Renewable Energy in Africa
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Renewable Energy in Africa EDITION 2 www.dlapiper.com Renewable Energy in Africa Contents DLA Piper in Africa 03 Mauritius 71 Uganda 155 Introduction 04 Morocco 81 Zambia 166 Angola 08 Mozambique 90 Zimbabwe 178 Botswana 19 Namibia 102 Appendix A 186 Burundi 29 Nigeria 113 Acknowledgments 188 Ethiopia 38 Senegal 126 DLA Piper Globally 190 Ghana 49 South Africa 136 Kenya 59 Tanzania 146 2 Renewable Energy in Africa DLA Piper in Africa It is often said that doing business DLA Piper Africa has offices in With the benefit of our global reach in Africa offers unique opportunities 20 countries across the continent, and strong local market knowledge, and challenges. We are one of the offering clients unrivalled coverage. we deliver legal services to a broad most active law firms in Africa and This comprehensive offering is the range of clients including: project it is our experience that, in order to result of over 15 years of commitment sponsors; governments; parastatals; see the opportunities and address and experience in Africa, combined EPC and O&M contractors; off-takers; the challenges, it is necessary to with long-standing relationships with and banking and financial institutions understand the cultural, economic and national firms, many dating back to in the renewables, power, oil and gas, political nuances that exist across this the 1990s. These firms have now been telecommunications, infrastructure vast and diverse continent. Our strong brought together as DLA Piper Africa, and mining sectors. and comprehensive presence across and we also have over 200 Africa the African continent gives us this lawyers who work on Africa-related critical local know-how. matters from our commercial hubs around the world. Our commitment to Africa is steadfast. 3 Renewable Energy in Africa Introduction Renewable energy (excluding South Africa) is 180kWh, of increased production through legislative support for ambitious in Africa compared to 13,000kWh per capita in recent or soon-to-be operational wind renewable energy development The African continent, with a the US and 6,500kWh in Europe.2 and solar plants. Ethiopia, with the initiatives. population exceeding one billion support of the International Finance people and an estimated combined Generation and distribution Corporation, recently initiated Round There is the potential for significant economy of USD1.5 trillion,1 presents of electricity is fundamental to 2 of Scaling Solar seeking to cover six further growth – the African continent huge opportunities for investors, unlocking economic potential, new projects with a total capacity of is rich with the resources needed developers and operators across the with the development of renewable up to 750MW. Ethiopia is the fourth to produce renewable energy, renewable energy sector. energy projects and innovative country in Africa to join the IFC’s including solar, there is an estimated electricity distribution strategies of Scaling Solar programme. Uganda 10TW of potential capacity or Renewable energy is already giving central importance to the delivery and Zambia, like the more established more. It is therefore unsurprising millions of people in Africa access to of the economic and socio-political programmes in Ethiopia and Kenya that many investors, developers electricity for the first time. However, objectives of central governments. are encouraging the development of and entrepreneurs continue to across the continent over 640 million geothermal energy projects. prioritize African markets and the Africans still have no access to As we reported in our previous vast and diverse opportunities which electricity. Approximately only 40% edition, activity in the sector has The recent implementation of legal they represent for the renewable of the population have access to and continues to grow rapidly, reforms to energy markets in Angola energy sector. electricity. Per capita consumption with countries such as Ghana and and Botswana highlights the drive of electricity in sub-Saharan Africa Kenya each adding hundreds of MW of central governments to provide 1 Statistics from the World Bank Databank, May 2018 (figures relate to Sub-Saharan Africa). 2 Statistics from the Africa Development Bank, May 2018 4 Renewable Energy in Africa The guide The guide DLA Piper is proud to release the projects supported by interconnectors hydro and solar power projects of the population with access to power sector. Additionally, the Kenyan second edition of Renewable Energy for the country's existing distribution currently under construction are electricity, Ghana's power demands government in partnership with the in Africa, updating the many changes networks are intended to enhance anticipated to increase capacity by continue to outstrip supply; however, World Bank, launched the Kenya that have occurred since our last capacity over the coming years. 300MW by 2020, helping to boost installed capacity had increased as National Electrification Strategy (KNES) edition. This publication remains an access to electricity from levels which at the end of 2018 to 4,562MW to in December 2018, which provides a ambitious task, seeking to summarize BOTSWANA are currently among the lowest help meet the growing requirement, roadmap for universal access by 2022. each country's regulatory environment Legislative changes introduced in globally. proposals to develop a number for renewable energy, highlight the 2016 have opened the country's of wind and solar farms are being MAURITIUS key policy objectives for national energy market to independent ETHIOPIA implemented with a 225MW wind Formation of the Mauritius Renewable governments and provide insight producers. However, the development Although the dominant energy farm under development and a Energy Agency in 2016 has provided a into the projects which are expected of renewable energy projects backed source in Ethiopia is hydropower, 100MW solar project proposed for the focus point for the further development to deliver these goals. The guide by private investors in a country which represents 90% of the installed Upper West Region of the country. of renewable energy sources to support showcases the diverse approach to historically dependent on state generation capacity, the Ethiopian In September 2018, a further 20MW the country's stable, investor-friendly renewable energy being adopted production remains challenging for government is seeking to diversify solar plant was commissioned at economy. The home solar project was across the African continent, and the the recently formed Botswana Energy with increased investment in wind and Gomoa Onyadze in the Central Region launched in May 2018. This project aims legal, economic and technological Regulatory Authority. geothermal production technologies of Ghana. at installing solar photovoltaic systems developments being implemented in which is recognized as crucial to on rooftops of 10,000 households in the following countries: BURUNDI support the government's National KENYA Social Category tariff 110A as part of A landlocked country at the heart Electrification Programme that aims The enactment of the Energy Act, the Mauritian government’s efforts to ANGOLA of Africa's Great Lakes Region, to attain universal access to electricity 2019, will see KPLC’s monopoly alleviate poverty while contributing to The Angolan government's Burundi holds significant potential through a combination of on-grid and broken as electricity distribution the national target of achieving 35% of proposals to facilitate USD18 billion for the development of renewable off-grid systems. and retail supply may be carried renewable electricity in the energy mix of investment in renewable energy energy which the government's out by other players. This move is by 2025. by 2025 are an ambitious vision for "Burundi Vision 2025" framework GHANA expected to result in an increase addressing the impact felt from the seeks to utilize in order to develop Despite established renewable energy in competition in the distribution rebalancing of the global oil market. sustainable ecological growth. production facilities and a widespread and retail supply of electricity and A program of hydroelectric generation A number of national and regional distribution network providing 82.5% improve the quality of service in the 5 Renewable Energy in Africa The guide MOROCCO of potential development sites, which of the government's intention to tap SOUTH AFRICA UGANDA Morocco is highly dependent on highlight the potential of the country's into the country's renewable energy Although it provides a regulatory Uganda's renewable energy resources imported hydrocarbon energy to renewable sector. Tariff regimes, potential in order to achieve its and economic framework which are estimated to provide the potential generate electricity, with approximately tax benefits and regulatory measures objective of generating 20% of national is attractive to private investment, for 5,300MW of additional capacity. 96% of its energy needs being are currently under development electricity supplied from renewable South Africa's electricity market Despite a range of operational sourced externally. to provide a legal and economic sources by 2030. Noteworthy is the remains highly concentrated, with biomass, hydro, solar and geothermal framework to attract investment. recently consummated debt financing the state-owned Eskom responsible production plants, this potential To meet the increasing local demand, transaction wherein North South for the generation and transmission