OPINION

PIECES
2015
from African INDUSTRY
Ministers of LEADER
Energy & ARTICLES
Infrastructure, from OPIC,
utilities and IFC, FMO,
regulators Norton Rose
Fulbright
& more

RECIPIENT
OF THE
ENERGYNET
LIFETIME
ACHIEVEMENT
AWARD:
Featured power H.E. Hon. Dr Salvador
projects and Namburete, Former
directories of power Minister of Energy,
technology providers Mozambique

In assiciation with
 EnergyNet - Africa Investors Portfolio 2015

EnergyNet Ltd. organise a global portfolio of investment meetings, conferences and infrastructure events focused
specically on the power and industrial sectors across Africa. Proven to engage the decision makers and technical
directors behind Africa's most exciting economies, EnergyNet places economic development at the heart of
industrial solutions, helping to generate a more stable and viable investment option for our partners in Africa.
Our up-coming meetings in 2015 include:

POWERING AFRICA: NIGERIA 14 15 September 2015 | Abuja

PA: SERIES Powering Africa: Nigeria 2015 is a two-day private sector-led summit on structured nance, development nance and private equity for
Nigerias Discos, Gencos and power sector leaders.
The programme will feature interactive dialogue between Gencos and Discos, private sector banks, multilateral investors and DFIs, government
and developers to discuss the changing investment landscape placing the critical role of the private sector at the heart of the agenda. The
platform will showcase the vast opportunities that await investment in Nigerias newly reformed energy sector as well as oer solutions to
overcome nancial challenges, deliverables and risks that will ensure the reliability of supply for Nigeria. Participants will also have the
14-15 SEPTEMBER opportunity to attend the black tie gala dinner, honouring some of Nigerias most prolic deal makers.
ABUJA
www.poweringafrica-nigeria.com

PA: SERIES
POWERING AFRICA: GHANA 17 18 September 2015 | Accra
The Powering Africa: Ghana summit will provide a platform for investor insights on the future direction of the power sector in Ghana. The agenda
will focus on the country's electricity landscape following the division of the energy and power ministries, the critical issues facing the government
G H A N A and investors, and the future project pipeline which is rapidly growing under the leadership of the Minister for Power. Meet with 250 decision-
makers including DFIs, banks, developers and EPCs to discuss what is needed to fully support and enable the transformation of Ghanas electricity
sector in the medium to long term.
17-18 SEPTEMBER
ACCRA www.poweringafrica-ghana.com

SOUTH AFRICA: GAS OPTIONS 1 2 October 2015 | Cape Town

The South Africa: Gas Options meeting is a focused 2 day investment meeting taking place from 1-2nd October 2015.
The meeting will take a detailed look at the opportunities available for gas developers and private sector investors as a result of the countrys
growing power demands. Debate solutions to the challenges of raising nance, delivering an ecient transmission infrastructure and the
supporting industry, and the global LNG trends which could realise the countrys vision of a stable and sucient power supply.
1-2 OCTOBER
CAPE TOWN www.southafrica-gasoptions.com

AFRICA INFRASTRUCTURE & POWER FORUM 15 - 16 October 2015 | Beijing

EnergyNets 4th Africa Infrastructure & Power Forum is the annual gathering for Chinese investors and African developers to do deals and develop
Africas infrastructure and power sector.
Taking place from 16-17th September in Beijing, China, the Forum will welcome government representatives, utilities companies, nancial
investors, project developers, technology providers and the advisory sector.
15-16 OCTOBER
BEIJING
www.africa-infrastructure-forum.com

PA: SERIES POWERING AFRICA: FINANCE OPTIONS 5 6 November 2015 | Cape Town
The 9th Annual Powering Africa: Finance Options meeting is an executive briefing designed for CEOs and senior-level directors active in
the energy, finance and consulting sectors and focused on the financing of projects across Africa. The meeting will get to the heart of the
issues and opportunities surrounding project nance, allowing participants to directly engage with key decision-makers over the course of the
concentrated 2 day retreat. This meeting is restricted to two delegates per company to preserve the roundtable format and high quality
networking opportunities.
5-6 NOVEMBER
CAPE TOWN www.poweringafrica-finance.com

PA: SERIES POWERING AFRICA: TANZANIA 3 4 December 2015 | Dar es Salaam

EnergyNet are delighted to present the 3rd annual Powering Africa: Tanzania meeting this November in Dar es Salaam. This meeting will provide
detailed insights into the investment opportunites in Tanzanias power sector in 2015, following on from the success of the 2014 meeting where
senior ocials from the Ministry of Energy & Minerals, TANESCO, EWURA, TPDC and the Dar es Salaam Stock Exchange invited regional and
international power experts to join them in timely discussions regarding the future role of the recently unbundled state utility TANESCO.
3-4 DECEMBER www.poweringafrica-tanzania.com
DAR ES SALAAM

PA: SERIES

Coming
up in 2016: 27-29 JANUARY 17-19 FEBRUARY 21-24 JUNE
WASHINGTON CAIRO LONDON

www.energynet.co.uk
 WELCOME

Dear Colleagues
A warm welcome to the ninth annual edition of the Africa Energy Yearbook, the official publication of the Africa Energy
Forum, hosted in Dubai this year for the first time in its 17 year history.

This years publication is split into three broad categories:

In the chapter Investing in Africa, Elizabeth Littlefield, CEO of OPIC, reflects on the renewables projects that have come
online through the support of OPIC and their collaboration with the U.S. Government partner agencies, and discusses the
vast growth potential of the continent.

In the chapter Policies and Best Practices for Africa, Angeli Hoekstra and John Gibbs of Management Consultancy firm
PwC look at the global megatrends currently influencing business models and utilities within Africas power sector and the
need for sector transformation in order to adapt accordingly.

Sustainable Solutions for Africa sees the IFC debate the merits of solar as a viable option for power generation, presenting
its Scaling Solar initiative as a potential solution to the bottlenecks which currently exist within the industry.

The 2015 Yearbook also features opinion pieces from industry leaders from the public and private sector, who reflect on their
experiences and set out their aspirations for the future. Respected contributors include Honourable Dr Salvador Namburete,
Former Minister of Energy, Mozambique, H.E. Cheick Taliby Sylla, Minister of Energy and Hydro-Power, Guinea, H.E.
Ambassador Henry Macauley, Minister of Energy, Sierra Leone, Vinod Kumar Khare, Chief Executive Officer, Ethiopian
Electric Utility, Ethiopia, Dr Mima Nedelocovych, President and CEO, Initiative for Global Development (IGD), Simon
Currie, Global Head of Energy, Norton Rose Fulbright and Rumundaka Wonodi, Managing Director and Chief Executive
Officer, Nigerian Bulk Electricity Trading Plc (NERC).

A sample of featured power projects from EnergyNets Powering Africa: Hub can be found in the middle of the book, as well
as directories of conventional and renewable technology providers at the end of the publication.

We hope you enjoy reading through these articles and opinion pieces which hone in on the opportunities for the development
of Africas power sector. The individuals who contribute span a diverse range of backgrounds and experiences, but share the
common goal of increasing Africas access to electricity to bring about the positive transformation of the continent and the
prosperity of its people.

Best regards,

Amy Offord
Editor- Africa Energy Yearbook
EnergyNet Ltd

2015 Africa Energy Yearbook 1

 EnergyNet are delighted to be working alongside
our Legal partner, Norton Rose Fulbright and our
Engineering Partner, Aggreko for the EnergyNet
Student Engagement Initiative (ESEI).
ESEI was established to promote human capital development
and job creation across Africas power and energy
infrastructure sectors. ESEI focuses on three key principles;
Law, Engineering and Finance. The ESEI Leadership
Committee together with our partners are constantly seeking
top performing students from around the African continent-
Africas leader of tomorrow.
EnergyNet have been in operation for 17 years of working
within Africas power sector. Planning for tomorrow is
paramount for any business to succeed, yet knowing where
the opportunities lie is not always straightforward. EnergyNet
is committed to recognising and profiling exceptional African
candidates and African entrepreneurs.
We are delighted to be welcoming back our ESEI 2014
We invite students to this years Powering Africa: Mozambique meeting.

you to support
We hope that during the meeting you will be able to connect
with them.

this exciting initiative

taking the classroom
to the industry.
For more information, please contact:
Veronica Bolton-Smith, E: veronica@energynet.co.uk, T: +44 (0)20 7384 8069

Legal Partner: Engineering Partner: Associate Partners:

 CONTENTS
WELCOME
WELCOME 1

INVESTING IN AFRICA
NIGERIAS ELECTRIC POWER SECTOR
converting potential to reality
ABIODUN AINA, SENIOR INVESTMENT OFFICER, IFC
FEMI AKINREBIYO, PRINCIPAL INVESTMENT OFFICER,
IFC 21

YEARBOOK PROFILE PIECE

RUMUNDAKA WONODI, MANAGING DIRECTOR
AND CHIEF EXECUTIVE OFFICER, NIGERIAN BULK
ELECTRICITY TRADING PLC 27

NAVIGATING THE CHALLENGES

USING DATA TO SUPPORT INVESTMENT
STRATEGIES
In The Africa Energy Sector
MICHAEL HODGSON-HESS, HEAD OF BUSINESS
DEVELOPMENT, AFRICAN FINANCIAL &
ECONOMIC DATA 9
TAPPING AFRICAS ENERGY LION SHARE
ELIZABETH LITTLEFIELD, CEO, OVERSEAS PRIVATE
INVESTMENT CORPORATION (OPIC) 13
YEARBOOK PROFILE PIECE
H.E. HON. DR SALVADOR NAMBURETE, FORMER
MINISTER FOR ENERGY, REPUBLIC OF
MOZAMBIQUE 17
of delivering IPPs in Africa
ASHWIN WEST, MANAGER - TRANSACTIONS, AFRICAN
INFRASTRUCTURE INVESTMENT MANAGERS (AIIM)
PAUL FRANKISH, MANAGER - ASSET MANAGEMENT,
AFRICAN INFRASTRUCTURE INVESTMENT MANAGERS
(AIIM) 29
THE CHANGING LANDSCAPE
Moving the Power Sector Forward
DAVID HUMPHREY, GLOBAL HEAD, POWER &
INFRASTRUCTURE, STANDARD BANK 33
YEARBOOK PROFILE PIECE
JUSTIN DEANGELIS, DIRECTOR, DENHAM CAPITAL 37

AFRICA ENERGY YEARBOOK Volume 9, June 2015

Published by: Editor: Articles, Directories & Copyright c 2015
Energynet Limited Project lists EnergyNet Limited
Fulham Green Amy Offord
Bedford House Amy.offord@energynet.co.uk ISBN 978-0-9551943-4-4
69-79 Fulham High Street +44 (0) 20 7384 8068
London All rights reserved. No part of this publication
SW6 3JW Artwork & Design: may be reproduced, stored in a retrieval system
Catherine van Dyk or transmitted, in any form or by any means,
Clear Impressions electronic, mechanical, photocopying, recording or
Publishing & Print Media Design otherwise, without prior permission of
clearimpressions@outlook.com EnergyNet Limited.
+27 79 344 1649

www.energynet.co.uk

2015 Africa Energy Yearbook 3

 CONTENTS

POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

RISKY BUSINESS?
Lower Oil Prices and Africa Energy Projects
KEITH MARTIN, INITIATIVE FOR RISK MITIGATION
IN AFRICA 43
INNOVATIVE FINANCING FOR THE LAST
MILE:
Output-Based Aid Provides Power to the
Poorest Households
SAL E. GONZLEZ, COMMUNICATIONS, GLOBAL
PARTNERSHIP ON OUTPUT-BASED AID, WORLD BANK 51
YEARBOOK PROFILE PIECE
PAUL KUNERT, HEAD OF BUSINESS DEVELOPMENT,
GLOBELEQ 59
H.E. HON. JAMES MUSONI, MINISTER OF
INFRASTRUCTURE, GOVERNMENT OF THE
REPUBLIC OF RWANDA 79
ANTICORRUPTION, DUE DILIGENCE
AND POWER INVESTMENTS:
getting more from the process
WALTER COURAGE, DIRECTOR, THE RISK ADVISORY
GROUP
JONNY BRAY, HEAD OF BUSINESS INTELLIGENCE
AFRICA, THE RISK ADVISORY GROUP 93
LESSONS LEARNED
In Implementing Off-Grid Electrification
Projects in Africa- Ghanas Example
FRANK YEBOAH DADZIE, PLANNING ENGINEER,
GHANA ENERGY DEVELOPMENT AND ACCESS
PROJECT 97

THE ROAD AHEAD YEARBOOK PROFILE PIECE

for power sector transformation in Africa STEPHEN KARANGIZI, DIRECTOR, AFRICAN LEGAL
ANGELI HOEKSTRA, PARTNER, AFRICA POWER & SUPPORT FACILITY 101
UTILITY LEADER, PWC

JOHN GIBBS, ADVISORY PARTNER, PWC 61 POWERING AFRICA:

Small Steps, Giant Leaps
YEARBOOK PROFILE PIECE NIAMH KENNY, ASSOCIATE CONSULTANT,
GAS & POWER, CITAC 103
SIMON CURRIE, GLOBAL HEAD OF ENERGY,
NORTON ROSE FULBRIGHT 65
YEARBOOK PROFILE PIECE
FRANOIS BANGAZONI, CHIEF EXECUTIVE
STREAMLINING POWER PROJECT OFFICER, ENERCA 109
DEVELOPMENT IN AFRICA
by Promoting Standardized Power Purchase
Agreements
DR. MIMA S. NEDELCOVYCH, CEO, INITIATIVE FOR
GLOBAL DEVELOPMENT 69

YEARBOOK PROFILE PIECE

DR MIMA S. NEDELCOVYCH, PRESIDENT & CEO,
INITIATIVE FOR GLOBAL DEVELOPMENT 73

TRANSITIONAL ELECTRICITY MARKET

(TEM)
and investor and stakeholder expectations for the
Nigerian Electricity Supply Industry (NESI)
DOLAPO KUKOYI, PARTNER, DETAIL 75

4 2015 Africa Energy Yearbook


SUSTAINABLE SOLUTIONS FOR AFRICA
SCALING SOLAR:
Making the Sun Work for Africa
JAMIE FERGUSSON, PRINCIPAL INVESTMENT
OFFICER, GLOBAL RENEWABLE ENERGY, IFC
DAN CROFT, SENIOR INVESTMENT OFFICER,
ADVISORY SERVICES, IFC
YASSER CHARAFI, PRINCIPAL INVESTMENT OFFICER,
AFRICA INFRASTRUCTURE, IFC 113
YEARBOOK PROFILE PIECE
H.E. AMBASSADOR HENRY MACAULEY,
MINISTER OF ENERGY, SIERRA LEONE 119
A YEAR OF SOLAR PV IN EAST AFRICA
LAURA KIWELU, SENIOR ASSOCIATE, NORTON ROSE
FULBRIGHT TANZANIA 121
A STEP AHEAD OF THE GAME
Site Selection and Constraints Mapping through
Geographical Information Systems (GIS)
ALAN COCHRAN, SENIOR CONSULTANT:
IMPACT ASSESSMENT & PLANNING PRACTICE, ERM
ANDREW BRADBURY, PARTNER AND COMMERCIAL
DIRECTOR: SUB SAHARAN AFRICA DIVISION, ERM 125
YEARBOOK PROFILE PIECE
ELVIRA EURLINGS, DIRECTOR OF ENERGY
DEPARTMENT, FMO
BERNHARD VAN MEETEREN, SENIOR INVESTMENT
OFFICER, STRUCTURED FINANCE ENERGY, FMO 131
Advertisers
AFRICA FINANCE CORPORATION 8
AFRICAN REVIEW 40
ANDRITZ HYDRO OUTSIDE BACK COVER
BLOOMBERG NEW ENERGY FINANCE 112
CONSTRUCTION REVIEW 168
ENERGYNETS COMMITMENT TO
EAST AFRICA 122
ENERGYNET AFRICA INVESTORS
PORTFOLIO Inside Front and INSIDE back Cover
ENERGYNET POWERING AFRICA: HUB 80
ENGERATI 150
ENERGYNET STUDENT ENGAGEMENT
INITIATIVE (ESEI) 2
ESI AFRICA 39, 151, 158
2015 Africa Energy Yearbook
CONTENTS
POWERING AFRICAS FUTURE BY WIND
KASPER DALSTEN, DIRECTOR GLOBAL BUSINESS
DEVELOPMENT, VESTAS WIND SYSTEMS 133
POWERING AFRICAS FUTURE BY WIND
VINOD KUMAR KHARE, CHIEF EXECUTIVE OFFICER,
ETHIOPIAN ELECTRIC UTILITY, ETHIOPIA 137
CAN RENEWABLE ENERGY
help to address South Africas energy crisis?
ALASTAIR CAMPBELL, MANAGING DIRECTOR
VANTAGE GREEN X 139
YEARBOOK PROFILE PIECE
JOSHUA CHOGE, CHAIRMAN, KENGEN 143
MOZAMBIQUE:
A Future in Renewable Energy?
PAULA DUARTE ROCHA, PARTNER, MOZAMBIQUE
LEGAL CIRCLE 147
YEARBOOK PROFILE PIECE
ARJAN VISSER, FOUNDER, ELECTRICITY4ALL 149
YEARBOOK PROFILE PIECE
REDA EL CHAAR, CHAIRMAN, ACCESS 153
GLOBELEQ 58
GROUPE JEUNE AFRIQUE 20
HERBERT SMITH FREEHILLS 56
IC PUBLICATIONS 108
LOUIS BERGER 118
MANITOBA HYDRO 12
METKA 84
NEDBANK 68
POWERING AFRICA: MOZAMBIQUE 146
POWERING AFRICA: SUMMIT 102
RAND MERCHANT BANK 42
SIEMENS 88
TCQ POWER 142
5
 CONTENTS

Projects
ANGOLA 81 MOZAMBIQUE 86

BOTSWANA 81 NAMIBIA 87

CONGO (KINSHASA) 81 NIGERIA 89

EGYPT 82 RWANDA 89

ETHIOPIA 82 SOUTH AFRICA 90

GHANA 83 TANZANIA 91

KENYA 85 UGANDA 91

MALAWI 85 ZAMBIA 92

With Special Thanks To Energynets

Arts: Energy Partner

BRUCE ONOBRAKPEYA GBENGA OFFO

GALA DAY UNDER THE RIVER I 14 THE QUARTET 128

DISEYE TANTUA SAM EBOHON

MONKEY BY GRADE, SHOE BY SIZE 38 FIGURATION 164

JULIET EZENWA MAJA-PEARCE GORGE EDOZIE

LOST INNOCENCE 50 FOUR FACES OF AGBOGHO MMUO 2, 2 167

GORGE EDOZIE GORGE EDOZIE

FOUR FACES OF AGBOGHO MMUO 2, 1 116 FOUR FACES OF AGBOGHO MMUO 2, 3 172

DIRECTORIES
CONVENTIONAL THERMAL POWER 159 HYDROPOWER 170

TEMPORARY POWER 165 SOLAR POWER 171

WIND POWER 169

6 2015 Africa Energy Yearbook

INVESTING IN
AFRICA
 INVESTING IN AFRICA

USING DATA TO
SUPPORT
INVESTMENT
STRATEGIES
In The Africa Energy Sector

Michael Hodgson-Hess, Head of Business Development,

African Financial & Economic Data

Michael Hodgson-Hess is Head of Business Development for African Financial and Economic
Data. Michael has an excellent knowledge of Africas commercial, financial, political, geopolitical
and security ecosystems, having spent a significant part of his working life strongly engaged with
emerging markets, but particularly Africa.

AFRICA, INFRASTRUCTURE, ECONOMIES & ENERGY A MEDLEY OF

STATISTICS
(Please note. SSA = Sub Saharan Africa)

Africa : 12% of world population, 4% of world energy
demand, 2% of world trade, 1% of global GDP
Economic output of 82 million Germans significantly
exceeds the 940 million people of SSA
Six of the worlds ten fastest growing economies are in
Africa
13% increase in 2013 of capital investment into Africa,
Africas share of global foreign direct investment 5.7%
SSA energy use up by 45% since 2000
SSA - only 290 million out of an estimate population of
940 million have access to electricity
SSA access rate for electricity has grown 10% since 2002
to 32% today
Estimated Capex to move the dial from 32% to 70%
access - USD$205 billion
SSA - 90GW on Grid power generation
50% of which is in South Africa
45% of the 90GTW total is coal, 22% hydro, 17%
oil, 14% gas
33% of Africas natural gas production is flared off
Since 2009, 30% of world oil and gas discoveries made in
SSA
18% of world uranium supplied from South Africa
Solid Biomass accounts for 70% of SSA final energy usage
Africas largest economy is Nigeria, with no grid access for
55% of the population
Ghana 70%+ on grid, Central African Republic <3%,
Chad 4%
IEA estimates renewables will make up 44% of SSA
power generation by 2040
China invests 14% of GDP in infrastructure; Africa 4%
Annual per cap energy usage (KWH) Liberia 82, Kenya
150, Ghana 342, USA 12,461
World Economic Forum country Global Competiveness

2015 Africa Energy Yearbook 9

 INVESTING IN AFRICA

The diversity of Africas cultures, ethnicity,

faith, people and language, requires a respectful
acknowledgement that these highly individual factors
will, and must, influence both the business strategy
adopted, and the quantum of investment deployed.

