN (Reuters) – Power purchase agreements between South African power utility Eskom and independent power producers (IPPs) are now categorized as contingent liabilities, adding about 200 billion rand ($13 billion)to government’s guarantee exposure from 2015/16, National Treasury said on Wednesday.

The government issues guarantees, which will amount to 467 billion rand at 31 March 2016, to several state-owned companies, with Eskom accounting for 74 percent of the total guarantee portfolio.

The portion of the guarantees that firms borrow against, known as the exposure amount, is a contingent liability and creditors can call on government to pay the debt should any default occur.

“The probability of default is low, since the regulator generally approves tariff increases that accommodate these agreements. However, significant deterioration in Eskom’s financial position may increase government’s risk exposure,” the Treasury said.

Exposure amounts are projected to increase to 258 billion rand at the end of March, from 226 billion rand in 2014/15, with Eskom accounting for most of the increase.

Africa’s most advanced but struggling economy is diversifying its energy mix away from an over-reliance on coal-power plants to include greener wind and solar projects.

A successful independent power producers program, started in 2010, is expected to provide 7,000 megawatts of energy with 47 projects fully operational by mid-2016, up from the 6,377 MW procured at the end of December.

Treasury reiterated on Wednesday that government’s plan for 9,600 MW of new nuclear power would continue “at a scale and pace that is affordable.”

Additional funding of 200 million rand was available in 2016/17 for transactional advisers and consultants on the nuclear programme.

Energy investment amounts to 70 billion rand this year and will be over 180 billion rand over the next three years as construction on Eskom’s Medupi, Kusile and Ingula power stations is completed, said Finance Minister Pravin Gordhan.

($1 = 15.3266 rand)

 

(Reporting by Wendell Roelf; Editing by Tiisetso Motsoeneng)

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ArcelorMittal South Africa seeks power producer to build new plant

12 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – ArcelorMittal South Africa is looking for an independent power producer to build an 800 megawatt gas-fired power station on land at its Saldanha steel works to help ensure its survival, Chief Executive Paul O’Flaherty said.

ArcelorMittal, which is reviewing its Saldanha operation partly due to high electricity costs, is willing to take as much as 220 MW of the plant’s capacity and the company is in talks with other industrial users and the government to sign long- term contracts for the rest.

Building an independent power plant is vital for the survival of Saldanha, O’Flaherty told Reuters, adding that state-owned utility Eskom’s rising electricity prices were unaffordable.

Electricity accounts for nearly a third of costs at Saldanha, the company’s newest and only export-focused plant, compared with less than 10 percent for the rest of the company.

“An environmental impact study is underway on our land,” O’Flaherty said adding that ArcelorMittal South Africa would not own the project.

On Friday, the company reported a slightly narrower loss than expected, sending its shares soaring.

There are also expectations that the government will give local steelmakers further protection beyond the 10 percent steel import tariff agreed in August.

Shares in ArcelorMittal South Africa were up a further 12.74 percent at 6.99 rand by 1200 GMT on Friday.

 

(Reporting by TJ Strydom and Thekiso Lefifi; Editing by Greg Mahlich)

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Drought plunges Kariba Dam hydropower to record lows

8 February 2016 Comments (0) Africa, Business, Featured

kariba dam

Power shortages in Zambia and Zimbabwe undermine their struggling economies.

Drought has brought record-low water levels at the Kariba Dam on the Zambia-Zimbabwe border, forcing significant power cutbacks and rationing.

The crisis at the world’s largest man-made reservoir threatens to further weaken the growth outlook for the two countries at a time when they face falling commodity prices. The struggling mining industry has been particularly hard hit.

The reservoir fell to 11 percent of capacity in late January before rising slightly to 12 percent this month after dam authorities cut hydropower production to 25 percent of capacity. A year ago, the dam, which is fed by the Zambezi River, was at more than 50 percent capacity but drought and heavier than expected water usage resulted in the decline.

Power shortage could last years

While authorities may avoid a shutdown of the hydropower production, power shortages are expected to last for years. According to the World Bank, the power deficit could last at least until 2018 and possibly until 2020.

