RES4Africa organized a two days Executive Seminar from 05-06 March 2019 and a one day high‐level Business‐to‐Government (B2G) workshop on 07 March 2019 in Addis Ababa, Ethiopia.
While the Executive Seminar focused on an international benchmark for auction programs and project finance in the renewable energy sector, the Business‐to‐Government (B2G) workshop focused on the long‐term strategies for integrating renewable energy into the national electric system, attracting investments and exploiting the socio‐economic benefits of renewables in Ethiopia.
From Kenya to Tanzania, from Uganda to Ethiopia, the familiar sound of petrol and diesel generators is about to disappear from the daily lives of millions of Africans. These East Africa countries have faced regular major power cuts since the early 2000s. But this is about to change; inhabitants of these countries are on the verge of switching them off for good, with the upcoming commissioning of a power transmission line to interconnect Kenya and Ethiopia. This line is scheduled to enter its operational phase in the course of 2019, providing an uninterrupted supply of electricity for all.
Inaugurated in 2012, this project falls under one of the African Development Bank's High 5 priorities - to Light up and Power Africa. Working with institutional partners, the Bank has mobilized resources to ensure the success of this project. At a cost of $1.26 billion, the project was co-funded by the African Development Bank ($338 million), the World Bank ($684 million), the Government of Kenya ($88 million) and the Government of Ethiopia ($32 million).
The African Development Bank has kicked off a feasibility study to explore the potential of electricity cooperative business models in Nigeria and Ethiopia. The effort is part of the Bank’s goal of achieving universal electricity access across Africa by 2025. Currently, power shortages diminish the region’s GDP growth by 2-4% per year, holding back job creation and poverty reduction efforts.
The study, funded by the South-South Cooperation Trust Fund, will be conducted by the National Rural Electric Cooperative Association (NRECA) International over three months. NRECA will consider regulatory, legal, technical and socio-economic factors that impact the creation of electric cooperatives in the two nations.
Over the past five years, Africa has seen an explosion in growth of residential solar and mini-grid companies, driven by lower cost solar and batteries, ubiquitous mobile money platforms and innovative financing mechanisms. These companies have found ways to deliver power to millions of African consumers for the first time and have started to show how countries within Africa can be leaders of the future global energy system, a system that will be distributed, smart, and renewables-based.
Despite these promising efforts from the private sector, however, companies working to get power to more than 600 million people without access to power still face massive policy and financing headwinds. While public sector grid extension projects are heavily subsidised by large-scale donor and government programmes, residential solar and mini-grid firms are largely left without such concessional financial support. Instead, private firms focused on energy access are directed to find ‘commercially viable models’ for rural electrification, even though their public sector counterparts are heavily subsidised, and rural electrification has never been achieved without concessional financial support on any continent in the history of the world. The historical precedent of supporting rural energy access is an important one, as it helps to avoid the morally and politically untenable situation where the rural poor pay the highest price for power.