Index of the 25 lowest ranked, 68% are African. The
infrastructure deficit remains profound.
Data driven empirical evidence shows conclusively that in
emerging markets, structural transformation is closely linked
to an economy with a meaningful natural resources sector.
Commodities push infrastructure development, which in
turn pulls economic progress, which in itself has become the
catalyst for Africas current (and effective) decoupling from
resource dependency, the commodity roller coaster and the
resource curse, something its worth noting that Russia has
so far failed to do.
The data, the statistics, the trend evidence, the Africa Rising
narrative, all point surely to only one conclusion. Africa,
the next Eldorado for generators, extractors, transmission
& distribution providers, renewables, the attendant
and necessary consultants, engineers, lawyers, funders,
bankers.happy times. But we know its not as simple as
that. Lets unpack the reality.
First up, the meaningless phrase We are doing business
with Africa. Africa is not a single place working to a
monocultural set of rules, regulations, customs and practices.
Africa is immense. The entire land-masses of India, China,
the United States, Japan and Europes main sovereigns can
all be accommodated within this continent of 55 countries,
itself a confusing mix of regional, political and trading blocs
that at times appear to have the domestic policy of member
States set at ninety degrees to that of the blocs own grain.
The opportunity for business in Africa can more than match
the sheer magnificence of the continents size. Remember
the cell phone explosion - the leap over legacy copper
wire networks that, in a matter of only years, linked up
a continent of over 1 billion people; the transformation
to mobile banking; the sheer innovation that Africans can
bring about? Watch renewables follow this path. However,
the diversity of Africas cultures, ethnicity, faith, people and
language (1,250 are spoken in Africa) requires a respectful
acknowledgement that these highly individual factors will,
and must, influence both the business strategy adopted, and
the quantum of investment deployed. Effective investment
in Africas energy space is not a generic, one size fits all
play, but will need sensitivity balanced with logic, research,
analysis, instinct and intuition. You cant always measure
the politics, but you can always measure the outcomes they
influence. Look to the data.
The next phase of development for the energy sector in
many of Africas countries is well under way. Infrastructure
and energy investments have long paybacks. In mature
economies enjoying stable government (frequently with
a regulator not unsympathetic to the sellers view) this
makes them attractive investments with a predictable
income stream derived from an essential cant live
without commodity. Assess each African country or
region individually based on its own characteristics,
then decide whether your organisation commits to
increased involvement, or pull back, or indeed first time
participation. Despite the difficulties of drilling down
through layers of political nuance, deploying a data
strategy will reveal risk and clarify its mitigation. Once
outcomes have been plotted, these can be mapped back
to the project fundamentals. Now are you in or out? Not
sure? Then an Africa precondition investment check list
should at least include the obvious basics, such as:
The projects high priority for government (political)
The capacity of government to deliver against their
commitments (political, economic, commercial)
A clear implementation time line not subject to
interference (political, economic)
A sovereign where political stability is not a recurring
issue (political)
Revenue certainty (commercial, political)
So, how do African countries stack against this base line?
There is now real belief that the Africa Rising narrative
has robust foundations. This is a real story of countries with
growing local production and consumption, a fresh, young,
pan-African middle class comprising discerning consumers,

10 2015 Africa Energy Yearbook


meaningful external and intra-African trade, with the
whole supported by improving civil society institutions and
structures that give local and international investors sufficient
comfort and confidence in the markets political stability and
governance to proceed. (Rwanda, only 20 years ago ruined
by its horrific civil war, is now judged a better place to do
business than Italy). Still unclear? Unsure what to do or what
to think? Then start by following the money; foreign direct
investment into Africa continues to increase.
But, without project funding, there is no narrative, no
infrastructure, no energy, no growth, no real hope. Africa
must move on, and rapidly, from its traditional on balance
sheet model for in country development, one which is
poorly supported by both illiquid local capital markets and
local financial institutions without the resources to fulfil
need, ambition and aspiration. PPP is much talked about,
and sometimes deployed, but cannot bridge the whole gap.
Multilaterals too have their role, but only form part of the
solution. The funding puzzle has a Jury out sign on its door
whilst Africa innovates and its banks confront their own issues.
In the context of Africas enormous opportunities (at times
caveated by complexities which can seem overwhelming)
how would Google, the worlds largest data company, look
at an infrastructural energy investment in Africa? We can
only speculate, however we know Google Ventures spends
billions of dollars on acquisitions and start-ups, and does not
believe in luck or instinct when it comes to the success
of its venture capital funding division. Bill Maris, Managing
Partner of Google Ventures, confirms the primary driver is the
numbers, the collection and analysis of data. The Google view
is; if you cant measure and quantify it, how you can hope
to start working on a solution. With access to the worlds
Unsure what to do or what to
think? Then start by following
the money; foreign direct
investment into Africa continues
to increase.
2015 Africa Energy Yearbook
INVESTING IN AFRICA
The case for using data to
support investment strategies is
overwhelming.
largest data sets, Googles founding principle remains that it is
foolish to make investments based on gut. It is the science
of the deal, not the art of the deal, as expressed in the New
York Times in June 2013. But intriguingly, there is flex in this
seemingly rigid position. Google Ventures accepts intuition
plays a role; dont invest in the venture if you have no belief
in the Runners and Riders, and equally even if the data says
the venture is a mistake, investing in the person may not be.
Bring all this back to Africa, and the case for using data to
support investment strategies is obviously overwhelming. To
make informed decisions which have to undergo a weight
of political assessment interleaved with the measurable, the
data, organisations need good analytics, sound information,
focused research and access to data of depth, breadth, detail
and provenance. In this brief discussion alone weve looked at
a multitude of data driven economic indicators, all of which
are available for African countries. Here are a few:-
Ease of doing business
Foreign direct investment and capital flows
Energy generation capacity
African capital markets liquidity
Electricity transmission and distribution
Resource dependency
Growth in renewables
Civil society governance structures
Each piece of data builds the picture, makes the case and
leads to a decision underpinned by evidence, either for or
against. But as the Google analogy shows, at times you will
have to base the call on the person and the politics, and not
just the numbers. And that can be brave. Or indeed the most
natural thing in the world.
As Ive written before, every Africanologist will confirm that
those who succeed on the continent first judge weather, wind
and currents, look up to the horizon, and then accept what is
beyond it. Even Google cant bend visible light yet.
11
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 INVESTING IN AFRICA

TAPPING
AFRICAS ENERGY
LION SHARE
Elizabeth Littlefield, CEO, Overseas Private Investment
Corporation (OPIC)

Since 2010, Elizabeth L. Littlefield has served as President and CEO of the Overseas Private
Investment Corporation, the U.S. Governments Development Finance Institution. OPIC
mobilizes private capital to help address critical development challenges and in doing so,
advances U.S. foreign policy and national security priorities.
Prior to OPIC, she was CEO of the Consultative Group to Assist the Poor, a policy and
research center dedicated to advancing poor peoples access to financial services housed at the
World Bank. Ms. Littlefield has also served as JP Morgans Managing Director in charge of
capital markets and financing in emerging Europe, Middle East and Africa and as well as the
Boards and Executive Committees of the MasterCard Foundation, Calvert Foundation and
Womens World Banking, among others.
She also spent 1989 1990 in West and Central Africa providing banking consultancy to
several start-up microfinance institutions.
Ms Littlefield is a graduate of Brown University and also attended Ecole Nationale de Sciences
Politiques in Paris.

These are extraordinary times for Africa and for Africas power sector. Were seeing unprecedented international
commitment and collaboration to address the energy poverty that has long constrained business activity, quality
of life, food production and overall economic growth. On a continent of nearly one billion people that is expected
to add one billion more by 2050, access to electricity is quite literally the key to a brighter, more prosperous, more
secure and more connected future.

C onsider that last year, Africa added more renewable energy

than it has in the previous 14 years combined. From Kenya
to Rwanda to Ghana, countries are increasingly tapping the
earths resources to generate more power. And this progress pales
in comparison to the potential that remains untapped. Africa is
one of the sunniest places on the planet and also has abundant
resources of wind power, geothermal power, oil and gas. In fact,
Africas proven reserves of natural gas have grown to 509 trillion
cubic feet since 1980, representing growth of over 140%.
The U.S. Government has pledged $7 billion through
President Obamas Power Africa Initiative, which aims to
double access to electricity on the continent. As the U.S.
Governments development finance institution, the Overseas
Private Investment Corporation (OPIC) is playing a key role in
this effort. OPIC has a long history of supporting investment
in emerging economies including those of Sub-Saharan Africa.
And our commitment to Africa is growing. OPIC now commits
about $1 billion a year in projects supporting healthcare,
education, agriculture, clean water and financial services. We
understand that at the core of all these development challenges
is power. If we want to address poverty, food insecurity,
insufficient healthcare and limited access to financial services,
we must increase access to electricity.

2015 Africa Energy Yearbook 13

 INVESTING IN AFRICA

Bruce Onobrakpeya | Gala Day Under The River I | 2006 | Plastograph on paper | 107 x 79 cm
For price contact Aabru Art / art@aabru.co.uk/ +44 7847 244 217

14 2015 Africa Energy Yearbook


Weve effectively collaborated
with our U.S. Government
partners to help jumpstart more
innovation in the renewable
power sector.
OPICs work bringing more electricity to Africa spans Kenya,
where we provided financing to support the expansion of a
major geothermal power plant, to Togo, where we supported
the construction of a major power plant, to Nigeria, where
we are supporting the first independent power plant to be
built in 10 years, and Free State, South Africa, where we are
supporting construction of a 60 megawatt solar power plant.
Weve also effectively collaborated with our U.S. Government
partners to help jumpstart more innovation in the renewable
power sector. Together with the U.S. Trade and Development
Agency and the U.S. Department of State, we provide
early stage support to promising renewable energy projects
through the Africa Clean Energy Finance (ACEF) program.
Through ACEF, weve supported many off-grid projects that
are empowering the people of rural Africa with home solar
kits, rooftop solar and other tools to generate electricity in
remote settings. Earlier this year, a major solar power plant
in Rwanda that received initial funding support through the
ACEF program came online powering 8.5 megawatts and
becoming the countrys first utility-scale solar facility.
OPIC brings some powerful tools to help investors in the
sorts of power projects that can require large investments of
time and money. We can provide loans of up to $250 million
Africa is a region brimming with youth, talent,
natural resources and potential. Many African
countries are enjoying rapid economic growth.
2015 Africa Energy Yearbook
INVESTING IN AFRICA
for tenors as long as 20 years and we provide political risk
insurance to help address and mitigate many of the challenges
common in the developing world.
So how can local governments, foreign governments and
private businesses all help advance the progress weve seen to
date and bring more electricity to the continent?
Local governments can focus on extending many of
the reforms weve seen to date that have improved local
investment climates. One key area of focus should be the
widespread energy subsidies, which can distort markets and
hamstring investment in renewable resources. With falling
fossil fuel prices, now is the time to push for subsidy reform.
In addition, foreign governments can support businesses
interested in investing in Africa to help them navigate what is
often a challenging business environment.
Heres an example. OPIC and other U.S. Government agencies
collaborated on a document outlining the 10 Elements of a
Bankable Power Purchase Agreement (PPA) to help give both
power producers and their bankers enough confidence to
commit to a large power project. A PPA, or long-term agreement
between the power producer and the power offtaker, is needed
to ensure the viability of the project. The 10 Elements
document outlines what every bankable PPA must contain
to give private investors and their lenders the confidence to
commit large amounts of funding to projects, while helping
African governments ensure that the contracts they enter are
written in a way that brings value to the African people.
Africa is a region brimming with youth, talent, natural
resources and potential. Many African countries are today
enjoying rapid economic growth as well as population
growth. According to the International Monetary Fund,
Africa will account for 80 percent of the population growth
expected by 2100. Increasingly these people will be living
and working in urban areas and demanding more power. To
support the growth forecast, Sub Saharan Africa will need to
install 7 gigawatts of new power generation per year enough
to power an additional 7 million homes a year. And we need
to get started today.
Im looking forward to working with many of you as we
journey on to this exciting and pivotal moment in the
continents development and growth.
15
 The rate of
access to
electricity
rose rapidly
from 7%
in 2004 to
45.3% in 2014
 INVESTING IN AFRICA

YEARBOOK PROFILE PIECE

H.E. HON. DR SALVADOR NAMBURETE, FORMER MINISTER FOR ENERGY,
REPUBLIC OF MOZAMBIQUE

Born in the southern Mozambican province of Inhambane, Salvador Namburete speaks Portuguese, English, French (fair), as well as
some national languages. Salvador Namburete holds a Masters Degree in International Trade and Finance from Lancaster University,
UK, and a Masters Degree in Corporate Finance from American University, Washington, DC, United States of America. He holds a
Licenciado Degree in Economics from Eduardo Mondlane Univesity, in Maputo, Mozambique, where he later taught International
Economics, including a module in Trade Policy in the Masters in International Trade Law Programme, at the Faculty of Law. He
also holds a Bachelors Degree in Economics from the same University. He was Minister of Energy from 2005- 2015. Before his
appointment as Minister of Energy he held the position of Deputy Minister of Industry and Trade.

QUESTION. How has Mozambiques
power sector changed over the past 20
years? Which of these developments
have made the biggest impact on the
population as a whole?
ANSWER. The power sector was
basically dominated by off-grid systems
fuelled by diesel generation sets with
a few exceptions, namely the Maputo
City (Countrys Capital), and a few
provincial capitals, especially in the
southern part of the country - despite
the fact that Cahora Bassa, a 2075MW
hydropower plant, already existed in
Mozambique. It generated hardly any
power because the transmission lines
had been knocked down during the
war. The rate of access to electricity was
around 2% to 3% at that time. The
tremendous national reconstruction
efforts after the war made it possible
to rapidly improve the situation. By
2004 the rate of access to electricity
had risen to around 7%. It was indeed
over the past decade, between 2005
and 2014, that an exponential growth
was witnessed. In 2004, only 51 of 141
District headquarters had access to
power. Today, 134 District headquarters
have access to electrical power.
renewable sources of energy (especially
solar photovoltaic) has allowed access
to electricity for more than 5 million
Mozambicans in the rural areas over
the past 8 years; 201 small villages and
towns were electrified along with 669
rural schools and 623 rural clinics. 77
rural public administration buildings
also benefitted.
In 2013, the first solar panel assembly
plant was commissioned with the aim
of expanding access to these sources
of clean energy in rural areas given
their lower prices, and to replace
the unhealthy wood fuels. The first
mapping of renewable energy sources
in the country was performed and
the first Mozambique Renewable
Energy Atlas was published. The
aim was to determine the renewable
energy potential of the country and
facilitate the decision-making process
of the investors. The first three solar
photovoltaic power plants were
commissioned in the country, and
are currently generating 1.3MW. The
first large scale gas fired power plants
were commissioned in the country,
currently generating 418MW. In
the power distribution segment, the
prepaid power metering system was
expanded from around 15% to 85%
of domestic power consumers in the
same period, and its operating online
throughout the country. In the fuel
sector, 48 new gas stations were built
by the public sector in areas which the
private sector find unattractive, and
the fuel storage capacity was expanded
from 430 to 830 billion litres between
2005 and 2014.
The first infrastructure to receive
imported LPG by sea was built,
including a 3.5km pipeline and a 3.000

The rate of access to electricity rose

rapidly from 7% in 2004 to 45.3% In 2013, the first solar panel assembly
in 2014. 5.700km of power lines, 12
large substations and other associated plant was commissioned with the aim of
infrastructures were erected in the
country. The share of renewable expanding access to these sources
energies in rural electrification rose
from nearly 0% in 2005 to 18.5% in of clean energy...
2014. The rapid expansion in the use of

2015 Africa Energy Yearbook 17

 INVESTING IN AFRICA
metric tonnes storage infrastructure
in Maputo and another 2.500 metric
tonnes in Beira. The first infrastructure
for the distribution of natural gas
for use in vehicles was built, and is
now operating with a capacity to
supply 3,000 vehicles in Maputo
and Matola. The first natural gas
household distribution by pipeline
was commissioned in 2014 in Maputo
and Marracuene, with an extension
of 74km. The developments with the
biggest impact were rural electrification
through the expansion on the national
power grid and the expansion of
renewable energy into rural areas.
QUESTION: In your opinion, what is
the single biggest obstacle facing new
investors and developers looking to
enter Mozambique in 2015?
ANSWER. It is combination of many
factors. These range from lack of
financial capacity to fund bankable
studies for the presentation of business
and investment opportunities to
investors coming from other countries,
some degree of bureaucratic behaviour
on the part of civil servants which
leads to higher transaction costs with
a negative impact on investors and
the investment process, shortcomings
in integrated planning which lead to
the misalignment of strategic projects
or to the misuse of scarce resources,
stringent labour laws and regulations
which discourage investors coming to
the country, and limited skilled labour
for some technical areas. In sum, the
single biggest obstacle is shortage of
human capital.
QUESTION: Can you share with the
readers of Africa Energy Yearbook some
of your career highlights during your
illustrious tenure as Energy Minister?
ANSWER. I was appointed Minister
for Energy for the first time in 2005 and
reappointed in 2010, and some of my
career highlights include:
i. Successful conclusion of the
acquisition from Portugal of
18
The biggest obstacles facing new investors
and developers range from lack of financial
capacity to shortage of human capital.
92.7% of the 2075MW Cahora
Bassa Hydropower Station by the
Government of Mozambique, a
process known as the reversion of
transfer of control over Cahora Bassa
from the Portuguese government
to the Mozambican Government,
which comprises the political
negotiations and raising the funding
for the payment of the project. This
has been a tremendous success as one
of the best performing loans in the
country and possibly worldwide;
ii. Raised the rate of access to electricity
in Mozambique, from 7% in 2004
to 45.3% in 2014;
iii. Increased the role of renewable
energy in Mozambique from
almost zero in 2004 to 18.5% in
2014, benefitting more 5.0 million
Mozambican citizens, in addition to
the electrification of schools, clinics,
teachers and nurses homes, and
public buildings in rural areas;
iv. Construction and commissioning
of the first solar panel assembly
plant in Mozambique, with aim to
disseminate the use of these devices
in replacement of wood fuels and
other unhealthy sources of energy
in the rural areas;
v. Successful conclusion of the mapping
of renewable energy resources, and
the subsequent publishing of the
Mozambique Renewable Energy Atlas;
vi. Accession of Mozambique to the
International Atomic Energy Agency
(IAEA) in 2006;
vii. Successful establishment of the
National Atomic Energy Agency
(ANEA); the signing of the first
Country Framework Programme
(CPF) for technical cooperation
between Mozambique and
the IAEA; the elaboration and
approval by Mozambique Cabinet
of the draft Atomic Energy Law
(awaiting consideration by
Parliament);
viii. Chairing of the Forum of Energy
Ministers of Africa (FEMA), 2007-
2009;
ix. Chairing of the Conference of
Energy Ministers of Africa (CEMA),
2010-2012;
x. Chairing of the Second Assembly of
the International Renewable Energy
Agency (IRENA) in January 2012,
being the first African Minister to
hold that position;
xi. Construction and commissioning
of the first natural gas fired power
station in Mozambique, located
at the town of Ressano Garcia,
Maputo, Mozambique, with a total
capacity of 175MW;
xii. Introduction of natural gas fuelled
vehicles in Mozambique, and the
initial expansion of this business
through the construction of the
first 3 fuelling stations, benefitting
more than 3,000 vehicles, including
buses and public transportation
units;
xiii. Introduction and development of
renewable energies in Mozambique;
2015 Africa Energy Yearbook

