East Africa is shaping up to be one of the emerging markets for cleantech. Burundi, Ethiopia, Kenya, Rwanda, Tanzania and Uganda possess significant renewable energy resources that span small hydro, solar and wind to geothermal and biomass.
Take Kenya. It is looking to raise its 1.3GW of clean energy capacity to 18GW by 2030. The nation already has Africa’s largest wind farm with the 300MW Lake Turkana project. This is due to be completed in 2014, and has an estimated geothermal capacity between 7,000MWe and 10,000MWe concentrated in the Rift Valley.
Ethiopia is thought to have 45,000MW hydroelectricity capacity, more than 10,000MW of wind and 5,000MW geothermal. However, to date it has tapped just over 2,000MW of green energy. The Ethiopian government has a five-year plan in place to change that, with the goal of increasing the current power generation capacity to 10,000MW by 2015.
In Tanzania, the Tanzania Domestic Biogas Programme (TDBP) is providing finance assistance to low-income farmers who wish to electrify their homes and have the capacity to support a biogas plant. Through an anaerobic process, cow manure and urine are stored in an underground digester and separated into methane gas and fertile slurry. The gas can be used to produce a small amount of electricity for stove cooking. The slurry can then be used as a fertilizer for the farms. The gas stoves also significantly reduce the harmful smoke inhaled b while preparing and cooking food. TDBP has been highly successful to date and expects to install 12,000 plants by 2013.
However, financing cleantech remains a barrier to deployment in the East African region where the majority of the populations do not have access to electricity. Understanding what type of Grid-connected and off-grid solutions can be deployed will be vital to bring power to rural regions. Ultimately, supplying sustainable energy is a crucial challenge in the economic development of this resource-rich region.
There are signs that investors are taking the region seriously.
In June 2012, the Overseas Private Investment Corporation announced the launch of the U.S. – Africa Clean Energy Initiative (US-ACE) in collaboration with the U.S. Department of State and the U.S. Trade and Development Agency. The Initiative consists of $20 million in available funding for environmental impact assessments, finalisation of power purchase agreements (PPA), preparation of feasibility studies and other project development. OPIC identified a number of key factors for attracting investment. These included establishing a renewable energy framework, a creditworthy offtaker with a strong PPA, and a stable regulatory, political and economic environment.
The World Bank offers another route via its Clean Technology Funds. They have a total envelope of $4.5 billion. To date, these funds have been used to leverage over $37 billion of additional investment for projects such as energy efficiency programmes and the creation of renewable energy installations.
The UK government too is exploring the potential. Energy and Climate Change Minister Greg Barker recently took a delegation of cleantech companies and investors on a whistle stop tour of the region with a view to expanding trade links between the UK and East African countries.