If you are looking for the way the wind is blowing and the sun is shining, turn to Egypt’s Benban solar park. The huge project, which will have the capacity to produce 1.8GW on completion, is proposing to sell surplus electricity at a tenth of the price of legacy power generators in Europe.
Talks are underway to build power connections to Europe and elsewhere in Africa. Other big solar plants in the pipeline are likely to be delayed by the economic uncertainty around Covid-19, says Jaakko Kangasniemi, CEO of Finland’s development finance institution, FinnFund.
He says governments are unlikely to back power-purchasing agreements while finances are being restructured. But, Kangasniemi says, the money is not going to be idle: instead, developers are targeting smaller industrial and commercial solar projects “like a factory or a block of apartments, or a neighbourhood […]. We are not talking a quarter of a million solar panels, but a few hundred or a thousand panels, around 1MW.”
One recent example: one of Zimbabwe’s biggest coldchain and tobacco players, Nhimbe Fresh, has signed a deal with South African startup Sun Exchange for a 1.9MW solar installation.
Sun Exchange crowdsources cryptocurrency leasing of solar cells – the latest iteration of the new micropayments for energy story that has taken off in recent years. Africa-focused miners are turning to renewables too.
CrossBoundary Energy has been aggregating these industrial and commercial solar agreements for a while. It recently sold off its 40MW off-grid solar portfolio to ARCH Emerging Markets Partners. Investors got an exit and a 15% return on their money, sending a clear signal: you can make good money from African solar.
This article is available as part of the print edition of The Africa Report magazine: ‘Africa in 2021 – Wo will be the winners and losers of the post-Covid era’?
By The Africa Report