QUESTION: What do you hope
your legacy will be from your time
as Minister for generations to come?
I am of the view that I will be remembered
as the Minister who:
i. Accelerated the expansion of access to
electricity, particularly in the rural areas,
covering 134 District headquarters,
from 51 in 2004;
ii. Increased the rate of access to electricity
from 7% in 2004 to 45.3% in 2014
iii. increased the share of renewable
energies from nearly 0% in 2004 to
18.5% in 2014;
iv. Promoted the construction of
5.700km of power lines, 12 new large
capacity substations, and associated
infrastructures throughout the country;
v. Successfully conducted the reversion
of Cahora Bassa in favour of the
Government of Mozambique, which
brought about a new impetus in rural
electrification and the expansion of
access to electricity in the country,
especially in rural areas;
vi. Promoted and monitored the
construction of the first solar panel
assembly plant in the country, which
was commissioned in 2013:
vii. Conducted the mapping of
renewable energies in the country,
and the subsequent publishing of the
Mozambique Renewable Energy Atlas
in 2013:
viii. Promoted and monitored the
construction of the first large scale gas
fired power stations in the country,
generating currently in Ressano Garcia
418MW;
ix. Introduced the use of natural gas in
vehicles;
x. Conducted the construction of the
first natural gas distribution network
to households in Maputo and
Marracuene;
xi. Led the construction of 48 gas stations
in areas seen as unattractive to private
investors;
xii. Promoted the construction of the first
solar photovoltaic power plants in the
country;
xiii. Conducted the accession of the country
to the International Atomic Energy
Agency.
2015 Africa Energy Yearbook
INVESTING IN AFRICA
QUESTION: What do you hope the QUESTION: Which projects are you
new Minister of Energy will bring to excited to learn more about at this
the table for the country considering years Africa Energy Forum?
his financial background?
ANSWER. I expect to hear new
ANSWER. It is believed that his developments about the following
knowledge of how the financial sector projects:
operates and the difficulties that energy i. Grand Inga/Inga 3 (44.000MW/
sector investors are confronted with will 3.000MW), in the DRC
enable him to better assist those who ii. Morrupoule B in Botswana
are willing to invest, being prevented (600MW);
only because the financial sector rules iii. Medupi (600MW) in South
are sometimes two stringent. Africa
Projects in Southern Africa that Added New Generation
Capacity in 2013 and 2014
Many projects in the SADC region were planned to be commissioned or begin
operation between 2013 and 2014, but the vast majority of them did not
live up to the expectations created. From the planned 1.477MW for 2013,
only 807MW came into effectiveness, basically because Morupule (coal) in
Botswana for 600MW and Komati (coal) in South Africa for 202MW did
not pass though the tests. Now the contributors of the 807MW are as follows:
Mozambique (Ressano Garcia, Natural Gas): 232MW (28.7%);
Angola (Lobito and Futila, both thermal): 70MW (8.7%);
Zambia (Ndola Energy, HFO): 50MW (6.2%);
Zambia (North Kariba, Hydro): 180MW (22.3%);
D.R.Congo (Inga 1, Hydro): 55MW (6.8%);
Tanzania (Mwanza, HFO): 60MW (7.4%);
South Africa (Grootvlei, Coal): 40MW (5.0%);
South Africa (Koeberg, Nuclear): 30MW (3.7%);
South Africa (Solar): 26MW (3.2%);
Malawi (Kapichira, Hydro): 64MW (7.9%);
Total 807MW (100%)
For 2014 an additional generation capacity of 2.894MW was planned, but
only 440MW came into the system for same reasons as pointed out above.
Of this total added capacity, 175MW (39.8%) was the contribution of
Mozambique with the natural as fired power plant in Ressano Garcia. The
remaining 265MW are distributed as follows:
Mozambique (Ressano Garcia, Natural Gas): 175MW (39.8%);
Angola (Lomaum, hydro): 50MW (11.4%);
Angola (Bom Jesus e Biocom, Coal): 100MW (22.7%);
South Africa (Sere, wind): 100MW (22.7%);
Zambia (Kariba North, Hydro): 15MW (3.4%);
Total 440MW (100%)
Yours sincerely,
Salvador Namburete
19
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NIGERIAS
ELECTRIC
POWER SECTOR
converting potential to reality
Abiodun Aina, Senior Investment
Officer, IFC
Abiodun Aina is currently a Senior Investment Officer with
IFCs Infrastructure Africa team based in Washington DC.
Abiodun focuses on identifying, promoting and investing
in Public Private Partnership opportunities in Infrastructure
projects in Sub Saharan Africa. Prior to IFC, Abiodun spent 6
years in the Energy Financial Services arm of GE Capital, where
he worked on equity and debt investments in various energy-
industry projects, with particular focus on thermal, renewable
energy, and midstream oil and gas projects in North America.
Abiodun began his career at Andersen / KPMG, as part of the
Assurance & Business Advisory team focused on Energy clients
based in Lagos, Nigeria. He holds an MBA from the Yale School
of Management, an MPA in Economic Policy Management
from Columbia Universitys School of Public and International
Affairs, and a B.Sc. in Economics from Obafemi Awolowo
University in Nigeria. He is also a CFA Charterholder.
Per-capita electricity consumption from the grid in Nigeria is currently less than 150kWh per year basically
one dim light bulb per person.
I ts hard to square that statistic with the buzz around Nigerias
long-run economic outlook. We know that Nigeria is a
demographic powerhouse: home to half of West Africans and
one fifth of Africans, its population roughly doubles every 25
years. Nigerians arent known for having low aspirations either:
in the face of statistics to the contrary (Nigeria consistently
ranks in the lowest quintile of African countries ranked by life
expectancy and Human Development Index), they will remind
you that they are the giants of Africa. Is this a case of national
cognitive dissonance? Thats a debate for another day. But on
one point there is virtual unanimity: for Nigeria to truly achieve
its potential, for it to fully become the N in MINT1, it
2015 Africa Energy Yearbook
INVESTING IN AFRICA
Femi Akinrebiyo, Principal
Investment Officer, IFC
Femi Akinrebiyo is currently a Principal Investment Officer
with IFCs Infrastructure team based in Washington, DC. He
has been with IFC for nine years and spent the last two years
on Nigeria leading the implementation of the Joint World Bank
Group (WBG) Energy Business Plan for Nigeria - an initiative
that is mobilizing WBG resources to support the Government
of Nigeria to accelerate reforms, attract private investment, and
fast-track key projects. In his current role, Femi is responsible
for business development in Nigeria, including building
partnerships with key stakeholders. He has led structuring and
negotiation of investments for IFC in Asia, Latin America and
Africa. Femis background includes working for ExxonMobil
and other multinational companies, including Philips Projects
and Spar Aerospace. He holds an MBA from the Kellogg
Graduate School of Management at Northwestern University,
Illinois, USA and a Bachelor of Engineering from the University
of Ilorin, Nigeria.
needs a functioning power sector that provides more, cheaper,
and cleaner energy to power its homes and industries. This
raises 2 critical questions: (1) which interventions does the
sector urgently need; and (2) how should they be implemented?
In this article, we illustrate how the Azura-Edo IPP, the first
reform-era IPP in Nigeria, grappled with these questions.
1 MINT, an acronym coined by Fidelity Investments but popularized by former
Goldman Sachss Jim ONeill, for the economies of Mexico, Indonesia, Nigeria
and Turkey, the most populous emerging market countries, with the potential
of being among the worlds largest economies in the 21st century. ONeill also
coined the term BRICS.
21
 INVESTING IN AFRICA
THREE HOURS OF ELECTRICITY PER
DAY
Nigerias power sector has a long history of underinvestment
in every segment (generation, transmission and
distribution), low tariffs, poor regulatory oversight and
weak governance each factor compounding the others.
Currently, only about 40% of the population is connected
to the grid, with only 20% for rural households. The
National Integrated Power Projects (NIPPs) initiated by
the Federal Government of Nigeria (FGN) in 2004 to fast
track a series of gas fired power plants by adding 5GW of
generation capacity to the grid basically doubling the
currently available fleet has failed to do so due to, among
other reasons, inadequate initial planning and a shortage
of gas supply. Privatization of the NIPP plants has also
stalled due to a number of issues.
Today, the average Nigerian receives an average of 3
hours of electricity from the grid a day. The situation is
made worse by dilapidated transmission and distribution
networks, which cause high levels of technical and non-
technical losses. The end result is sobering: Nigeria has
the largest installed fleet of off-grid gasoline and diesel-
fired electricity generators in the world, estimated at 5GW
installed capacity, generating power at a cost of US$ 0.40
0.75/kWh.
REFORMS OPEN DOORS TO PRIVATE
SECTOR-LED IPP
When President Goodluck Jonathan took office in 2010,
he made the strengthening of the power sector one of
the key pillars of his administration. The governments
ambitious reform program, documented in Nigerias
Presidential Road Map for Power, has achieved some
significant milestones:
(i) Unbundling of the Power Holding Company of
Nigeria (PHCN) - the formerly vertically integrated
state-owned power utility into eighteen successor
companies consisting of 6 generation companies
(GENCOs), eleven distribution companies
(DISCOs), and a national transmission company, the
Transmission Company of Nigeria (TCN);
(ii) The creation of a single buyer, the Nigerian Bulk
Electricity Trading Plc (NBET), as the prospective
off-taker for private generators and seller of power to
the distribution companies with US$ 0.8 1.2 billion
capitalization - an intermediate solution to address
the lack of credit history and credit worthiness of the
newly created DISCOs;
(iii) Implementation of a domestic gas pricing framework
aimed at incentivizing local gas production to fuel
the power sector domestic gas prices for power
production have increased from the historical levels
22
of US$0.50/mmbtu to circa US$2.5/mmbtu, for
example;
(iv) Award of a 3 year management contract (with
2 optional renewals of 1 year each) to Canadas
Manitoba Hydro International (MHI) to operate and
manage the national transmission network;
(v) Introduction of a methodology for cost-reflective
end-user tariffs starting from July 2012 under the
Multi-Year Tariff Order (MYTO);
(vi) Creation of the Gas Aggregation Company Nigeria
Limited (GACN) to facilitate access and firm gas
allocation from domestic gas suppliers to existing
power plants and companies in other industries;
(vii) Establishment of Nigeria Electricity Liability
Management Company (NELMCO) to assume and
manage PCHNs non-transferrable assets, liabilities
and other obligations; and
(viii) Signing the loan agreements for the Azura IPP, the
first private sector led IPP in the country post-reform.
Azura-Edo IPP: On November 28th, 2014, IFC signed
the Loan Agreements and the Common Terms Agreement
for US$80 million of senior and subordinated debt
financing for IFCs own account (US$50 million senior
debt and US$30 million mezzanine) to Azura Power West
Africa Limiteds Independent Power Project (IPP) in Benin
City, Edo State, Nigeria. The Core Lender Group of banks
(Standard Chartered Bank, Standard Bank, FMO, FCMB
and IFC) was led by Standard Chartered Bank. The project
entails the construction, operation and maintenance of a
459 MW gas-fired open-cycle power plant, including the
construction of a short 330kV transmission line and an
underground gas pipeline spur connecting the power plant
to the countrys main gas trunk line.
As Azura-Edo IPP is the front-runner IPP transaction to
emerge from Nigerias ambitious power sector reforms, the
hope is to use Azuras transaction documents as templates
for follow-on IPPs. It is also a cornerstone transaction
under the World Bank Groups Energy Business Plan for
Nigeria, a commitment of the IBRD, MIGA and IFC to
support the Federal Government of Nigerias power sector
reforms through joint engagement across the energy
value-chain, from generation through transmission and
distribution. The Energy Business Plan, covering a 3
year period from 2013, seeks to support investments in
(i) up to 1,500 MW of new installed generation capacity
either through greenfield or refurbishment/expansion
projects; (ii) the recently privatized electricity distribution
companies, by supporting their capital investment
programs; (iii) a select number of gas-to-power supply
projects, thereby unlocking one of the key remaining
bottlenecks to power generation in the country; and (iv)
a select number of pilot off-grid lighting and solar power
solutions in rural areas.
2015 Africa Energy Yearbook
 INVESTING IN AFRICA

Figure 1: Nigerias Power Sector - Past, Present and Future

THE FUTURE - HOW DO WE GET
THERE?
While the progress made in the last 5 years has been
remarkable, the journey ahead for the incoming government
remains daunting. Privatization is not an end in itself the
concept only works if market signals are robust enough to
attract investment and expertise of new sector entrants at scale.
However, apart from a few cases, foreign direct investment
(FDI) into Nigerias power sector has not been significant to
date the privatization of the GENCOs and DISCOs was
largely financed with debt from Nigerian banks, with most of
the equity from Nigerian sponsors. Cash shortfalls in the sector,
insufficient gas molecules to power the existing and expected
generation fleet, and a still weak electricity transmission grid
have slowed progress, especially in the past 18 months. Absent
a clear pathway to resolving these issues, foreign investors will
continue to sit on the sidelines, perceiving the ratio of risks to
rewards as too high to justify investment.
1. CASH SHORTFALLS IN THE SECTOR, LEADING
TO TRANSACTION COMPLEXITY
Prior to the review of the MYTO tariff in January 2015, the
estimated sector cash shortfall (cash required for all sector
participants to earn a return on, and, of their invested capital,
LESS cash inflows into the sector) was approximately US$
700 million a year, mainly due to high technical and non-
technical losses, particularly at the distribution companies.
At these deficit levels, had NBET started performing its
role as the single buyer and seller of power, it would have
eroded its capital base in 1 year (assuming no improvement in
sector losses), defeating the purpose of its very establishment.
Something had to give for the electricity market to function
as designed. This led to a 40% increase in the retail tariff
in February 2015 (from US$ 0.11/kWh to US$0.15/kWh),
ignoring exchange rate effects. While there was recently
a partial reversal of this tariff increase, market participants
expect that the retail tariff will be set at sustainable levels in
the future. This reflects a simple truth the market simply
cannot sustain significant cash deficits over time. At these
levels, no market can weaker companies will run out of
capital quickly, and, without periodic palliative measures,
even the strongest players will face a non-trivial risk of failure
over time.
Azura - a marathon, not a sprint: As the first IPP to emerge
from the FGNs power sector reform, the Azura-Edo IPP
sponsors and lenders have had to be very innovative in
structuring solutions to the complex sector challenges. An
unmistakable aspect of the transaction is the complexity of the
contractual structure (see Figure 2, overleaf ). While project
finance structures are no strangers to complexity, due to the
nascent institutional arrangements in Nigeria and absence of
precedent transactions, the Azura-Edo deal required an even
more dizzying array of contractual innovations and project
participants than is typical of emerging market IPPs. A lot of
these elements were put in place to structure around the lack
of a track record of positive cashflows in the sector. A good
example of this is the credit enhancement that Azuras gas
suppliers required. This added approximately US$ 50 million
to the projects cost, and, led to higher overall complexity of
the transaction documents.

As the first IPP to emerge from the FGNs power

sector reform, the Azura-Edo IPP sponsors and
lenders have had to be very innovative in structuring
solutions to the complex sector challenges.

2015 Africa Energy Yearbook 23

 INVESTING IN AFRICA

Figure 2: Azura-Edo IPP Project Structure

Way forward Simple is Beautiful: Working towards
simpler documents and project structures, will increase
the number of new IPPs (follow on projects to Azura), to
the benefit of all stakeholders. However, you cannot wish
risks and issues away sustainable simplification cannot
be achieved without first addressing the underlying sector
challenges and headwinds going forward. To be sustainable,
the sector badly needs a fully cost reflective tariff, proper
incentives to distribution companies to reduce their
technical and non-technical losses, and an increase in actual
power generation. Alongside increasing the availability of
gas to existing and new power plants - a low hanging fruit
(more on that next) - progress on these items would set the
stage for plainer sailing for IPPs in Nigeria.
2. INSUFFICIENT PROCESSED GAS MOLECULES
Nigeria has abundant natural gas reserves 180 Tcf but
grossly insufficient gas processing capacity. Nigerias current
installed power generation fleet is 11GW 4GW existing
thermal plants, 2GW hydroelectric power plants, and 5GW
new NIPP plants. Approximately 6GW of the thermal
plants are currently not producing power due to insufficient
processed gas molecules. This is largely due to historically
low levels of investment in the domestic gas to power sector,
where prices were below US$1/mmbtu until the last 2 years.
Low prices were a disincentive to gas companies looking
to invest in the domestic gas sector. The recent increase in
the domestic gas to power price to approximately US$ 2.5/
mmbtu basically export parity prices should increase

There has been increased interest in the sector,

particularly from indigenous gas producers 7Energy,
Seplat, Gaslink, among others. But this interest will
take a couple of years to translate into significant new
gas molecules.

24 2015 Africa Energy Yearbook


Until recently, gas producers
have insisted on up to 12
months of letters of credit from
power generators...
interest from gas suppliers in the sector. There has been
increased interest in the sector, particularly from indigenous
gas producers 7Energy, Seplat, Gaslink, among others.
But this interest will take a couple of years to translate into
significant new gas molecules.
Credit Enhancement in the gas sector is another lingering issue.
Until recently, gas producers have insisted on up to 12 months
of letters of credit from power generators, which slowed down
the finalization of a number of gas sale agreements. 12 months
of gas LCs translates to US$ 600 million for the current
installed portfolio of gas generators and an amount that is
required to be cash-backed by issuing banks when not counter-
guaranteed by creditworthy entities such as the World Bank.
This issue is shaping up to be a temporary but serious one, due
to the sectors poor payment track record. Once there is a track
record of positive cashflow in the power sector, gas suppliers
should no longer require such long-tenored and expensive -
credit enhancement tools.
Impact on Azura: Azuras sponsors were smart on this point
the plant will be located 1km from a gas transmission
pipeline, and, was able to secure long term gas supply at a
negotiated price. However, the letter of credit to be issued
by Azura to the gas supplier (addressed earlier) has increased
the overall complexity of the transaction documents.
Way Forward take a cue from the power sector: A
way out could be for Nigerias government to create a
bulk trading entity for the gas sector similar to NBET.
Given that the key issue in the gas sector is similar to
that affecting power generation and supply (significant
sector cash deficits, creating a need for long-tenored credit
enhancement products and deal complexity), having an
adequately-capitalized bulk gas trading company that buys
gas from all of the different gas producers and sells it to
IPP offtakers, could be a short to medium term solution to
2015 Africa Energy Yearbook
INVESTING IN AFRICA
the cashflow issues in the gas segment. In doing this, care
must be taken NOT to simply double up on bureaucracy
and to do this with simplification in mind. Creating
another bottleneck will defeat the purpose of creating the
gas aggregator. Once the domestic gas market has sufficient
buyers and sellers, the bulk gas buyer could then be phased
out similar to plans for phasing out NBET once the
electricity market matures.
3. THE TRANSMISSION GRID
Nigerias transmission wheeling capacity is currently around
5GW. This means that, for the NIPPs and other new IPPs
to sustainably generate and sell their power to distribution
companies, transmission grid capacity must be approximately
doubled. The Transmission Company of Nigeria (TCN) has
been managed by Manitoba Hydro International under a
management contract for the last 3 years. TCN estimates
that US$ 9 billion of new transmission investment will be
required over the next 5 years. Transmission, being a natural
monopoly, is the only segment of the sector still wholly
owned by the government. While this is sound policy,
there is room for the private sector to participate and
for competition in the transmission segment as a means of
expanding the grid.
Impact on Azura: Again, Azuras sponsors were smart on this
issue. The plant will be located close to an existing substation,
which reduces the cost of linking the plant to the grid
significantly.
Way forward: All of the above: US$ 9 billion is a lot
of money. While TCN can potentially secure all of the
required financing, getting creative could reduce the need
for transmission capex. For example, aggressively pursuing
distributed generation, through project-financed utility-
scale solar power plants in off-grid locations, could alleviate
some of the capacity constraints, and reduce the need
for new transmission lines and substations. Separately,
having a clear Public-Private-Partnership program for the
transmission segment, where specific new transmission lines
are competitively awarded to transmission construction
companies/ infrastructure investors on a time-bound
concessionary basis, with clear return thresholds, should ease
part of the current transmission constraint.
CONCLUSION
The scale of Nigerias power sector reforms is unprecedented
in Sub Saharan Africa. The architects and teams executing the
reforms should be applauded for their work. However, the
reforms will not be as effective as they need to be if the lingering
sector cashflow, gas and transmission issues are not solved
simultaneously. This is a once in a generation opportunity for
Nigerias incoming government to brighten those dim light
bulbs.
25
 Nigerias electricity
market is still the hot topic
because of its huge potential.
Teething issues were expected
but investors have confidence
they will be resolved.
 INVESTING IN AFRICA

YEARBOOK PROFILE PIECE

RUMUNDAKA WONODI, MANAGING DIRECTOR AND CHIEF EXECUTIVE
OFFICER, NIGERIAN BULK ELECTRICITY TRADING PLC

Rumundaka Wonodi is the pioneer Managing Director/Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc (NBET), aka
the Bulk Trader. Prior to his appointment, in August 2011, he led the Regulatory & Transactions Monitoring team of the Presidential
Task Force on Power (PTFP), mandated with driving the power sector reform roadmap of the Federal Government of Nigeria (FGN).
He led the team of Bureau of Public Enterprises (BPE) and PTFP experts in establishing the Bulk Trader. Under Rumundakas leadership,
NBET has received N104 billion capitalisation from the FGN. NBET has executed Vesting Contracts with the 11 privatized successor
Distribution Companies for the onward sale of purchased electricity. NBET has also executed nine Power Purchase Agreements. Six are
with the privatized successor Generation Companies; with Egbin Power Plc Nigerias largest power plant with an installed capacity of
1320MW; with Olorunsogo Power Plc, which was sold in a Debt-Equity swap deal with the FGN; and with Azura-Edo IPP, which is
NBETs first greenfield project.
NBET is in negotiations with multiple Independent Power Producers (IPPs) for new generation capacity valued in excess of $6 billion.
These are projects with a variety of energy sources: natural gas, coal, wind and solar. For the creation and development of an effective
transaction environment for power investors, Rumundaka steers NBET with the core values of integrity, transparency, professionalism and
teamwork. Rumundaka is the current and inaugural Chairman of the Initial Stakeholder Advisory Panel of the Nigeria Electricity Market;
the highest ranking consultative panel in the industry. Rumundaka has an MBA from Yale University School of Management, USA and
was a J. Olin Research Fellow at Yale University.

QUESTION: Why is Nigerias
electricity market still the hot topic
in Africa considering all the challenges
being faced in privatising the sector?
It is still the hot topic because of its huge
market potential. Teething issues were
expected but investors have confidence
they will be resolved. Recently, Nigeria
has taken over from South Africa as the
largest economy in Africa even with its
poor electricity supply. Nigeria with its
population of over 160 million generates
only 4,000 MW of electricity and South
Africa with a population of 52 million
generates 40,000MW. This capacity gap
demonstrates the investment potential
in the next ten years for instance.
Nigerias government has an economic
transformation agenda that seeks to
create more opportunities for local and
international investors. Privatization of
the sector has opened it up for foreign
investment, and further the recent
peaceful conclusion of the elections has
also boosted investors confidence in the
stability in the nation and the market.
QUESTION: What is todays average
electricity price in Nigeria and what
does it need be in order to make IPPs
and GENCOs bankable how is the
gap going to be bridged?
The current wholesale tariff for hydro
plants are N6.35 per kwh while thermal
plants are 9.86 per kwh but this is
subject to change as the new gas price has
not taken effect. The energy component
that makes up the wholesale price for
thermal plants will change when the new
gas price is effected. New Independent
Power Projects (IPPs) and Generation
Companies (GENCOs) have the option
of accepting the benchmark tariffs or can
choose to go through an open book tariff
setting process.
QUESTION: Having just entered
the transitional electricity market in
Nigeria, how does this change the near
term bankability of the sector?
Active contracts provide comfort to
investors that the flow of funds will be as
expected and not arbitrary as contractual
obligations are legal and binding. The
framework for the market provides for
a tight coupling of contracts and an
alignment of incentives that is expected
to yield positive results at every step of
the value chain in the power sector.
QUESTION: Your role as [effectively]
Nigerias off-taker is critical for both
public and private sectors; what are the
biggest hurdles youve had to overcome,
and what challenges lie ahead for the
bulk trader?
The biggest hurdle the bulk trader has
had to overcome are:
Communicating that NBETs
working capital is NOT a subsidy for
the industry and is only a temporary
bridge which it expects to fully recoup
from the distribution companies.
Streamlining the process for the
evaluation and engagement of viable
potential IPP projects.
Financing - NBET will do more with
public and private financing to enhance
our ability to meet our obligations in
the market as a critical off-taker.
Continued investment in the grid
to enhance better transmission and
reduce loss.
With the privatised distribution
companies, the DISCOs lack of
investment in power infrastructure for
electric power distribution to increase
performance and payment settlement
which the CBN intervention fund
has encouraged.