Henry Kapata, spokesman for Zambia’s state power utililty said power blackouts were averaging eight hours a day or more when imports were limited.

Kapata said the power deficit totaled 630 megawatts in January. The utility’s goal is to reduce the deficit to less than 160 megawatts by August, he said.

Mining industry suffers

Kariba Dam

The power cuts have dealt a significant blow to a mining industry that was already in trouble.

Zambian mining interests in August agreed to cut hydropower consumption by 30 percent as the problems became evident last summer. In Zimbabwe, mines and other major users were ordered to cut their consumption by 25 percent in October.

As a result of cutbacks and global price declines, mining growth has stalled.

In Zambia, where mining accounts for 80 percent of exports, production of copper, also was expected to decline this year. Two major mining companies suspended operations and cut thousands of jobs following the decline in copper prices and thousands of jobs were lost.

Effective January 1st, the government increased power tariffs by 25 percent in an attempt to encourage mining companies to invest in power generation.

In Zimbabwe, where minerals account for 55 percent of all exports, production fell slightly in 2015, according to the Chamber of Mines of Zimbabwe. The total value of mineral shipments declined steadily between 2012 and 2015 from $2.2 billion to $1.8 billion because of low output and declining prices globally.

Finance Minister Patrick Chinamasa has said the power crisis has become an obstacle to economic growth in Zimbabwe and the government is putting a priority on power projects.

“We regard power generation as our number one priority to move the country toward an economic recovery,” Chinamasa told the Parliament in December.

Engineers see risk of dam collapse

Even as the drought eases, a larger crisis looms for the Kariba Dam. Engineering experts have been warning for years that the dam wall is in danger of collapse.

The low water level reduces the pressure temporarily, but “the bigger picture of the state of Kariba dam is critical,” said Kay Darbourn, author of an extensive 2015 report on the dam.

Darbourn said factors including high rainfall that will feed water inflows locally and from other regions as well as potential earthquake activity, “could all contribute to the likelihood of failure of the Kariba Dam.”

The report, “Impact of failure of the Kariba Dam,” (pdf) said 2014-2017 was a crucial period of danger for the dam, while a project to repair it will not be completed until 2025.

Bedrock at the foot of the dam erodes

The dam was built in 1959 on a seemingly solid bed of basalt. However, torrents from the spillway have eroded the bedrock at the foot of the dam and a large crater now undermines the base of the dam wall.

Engineers have warned for years that the dam, which is 128 meters tall and 579 meters wide, will collapse and the floodwaters will breach Mozambique’s Cahora Bassa Dam, knocking out about 40 percent of southern Africa’s hydroelectric supply.

An estimated 3.5 million lives would be at risk in Zambia and Zimbabwe as well as further downstream in Malawi and Mozambique.

Fears were heightened in January when an earthquake measuring 4.6 on the Richter scale struck less than 60 kilometers away from the dam. The dam has withstood quakes as high as 5.5. Authorities are assessing whether the quake caused additional damage to the dam.

Munyaradzi Munodawafa, spokesperson for the Zambezi River Authority (ZRA), manager of the dam, said Zambia and Zimbabwe had raised about nearly all of the $300 million needed to fix the structure. Work was expected to start early in 2016.

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Hydrogen Power in Mali

2 January 2016 Comments (1) Africa, Business, Featured

Aliou_Boubacar_Diallo

Green power in Mali from hydrogen gas wells could power the future.

Hydrogen power refers to the use of hydrogen fuel as a zero emission fuel, since burning hydrogen with oxygen emits no carbon dioxide (only water). It sounds a bit futuristic perhaps, but the physics behind it are valid, though up until recently there have been very few practical examples. This is due to hydrogen power relying on either some kind of hydrogen fuel cell or on hydrogen gas, which until recent times, wasn’t believed to be in the earth’s crust in great quantities, nor in the earth’s atmosphere in clean or usable form.

In a new book about natural hydrogen entitled Natural Hydrogen: The Next Energy Revolution?, the the authors assert that natural hydrogen seeps or wells are abundant almost everywhere on earth and are a real viable alternative to fossil fuels. The book is written by acclaimed geologists Alain Prinzhofer and Eric Deville. With this new book it is clear that hydrogen power is no longer the technology of the future, but rather the technology of today.

