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Journal of African Business Issue 5

  • Text
  • Infrastructure
  • Sectors
  • Energy
  • Continental
  • Technology
  • Finance
  • Trade
  • Invest
  • Business
  • Africa
  • Countries
  • Tourism
  • Continent
  • Solutions
  • Global
  • Projects
  • Mining
  • African
Welcome to The Journal of African Business - a unique guide to business and investment in Africa. Every edition carries editorial copy covering the following general topics, with a wide range of subjects within each broader economic sector: energy; mining and exploration; trade; finance; technology and tourism. In addition to this, special features on topical matters will be published periodically, along with country profiles. In this edition, the in-depth interview with Aggreko Head of Sales, Southern East Africa, Max Schiff, makes clear how important captive power is for the future viability of a wide variety of projects in Africa. As Schiff points out, the extractives industry has long been a leader in the application of captive power, given the remote location of many mining operations, but the flexibility and ESG advantages that captive power using renewables offers is making it an ever-more attractive option for many different sectors.

THE WINDS OF ENERGY

THE WINDS OF ENERGY CHANGE ARE BLOWING IN AFRICA Diversification of the continent’s wind energy sector is expected in response to the rollout of new projects in new regions. An International Finance Corporation (IFC) study has found that Africa’s onshore wind potential is immense. The organisers of the annual Green Energy Africa Summit compiled this article to record how that potential is being realised. Lake Turkana Wind Farm is not only one of Africa’s biggest wind projects, it also, at 0-million, represents the single-largestprivate investment in Kenya. Kenya Power buys power from the facility, which generates 310MW of energy. Credit: LTWP As the continent continues to seek ways to expand energy access, the adoption of wind as a source of energy is expected to accelerate. Outside of a limited number of countries, wind turbines have remained a rare sight in Africa. But this is not for lack of potential. In 2020, a study by the International Finance Corporation (IFC) found that continental Africa possesses an onshore wind potential of almost 180 000 TWh/annum, enough to satisfy the entire continent’s electricity needs 250 times over. As the continent continues to seek ways to expand energy access, the adoption of wind as a source of energy is expected to accelerate. To date, only Morocco, Egypt and South Africa have been truly successful in harnessing their wind potential and attracting private capital to set up wind parks. Through its widely-acclaimed Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), South Africa has already commissioned 34 wind farms with an installed capacity of over 3.3GW, according to the country’s IPP Office.. And this is far from over. In 2021, the South African Ministry of Mineral Resources and Energy announced 25 successful bidders 16 under its REIPPPP Bid Window 5, including 12 wind farms with a total capacity of 1 600MW. Bid Window 6, which was due to allocate a maximum capacity of 1 600MW of wind, with projects ranging from 50MW to 240MW, was doubled in capacity by President Cyril Ramaphosa very soon after its initial announcement, in response to the problems the country has been having with rolling blackouts. Up north, Morocco and Egypt continue to drive wind-energy developments. The latter has an installed wind-generation capacity of almost 1.5GW across 13 wind farms, according to its Ministry of Energy. It now expects to commission another 2GW by 2025 with an additional 14 wind farms. On the other side, Egypt has seen fewer but bigger projects. Its four wind farms have a current installed capacity of 1.6GW. The most recent one, West Bakr, was commissioned by Lekela Power in November 2021.

WIND POWER DEVELOPMENT AND MULTILATERAL FINANCE Across the rest of the continent, multilateral and development finance institutions (DFIs) have played a key role in supporting the emergence of the wind sector. West Africa has increasingly harnessed its wind potential with facilities commissioned in Cabo Verde (Cabeólica, 2011), Senegal (Taiba Ndiaye, 2019) and Mauritania (Boulenouar, 2020). The projects received significant backing from the likes of the Africa Finance Corporation (AFC), the US International Development Finance Corporation (DFC) and the Arab Fund for Economic and Social Development (AFESD). They have successfully laid the ground for more projects to follow. In December 2021, the DFC notably provided funding for a feasibility study to expand Senegal’s 158.7MW Taiba Ndiaye Wind Farm by another 100MW. East Africa is also joining the game, led by Kenya. After the expansion of the Ngong facility in 2014, the country commissioned the 310MW Lake Turkana Wind Farm in 2017 and the 100MW Kipeto Wind Farm in 2021. The African Development Bank (AfDB) was the mandated lead arranger on Lake Turkana’s debt package and managed to attract several leading European DFIs to finance the project. The Kipeto project was mostly funded by the DFC. After its success in Cabo Verde, the AFC has moved east where it is the lead developer on Djibouti’s Red Sea Wind Power Project in Ghoubet. The 60MW facility is nearing completion and is the country’s very first independent power producer (IPP). AN IDEAL CHOICE TO CUT CARBON EMISSIONS More recently, natural resources and extractive industries have provided an additional driver of wind-energy adoption in Africa. Publicly-listed oil and gas and mining companies seeking to decarbonise their portfolio and cut carbon emissions across their operations are looking at wind projects. In March 2022, Savannah Energy executed an agreement with the Ministry of Petroleum, Energy and Renewable Energies of the Republic of Niger to develop the country’s first wind farm. Savannah Energy, operator of some of the most prolific oil blocks in Niger, is planning to construct and operate the 250MW facility in the Tahoua Region. The wind farm will be structured as an IPP and is currently in feasibility study. It is expected to be sanctioned in 2023 for a potential commissioning in 2025. In Zambia, First Quantum Minerals (FQM) entered into a new partnership with Chariot and Total Eren in 2022 to develop 430MW of solar and wind power for its mining operations. The company operates Africa’s biggest copper mine by production in Zambia and it seeks to reduce its carbon footprint by 30% by 2025. In South Africa, Anglo American is embarking on an even bigger project with EDF Renewables. Both companies signed a Memorandum of Understanding in March 2022 to work together on the development of a new regional renewable energy Akhfenir Wind Farm is owned by Nareva, a subsidiary of Morocco’s National Investment Company. Credit: Eurogrues Maroc. Publicly-listed oil and gas and mining companies seeking to decarbonise their portfolio and cut carbon emissions across their operations are looking at wind projects 17 West Bakr Wind Farm, Egypt. Credit: Lekela

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