2015 Africa Energy Yearbook 27

Organised by:

9th annual meeting

FINANCE OPTIONS
5-6th november 2015
The Vineyard
The Vineyard Hotel,
Hotel, Cape Cape
TownTown

It was my pleasure to be part of such an interactive and thought provoking audience

Dar Es Salaam, Stock Exchange

Confirmed speakers include

Jurie Swart Alastair Anton Eberhard Jonathan Berman

Chief Executive Officer Campbell Management of Managing
African Infrastructure Managing Infrastructure Reform Director
Investment Managers Director and Regulation Fieldstone
(AIIM) Vantage GreenX University of Cape Town

For more information about this meeting,

please contact amy.offord@energynet.co.uk
or visit www.poweringafrica-finance.com

NAVIGATING THE
CHALLENGES
of delivering IPPs in Africa
Ashwin West, Manager -
Transactions, African Infrastructure
Investment Managers (AIIM)
Ashwin is responsible for originating potential deals, analysing,
assessing, structuring and negotiating investment opportunities,
as well as the execution, performance monitoring and realisation
of investments.
Ashwin has worked on infrastructure project finance deals in
the thermal energy and renewable energy sectors, as well as the
transport sector. Most recently, Ashwin was involved in the
successful execution of the 350MW gas fired Kpone IPP power
project in Tema, Ghana. During 2011, he was involved in the
successful execution of two renewable energy investments in
South Africa, namely the 139MW Cookhouse Wind Farm and
81MW REISA Solar PV investment, both of which reached
commercial operations in 2014.
Prior to joining AIIM, Ashwin spent 8 years with Aurecon.
Ashwins areas of focus were the large infrastructure, energy and
water sectors. Before joining Aurecon, Ashwin spent two years in
the UK working for Thames Water in project management and
management systems implementation and review.
It is a well-known and cited fact that sub-Saharan Africa (SSA) is desperately short of electricity, and, from an
access-to-electricity perspective, is considered to be one of the worst regions in the world. SSA has 13% of the
worlds population, but 48% of the global share of the worlds population without access to electricity.1
O nly seven countries in SSA have electricity access
rates in excess of 50%, while the remainder of SSA
has grid access rates of circa 20%1. However grid access
doesnt necessarily equal access to reliable electricity, with
demand outstripping supply, and regular interruptions to
the electricity supply common. Average annual electricity
consumption per capita in SSA (excluding South Africa) is
150 kWh. If South Africa is included, the average increases
to 540 kWh/capita, far below the average of other emerging
1 Castellano A, Kendall A, Nikomarov M, Swemmer T, 2015, Brighter Africa:
The growth potential of Sub-Saharan electricity sector, McKinsey & Company
2015 Africa Energy Yearbook
INVESTING IN AFRICA
Paul Frankish, Manager - Asset
Management, African Infrastructure
Investment Managers (AIIM)
Paul is responsible for the structuring and development of AIIMs
managed funds as well as new business initiatives.
Paul led the structuring of AIIMs dedicated renewable energy
investment vehicle, Apollo, focused on building out a portfolio
of investments in the South African renewables market. Paul
has also been involved in the selection and submission of bids
supported by the AIIM funds in the South African renewable
energy procurement programme and led the integration of these
projects into the AIIM portfolio. Paul represents the AIIM funds
on the board of the Cookhouse Wind Farm.
Prior to joining AIIM, Paul spent five years working on the
alternative assets structuring desk at Credit Suisse in London
where he was responsible for the development, structuring and
execution of alternative investment products for the pension and
insurance industries.
markets.2 Historically, the provision of electricity generation
capacity has been financed by state-owned power utilities with
support from international lenders and agencies. However,
with the challenges facing the power sector in SSA, there have
been changes in the financing approach, resulting in power
projects being funded by, among others, Chinese companies
through concessional Chinese government-backed funding,
development finance institutions (DFIs) and private sector
independent power producers (IPPs). This has come as a
2 Non-OECD Energy Statistics, World Bank Group, 2013, World
Development Indicators, World Bank Group, www.worldbank.org
29
 INVESTING IN AFRICA
result of government sector reforms as well as initiatives such
as the Power Africa programme, to promote alternative
sources of financing into the SSA power sector.
African Infrastructure Investment Managers (Pty) Ltd
(AIIM), as the manager and advisor of five infrastructure
funds with circa USD1.3 billion of equity under
management, participates in the financing of infrastructure
projects, on a project finance basis, and through its
investment in power projects in SSA has consequently gained
a wealth of experience and weathered many challenges. The
lessons learnt stem from engaging throughout the project
lifecycle, from project developer through to equity investor.
This article highlights some of the key challenges AIIM
has experienced in the pursuit of energy infrastructure
investments across SSA.
AIIM PORTFOLIO OF PROJECTS
AIIMs experience as a project developer in the power sector
commenced in 2008, with the development of the Umoya
Energy wind farm, a 66 MW facility in the Western Cape
province of South Africa. Shortly thereafter, in 2009, AIIM
and Macquarie formed a joint venture called African Clean
Energy Developments (Pty) Ltd (ACED) with the mandate
to develop a pipeline of renewable energy projects in South
Africa. The first of these projects to be delivered to market
was the Cookhouse Wind Farm, a 138.6 MW facility in the
Eastern Cape in South Africa. Based on the success of its
South African developments, AIIM leveraged its renewable
energy-development experience beyond South Africas
borders, in the Kinangop (60 MW) and Kipeto (100 MW)
wind farms in Kenya, and the Azura 450 MW open cycle
gas turbine power station in Nigeria. As a financial-close
investor, AIIMs funds have invested equity at financial
close in Renewable Energy Investments South Africa (Pty)
Ltd (REISA), an 81 MW solar photovoltaic facility in the
Northern Cape in South Africa and Cenpower Generation
Company Limited, a 350 MW combined cycle gas fired
power station in Tema, Ghana.
PRE-FINANCIAL CLOSE
CHALLENGES AND LESSONS
LEARNT
IPP PROJECTS TAKE A LONG TIME
TO DEVELOP
Developing large-scale, capital-intensive infrastructure
projects are time consuming and resource intensive. The
situation is compounded by uncertainty in and changes to
regulatory frameworks across SSA.
When AIIM commenced the development of the Umoya
Energy project in 2008, there were no specific opportunities
30
The REIPPPP is considered
to be one of the best, if not the
best, public private partnership
in Africa.
for IPPs but the need for renewable energy was strong. AIIM
persisted with the development of the project and engaged
with several potential off-takers. The introduction and
subsequent cancellation of Eskoms medium-term power
purchase programme, and the renewable energy feed-in tariff
programme added uncertainty to the development process,
until the competitive bidding process for renewable energy
(referred to as the Renewable Energy IPP Procurement
Programme (REIPPPP)) was introduced by the South African
Department of Energy in 2011. The process delays were
frustrating for developers, however those who continued with
project development were rewarded when the REIPPPP was
launched, and the first round of power purchase agreements
awarded in November 2011. The REIPPPP is considered to
be one of the best, if not the best, public private partnership
in Africa, but even this programme has had its challenges
with the announcement of preferred bidders and financial
close being delayed in the various procurement rounds.
The aforementioned IPP projects in Ghana and Kenya were in
the development phase for circa eight and six years respectively,
before achieving financial close. The developers faced uncertainty
and endured numerous government elections before the
necessary approvals and financing could be secured to achieve
financial close. The drawn-out development process creates a
drag on developer cash flows, and often results in developer and
advisor fatigue, causing projects that are eventually abandoned.
Optimism, realistic expectations, tenacity and a risk appetite
to continue investing in project development is required to
overcome the regulatory uncertainty hurdles.
KNOW YOUR STAKEHOLDERS AND
ENGAGE WITH THEM REGULARLY
Stakeholder engagement is critical to the success of a
power project, which has many interfaces including the
local community, the power purchaser, energy regulator,
2015 Africa Energy Yearbook

construction contractor, operations contractor and fuel
supplier, among others. Each of the stakeholder groups has
an active role to play in the development, construction and
operation of the project, and must be engaged appropriately.
During the development phase, one of the wind farm projects
in South Africa was placed under pressure when, in 2012, in
the lead-up to financial close, the engineering procurement and
construction (EPC) contractor was forced to enter into a debt
restructure programme, due to its inability to service certain
debt obligations which fell due in mid-2012. ACED, the
equity investors and senior lenders to the wind farm, as well as
the EPC contractor, were forced to adopt a pragmatic approach
in order to restructure the project and facilitate financial close.
Material amendments were made to the EPC contract to
rebalance the risk profile, which allowed the project to proceed.
The ability to engage with the key project stakeholders, in this
case the EPC contractor and the senior lenders, in an open and
Community engagement is
required to be culturally sensitive and appropriate, in
order to avoid unintended consequences.
frank manner allowed for the necessary changes being brought
to bear on the contracts and the ultimate success of the project.
Engaging with the wrong members or structures in a
community, engaging too often or not frequently enough,
and changes to the political structures are regular challenges
for project developers in SSA. Community engagement is also
required to be culturally sensitive and appropriate, in order to
avoid unintended consequences. From our Kenyan experience,
changes in the local governance and political structures in 2013
meant that local government stakeholders engaged during the
project development phase were replaced with new officials who
were not adequately informed about the project at the time
of project implementation, which may have led to additional
hurdles needing to be cleared with local government officials
and the local communities. Furthermore, understanding and
respecting cultural norms is critical; elders and chiefs are typically
consulted on project matters as the head of the communities
and households. However in certain communities it is only
acceptable for the household head to express an opinion, hence
his family may not be afforded an opportunity to participate
in a meaningful way. In such circumstances it is important to
engage affected youth separately to ensure they are afforded an
opportunity to represent their interests. This is particularly the
case in the family unit where the head of the household receives
2015 Africa Energy Yearbook
INVESTING IN AFRICA
compensation, and his children are not compensated directly. A
well-considered and structured stakeholder engagement plan is
required to map out key stakeholders to be engaged, determine
their level of interest and influence, to track when key stakeholders
have been engaged, and to plan all future engagements.
CHOOSE YOUR LOCAL PARTNER
CAREFULLY
The development of a large infrastructure project, such
as a power project, requires numerous permits, licences,
exemptions and waivers from a range of government
institutions prior to and during the construction process. A
local partner who knows the processes in-country and has
experience in undertaking the processes to obtain the various
authorisations is key to the success of a project. Furthermore,
a local partner with stature in the industry and who has the
ability to raise the profile of the project is also helpful in
ensuring that the project receives the necessary attention and
support from government.
Furthermore, it is critical to ensure that there is alignment
of interest between local partners and international equity
investors, particularly when the project is under pressure.
In AIIMs experience, a local partner may have a variety of
interests beyond the project in which you are jointly invested,
which may be dependent on maintaining relationships with
government or other stakeholders, resulting in differing
priorities and divergent views. This can be problematic when
needing to enforce contractual remedies against government.
POST FINANCIAL CLOSE
CHALLENGES AND LESSONS
LEARNT
GETTING THE CONTRACTOR TO
SITE
The achievement of financial close is a major milestone in the life
of an infrastructure project, which typically signals the start of a
multi-year construction process, often in remote or challenging
environments. Completion of the construction works within
the negotiated project schedule is the best outcome for both the
31
 INVESTING IN AFRICA
investors and the contractor, by avoiding claims against delay
liquidated damages, loss of revenue and additional costs, such
as interest during construction. Mobilisation of the contractor
to site and commencement of construction according to the
project schedule is key to keeping the schedule on track. Before
a contractor can mobilise to site, there are several activities
that must be completed with respect to health and safety,
and local employment requirements, among others. From
our experience, international EPC contractors who have not
partnered with local contractors or are undertaking work in a
new jurisdiction require a longer period of time to mobilise to
site, which is typically not factored into their project schedule.
The additional mobilisation time is spent modifying their
existing plans and programme to be compliant with the local
country requirements. AIIMs preference is to ensure that
the EPC contractor is either established/experienced in the
relevant jurisdiction, or has partnered with a local contractor,
for a more efficient construction process. Alternatively, ensure
that the project schedule includes additional time for site
mobilisation. This has been particularly evident in the South
African renewable energy market, where many international
EPC contractors have entered the South African market, with
varying outcomes and levels of performance.
ASSEMBLE THE BEST MINDS TO
DELIVER A PROJECT
All of the investments we make are via dedicated stand-alone
special purpose vehicles (SPV) established to deliver a single
project. AIIM is regularly faced with the dilemma of when
to recruit key staff for the project SPV. The lenders typically
require a resourcing plan and comfort that the key staff such
as a chief executive officer, chief financial officer and chief
technical officer will be identified and employed by the time
the project achieves financial close and funds are disbursed.
However, it can be challenging to attract key staff to a project
SPV prior to financial close, given the level of uncertainty
in an employment contract at that point in time. AIIM has
applied three models to overcome this challenge; namely
early recruitment underwritten by one of the shareholders,
longer-term secondment of shareholder staff to the project
SPV and temporary step-in to executive roles.
In our experience, the best model is early recruitment,
as it provides an opportunity for the key staff to immerse
themselves in the project prior to financial close and are
fully prepared to run the project SPV following financial
close. This does however require one of the shareholders to
underwrite the employment contract for a reasonable period
of time, to ensure that the key staff are not left exposed
should the project not achieve financial close. An alternative
to this model is the secondment of key staff into the project
SPV, from the shareholders. This works particularly well for
the power utility-type investors with specialist resources,
geared towards project secondments. The last model is for
the shareholders to provide resources on a short term basis
32
(one to three months) to step into the running of the project
SPV and to hand over SPV operations to the key staff, once
appointed. No matter which model is chosen, it is important
to appropriately resource the project SPV as soon as possible,
to ensure it is able to function and does not hamper or delay
the implementation of the construction schedule.
DEVELOP A GOOD WORKING
RELATIONSHIP WITH THE EPC
CONTRACTOR
The construction of a large scale, complex infrastructure project
is always challenging, and is never without unexpected hurdles.
The EPC contractor has typically agreed to a fixed price, fixed
schedule project, and assures the quality of work is to the agreed
standard. Clarifications may however arise regarding the scope of
work or the project schedule. While the legal agreements between
the EPC contractor and the project SPV seek to contract for a
variety of outcomes, having a good relationship with the EPC
contractor cannot be overlooked to unlock potential disputes,
before having to revert to contractual remedies and measures.
On our South African and Kenyan projects, having a good
relationship with the key decision makers within the EPC
contractor allowed for the shareholders to apply pressure at
the right times to minimise project schedule delays, accelerate
components of the work (such as turbine erection) and to work
collaboratively on resolving on-site issues when they arose, rather
than reverting to the contractual remedies immediately.
CONCLUSIONS
Infrastructure investments by independent power producers
in SSA are not easy, with the hurdles dependent on the type
of project and jurisdiction. There are a set of key challenges
that will arise on most projects, which in our experience, can
often be mitigated.
Large infrastructure developments typically require more
time than initially anticipated to achieve full bankability
status. As part of the development process, identification
and engagement with key stakeholders is a critical success
factor, and stakeholders must be mapped and managed
appropriately. Selection of a strong local partner is also a
key factor for success but requires an alignment of interests
between all parties to ensure a productive relationship.
During the construction phase of a project, mobilising the
EPC contractor to site per the project schedule is helpful if
project delays are to be avoided. International contractors
teaming up with a local contactor may be the best solution
to this challenge. Securing the project SPV resources to
deliver the project as soon as possible should also minimise
construction delays. Lastly, develop a strong working
relationship with the EPC contractor, to assist in resolving
minor disputes amicably, before reverting to contractual
remedies and protections.
2015 Africa Energy Yearbook
 INVESTING IN AFRICA

THE CHANGING
LANDSCAPE
Moving the Power Sector Forward

David Humphrey, Global Head, Power & Infrastructure

Standard Bank

As Global Sector Head, Power and Infrastructure David is responsible for developing Standard Banks
involvement in the growth of this core sector in Africa, and helping clients expand their activities into
or within Africa.
David has had a career in asset based deals in Europe and Africa, and has specialised in rail and
telecoms. As Global Head, David oversees industries such as conventional power, renewable energy,
construction and cement, as well as transport.
He was formerly employed at the Strategic Rail Authority and then Babcock & Brown (B&B) in the
UK, specialising in rail finance. He was involved in many of the major projects in the late 1990s and
2000s, including the West and East Coast Main Line developments in the UK, and investment in the
rolling stock market in Europe, including the purchase of Angel Trains from RBS in 2008.

REGIONAL OVERVIEW developments like Pungwe and Kariba South expansion

Looking at developments in sub-Saharan Africa over the past
18 months, in many jurisdictions it seems like it has been a
case of three steps forward, two back.
South Africa has maintained its Renewable Energy
Independent Power Producer Procurement Programme
(REIPPP), with three rounds awarded, a fourth currently
being evaluated, and tenders out for the first round of base
load coal power Independent Power Producers (IPPs). In
excess of 1500 megawatts (MW) of electricity is now being
generated by the renewables industry. Thats the plus side - on
the minus side, ongoing challenges at Eskom have resulted in
its downgrade to junk status by S&P.
The rest of the Southern African Development Community
(SADC) region is generally improving. Mozambique saw its
first two gas IPPs start construction in 2014, while Vales coal
power station being built by ACWA continues construction.
The grid is becoming constrained, but Mozambiques state-
owned utility, Electricidade de Mocambique (EDM), has
a good strategy and understands what needs to be done.
This envisaged generation capacity raises the possibility for
EDM to export power to surrounding countries via the
SAPP. Malawi is looking to procure its first IPP in 2015.
Zimbabwe is quietly adding extra capacity, with hydro
coming on stream.
Zambia is starting construction on the Maamba Power
Station, its first IPP coal power station in 50 years, and several
hydro schemes such as Copperbelt Energy Corporations
(CEC) Kabompo dam, are in project development. Angola
has faced funding headwinds in 2015 following the oil
price crash in 2014, but several power projects such as the
Luachimo dam are underway.
Although the Morupule B power station in Botswana is
still to be completed, further expansions to the complex are
planned for 2015. Namibia has some challenges. It has one
of the highest solar radiation footprints in the world, yet it
imports most of its power from an increasingly fragile South
Africa and the power it generates is mostly from the hydro
resource in the north of the country. The Kudu gas field/
power project remains a top priority, as is the Xaris 250MW
gas power project. Namibia needs new projects to come on
stream in the next few years to give itself a stable base load.
Looking further north, the DRC remains high on potential.
However, governance and regulatory issues are greatly
hampering private investment in energy outside the mining
sector. While agreements have been signed to develop the
next stage of the Inga project on the Congo, there is little

2015 Africa Energy Yearbook 33

 INVESTING IN AFRICA
actual progress in finalising the full technical solution and the
procurement process that needs to follow.
In West Africa, both Ghana and Nigeria are facing challenges
and opportunities, but for different reasons. In Ghana,
setting tariffs too low has required enormous subsidies that
the Government has been unable to fund in full, leading to
backlogs in maintenance, plunging plant availability and
severe black-outs. There is not enough gas offshore to provide
all the new base load requirements, so a liquefied natural gas
(LNG) solution is likely needed as the gas supply from Nigeria
is unreliable. There are numerous IPPs under development in
Ghana - so if the country can solve its fiscal crisis and its base
load fuel supply, the future could be bright. It does make one
wonder if privatisation (if properly followed through) would
now be a better option for Ghana in the long term.
Nigeria stands on the edge of success or failure of its
privatisation in 2015. A good regulatory and industry
structure has been put in place, and the distribution
companies (Discos) and generation companies (Gencos) now
find themselves in private hands, funded through dollar loans
from the Nigerian banking sector, and implementing the
much needed corporate, billing and technical improvements
slowly. But the Nigerian Electricity Regulatory Commission
(NERC) allowed the regulatory regime to be delayed by over
a year, during which time there was a cash shortfall in the
amount the Discos could bill, over well over $1 billion, a
gap which the Central Bank agreed to fund in January 2015,
provided the regulated market came into operation.
Before the election NERC announced tariff cuts of up to
50%, throwing the market into confusion and threatening
the financial viability of the Discos, Gencos and possibly the
entire Nigerian banking sector should the loans they provided
to the sector default. The change in Government following
the election and what it means for the power sector will be
followed with considerable interest by the market. Should
tariffs be allowed to rise to a sustainable level, then the size
of the opportunity is enormous, with at least 20 Gigawatts of
new power needed over the next decade.
East Africa is showing good progress, though again, some
hiccups are apparent. Kenya leads the way, with the IPP
programme firmly embedded, though some projects have
been delayed because of local issues. These are probably
side effects of devolution. Kenya needs to work out how to
deliver sites to project owners that have all the permissions
and local political issues sorted by the construction start date,
otherwise delays and cost overruns will occur. This, however,
is probably the only significant issue in a power sector that is
well run and expanding nicely.
Opportunities include an undisclosed 35MW geothermal
power project in Kenya. The project has the location and steam
field potential for up to 140MW of capacity and is currently
being developed by a consortium of local and international
34
developers. It will be fully underwritten by Standard Bank
together with a development finance institution.
Tanzania continues to struggle as parastatal Tanzania Electric
Supply Company Limited (Tanesco) tries to improve access to
electricity for the population and to partner with the private
sector. We may see substantial investment in the following
years if the Millennium Challenge Corporation (MCC), which
provides economic assistance from the US government through
a competitive selection process to developing nations, can sign
its compact with Tanzania this year. Uganda also continues to
make progress, with a sector that functions efficiently. The Get
Fit small hydro schemes, sponsored by KfW, have allowed
a great deal of consistency and standardisation into the IPP
model that is capable of being exported to other jurisdictions.
MARKET COMMENTARY
Overall then, the regional picture is somewhat ambiguous in
terms of progress and further uncertainty is caused outside
South Africa by the tendency to use dollar funding for power
projects whose revenue is in local currency. Unless there is
a user pays for the currency volatility risk (as in Kenya),
the increasing local currency funding requirement caused by
depreciation against the dollar, becomes a real risk, as it is
often followed by liquidity and convertibility constraints in
the affected country.
But what is clear is that Africa remains firmly on the radar of
major investors, with significant funding coming through from
big multinationals, including those in America. Economic
growth in sub-Saharan Africa has exceeded 5% a year for
more than decade and US multinationals are noticing. CE of
US engineering giant General Electric (GE), Jeffrey Immelt,
continues to see Africa as its most promising growth region
his company built a $6 billion position in Africa over the
last decade, virtually from scratch. GE Africa now operates
in 35 countries on the continent and the company recently
pledged to invest $2 billion in new investments in Africa by
2018, with the electric power sector seen as a top priority. In
2014, Standard Bank sealed a R3.4 billion financing agreement
with General Electric aimed at increasing access to power and
infrastructure across 10 countries.
The USs Power Africa initiative, launched in 2013, got the
ball rolling from a US perspective. It aims to double access
to power with its six partner countries in Africa Ethiopia,
Ghana, Kenya, Liberia, Nigeria and Tanzania. More than $7
billion has been committed via financial support and loan
guarantees, but that amount almost doubles when private
sector project finance commitment is added.
In this environment, the need for innovative funding
arrangements is becoming increasingly important, if deals are
structured well, the overall cost of an investment and overall
capital needs are reduced.
2015 Africa Energy Yearbook
 INVESTING IN AFRICA

Investing in Africas energy sector does not come without
risks, however, and those that take the plunge need to go in
with their eyes wide open. But more workable and innovative
models for project finance are helping fast track projects and
bridge gaps that existed previously.
The development of an environment more conducive to the
growth of an IPP industry is beginning to take shape and
bodes well for the future. The Triumph Power Generating
Company Limited stands out as the first locally owned IPP
in Kenya. Its first project is the development of an 83MW
heavy fuel oil power plant and power produced by Triumph
will be sold to Kenya Power and Lighting Company under a
20-year Power Purchase Agreement (PPA).
Electromaxx Limiteds diesel power plant in Uganda, which
began operations in 2010 with 20MW and expanded by
30MW in 2012, is Ugandas only locally owned IPP and
power produced is sold to the national off-taker, Uganda
Electricity Transmission Company Limited under a 6 year
PPA. Both the original construction and expansion phases
were financed by Stanbic Bank Uganda. Since commissioning
in October 2013, Electromaxx Limiteds 50MW diesel power
plant in Uganda has enjoyed 100% availability based on a
contracted capacity of 50MW.
Exciting potential lies in hydro power. Mpanda Nkuwa, for
example, is a 1 500MW hydro power station situated in the
Tete province of Mozambique currently being developed
by Camargo Correa, with offtakers likely to be Eskom and
Electricidade de Moambique.
The renewable sector will continue to play a more pertinent role
in alleviating some of the energy shortfalls across a continent that
is struggling to keep the lights on. While progress on the REIPPP
in South Africa has been slower than anticipated, recent bidding
rounds have shown some promising signs, like lower tariffs being
achieved due to active competition. The successes achieved can
certainly be replicated across Africa, where opportunities abound
for solar, wind, hydro and gas projects, but where only 20% of
people are connected to power grids.
Standard Bank has seen 13 of its projects connected to the
grid already, supplying 826MW into the grid. Successes
include the 75MW Solar Photovoltaic (PV) Solar Capital De
Aar (Pty) Ltd facility, which was awarded preferred bidder
status under REIPPPP. The project is located near De Aar
in the Northern Cape Province of South Africa and was the
first phase of what could become a 300MW solar farm. The
company, which is chaired by Dr Mamphela Ramphele, says
the De Aar development is part of the larger plan to deliver
25 solar farms on 50 000 hectares of land in the Northern
and Western Cape provinces. Standard Bank was mandated
as lead arranger, financial advisor and provided senior debt
funding and interest rate hedging to the project.
While challenges remain, the upsurge in global interest
to provide funding or to get involved in building projects
directly, especially when combined with the correct structured
products, is going to improve access to electricity for millions
of people that are currently without. The future of the energy
sector in Africa continues to flicker brightly as a result.