In July 2015, three years after their first successful test, the Petroma Company demonstrated how hydrogen gas can be used to generate power, by lighting up part of the village of Bourakebougou not far from the capital Bamako in Mali, the eighth largest country in Africa. This has created almost 100% clean electricity in a poor rural area that did not have any access to electricity, something that would have hardly seemed plausible only a decade ago. In doing so, Petroma is not only reigniting the debate about alternative energy, it is also showing the world that even a poor African country can be innovative and turn to renewable fuels and prevent the massive pollution that comes with the fossil fuels used today.

The man behind this new venture into the field of hydrogen power is 56-year-old Aliou Boubacar Diallo, who is the president of Petroma Inc and also the leader of the Democratic Alliance for Peace. Aliou Boubacar Diallo is the driving force behind the new push for green energy in Mali, where he is a well-known player in not just politics and the energy sector, but also within gold mining and peace brokering.

HEC Feasibility Study

In the field of hydrogen engines, Petroma turned to well-known experts from the Hydrogen Energy Center in the US to perform a feasibility study. HEC is on the forefront when it comes to hydrogen energy and hydrogen power generators.

The study conducted by HEC was to check if it would be possible to harvest the hydrogen gas and use it in generators and generate at least 100 megawatts of power. Furthermore the study was to determine whether it would be better to have many small plants or one larger plant. The power would be used by local villages as well as the capital Bamako and its surrounding industries.

This study was the basis which Aliou Boubacar Diallo used to start the hydrogen power revolution in Mali. The first generator was built and demonstrated in July 2015 and will be followed by many more, as ten wells are on the way. Once those ten have been successfully installed, another almost 300 are planned in the first major phase of the project, quite possibly with more to come.

mali

Power in Mali

While Mali is a large country in terms of land size, it is a poor country with around 15 million people, of which half live below the poverty line. More than ten years ago Mali was already quite green by most standards, as half the country’s power came from the use of hydroelectricity, though only about half of the citizens could be reached by the network.

Today these numbers are not much higher, as expanding the hydroelectric capacity of the country beyond the current level is expensive and many locals are still not connected with the grid.

It was pure luck when Petroma found the hydrogen well at Bourakebougou, as they were in fact drilling to get water to the village. Instead of clean water they found almost pure hydrogen, which will continuously power the generator for as long as it lives, without exhausting the hydrogen gas. In fact, while scientists don’t fully understand this seeping hydrogen gas phenomenon, some believe it could be stable enough to last for thousands of years.

With the numerous massive and almost pure hydrogen wells already found in the country, it will perhaps be feasible to convert the country to almost exclusively to renewable green sources within a foreseeable future. This has proven almost impossible for much richer and more technologically advanced nations, as their power needs are much higher.

Time will tell if this adventure into alternative energy can deliver as much as it promises.

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Most of Zambia plunged into blackout

23 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

LUSAKA (Reuters) – Zambia was plunged into a blackout on Tuesday affecting almost the whole of the country, the state power utility Zesco Ltd said.

“Almost the whole country except for Southern and Western province has experienced a power failure but we are yet to establish what has caused it,” Zesco spokeswoman Bessie Banda told Reuters.

Most of Zambia was affected by a power blackout on Dec. 11 because of a technical fault and supply was restored only the following day.

The southern African country, the continent’s second biggest copper producer, has been grappling with power shortages related to a searing drought as levels in the Kariba dam, which provides much of the nation’s electricity, drop.

Zambia’s Konkola Copper Mines (KCM), owned by Vedanta Resources, said after the Dec. 11 blackout it would suffer slight output losses.

An electricity shortage and weaker copper prices due to slower growth by top consumer China have threatened output and jobs in the mining industry, with the slow-down putting Zambia’s currency on the back foot against the dollar.

 

 

(Reporting by Chris Mfula; Writing by Ed Stoddard and Richard Balmforth; Editing by Kevin Liffey)

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