About Standard Bank Group

Standard Bank Group is the largest African bank by assets with a unique footprint across 20 African countries.
Headquartered in Johannesburg, South Africa, we are listed on the Johannesburg Stock Exchange.

Standard Bank has a 153-year history in South Africa and started building a franchise outside southern Africa in the early 1990s.

Our strategic position, which enables us to connect Africa to other select emerging markets as well as pools of capital in
developed markets, and our balanced portfolio of businesses provide significant opportunities for growth.

The group has nearly 49 000 employees and over 1 200 branches, which enable it to deliver a complete range of services across
personal and business banking, corporate and investment banking and wealth management. Standard Banks Corporate
& Investment Banking division offers its clients banking, trading, investment, risk management and advisory services to
connect selected emerging markets to Africa and to each other. It has strong offerings in mining and metals; oil, gas and
renewables; power and infrastructure; agribusiness; telecommunications and media; and financial institutions.

Headline earnings from continuing operations for 2014 were R21 billion (about USD 1.9 billion) and total assets were
R1 907 billion (about USD 165 billion). Standard Banks market capitalisation at 31 December 2014 was R232,2 billion
(about USD20 billion).

The groups largest shareholder is Industrial and Commercial Bank of China (ICBC), the worlds largest bank, with a
20,1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and
deal flow between Africa, China and select emerging markets.

For further information go to www.standardbank.com

2015 Africa Energy Yearbook 35

 Access to power is the key to
creating a sizeable middle class
in Africa, which will open up
a whole slew of investments.
 INVESTING IN AFRICA

YEARBOOK PROFILE PIECE

JUSTIN DEANGELIS, DIRECTOR,

Justin DeAngelis is a Director, responsible for origination, analysis, structuring, valuation and execution of investments for the Power Deal Team.
He joined Denham Capital in 2007. Prior to joining Denham, Justin was a Director at Waypoint Energy and worked as a Manager at Pace Global
Energy and PG&E National Energy Group, after serving as an Engineer at Delmarva Power. He is currently a member of the Board of Directors
of Endeavor Energy, Thesis Energy, and subsidiaries of Rio Energy. Justin received a Bachelor of Science from Drexel University and a Master of
Business Administration from LeBow College of Business at Drexel University.

QUESTION: Denham has garnered a
strong reputation in Africa with many
successful investments, so Im sure you
would be reluctant to disclose your
thoughts on the next hot investment
opportunity for Africa. Taking a slightly
different tact then; what was the hot
opportunity in Africas electricity sector
in recent years, and do the rewards look
set to track in line with the original
opportunity?
ANSWER: First, Denham does not
invest in momentum. That is, we
assess investment themes based on the
fundamentals of the theme rather than
try to time the market. In Africa, its
clear that there is a need for all different
types of power generation (e.g., gas fired,
solar, wind and in some instances hydro
generation). The World Energy Outlook
2014 (WEO2014) estimates the capital
needs in power at $46 billion per year for
the next 25 years, where power generation
needs are nearly half of the total. So, the
power need today and well into the future
is significant.
Denham Power also sees a tremendous
appetite from investors to buy high
quality, well-structured power plants once
they have reached commercial operations.
Investors and strategics alike want to own
these core power infrastructure assets
because once operating they provide
reliable yield.
Thus, the opportunity we see in African
power is the development and construction
of well-structured power generation assets
across the continent, which we will then
sell to create private equity returns. To
execute on this strategy we have assembled
what we believe to be the best teams to
originate, develop and build high quality
power projects across Africa.
QUESTION: What made that
opportunity so compelling?
ANSWER: The need for power in Africa
combined with the advancement of
financeable contract structures (e.g., long-
term PPAs with government guarantees),
the significant presence of an avid buyer
market with demand for top quality,
well-structured power infrastructure-type
projects that we develop and finance.
Denham believes that the teams it
has assembled are exceptionally well
suited to capitalize on the opportunity,
with a high quota of skill, patience,
discipline, experience and inter-personal
communicative abilities.
QUESTION: Ten years from now,
once Africa has increased its access to
electricity, what are going to be the big
trends petrochemicals, housing and
construction perhaps?
I wont predict the next wave, but
certainly access to power is the key to
creating a sizeable middle class in Africa,
which will open up a whole slew of
investments. As evidence of that, the
WEO2014 estimates that $1 invested in
the power sector in Africa will generate
$15 in incremental GDP.
How has the price of oil impacted
Africas ability to raise capital for
renewable energy projects?
The short answer is it has not impacted
Africas ability to raise capital for
renewable projects. First, unlike
developed markets, renewable energy
can be economic, even under-cutting
the marginal cost of power, in most Sub-
Saharan African countries.

I wont predict the next wave, but certainly access

to power is the key to creating a sizeable middle
class in Africa, which will open up a whole slew of
investments.

2015 Africa Energy Yearbook 37

 INVESTING IN AFRICA

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38 2015 Africa Energy Yearbook

 INVESTING IN AFRICA

Many African countries use liquid fuels

for marginal power generation. Even
with a substantial drop in oil prices,
there is tremendous headroom where
Anything that can help
the marginal cost for diesel power plants
is in the $150-$270/MWh range based
move power projects along
on a crude oil price of $40-$100/bbl. more quickly will help the
Renewable power generation is highly
competitive within this range of power continent.
prices.

What considerations should COP21
take into account this year when
deciding on the future of carbon
investments in Africa?
Anything that can help move power
projects along more quickly will
help the continent. Thus, if carbon
offsets are available and this revenue
stream relieves some stress from host
countries, offsets should be considered.
To maximize the impact from carbon
offset/credit sales, long-term sales
contracts will be required to increase
debt sizing.
Beyond Africa, does Denham see
opportunities in other developing
markets?
Absolutely! Africa is only one target
investment area of many to Denham.
Denham Powers primary investment
strategy focuses on the development
of power projects in regions that are
expected to have high growth rates,
require new-build power generation
and where we can build projects with
long-term power purchase agreements
at a reasonable equity return. Many
emerging markets globally exhibit those
qualities. For example, we are delivering
wind power at $50-$60/MWh in Brazil.
In the Philippines, we helped to build
a 600MW coal plant that delivers sub
$100/MWh power in a market priced
at $140/MWh when it has equilibrium,
well above that when it doesnt. Solar
power can also be an economic power
solution, for example in Uruguay, where
we previously delivered solar power at
under $100/MWh.
In all cases, it is Denham Powers
goal to help increase reliability of the
power system while reducing the cost
of power.

One of Powertechs key strategies is our expansion into the African markets.
For a number of years already we have partnered with ESI Africa to reach our
target audiences in Africa on their home soil. ESI Africa has proven to be the
publication of choice when it comes to building our brand in Africa. We will
definitely continue our relationships in the years to come.
Regula Niehus, Corporate Communications Client Manager

HTML WEEKLY
MAGAZINES WEBSITE WEBINARS
MAILERS NEWSLETTER

ESI Africa allows you to reach your audiences in Africa on their home soil.
Contact Gerald Schreiner on +27 21 700 3533

facebook.com/ESIAfricaNews @ESIAfrica ESIAfricaTV www.esi-africa.com

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 POLICIES AND
BEST PRACTICES
FOR AFRICA
 POLICIES AND BEST PRACTICES FOR AFRICA

RISKY BUSINESS?
Lower Oil Prices and Africa Energy Projects

Keith Martin1, Initiative for Risk Mitigation in Africa

Keith has been working on project finance and risk mitigation for investments in Africa and Latin
America for over 15 years. He currently advises the African Development Banks Initiative on
Risk Mitigation in Africa, which seeks to improve the availability and use of various mitigation
instruments to, in turn, support project finance for large capital projects.
Keith has also spent the past 8 years working in and with Brazilian companies, particularly in the
area of risk mitigation for their exports to and investments in Africa. From 2007 to 2009, he was
the Vale General Manager for External Affairs, with responsibility for all projects outside Brazil.
He has since also worked for Aon Brazil, heading its International Trade and Investment area,
as well as for the IFC, where he was responsible for a Brazil-Africa initiative. Finally, Keith held
various positions during his 7 years working at MIGA/the World Bank Group, including support
for investments in fragile and conflict-affected states.
Keith holds degrees from Georgetown University and McGill University. He also taught
International Risk Analysis and Management at Georgetown. He has widely published on
various topics related to risk mitigation, South-South investments and project finance, with a
special focus on Brazil-Africa.

1 The author is a consultant to the Initiative for Risk Mitigation in Africa, a donor-funded trust fund housed at the
African Development Bank. The views expressed in this article are strictly the personal views of the author and do
not represent those of the AfDB or IRMA. The author would like to thank Ms. Grace Gabala, who assisted in its
preparation.

The substantial and rapid decline of world oil prices over the past year and the prospect that they may remain
at lower levels over the coming years has focused attention on the winners and losers, in terms usually
linked directly to a given countrys position as an exporter or importer of oil and gas.

T he substantial and rapid decline of world oil prices over

the past year and the prospect that they may remain
at lower levels over the coming years has focused attention
on the winners and losers, in terms usually linked directly
to a given countrys position as an exporter or importer of oil
and gas. In general, it is argued (quite logically) that countries
which are exporting these resources are suffering shortfalls in
their budgets, which will need to be corrected and that states

2015 Africa Energy Yearbook 43

 POLICIES AND BEST PRACTICES FOR AFRICA

wanting to create or expand their hydrocarbon production
capacities will need to scale back or postpone their plans. In
Africa, there has hence been much discussion about countries
such as Angola, Ghana, Nigeria, Mozambique and Tanzania.
While this article will touch on this theme, our focus is on a
broader question: what will be the impact of lower oil prices on
risk (and risk mitigation) for energy projects on the continent?
Here, we refer not only to those projects linked directly to
production of oil and gas, but also to those in power generation
(from fossil fuels as well as renewables). I propose that the
decline in oil prices both due to the decline itself and its
rapidity poses new challenges to governments in Africa as
well as private developers and lenders for all types of energy
projects in Africa. The result is an altered risk landscape which
will require new thinking on the part of all involved and the
use of improved and expanded risk mitigation tools.
THE GLOBAL CONTEXT:
LOWER OIL AND GAS PRICES ARE (MOST LIKELY)
HERE TO STAY
Supply Side: The recent rapid decline in oil prices, as has
been noted elsewhere2, is due to several factors. Together, one
can term these the democratization of oil. By this, I mean
two separate but concurrent trends. On the one hand, an ever
increasing amount of production is (and will be) outside of
OPEC countries3. In addition to the emergence in the past
decade of major producers like Kazakhstan and Azerbaijan,
and the rapid rise of production in the US, a growing number
of African countries (Ghana, Mozambique and Tanzania), as
well as Brazil and Argentina, among others, are poised to add
significant amounts of oil and gas to world production in the
coming years4. Finally, if sanctions on Iran are in fact eased or
lifted, increased production there would add more production
even within OPEC5. Separately, the hydrocarbon production
matrix is changing and increasing the flexibility of the market to
adjust: shale oil production is much more easily ramped up and
down (to reflect global prices) than are conventional oil wells6.
If the price rises too much, Canadas vast tar sands become more
attractive, as does more expensive deepwater production.
All of this means that the collective bargaining power of
OPEC is significantly lower now than it was some years ago
with a tendency to become lower still. Furthermore, the
impact on global prices that some politically-motivated supply
interruption in any given country could cause will be more
limited. (Obviously, a broader regional conflict particularly
in the Middle East could still cause oil prices to spike; this
is the one scenario under which prices are most likely to rise.)
Demand Side: While demand growth is expected to continue,
particularly from emerging markets and developing economies,
newer predictions are that such growth will be slower than was
imagined before7. In particular, China is entering an era where
growth of 7% or less will likely be the norm. Climate change
and economic concerns are also likely to push China and
other leading emerging economies to do more in the areas of
energy conservation and renewables even if not to the extent
that many environmentalists would like to see8. In OECD
countries, by contrast, demand is likely to be stagnant or even
decline, and concerted efforts are being made to both lower
energy use and to switch to more renewables.
WHAT DOES THE NEW REALITY MEAN
FOR AFRICA IN GENERAL?
As elsewhere in the world, lower global energy prices are
producing winners and losers at national and sub-national level.
In short, the most obvious winners are net energy importers and
consumers, while those who depend on hydrocarbon revenues
(mostly national governments and state-owned enterprises in
oil-producing states) will face the greatest challenges, possibly
impacting energy projects (see below).

2 Numerous studies and analyses ranging from Goldman Sachs to Exxon

have documented the causes of the recent oil price collapse, all identifying
increasing supply as the main factor. See http://www.bloomberg.com/news/
articles/2015-02-11/goldman-here-s-why-oil-crashed-and-why-lower-prices-
are-here-to-stay and http://www.ft.com/cms/s/0/20fda1f8-c285-11e4-bd9f-
00144feab7de.html#axzz3XnW4D7ZB among many others.
3 This apparently is one of the main reasons OPEC decided not to try to
influence prices in November 2014, when it decided not to cut production.
See http://oilprice.com/Energy/Oil-Prices/UAE-Says-Its-Up-To-Shale-
Producers-Not-OPEC-To-Cut-Production.html
4 How much will, in fact, be added from these countries of course depends on Source IMF
the oil and gas prices. It is clear that more expensive (deepwater) offshore fields
will suffer as will those requiring expensive or risky infrastructure to get to
market (e.g., from some landlocked African countries).
7 The IEA has cut its global energy demand growth until 2040 from 56% to
5 See https://www.iea.org/oilmarketreport/omrpublic/ 37% in its most recent annual World Energy Outlook publication. See http://
6 See Christof Rhls November 2014 blog entry, OPECs dilemma: www.iea.org/publications/freepublications/publication/WEO_2014_ES_
https://www.linkedin.com/pulse/20141126202928-259060403-opec-s- English_WEB.pdf, p. 2
dilemma?trk=mp-reader-card 8 Ibid.

44 2015 Africa Energy Yearbook


However, oil and gas prices have a ripple effect through the
entire chain of energy projects, as I will discuss in detail.
Specifically, they are likely to lead to a reconsideration of more
expensive renewable energy projects: when thermal power
becomes cheaper, it is harder to argue for more expensive
ones that use renewables. While climate change arguments
carry some weight, governments in many countries are likely
to re-examine projects when the cost differential becomes too
great. This is particularly true in Africa for two reasons: more
dependence in most countries on fossil fuels for electricity
production; and less tax incentives (and fiscal room for them)
for solar and wind.9 Taken together, this may have wider
ramifications for the energy matrix in Africa: more thermal
power plants and less generation from renewable energy
sources.
RISKY BUSINESS? THE RISKS FROM
THE NEW ENERGY SCENARIO
Investors and lenders will be most interested in the impact
the fall in energy prices is likely to have on their risk/return
matrixes and prospects for future investments. To facilitate,
the risks are discussed below using categories that are
commonly covered by political risk insurance (one of the
mitigation measures elaborated subsequently).
Source: http://www.internationalpolicydigest.org/2015/01/30/african-energy-
producers-face-oil-price-pressure/
9 On a global basis, there is no consensus on what the impact of lower oil
prices will be on renewable energy prices. See http://www.carbonbrief.org/
blog/2015/01/what-falling-oil-prices-may-mean-for-the-future-of-renewable-
energy-investment/ for a detailed discussion. The US EIA predicts little
impact in the US but that is based on its assumption that tax incentives and
pro-green regulation will outweigh the shift in oil and gas prices. See http://
www.theguardian.com/environment/2015/jan/28/low-oil-prices-wont-hurt-
renewable-energy-says-us-eia . But Africa is likely to be a different story, even
if no detailed analyses are yet available. As an example, South Africa depends
on fossil fuels for 96% of its primary energy production. http://www.eia.gov/
countries/cab.cfm?fips=sf
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
INCONVERTIBILITY AND TRANSFER:
In various countries Nigeria, Angola, Equatorial Guinea,
Algeria, Libya and Gabon oil and gas exports are the
main source of revenue for the government. Hence, the
rapid and sustained fall in prices is putting great strain on
national coffers. In some countries, local currencies have
already come under pressure (e.g., Ghana and Nigeria)10.
Investors and lenders will be
most interested in the impact
the fall in energy prices is likely
to have on their risk/return
matrixes...
If governments are not able to reduce spending (which in
turn may increase other risks), they may find it difficult
to maintain their hard currency reserves which could
oblige them to impose capital controls (like those in place
in Venezuela, or imposed in Russia in 1998)11.
Foreign investors and lenders would then be unable to
convert their local currency or to transfer hard currency
out.
To their credit, countries like Ghana and Angola have already
taken serious steps, such as seeking advice and support from
the IMF and others, to address the issues created by the
shortfall in government revenue12. But decisions on where to
cut public spending will be politically difficult
10 In Ghana, the cedis 40% slide (related, in turn, to profligate government
spending) led it to seek IMF support - http://www.wsj.com/articles/ghana-
to-seek-help-from-international-monetary-fund-1407075262 . The naira
slid below 200/US$ as S&P put it on negative watch in part (but not
only) because of the fall in oil prices. http://www.bloomberg.com/news/
articles/2015-02-11/naira-volatility-jumps-to-6-year-high-as-nigeria-currency-
slides
11 Nigeria similarly, and tentatively, imposed restrictions in late 2014 which
even caused JP Morgan in January 2015 to threaten removing Nigeria from
bond indexes: http://www.bloomberg.com/news/articles/2015-02-05/nigeria-
woes-deepen-as-jpmorgan-hits-emefiele-with-debt-warning
12 For Ghana, see above. On Angola, which received IMF support during its last
crisis in 2008, see the IMFs very direct advice: http://www.bloomberg.com/
news/articles/2015-02-06/angola-must-raise-taxes-cut-fuel-subsidy-as-oil-falls-
imf-says
45
 POLICIES AND BEST PRACTICES FOR AFRICA
Source: http://www.internationalpolicydigest.org/2015/01/30/african-energy-
producers-face-oil-price-pressure/
Also, allowing currencies to fall in value is likely to stoke
inflation in those countries. This will reduce the spending
power of ordinary people and may increase other risks
(see above).
Finally, currency devaluation is not something covered
by political risk insurance (though hedges exist). This
means that as happened with Argentinas pesefication
foreign lenders and investors may be severely impacted by
a sudden, sharp depreciation in the local currency, even if
they continue to exchange and repatriate currency13.
POLITICAL VIOLENCE (WAR, CIVIL WAR,
TERRORISM, SABOTAGE, STRIKES AND CIVIL
COMMOTION)
Governments of oil-producing states are now facing
stark choices. One measure to reduce spending usually
on advice of IFIs is to remove or decrease subsidies
13 Currency devaluation is considered by PRI providers (rightly or wrongly) to
be a commercial risk. It should be noted, however, that investors can write
a given exchange rate (or mechanism of adjustment) into their contractual
arrangements with host governments (as often occurs in PPAs). In that case,
the risk can be covered under breach of contract coverage.
Countries like Ghana and Angola have already taken
serious steps, such as seeking advice and support from
the IMF and others, to address the issues created by
the shortfall in government revenue.
46
(for energy, transportation and/or food). However, in
countries where subsidies have long been part of the
economic safety net of the population, or are considered
a birth right of living in a resource-rich country,
removing subsidies often leads to riots, looting and even
the attempted overthrow of governments14.
Beyond subsidies, devaluation and inflation will impact
the populations overall purchasing power and result in an
increase in poverty. This, too, will increase the likelihood
of political violence.
Foreign investors are often prime targets of such violence
particularly if they have highly visible brand names or
if they are seen as being particularly closely associated
with the government (as most foreign oil companies, for
example, are). This may lead not only to more violence
against foreign installations, but also to greater physical
security threats (including kidnapping) for foreign
personnel.
EXPROPRIATION AND NATIONALIZATION
In general, it is currently unlikely that falling oil prices will
lead to a spate of expropriations be it of oil installations
or other foreign investments.
On the other hand, if private energy companies decide
to alter their investment plans for example, cancelling
planned deepwater exploration or production due to the
lack of commercial viability there may be pushback
from governments, and decisions to seize assets. In
Argentina, for example, the government expropriated
the largest private company oil and gas producer YPF
amid allegations it was failing to invest enough15. (Most
risks of this nature, however, are likely to come under
breach of contract.)
In a context of more generalized political violence due to
increased poverty or removal of subsidies, governments
may seize strategic foreign assets in consumer areas such
14 Mozambique one example of many has seen repeated deadly riots over
government attempts to remove fuel and food subsidies: 2008, 2010, 2012
See http://www.economist.com/node/16996835
15 http://www.energytribune.com/20101/argentinas-re-nationalization-of-the-
energy-industry-and-what-it-means-2#sthash.ccCqNIcP.dpbs
2015 Africa Energy Yearbook

as supermarkets or agribusiness - in order to prove their
support for the people in the struggle against price-
gouging, etc. (Venezuela is a recent example16.)
BREACH OF CONTRACT
Last but not least, in the current context, is the risk that
governments will breach undertakings with (foreign)
private investors. Note that government includes all
levels of government (federal, provincial or state, and
local) as well as SOEs.17
This risk becomes particularly heightened during times of
change and uncertainty, such as the current ones. It is also
highly connected with all kinds of energy projects, which
generally involve a deep and on-going (contractual)
relationship with one or more levels of government18.
In energy-producing countries, based on past experience
in Africa and elsewhere, we can predict the likelihood of
four specific, heightened risks:
- As government revenues fall, there may be attempts
to renegotiate royalties, taxes and other income from
private (usually foreign) investors in O&G production
- Those same investors may, themselves, seek changes
in PSAs (production sharing agreements) and other
contracts to reflect declining returns from current and
especially planned (higher cost) production
- Governments are also likely to cancel, postpone or
renegotiate public works and PPP projects in other
sectors, including infrastructure (something that may
well effect EPC contractors as well as investors)19
- For new projects in all sectors, governments will be
less likely to provide guarantees which compromise
their fiscal position and add to their debt burden
particularly those that approach the IMF for
support
In all states, there may also be efforts to change or cancel
planned projects, based on the new economics of thermal
power plants. In other words, plans for wind and solar
(and to a lesser extent hydro) may be affected.
In addition, there are several other risks that may impact energy
projects in Africa but do not directly impact the risks above.
One is that energy producing countries will potentially face
16 In 2010, Hugo Chavez nationalized a Franco-Colombian supermarket chain.
More recently, Nicolas Maduro, his successor, has taken similar steps (including
forced price controls) against additional supermarkets. http://www.reuters.com/
article/2010/01/19/venezuela-nationalization-idUSN1922545920100119
17 In practice, insurers are reluctant to cover SOEs explicitly (on a stand-alone
basis) unless they are directly and fully backed by the federal government.
18 Several of the largest political risk insurance claims of the past 15 years involved
breaches of contract in energy projects. These include the Dabhol thermal
power plant in India (over US$110 million) and the MidAmerican power plant
in Indonesia (over US$218 million); the amounts are only those of OPC, as
private market numbers are confidential. https://www.opic.gov/sites/default/
files/files/fy2012-claims-report-web.pdf
19 During the 2008-9 crisis, for example, Angola accumulated US$9
billion in accumulated arrears, mostly with Brazilian and Portuguese
construction companies. https://www.ihs.com/country-industry-forecasting.
html?ID=1065997697
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
Many projects currently in the
planning stages will not be
pursued: money spent on project
preparation, feasibility studies,
etc. will be lost.
downgrades from the rating agencies20, impacting their access
to financing. A second is that many projects currently in the
planning stages will not be pursued: money spent on project
preparation, feasibility studies, etc. will be lost. Some countries
which had hoped to become energy producers but whose
costs of production or of access to markets are high (including
some landlocked African countries21) will have to rethink
their national strategies potentially making it difficult for
them to find foreign investors willing to support their energy
independence dreams. (On the other hand, some countries
may continue with their plans for renewable energy projects
that reduce dependence on imported oil and gas and to diversify
their energy matrix even in the new cheap hydrocarbons
context.) For Africas coal exporters, these will be tough times;
as experience in the US has shown, the lower price of oil and
gas will make coal an even less attractive energy alternative
than it already was22. Finally, lower electricity prices are likely
to have a knock-on effect on the (already precarious) financial
position of many state-owned electric utility companies.
One looming question for the medium and long term that
this paper does not address is: What of climate change? The
cumulative global effect of the above-mentioned changes
(even taking into account use of more natural gas) would be
20 For Nigeria, see above. Fitch and Moodys have both recently changed
their Angola outlook to negative, while not yet changing their rating:
https://www.moodys.com/research/Moodys-affirms-Angola-Ba2-ratings-
changes-outlook-to-negative--PR_318660 and http://www.reuters.com/
article/2015/03/27/idUSFit91780720150327
21 A prime example is Uganda, where $60/barrel oil is likely to cast a heavy cloud
over its prospects for oil exploration and production: http://observer.ug/
business/
38-business/35918--low-global-oil-prices-could-affect-ugandas-prospects--
analyst
22 Even before the decline in oil prices, both thermal and metallurgical coal
were down 40% from 2011. http://www.carbontracker.org/wp-content/
uploads/2014/09/Coal-Financial-Trends-ETA.pdf . It is also one of the
reasons that Vale sold a share of its massive Mozambique operations to
Mitsui in December of last year: http://www.mining.com/vale-sells-stake-in-
mozambique-coal-project-to-mitsui-for-763m-34877/
47
 POLICIES AND BEST PRACTICES FOR AFRICA
The best-known product in this area is the A-/B-loan
structure, where commercial lenders participate in
lending to a project on the back of a loan from an
official financial institution.
more greenhouse gases, undermining efforts to limit climate
change. If China, the US, and other major economies decide
to curb emissions more aggressively, this would again change
the risk-return matrix on a global basis. However, such
a decision is not yet on the horizon a subject for further
discussion and speculation.
AND THE MITIGATION TOOLS OLD AND
NEW TO DEAL WITH THEM
Investors and lenders have traditionally relied on a series
of risk mitigation tools for their foreign investments and
financing (in Africa and elsewhere). These continue to be
available for most African energy projects at the moment
with some caveats. In addition, new tools have been added
and existing ones modified to reflect new risk realities. The
tools include:
Political risk insurance for the coverages mentioned
above (as well as non-honoring of sovereign guarantees)
is available from both public sources (such as the World
Bank Groups MIGA, the Islamic Development Banks
ICIEC, Africas own ATI and national investment insurers
such as the USs OPIC and Chinas Sinosure), as well as
private insurers23. What has changed in this area recently
is the willingness to specifically offer insurance against
the risk of breaches by subsovereigns (such as state and
local governments) and SOES something particularly
relevant for many energy projects that may involve SOEs
as offtakers in PPAs (power purchase agreements) or as
joint venture partner in E&P contracts. Additionally,
the private market has become much more familiar with
Africa and now can offer much longer tenors and greater
capacity for projects than 5 years ago24.
Export credit agencies may also provide similar coverage
for their nationals exports of goods and services and
23 Private insurers include the London-based market around Lloyds syndicates,
as well as US- and Bermuda-based insurers like Zurich, AIG, ACE and
Sovereign.
24 In the past year, the private market has offered PRI for projects in specific
African markets for up to 10 and even 12 years.
48
may cover all risks (commercial and political). They can
also provide financing that removes the risk for their EPC
contractors, for example. The main limitation here is that
most ECAs use OECD ratings to determine pricing
and most African countries continue to be rated as high
risks (5 to 7 on the OECD scale, on which 7 is the highest
risk).
(It should be noted that particularly the private market
is very sensitive to claims. So, a spike in claims from a
particularly sector or country could lead to higher rates,
shorter tenors and less capacity.)
Involvement of Multilateral Lenders such as the African
Development Bank and the World Bank or IFC also
mitigates the risks to lenders and investors.
- The best-known product in this area is the A-/B-loan
structure, where commercial lenders participate in
lending to a project on the back of a loan from an official
financial institution. While this gives some protection
to commercial lenders, there are two limitations. First,
beyond the implicit (halo) effect for the project, there
is no explicit risk mitigation for the equity investors
themselves. Additionally, some commercial lenders
(especially due to Basel III restrictions) may not find
their risks adequately mitigated by the current structure.
As a result, lenders and insurers are increasingly working
together to explore providing adequate coverage
(through political risk insurance) for investors and
B-loan participants. This process is made more difficult
by the need for both lenders and insurers to have a right
to the projects shares under a possible default/claim,
but progress is being made on reaching a compromise
that takes into account all relevant interests25.
- In addition, the African Development Bank and World
Bank, among others, offer Partial Risk Guarantees (that
cover specific political and regulatory risks) and Partial
25 For many years, the competing demands for unencumbered rights to
shares in the case of a claim/default have been an obstacle particularly to
cooperation between MIGA and other official lenders, both of whom have
a de facto or de jure preferred creditor status that they believe should have
precedence over all others. Recently, MIGA has moved to a more flexible
position that could result in more cooperation with official lenders.
2015 Africa Energy Yearbook

Credit Guarantees (that cover a part of a potential debt
service default). These guarantees have only been used
on a very limited basis, but it can be expected that,
under the new conditions, they will be a cost-effective
substitute for some oil-producing African countries to
use instead of full government guarantees. (The AfDBs
PRGs and PCGs, for example, have a 1:4 ratio toward
a given countrys performance-based allocation, or
lending. So, a US$100 million PRG only takes up $25
million of the envelope.)26
Other Sources of Mitigation
- Many investors and lenders rely on bilateral
investment treaties to support their claims in a possible
dispute with the host country. The value of such treaties
was recently underlined in the dispute between Spains
Repsol and the Government of Argentina over the
expropriation of YPF. In Africa, the use of BITs is still
limited by the fact that many countries do not have
such treaties in place with major investor countries.
- International arbitration such as ICC and ICSID
is also frequently used for energy projects with a
significant record of success. The major drawbacks to
such arbitration are the high legal costs (not least for the
government) and the long amount of time required to
reach a final arbitral award. Also, the system does not
work well for smaller disputes or on-going negotiations
with the governments. For this reason, there are
increasing international efforts to promote voluntary or
binding mediation28 in contracts that promote reaching
consensus over a protracted legal confrontation.
- Local currency financing is increasingly attractive in
countries with both sufficient liquidity and tenors, and
interest rates that are not prohibitive (such as South
Africa, Botswana and Namibia). In this case, obviously,
the portion financed locally is not subject to exchange
and transfer risk, nor to devaluation. Additionally, local
financing may indirectly mitigate other risks, since
government actions that negatively impact the project
may also damage the local lender.
- Structuring tools of various forms may also act as risk
mitigants. These cannot be explored in detail here,
but could include syndications (bond issues) backed
by project revenues, which in turn can also be insured
against political risks to enhance their ratings; local
joint venture partners; long-term supply or off-take
agreements; and use of hedges and swaps.
26 See http://www.afdb.org/en/projects-and-operations/financial-products/
african-development-fund/guarantees/ . The first AfDB (African
Development Fund) PRG was issued precisely for an energy project: the Lake
Turkana Wind project in Kenya. http://www.esi-africa.com/lake-turkana-
wind-project-gets-adf-partial-risk-guarantee/
27 http://www.ft.com/cms/s/0/99d1ead0-9e9d-11e1-9cc8-00144feabdc0.
html#axzz3XnW4D7ZB
28 For a detailed analysis, see: http://elibrary.law.psu.edu/cgi/viewcontent.
cgi?article=1003&context=jlia
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
Local currency financing is
increasingly attractive in
countries with both sufficient
liquidity and tenors, and
interest rates that are not
prohibitive...
CONCLUSION
There is a strong likelihood that lower oil prices are here to
stay for a significant period of time. This is already having a
direct impact on many African countries particularly those
that are, or want to be, oil and gas producers. Directly and
indirectly, however, this trend will affect all current and future
energy projects in Africa, whether they are in the oil and gas
extraction sector, or in energy production, transmission and
distribution. The impacts are only beginning to be felt, which
means the sector is entering an era of increased uncertainty, as
private investors and governments alike respond to the new
realities. Their responses, like their interests, will be different.
However, if change signifies greater risk of renegotiation of
contracts (among others), it does not signify that, overall, the
risks in Africa have increased or that adequate risk mitigation
tools are not available. On the one hand, African governments
today (in general) are better equipped and more willing to
undertake the necessary, constructive responses to these new
challenges. On the other, risk mitigation tools have evolved,
new ones have been introduced and, above all, risk mitigators
(insurers, lenders and others) have gained much more experience
and comfort with projects in Africa. Additionally, lower energy
prices are likely to stimulate overall economic growth in many
economies, not least through consumer spending.
Those who are willing to adapt to the new context for Africas
energy projects will undoubtedly flourish and find the
necessary financing and risk mitigation. To this end, however,
governments and investors alike will need to be flexible,
creative and visionary for Africas pressing energy needs
continue to be just as great, whatever the current oil price
may be.
49
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50 2015 Africa Energy Yearbook

 POLICIES AND BEST PRACTICES FOR AFRICA

INNOVATIVE
FINANCING FOR
THE LAST MILE:
Output-Based Aid Provides Power to the
Poorest Households
Sal E. Gonzlez, Communications, Global Partnership on
Output-Based Aid, World Bank

Sal E. Gonzlez has been working in communications with the Global Partnership on
Output-Based Aid (GPOBA) since December 2012, coinciding with GPOBAs ten-year
anniversary (beginning in 2013). In addition to organizing a conference to commemorate
this event, he helped produce a video titled 10 Years of Output-Based Aid Around the
World. Prior to being with GPOBA, he worked as a researcher in the guarantees and legal
departments of the Multilateral Investment Guarantee Agency (MIGA), the unit of the World
Bank that provides investors with political risk insurance. Sal is a former US foreign service
officer, having served with the United States Information Service: in Riyadh, Saudi Arabia
as the former Deputy Information Officer, and in Rabat, Morocco as a junior officer. Sal
pursued an MPA at the Lyndon B. Johnson School of Public Affairs, received a CONACYT
Fellowship for the Colegio de Mexicos Summer Institute for US-Mexico studies, and received
a BA in Spanish from the University of Texas at Austin.

Nearly half of the worlds population without access to electricity lives in Sub-Saharan Africa.1 The current
energy deficit will worsen without massive new investments and threaten long-term economic growth and
competitiveness.

A dequate access to power sources for economic

development and an improved quality of life is a goal
currently beyond the reach of many of these countries,
even more so for its poorest citizens. By 2040, about 950
million people in the region will gain access to electricity, a
quadrupling in capacity, but this will still be insufficient to
meet the demand as investments are not projected to keep
pace with the rate of population growth.2 While the urban
populations lack of connectivity will be cut in half by 2040,
1 IEA (International Energy Agency) (2014), Africa Energy Outlook
2 ibid
90 percent of the population without access will reside in
rural areas.3 In either case, the poorest in rural and urban
areas will be the last to be connected without some form of
aid intervention.
KEY ISSUES IN SUB-SAHARAN
AFRICAS ENERGY SECTOR
Connectivity rates in sub-Saharan Africa are the lowest
in the world, with one in four people enjoying access to
3 ibid

2015 Africa Energy Yearbook 51

 POLICIES AND BEST PRACTICES FOR AFRICA
reliable energy compared to 40 percent in other low-income
countries. Generation capacity is the lowest, with South Africa
alone making up nearly half of that capacity. Service delivery
is unreliable, and rolling blackouts and power outages hurt
businesses, averaging 56 days per year. Private companies
often purchase diesel generators to guarantee energy security,
which doubles and sometimes triples the power costs with
harmful effects to the environment. Average tariff rates per
kilowatt hour are the highest in the world; rates in countries
relying on diesel-based systems are higher still.4
OUTPUT-BASED AID
Output-based aid (OBA) is an innovative, results-based
financing mechanism designed to address the problem of
connecting the poorest in developing countries to basic
services. OBA works with service providers to bridge the gap
between the cost of service provision and the beneficiaries
ability to pay. As private sector companies are profit-driven,
they often overlook the poor as viable consumers. The main
obstacle in most cases, however, is the prohibitive cost of
connection -- even though most households incur greater
monthly costs by using alternative energy sources such as
firewood, charcoal, batteries, kerosene, diesel and others
compared to an electricity bill.
4 World Bank, Fact Sheet: The World Bank and Energy in Africa.
52
As donor countries demand greater accountability and
efficiency in development aid, and developing countries
face budgetary constraints, OBA is considered a viable
alternative to traditional aid. OBA provides payments linked
to the delivery and independent verification of outputs. For
example, payments to providers will not be made unless
a connection has been installed and in working order for
a defined period of time. While OBA provides incentives
for private sector financing, it does not exclude supporting
commercially viable state-owned enterprises. While OBA is
not applicable in all cases, it can provide notable advantages
over traditional development aid.
The World Banks 2002 Private Sector Development
Strategy included OBA as a key element to motivate
the private sector and leverage private capital through
subsidies targeted to the poor. In 2003, the World Bank
and the UKs Department for International Development
(DFID), established the Global Partnership on Output-
Based Aid (GPOBA) as an advisory body for OBA, and in
2005 approved direct funds to pilot projects to test OBA
approaches and evaluate lessons learned.5
5 Subsequent donors include: the Netherlands Directorate-General for
International Cooperation, the International Finance Corporation,
the Australian Agency for International Development and the Swedish
International Development Cooperation Agency.
2015 Africa Energy Yearbook
 POLICIES AND BEST PRACTICES FOR AFRICA

OBA schemes provide greater transparency as they

specify the specific outputs against which subsidies are
disbursed, and always target the poor.

GREATER TRANSPARENCY, SPECIFIC private financing is to provide longer-term loans, with

TARGETING
Critics of development aid cite the difficulty in determining
whether benefits are reaching the targeted population. OBA
schemes provide greater transparency as they specify the
specific outputs against which subsidies are disbursed, and
always target the poor. To reach the poor, the most common
method is geographic targeting; by design this is the most
effective way to target an economically homogeneous
population. Output verification by an independent third-
party then confirms that the project is reaching the intended
beneficiaries, making OBA a tool for improving targeting of
development aid.
INCREASED ACCOUNTABILITY,
PERFORMANCE RISK SHIFT
future OBA payments as collateral. An OBA project relies
on the private sector expertise to optimize efficient delivery
of quality results -- regardless of whether a service provider
is private or public.
ENHANCED INNOVATION,
COMPETITIVE BIDDING
OBA approaches use competitive bidding, which often leads
to a lower subsidy for the project. There have been instances
when subprojects demonstrated their commercial viability
without the need for a subsidy as a result of competitive
bidding. Service providers are given the autonomy and
flexibility to determine how to provide the planned outputs
using new or innovative methods, encouraging creative, cost-
effective solutions to reach the poor.

Service providers are held more accountable as their

reimbursement relies on the delivery and independent
verification of service provision, shifting performance risk
from the aid agency to the service provider. A 2009 review
of OBA by the World Bank indicated that this shift in
performance risk proved that a project was more likely to
meet its objectives before or by the deadline (compared to
traditional input projects,) and less likely to exceed its budget
or underperform in the delivery of outputs.
MONITORING AND EVALUATION OF
RESULTS
An integral part to the OBA approval and design process is
the monitoring and evaluation of results. Without tracking
and independent verification, service providers cannot receive
payment. Clearly defined and monitored outputs, along with
independent verification, enhances an effective monitoring
program.

MOBILIZATION OF PRIVATE CAPITAL EVALUATING OBA SUITABILITY

AND EXPERTISE
OBA subsidies motivate the private sector to invest in
extending services to the poor. OBA allows these companies
to expand their customer base and provide more equal
access. One method used to increase access to additional
Even with the preceding advantages provided by OBA,
other externalities are needed to identify its feasibility. A
supportive legal and regulatory environment (see chart
below) is key to ensure a sustainable OBA scheme. It is
also more suitable for OBA to be part of a larger service

Without tracking and independent verification,

service providers cannot receive payment.

2015 Africa Energy Yearbook 53

 POLICIES AND BEST PRACTICES FOR AFRICA
delivery arrangement already in place, acting as the last
mile to connect the poor, at a level that minimizes the
subsidy amount and enhances project sustainability. OBA
has proven effective in mobilizing the private sector and
leveraging capital, as well as explicitly targeting the poorest
beneficiaries with subsidies.
OBA IN THE ENERGY SECTOR
OBA schemes in the energy sector have already benefitted
more than 6.8 million people.6 Given that rural areas are
more sparsely populated and/or composed of smaller
communities, as well as distant from on-grid access, OBA
schemes are used to connect end users through off-grid
and mini-grid systems by working with small and medium
private companies (often through solar home systems
SHS, as in GPOBAs project in Ghana7). OBA has also been
used in connecting the poor to on-grid systems, mostly by
larger providers or state-owned enterprises, as these are the
entities with the capacity for pre-financing and capital flows
critical for the project.
6 GPOBA, OBA Approaches Note No. 10, Output-Based Aid and Energy:
What Have We Learned So Far? November 2010. (This figure includes
projects not undertaken by GPOBA).
7 GPOBA News, 08/2008, October 2008.
54
CONTEXT
A 2008 IMF Report ranked Liberia as the third most
impoverished country in the world, with two-thirds of its
population below the poverty line and about half living in
extreme poverty. The countrys gross national income per
capita equaled US$160, or about one-tenth the regions
average.8 The country had been wracked by two civil
wars in 15 years that destroyed the economy and services
infrastructure. The Liberian Electricity Corporation (LEC),
the sole power company charged with electricity generation,
transmission and distribution, ceased operations during
the conflict, making Liberia the only country in the world
without a public distribution network. The devastation
was such that even in its capital city, where one-third of
the countrys population lives, it was estimated that only
0.6 percent of Monrovias 1.13 million residents had access
to electricity, with the rest of the population relying on
kerosene, dry cell batteries, diesel generators and candles for
lighting needs, and firewood and charcoal for cooking. With
the scarcity of access to power, the tariff rate of US$0.48
per kilowatt-hour was perhaps the highest in sub-Saharan
8 International Monetary Fund. IMF Country Report 08/106,
Liberia:Enhanced Initiative for Heavily Indebted Poor Countries.
2015 Africa Energy Yearbook

Africa, almost three times the cost of the average power
tariff in sub-Saharan Africa and six times more expensive
that the typical cost in other developing countries. Small
businesses cost for power alone consumed up to 57 percent
of their operational costs.
LESEP
To remedy this situation, the World Bank in November
2010 committed US$10 million through IDA credits to
the US$53 million Liberia Electricity System Enhancement
Project (LESEP), a program specifically designed to
support expanding Monrovias distribution network
and enhance associated power generation facilities. The
World Banks Africa Renewable Energy Access (AFREA)
also contributed with a US$2 million grant. Partnering
with the World Bank was the Norwegian Agency for
Development Cooperation (NORAD, US$29 million)
and USAID (US$2 million).
In December 2011, GPOBA committed to funding LESEP
by signing a US$10 million grant agreement. This subsidy
targeted 16,806 poor households (approximately 80,000
beneficiaries) in identified priority areas for on-grid electricity
connections. The objective was to ensure an inclusive and
broad-based electrification expansion in the capital city
by providing access to the poor and not just those wealthy
enough to afford a connection. Until the GPOBA subsidy
could disburse, NORADs US$29 million pre-financed
LECs investment costs and procured the necessary resources
to implement the connection program.
The subsidy per household connection was estimated at
US$595 (=US$124/person), equal to 63 percent of the
total cost of US$951. This is a comparatively high figure as
it reflected investments in new connections rather than the
usual financing of connection fees for customers; that is,
the subsidy is to offset the cost of the provider rather than
supplement the connection fee charged to customers. Eighty
percent of the subsidy would be disbursed to LEC upon
independent verification of connections, with the remaining
20 percent disbursed upon independent verification of three
months satisfactory service delivery. New, low-income
customers were charged a US$50 upfront connection fee, to
be paid in five monthly installments of US$10.
Through a competitive bidding process, the Liberian
government selected the Canadian power company
Manitoba Hydro International to take operational control
of LEC via a five-year management contract to bring the
utility to a level of full functionality with professionally
trained staff. One important feature of this management
contract is the participation of the private sector for the
9 Foreign Policy. Lets Power Africa by President Ellen Johnson Sirleaf. August
29, 2013.
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
first time in Liberias power sector, along with establishing
regulation by contract in the absence of a regulatory agency
(eventually to be established as part of the energy sector
reform).
GPOBAS ROLE
GPOBAs involvement was a crucial building block in the
reconstruction of Monrovias electricity distribution network.
GPOBAs participation ensured the inclusion of the poor in
the reconstruction and extension of the electricity network,
as the market would tend to first connect wealthier areas,
either due to their ability to pay full costs or to the relatively
less expensive connection costs the existing networks. The
investment to connect the poorest households is entirely
donor-funded, with the service provider not investing any of
its own resources, making GPOBA an essential element to
the success of the project.
The Liberian governments National Energy Plan (NEP),
adopted in 2009, aims to provide universal access and
affordable, reliable energy to rehabilitate the countrys economy
and lend to its stability and social cohesion -- all essential
elements in a post-conflict situation. The subsidy provided by
GPOBA helps meet the goals of extending access to power to
households that would otherwise be the last to be connected,
if at all, at an affordable price while contributing to the
adoption of international best practices in the electricity sector.
The households in the 21 identified areas have demonstrated a
willingness and ability to pay for a monthly electricity bill, as
the costs incurred in the other sources of energy are higher still
and consume from one-half to one-third of their disposable
income. As an integral part of LESEP and NEP, GPOBA not
only helped expand the electricity distribution network to
reach low-income households that demonstrated a willingness
to pay but also helped meet the Government of Liberias
(GoL) objective of reducing tariffs for beneficiaries, leading
to households saving on energy costs and reallocating limited
disposable income to other important needs.
PROJECT UPDATE
While LECs goal was to connect 3,000 households per
quarter, the utility struggled to generate enough capacity
to meet the demand of the reconstructed and expanded
network, leading some households to still not enjoy full
access to power. In some of the areas, it was discovered that
some of the connected beneficiaries were unaware of their
newly acquired access, demonstrating the need for a public
awareness campaign.
While the original grant agreement was set to expire in
June 2014, the project received an 18-month extension
to allow sufficient time to complete the remaining
connections, and conduct an independent verification to
ensure the delivery of three months service. A preliminary
GPOBA report indicates that about 45 percent of the
55
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RANKED TOP FOR Our energy experts are internationally recognised as market leaders in the power,
AFRICA-WIDE nuclear, renewables and oil and gas sectors. Together they provide the broad range
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200 in the last year alone. We are consistently ranked top for projects and energy
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Contacts

Stphane Brabant Martin Kavanagh Alexander Currie Lela Hubeaut

Partner Partner Partner Partner
+33 1 53 57 78 32 +44 20 7466 2062 +971 2 813 5005 +33 1 53 57 74 19
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 POLICIES AND BEST PRACTICES FOR AFRICA

GPOBA ENERGY PROJECTS IN SUB-SAHARAN AFRICA

GRANT AMOUNT PLANNED
COUNTRY PROJECT
(US$m) BENEFICIARIES
Ethiopia Ethiopia Electricity Access Rural Expansion 8.00 1,142,855
Ghana Solar PV Systems to Increase Electricity Access 4.35 75,000
Kenya Kenya Electricity Expansion Project 5.15 264,000
Liberia Monrovia Improved Electricity Access 10.00 80,000
Mali Rural Electrification Hybrid System 5.00 130,000
Uganda Grid-based OBA Facility 5.50 510,000

planned connections were made by the end of the 2014
calendar year, with 4,000 of these connections facilitated
by a reallocation of US$7 million in IDA funds for pre-
financing and to speed up the procurement of necessary
material. Another factor responsible for the slowdown in
connections was the Ebola crisis in mid-2014, as extension
work was slowed in the poorer areas and independent
evaluators were unable to interview households and verify
the connections.
of Monrovia. GPOBA can continue to support the poor in
Liberia by facilitating access to electricity services through
projects in the governments national energy plans, both in
scaled-up on-grid projects as well as in those involving the
introduction of renewable and off-grid solutions.
10 Donors include the World Bank Group, the Inter-american Development
Bank, the European Bank for Reconstruction and Development, the Asian
Development Bank, and the African Development Bank.

CONCLUSION
OBA has played a vital role in revitalizing the
Liberian electricity sector while the country
recovers from a decade and a half of an
internecine stress, both on its people and its
quality of life. In this post-conflict scenario
GPOBA has played a part in helping the
GoL design the reconstruction of Monrovias
electricity distribution network. OBA has
demonstrated its viability in promoting
the GoLs goal to re-introduce power to its
capital city, anticipated to reach an 8 percent
connection rate by projects end. While there
have been unanticipated but temporary
obstacles to fully adhering to goals as planned,
ie the generation capacity not keeping pace
with consumer demand, mechanical issues,
the need for consumer awareness/education
campaign, and the Ebola virus, efforts are
ongoing to make up for lost time and to raise
the robustness of LEC to more efficiently
deal with setbacks as they occur. Massive
investments still need to be undertaken to
achieve the GoLs goal to connect 35 percent
of the urban and peri-urban households by
2030. In 2013, Liberia was estimated to still
have the lowest nationwide electrification
rate of any country 1.6 percent. Liberia is
one of the eight pilot countries taking part
in the multilateral donor initiative Scaling-
Up Renewable Energy Program,10 which
seeks to expand access to electricity outside

2015 Africa Energy Yearbook 57

Generating power for emerging markets

Supported by a team of dedicated and experienced professionals,

Globeleq is providing more capacity and contributing to the growth
and development of the economies in Africa.

Since 2002, Globeleq has been a leading developer, owner and Jeffreys Bay Wind Farm
138 MW, South Africa
operator of independent power projects in the emerging markets
and has participated in nearly 14,000 MW of generation capacity
in 27 countries. The company develops economically sustainable
businesses that support the continued development of the electric
power sector in Africa.
Droogfontein & De Aar Solar Power
50 MW each, South Africa
Award winning expertise:
ACQ Magazine International Energy Business of the Year (Emerging Markets) 2014
Infrastructure Journal Power Deal of the Year 2013 - Azito Expansion
Project Finance African Power Deal of the Year 2013 - Azito Expansion
ACQ Magazine International Energy Business of the Year (Emerging Markets) 2013

Azito
430 MW gas fired (of which 139 MW
is under construction), Cte dIvoire
www.globeleq.com
2 More London Riverside, London, SE1 2JT, United Kingdom
T +44 (0)20 7234 5400 F +44 (0)20 7234 5486 E info@globeleq.com

Songas
190 MW gas fired, Tanzania

Kribi
216 MW gas fired (expansion to 330 MW
under development), Cameroon

Dibamba
88 MW oil fired, Cameroon

Tsavo
75 MW oil fired, Kenya
 POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

PAUL KUNERT, HEAD OF BUSINESS DEVELOPMENT,

Paul Kunert is responsible for coordinating all business development activities in Africa. As a member of the Executive Committee, Paul is
fully involved in the strategy and planning of Globeleqs growth and development.
With 15 years experience in developing, financing and managing power and other infrastructure projects he has been with Globeleq since
its inception. From 2003-2007, he was Vice President for East Africa and the Managing Director of Globeleqs Songas project, managing its
construction, operations and two expansions. Prior to this Paul successfully led the companys power acquisitions for both Tanzania and South
Africa and the acquisition and development of the electricity distribution business in Uganda.
Paul was with CDC Group from 1999-2002 where he developed, financed and managed power projects in India and sub-Saharan Africa.
Prior to 1999, he held positions in project and corporate finance, advising investors and off-takers in UK and European PPP schemes.

QUESTION: What has been the most
rewarding or memorable project that
Globeleq has been involved in in Africa
to date?
ANSWER: Thats a hard one! Every
one of our projects is rewarding its
hard to choose. Every time we bring a
project online we know were making a
real difference in hundreds of thousands
of peoples lives. Our business is about
providing new power generation to
markets where supply is continually
outstripped by demand, so the new
generation capacity we add means faster
economic development in that country.
If I had to single out specific projects, I
would say Songas, with its 225 km gas
pipeline and 190 MW Ubungo power
station in Tanzania; and, of course, the
South African solar and wind power
projects:
Songas is special in so many ways.
Its a large project in a smaller
economy, so we can see really clearly
the massive difference we make; its
saved Tanzania over $4.5billion in
avoided costs of imported oil; and
its catalyzed gas exploration in the
region, the use of gas in Tanzanian
industry from cement to brewing
to hotels and of course has been
the back-bone of the electricity
generation sector, generating up to
40% of Tanzanias electricity in some
years, with world class reliability. And
its cost effective: at 6.5 USc/kWh
nothing else in the region comes
close.
The 50 MW De Aar, 50 MW
Droofontein solar and 138 MW
Jeffreys Bay wind power plants in
South Africa were some of the first
renewable energy facilities to be built
in a country which always relied on
the abundance of domestic coal to
generate majority of its power. South
Africas government realized that it
needed to diversify its energy mix and
introduced a revolutionary renewable
energy program which during its first
two rounds mobilized $9.5 billion
of private sector capital. Globeleq
is proud to say that we were a part
of this and we now provide a clean
source of generation to the South
African energy grid.
QUESTION: From a developers
perspective, what are the key
components required to ensure a
successful experience when working
in a developing country?
ANSWER: There are a lot of things that
need to fall into place to make a project
happen policy stability, broad-based

Our business is about providing new power

generation to markets where supply is continually
outstripped by demand, so the new generation
capacity we add means faster economic
development in that country.

2015 Africa Energy Yearbook 59

 POLICIES AND BEST PRACTICES FOR AFRICA

government commitment, transparent

and clearly defined procurement
processes, a coherent energy plan,
sustainable cost reflective tariffs and
creditworthy off-takers but, to me,
whats critical is the genuine engagement
of key decision makers in government.
Without that, despite all the other pieces
being right, projects languish when
they should get done. It takes two to
tango! And where there is that genuine
engagement, well, frankly, projects can
get done without all the other pieces
being exactly right.
What is the link between social and
economic development in Africa?
How can the power sector contribute
positively to this relationship?
Theres a lot of talk about poverty
alleviation. I prefer to talk about
creating prosperity. When a country
and its people prosper, they can afford
the food, housing, clothing, education
and health they need. And countries
prosper through economic growth. And
electricity reliable, cost-effective, widely
available electricity is key to making
economic growth happen: increasing
energy consumption is directly associated
with economic and social growth.
Electricity gives you the opportunity to
start a small business, build and operate
a factory, get a decent education, run
hospitals, light and heat or cool your
home, get online and make cities better
places to live.
At the core, I believe that were
designed to do good: to be
creative, to make good things and
make them available to others, to
wisely steward the resources of the
earth to provide good goods and
services that serve.
About 1.2 billion people worldwide do knowing that were doing something
not have access to electricity mostly in good. At the core, I believe that were
Africa and Asia. So, what were doing at designed to do good: to be creative,
Globeleq providing reliable, cost-effective to make good things and make them
electricity directly impacts the prosperity available to others, to wisely steward the
of the places in the world that most need resources of the earth to provide good
it. Accepting the fundamental conviction goods and services that serve. There are
that economic growth fairly shared across lots of industries where, when theyre
all of society, to be sure is key to creating done well, you can see that. But in our
prosperity, means that what we do creates business in Africa, we can see clearly
the room for social development. We cant the beneficial impact of what we do.
do everything. But what we do creates the The other thing I love is working with
room for societies to prosper and develop. African industry leaders often under-
resourced and hard-pressed with vision
What do you enjoy most about and energy to lead change in their own
working in Africa- from a professional countries its a genuine privilege to
work with such committed people.
or personal viewpoint?
I hope its obvious from the answers The Africa Energy Forum provides a
to the other questions that the biggest meeting place for the key players in
satisfaction I get from my work is in Africas power sector- both established
and emerging. Who in particular are
you looking to meet with in Dubai
this year?

Electricity gives you the Africa Energy Forum is always a great

place to meet our customers heads of
opportunity to start a small utility businesses, government ministers,

business, build and operate a regulators. Weve attended and sponsored

the AEF every year since 2002. This

factory, get a decent education, conference is the key event for all those
involved in the African Energy sectors

run hospitals, light and heat or and so there are many opportunities
to network with old and new players

cool your home. in the industry. Well be meeting with

representatives from all our target
markets at the conference this year.

60 2015 Africa Energy Yearbook

 POLICIES AND BEST PRACTICES FOR AFRICA

THE ROAD AHEAD

for power sector transformation in Africa

Angeli Hoekstra, Partner,

Africa Power & Utility Leader, PwC John Gibbs, Advisory Partner, PwC

Angeli started her management consulting career at PwC in
the Netherlands in 1991 and moved to South Africa in 1998.
In South Africa she led the Technology Practice for 11 years and
was part of the Global Technology Leadership team and the PwC
Global Emerging Leadership team.
Angeli is leading the Power and Utility practice for PwC in Africa
and is the Client Relationship Partner on South Africas major
utility, Eskom. She was the PwC partner responsible for a wide
range of Power & Utility projects within Africa.
John is an Advisory Partner based in Johannesburg where
he has particular responsibility for PwCs Capital Projects &
Infrastructure Power & Utilities business across Africa. In addition
John leads the Deals Infrastructure Finance team in South Africa.
Across a 25 year career in infrastructure John has worked for
public and private sector clients across the globe. A specialist in
the Power & Utilities sector. John brings particular experience in
the development of major infrastructure in Africa having worked
extensively in Southern and Eastern Africa. He is currently one of
the lead advisers to the Department of Energy in South Africa on
the Renewable Energy IPP programme, now in its fourth round
of competitive capacity allocation.

A series of megatrends and markets disruptions are creating opportunities for increasing supply and access to
affordable and reliable electricity in Africa. Both countries and companies need to make the right moves in order
to ensure that they can take advantage of these opportunities. To do this will require a clear vision of the new
market and an understanding of which business models will deliver the required success.

2015 Africa Energy Yearbook 61

 POLICIES AND BEST PRACTICES FOR AFRICA
Different forces are creating a complete transformation in the energy industry
T he global and regional forces driving radical, disruptive
change in the energy industry can be summarised as
follows:
Global trends having material impacts on Africas power
sector include rapid urbanisation, population growth and
demographic change, water scarcity, new technologies
(including renewable energy and improvements in energy
storage) and economic growth (with seven out of the ten
worlds biggest growing economies located in Africa).
These global trends are complemented by Africa-specific
pressures arising from an ageing, ill-maintained asset basis,
low rates of electrification, scarcity of skilled labour, especially
in the engineering and construction fields and opportunities
arising through intra-regional transmission and trading of
electricity both on a bilateral governmental basis and through
regional power pools.
These megatrends are creating new opportunities and challenges
driven increasingly by changes in customer behaviour, new
forms of competition and changes in regulation.
Fast growing regions in Africa are reviewing and implementing
different solutions as they seek to enhance and expand their
electricity supply. New business models are being established
and in certain parts of Africa, such as Kenya, Uganda and
Nigeria, we see the establishment of new market models,
driven by governments, sector regulators and business.
Certain new business models, such as the outsourcing
of emergency power supply to independent producers,
62
may provide short term relief to severe electricity supply
constraints, but in the longer term often prove costly and
may act as barriers to the development of more affordable
alternatives. There are however great success stories
including the use of business models focussed on behind
the meter solutions, such as solar heater providers and
prepaid meters, which incentivise energy efficiency and
revenue maximisation.
New business models need to be thought through in terms of
their impact on the wider strategies of the applicable power
company or state-owned entity in order to avoid unintended
negative consequences, as in the case of a scheme to provide
smart meters to a municipality in South Africa. In this case
the installer/operator of the smart meters shares the electricity
revenue accruing to the meters and this revenue sharing
arrangement has impacted materially on the sustainability of
the municipalitys finances.
True transformation can only take place with the introduction
of new market models that can facilitate new business models
that can deliver increased access to reliable and affordable
electricity. It is typically the role of the Regulator to identify
the required market models and to establish the regulations
required around the preferred option.
On a high level PwC has identified four major market
models:
1. Command and control markets in which governments
own and operate the energy sector and mandate the
adoption of forms of electricity generation;
2015 Africa Energy Yearbook

Its not a question of whether new market models
will be adopted but which business models will most
widely be used in the sector.
2. Local energy systems markets in which there is significant
fragmentation of existing transmission and distribution
grids and local communities demand greater control over
their energy supply, or markets in which a local approach
is adopted for serving remote communities;
3. Regional supergrid(s) markets which are pan-national
and designed to transmit renewable energy over long
distances, requiring large-scale (renewable) generation,
interconnectors, large-scale storage and significant levels
of transmission capacity; and
4. Ultra-distributed generation markets in which generators
have invested in distributed (renewable) generation, with
investment decisions based on policy incentives and/or
economic business cases.
In Africa, the traditional command & control model
remains the norm although there is an increasing
recognition that change is required if the continent is to
unlock its full potential and bring its power sector up to
the standards required to compete in a 21st century global
economy.
In recent years, local energy systems and ultra-distributed
generation market models have gained traction as they offer
particular potential to increase both quality/reliability of
supply and coverage/access to underserved populations using
affordable and geographically appropriate technologies.
The Renewable Energy Independent Power Producer
Programme (REIPPP) in South Africa is a particular
success story that demonstrates how the private sector can
be incentivised to develop a substantial programme of new,
ultra-distributed generation assets located on a geographical
basis to take advantage of high wind speeds or insolation
levels. Power is then evacuated to population centres though
the primary transmission grid. Interestingly the REIPPP
has been implemented by the Department of Energy whilst
Eskom, the power utility, remains firmly in state-ownership.
A feature of the local energy and ultra-distributed models is
that they can be developed in a scalable manner that may
facilitate both financing of initial investment and recovery of
such investment over time. This contrasts with the regional
super-grid model which, by definition, requires major capital
investment on projects that require close co-operation between
countries, often with divergent power systems, regulatory
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
and legal frameworks and sector institutions. Perhaps for this
reason, major super-grid projects such as ZIZABONA in
Southern Africa are being implemented slowly.
The introduction of new business models and market models
(such as the introduction of IPPs) may have major impacts
on existing power utilities. For example, existing generation
assets could be left stranded as local energy systems and self-
generation by customers eat away at the traditional command
& control model with its emphasis on a centralised grid and
large-scale generation. This leaves integrated state-owned
utilities with high fixed costs associated with additional
complexity of managing the transmission grids and
increasingly stranded assets.
It is therefore conceivable that sector transformation could
shrink the role of some power utility companies to providers
of back-up power. Alternatively, where existing grid and
network systems cannot evolve to meet the needs of the new
decentralised models, countries may be unable to take full
advantage of advanced technologies.
The disruption taking hold in the power sector is just
the start of a fundamental transformation in the energy
industry. Its not a question of whether new market models
will be adopted- this is already happening around Africa-
but which business models will most widely be used in the
sector, what steps governments, regulators and other players
will take to achieve structural change and whether existing
power utilities will be able to adapt with sufficient speed
and flexibility.
About PwC
PwC helps organisations and individuals create the
value theyre looking for. Were a network of firms
in 157 countries with over 195,000 people who are
committed to delivering quality in assurance, tax and
advisory services. Tell us what matters to you and find
out more by visiting us at www.pwc.com.
2014 PwC. All rights reserved.
PwC refers to the PwC network and/or one or more of its member
firms, each of which is a separate legal entity. Please see www.pwc.
com/structure for further details.
63
 We are seeing a focus on
developing low cost LNG
projects globally.
 POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

SIMON CURRIE, GLOBAL HEAD OF ENERGY,

Simon Currie is the Global Head of Energy at Norton Rose Fulbright. He advises clients across the globe on strategy and the development,
acquisition and financing of assets in the energy, natural resources and infrastructure sectors.
Simon has worked on ground breaking and innovative transactions in over 50 countries.
Over the last 15 years he has advised clients on the development of energy projects across Africa. He has worked on several first in country
projects in Africa and understands the changing dynamics and opportunities in the energy sector. He has experience across the entire value
chain, ranging from upstream oil and gas to electricity and gas transmission and distribution.
Simon is a keen supporter of AEF and, in particular, the local content and the student engagement programmes.

QUESTION: I notice youve recently
moved to Australia. Surely the move
cant purely be a personal one?
ANSWER: I was very fortunate to live
in London for 17 years. At the beginning
of 2015 I relocated to our Sydney office
to help drive our Asia-Pacific (APAC)
practice.
The energy markets in the APAC region
are of critical importance to the global
economy from a supply and demand
perspective. I am working with our global
clients and our network supporting
the growth of inbound and outbound
investment for the region.
I continue to be the global head of our
energy team and I will also continue
focus on the development of the energy
industry across Africa.
Over the next decade we are going to see
APAC-Africa trade grow exponentially.
We believe it is critical to have our
leadership team sitting across the globe
and enabling clients to look east and
west and north and south, wherever the
client is located.
Australia has recently reduced the
number of LNG projects under
development- what led to this decision?
Australia will soon be the No.1 exporter of
LNG globally. When I left New Zealand
in 1997 for London this wasnt just
optimistic but completely unthinkable.
It shows to me the ability of countries to
harness their resources and swing towards
new markets and customers.
However, Australia is now in the position
where new projects dont make sense
to develop straight away at current gas
prices and due to the high construction
costs for the existing projects. As many
international companies have said about
Australia, you can ruin the resources
story if you dont control labour costs
and labour market flexibility.
Australia is lucky to have conventional
and unconventional gas resources and has
the opportunity to develop several more
LNG projects in the future. For now, the
producers are focusing on getting mega-
projects like the 3 Gladstone projects and
the Gorgon project in Western Australia
into full production.
We are seeing a focus on developing
low cost LNG projects globally at the
moment where field development and
liquefaction plant costs will be controlled.
The best example right now is Papua New
Guinea which is continuing to see the
development of new projects, on the back
of the success of PNG LNG.
Australia is competing with these countries
as an investment destination. This
competition is also facing other new LNG
producers like Mozambique and Tanzania.
Another interesting trend is focusing
on what can be done with existing
LNG plants which are not running at
capacity. The push to utilise the almost
idle Egyptian LNG plants with gas from
offshore Israeli and Cypriot fields is a
good example.

Australia is now in the position where new projects

dont make sense to develop straight away at current
gas prices and due to the high construction costs for
the existing projects.

2015 Africa Energy Yearbook 65

 POLICIES AND BEST PRACTICES FOR AFRICA
What should African governments
be thinking about when raising debt
against its future LNG based revenue?
LNG is a commodity.
I firmly believe that we will see a move
towards global rather than regional
pricing. The Asian buyers search for
alternatives from the oil price bucket
isnt going to be halted, even with the
fall in oil price over the last six months.
European buyers are looking for
alternative gas supplies for pricing and
energy security reasons.
However, overall LNG will remain
connected to oil prices despite the long
term trends towards gas displacing coal
in the energy production chain.
So you need to prepare your budget so
you dont spend money before you have
it. There are many examples today in
2015 of governments in Africa and other
continents where they expected an oil
price of $100+ per barrel and now they are
struggling to fill the funding gap. Most of
us in the industry have lived through oil
being below $10 per barrel. It is tempting
to believe that things will continue to be
rosy but does this help build sustainable
businesses and economies which are
robust enough to sustain the ups and
downs of commodity markets?
This isnt just an issue for Africa - look at
Western Australia, Queensland and Chile.
They have all ridden the resources super-
cycle and now are wondering where the
tax revenues will come from to meet the
commitments made in the good times.
So if you are raising debt against future
LNG revenues you need to understand
the dynamics of the pricing and what
I passionately believe in the importance of local
content requirements and capacity building
programmes, as long as they are achievable and not
treated ... as token schemes which can be ignored.
66
You can structure debt on a
borrowing base structure so
the level of debt available falls
when prices fall.
happens to revenues when there is a rapid
fall in oil prices.
You can structure debt on a borrowing
base structure so the level of debt
available falls when prices fall (and
accordingly the borrowing base is
reduced). However, this doesnt help
you if you dont have the money to repay
that additional debt when the base is
reduced.
A prudent approach is only to borrow on
the basis of a low case LNG price and
take into account the risks of delays in
commissioning and initial production,
especially if you are a new producer.
Youre passionate about job creation
and Im delighted that again Norton
Rose Fulbright will be supporting
the EnergyNet Student Engagement
Initiative. Outside of simply a moral
obligation to support your aspiring
individuals, why should the electricity
sector take capacity building seriously?
What can be the medium to long term
benefits?
Electricity is a people business, right
across the production and supply chain.
We are seeing transformational changes
in the electricity sector as the industry
grapples with the technological
challenges. In an African context
these include increased penetration of
renewables, distributed energy, electricity
storage, energy efficiency and demand
side management.
The electricity sector is no longer about
centralised command and control
systems but much more customer-centric
solutions.
We have seen the benefits in markets
like Brazil and South Africa of building
local capacity - particularly to kick-start
renewable programmes.
I passionately believe in the importance
of local content requirements and
capacity building programmes, as long
as they are achievable and not treated by
local and international actors as token
schemes which can be ignored. Sadly
this has often been the case with such
programmes for the oil and gas industry
in Africa.
If you look at the immediate oppor-
tunities in Africa I would focus on the
following:
- Rooftop solar: Rooftop solar can be
done on residential or commercial
roofs. The technology is evolving
constantly and pricing continues
to fall. Rooftop solar requires local
2015 Africa Energy Yearbook

Countries like Morocco have many of the right
ingredients to encourage the development of a solar
PV manufacturing industry.
delivery and logistics systems and
doesnt require the level of specialised
labour of something like, a large gas
fired power or an LNG liquefaction
project.
- Ground mounted solar: We continue
to see more and more utility scale
solar projects being deployed
globally. The opportunities for local
involvement are across the value
chain, including site selection and
development, resource validation,
permitting, civil and electrical works
and, in the right environment, solar
module assembly.
- Energy efficiency: Many energy
efficiency projects are quite labour
intensive - such as upgrading street
lighting. I believe there will be
increasing opportunities for African
companies to be seen as leaders in
energy efficiency deployment across
the continent. We need more African
countries and large industrials with
facilities in Africa to get behind
energy efficiency initiatives. We also
need more entrepreneurs to recognise
the potential.
Weve talked previously about whether
a local content law would support the
electricity sector at this early stage,
or perhaps add another hurdle for
investors that may add additional
risk. What are your thoughts on this
a year later?
I am generally supportive of local content
rules in order to make industries do
what they should be doing as a sensible
business.
I also believe that we must look to
develop regional hubs of excellence.
2015 Africa Energy Yearbook
The alternative is to end up with
white elephants in a range of countries
which are not competitive. This hurts
everyone as it adversely affects investor
confidence.
And from a politicians perspective there
is nothing worse than promising 100s
of jobs and then seeing them evaporate
in a few years when the industry wasnt
competitive and the plants had to close.
Countries like Morocco have many of
the right ingredients to encourage the
development of a solar PV manufacturing
industry. South Africa has shown the
way with the development of a local
renewable energy supply chain. But this
cant be replicated everywhere. It helps
to have scale and the potential to export
beyond the local market.
I do believe that you can impose quite
strict requirements on the skills transfer
aspects of the industry and require
very high levels of local participation
in operations & maintenance and
management.
Local content rules must be sustainable
and the best ones take a long term view.
As we have seen most recently with
Brazil, you also need to avoid creating an
environment where a few people benefit
and the country loses out.
Norton Rose Fulbright is a global
firm advising pretty much across all
sectors, including climate change.
What do you hope decision makers
at this years COP21 meeting will
consider when deciding on climate
change policies that will affect
Africas ability to raise finance against
resources such as coal?
POLICIES AND BEST PRACTICES FOR AFRICA
I have only been in Australia a few months
but I am already a growing supporter of
the Japan-Australia initiative pushing the
merits of clean coal.
We are transitioning to a cleaner and
greener fuel mix globally. And by fuel
mix I mean fuels for all sectors - not
just electricity.
I dont support the view that Africa cant
have coal-fired power while the rest of us
drive our gas-guzzling SUVs and push
renewable energy only solutions for the
developing world.
We have the technology to make a
difference.
My hope for COP21 is that the US,
Europe and other OECD countries
accept the need for rapid transition to
electrification of the transport industry
and continuing investment in clean
coal technology.
The reality is likely to be more investment
and support for renewables. The good
thing for Africa (and anywhere else with
decent weather) is that solar PV is now
competitive with almost every other
form of power generation. If you look
at the lifecycle costs of coal-fired power
in markets who dont have ready access to
cheap mine-mouth solutions the LCOE
(levelised cost of energy) for solar PV is
now beating coal in many situations.
Solar PV is not the answer to all our
problems. It may be more dependable
than wind energy but it cant deliver
baseload power, at least until storage
technology is scaled-up and is cheaper.
That is why I believe that clean coal
should be seen as a viable option in the
countries where is makes sense.
67
11572

MAKING

RENEWABLE
ENERGY
HAPPEN

30 PROJECTS R25 BILLION COMMITTED 13 AWARDS

 POLICIES AND BEST PRACTICES FOR AFRICA

STREAMLINING
POWER PROJECT
DEVELOPMENT
IN AFRICA by Promoting
Standardized Power Purchase Agreements

Dr. Mima S. Nedelcovych, CEO, Initiative for

Global Development

Dr. Nedelcovych is the President & CEO of the Initiative for Global Development, a nonprofit
organization that engages corporate leaders to reduce poverty through business growth and
investment in Africa. Prior to joining IGD, Dr. Nedelcovych was the Chairman of Schaffer
International, where he led the development of a number of agro-industrial concerns throughout
Africa, including the Markala Sugar Project in Mali.
Dr. Nedelcovych served in the Administration of President George Bush from 1989 to 1993 as
the U.S. Executive Director to the African Development Bank (AfDB) in Abidjan, Cote dIvoire.
He was instrumental in formulating the private sector initiative at the AfDB, the African
Business Roundtable and the African Export-Import Bank.
Dr. Nedelcovych presently sits on the Boards of Schaffer International, International Green
Structures, the Partnership to Cut Hunger and Poverty in Africa, Afriland First Bank SA
(Cameroon) and is a past Director and President of the CCA and Member of EXIM Banks Sub-
Saharan Africa Advisory Committee.

Power plays an important role in fostering inclusive economic development. While standardizing power purchase
agreements (PPAs) will help accelerate negotiations for independent power projects, its up to all stakeholders
involved to create an environment that will ultimately facilitate greater access to power for both urban and
rural communities.

L ast year 1.2 billion people in the world lived without

electricity, half of them in Sub-Saharan Africa. A lack of
reliable and accessible power often has debilitating social and
economic impacts. Businesses cannot efficiently expand while
hospitals and schools are unable to properly function at full
capacity. The lack of electricity access is exacerbated by the
long process of negotiating and implementing investments
in independent power projects. The extended discussions can
lead to missed investment opportunities. Overcoming these
barriers to much needed investments in power infrastructure
will ultimately help transform and shape Africas future
economic growth.

2015 Africa Energy Yearbook 69

 POLICIES AND BEST PRACTICES FOR AFRICA
USING POWER TO CLOSE THE
EQUALITY GAP
The growing population in Africa will play a driving role in
the continents development narrative. The overall population
is expected to double to over 2 billion inhabitants in the next
35 years. More than half will be living in urban areas and be
eager for jobs. As such, Africas urban centers can become hubs
for manufacturing and industrialization. To turn this potential
into reality, there is a need for access to reliable, competitively
priced power. Without it, many African countries may face
social unrest and political instability as they are unable to meet
the rapidly growing employment demand.
Ethiopias new Grand Renaissance Dam is an example of
one nations efforts to develop the infrastructure necessary to
meet the demand for industrialization. The $5 billion project
is funded by the Ethiopian government with support from
Chinese banks and will generate around 6,000 megawatts
of electricity to meet domestic and regional demand. Once
completed and on line, the World Bank estimates Ethiopia
could earn $1 billion a year in electricity exports, making it
the largest exporter of power on the continent. This project is
also expected to drive economic development along the Nile
basin in countries such as Sudan and Egypt. Increasing electric
power in the region will provide Ethiopia and its neighbors
the ability to power homes and businesses, ultimately driving
regional economic growth.
These kinds of projects are necessary to make Africa a
competitor in the global economy. As China moves up the
industrialization ladder, the manufacturing jobs that have
driven Chinas growth will ultimately move. How can Africa
compete with Southeast Asia or other regions with low
labor costs for those jobs? Access to reliable, competitively
priced power is the major pre-requisite. That, along with
Africas abundant natural resources and a large, young and
increasingly urban population, should make it an attractive
destination for those manufacturing jobs.
The complement to rapid urbanization is a decreased number
of farmers feeding the growing population. At present,
agriculture is the largest employer and major economic
driver in many African economies. For African economies
to take advantage of its vast, arable resources, smallholder
subsistence farmers must transform to support sustainable
productivity. This means expanding the agro-allied industry
to include the full complement of services along the farm
to fork value chain, including provision of inputs and farm
services, offtake of product and aggregation, warehousing,
processing, packaging, branding, wholesaling and retailing
food products. Very efficient links along the value chain will
create higher paying jobs as well as more competitively priced
food to the consumer, and will drive sustainable economic
growth. But again, these added efficiencies in value addition
to raw food products will require reliable and affordable
power in rural areas.
70
Outside of urban areas, there is little access to power due to
poorly designed, inadequate or often missing national grid
systems, or simply not sufficient power generation. The central
power grid often fails to reach out to those in rural communities,
and, in areas where it does reach, many countries lack sufficient
generation capacity to provide reliable power year-round. As late
comers to industrialization, African countries can take advantage
of more recent innovations in technology to incorporate
renewable energy and point of use power generation into their
power supply mix and bank on off-grid solutions to bring
power to rural areas. With the addition of and mini- and off-
grid systems to the often frail national grid networks, electricity
can reach underserved, hard to reach communities and drive
inclusive growth where there has been virtually none.
THE CASE FOR STANDARDIZED
POWER PURCHASE AGREEMENTS
Private investment in the electricity sector in Africa will be
fundamental to increasing access in the region. Because any
Independent Power Project (IPP) must be based upon a
Power Purchase Agreement (PPA) between the IPP and the
off-taker, it will be necessary to facilitate the negotiation and
finalization of bankable PPAs.
In many African countries, PPA negotiations can take 5-10
years more than two to three times longer than in other parts
of the world. The result? Fewer projects are successful and
ones that are completed can be more expensive due to these
costly delays. Ive been on the four sides of the negotiating
table: representing the developer, financier, the government,
and now an NGO. One of the major initial challenges
hindering power projects is overcoming a lack of trust and
understanding for the perspectives of the other stakeholders.
The developer wants profits and the government wants cheap
power. Without compromise, it can take 2-3 years just to
settle on a minimum price for the power even before any
further discussions about terms and conditions.
A new PPA handbook, Understanding Power Purchasing
Agreements, was produced by IGD in collaboration with
the US Department
of Commerce, OPIC,
USAID, and the African
Development Bank
through the African
Legal Support Facility.
The handbook translates
knowledge and best
practices on PPAs into
an accessible primer on
this often complicated
and misunderstood legal
instrument. It brings
more structure to the
process by increasing
2015 Africa Energy Yearbook
 POLICIES AND BEST PRACTICES FOR AFRICA

understanding of important provisions that address risks,

obligations, and remedies. Ultimately, it provides the foundation
for any conversation about an IPP by framing each of the key
issues for the investor, the off-taker, the financing parties and
the consumer him or herself.

Creating a standardized document minimizes the confusion for

multiple parties within the complex PPA process and narrows
the number of issues that must be negotiated between the
parties. When the negotiation process begins with a previously
agreed document that includes all of the elements necessary
for bankability, the parties will increase the likelihood of
financing by facilitating the review to be conducted by banks
and other financing partners. By introducing a standardized
PPA, the intention is that the insights shared will reduce the
PPA negotiation time and lower transaction costs significantly
ultimately facilitating IPPs, lowering development costs and
offtake pricing requirements, increasing the attractiveness
of investments in the power sector, and most importantly
increasing the speed of access to power.
INTERSECTION BETWEEN THE
DEVELOPERS AND
GOVERNMENT AUTHORITIES:
SEEKING COMMON GROUND AND
ALIGNING INTEREST
Standardized PPAs simplify the development and negotiation
process and facilitate private investment in electricity generation
assets. But the PPA is only one piece of the power investment
puzzle. Investors require a reliable legal and regulatory regime; the
off-taker needs a tariff that falls within its budget and accounts
for the (often) low price at which it sells electricity. Politicians
need a deal they can sell to a skeptical public and developers
need to show a rate of return that is sufficiently high to attract
investors in a potentially risky project. These pieces must all
come together for an investment in the power sector to succeed.
In addition to aligning interests of invested stakeholders,
we see the process of developing a standardized PPA as
useful to consolidating interest and creating political
momentum for increased investments in the sector. Yet
due to the significant legal, economic, and policy matters
at stake, a government- whether in Africa or elsewhere-
must have the political will to pass measures that will
increase private sector investment.
A number of measures will be unpopular in the short-run.
However addressing these issues such as using transparent
procurement processes, adopting cost-reflective tariffs,
ending corruption, implementing fiscal transparency,
long-term sector planning, and respecting the sanctity of
contract are necessary for long term economic growth.
When these measures have been adopted in other regions,
private investment has increased and where they continue
to languish, investment has stalled along with development.
The handbook translates
knowledge and best
practices on PPAs into
an accessible primer on
this often complicated
and misunderstood legal
instrument.
GOING BEYOND STANDARDIZED PPAS
The Africa Rising narrative focuses on the continents
resources which can alleviate poverty, strengthen inclusive
growth, and turn Africa into a major player in the global
economy. Access to power will play a fundamental role
in realizing this potential. While the development and
dissemination of the new handbook will go a long way
toward increasing general understanding of the PPA and its
role in a power sector investment, IGD has decided to use
this document as the starting point for a program focused
on developing and adopting standardized PPAs in select
countries in Africa. Some of the factors that will be looked
at include deal flow, i.e. significant potential for independent
power production development in the country, as well as for
the appetite for governments to set the right conditions to
attract private developers. We will also look at the interest that
local and foreign stakeholders expressed in encouraging IPPs.
And of course, it is important to also consider the complex
issue of navigating the countrys bureaucracy and regulatory
system to gain traction for establishing a standardized PPA.
Our goal is to work with governments committed to increased
private investment in the sector by crafting a PPA document
specific to that countrys unique political and business landscape.
It can form the basis of future negotiations with developers and
banks. With a more streamlined approach, the hope is to expedite
the power project development process to provide greater power
access and ultimately help drive economic development on the
continent at a faster pace than has been the case to date.

2015 Africa Energy Yearbook 71

Our main aims are to provide private
sector solutions to the challenges of
inclusive economic growth in Africa
 POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

DR MIMA S. NEDELCOVYCH, PRESIDENT & CEO, THE INITIATIVE FOR
GLOBAL DEVELOPMENT

Dr. Nedelcovych is the President & CEO of the Initiative for Global Development, a nonprofit organization that engages corporate leaders to reduce
poverty through business growth and investment in Africa. Prior to joining IGD, Dr. Nedelcovych was the Chairman of Schaffer International, where
he led the development of a number of agro-industrial concerns throughout Africa, including the Markala Sugar Project in Mali.
Dr. Nedelcovych served in the Administration of President George Bush from 1989 to 1993 as the U.S. Executive Director to the African
Development Bank (AfDB) in Abidjan, Cote dIvoire. He was instrumental in formulating the private sector initiative at the AfDB, the
African Business Roundtable and the African Export-Import Bank.
Dr. Nedelcovych presently sits on the Boards of Schaffer International, International Green Structures, the Partnership to Cut Hunger and
Poverty in Africa, Afriland First Bank SA (Cameroon) and is a past Director and President of the CCA and Member of EXIM Banks Sub-
Saharan Africa Advisory Committee.

QUESTION: What are the main aims
and objectives of the Initiative for
Global Development (IGD)?
ANSWER: Our main aims are to provide
private sector solutions to the challenges
of inclusive economic growth in Africa.
To do so we draw on our leaders
experiences worldwide in applying the
best practices and are convinced that the
right answers to any one country or region
in Africa no longer emanate only from
Washington, London or Paris, but are
often found in other recently emerging
countries, not to mention other parts of
Africa. So cross-sharing experiences is
very important to our leadership. IGD
brings together an influential network
of senior executives from sector-leading
companies with the interest and capacity
to make strategic investments in high-
need, high-potential areas of Africa.
Members of our Frontier Leader Network
shape frontier market insights, promote
business-driven development, and create
economic growth.
QUESTION: What is IGDs rela-
tionship with the US Governments
Power Africa initiative? Were there
any important outcomes to take away
from the Powering Africa: Summit in
Washington this January?
ANSWER: We are the NGO partner
to Power Africa, working very closely
with the Department of Commerces
Legal Advisory Services, USAID and
all the USG agencies involved in the
Program. Our Power Working Group,
comprised of developers, lawyers and
financiers, worked very closely with DOC
and the Africa Legal Support Facility at
the AfDB to compile the document
entitled Understanding Power Purchase
Agreements which offers up standard
PPAs that countries can adopt as a way
of speeding up the development of new
power plants. The main outcomes from
the Washington Summit were that there
is definitely a will both from developers
and government authorities to speed up
the development of new power generation
plants; the issue is simplifying the way
and this is where our PPA Handbook
will hopefully make an impact.
QUESTION: The handbook
Understanding Power Purchasing
Agreements (PPA) should drive forward
the development of independent power
projects and provide clear guidelines
for investors and governments alike.
Can you tell the readers of the Africa
Energy Yearbook a bit more about how
the idea behind the handbook came
about, and what the catalysts were for
its creation.
ANSWER: The idea came from our
Power Working Group, based on
examples outside Africa where such
standard PPAs are more routine, to find a
way to speed up the process and get badly
needed power generation into Africa.
In fact, we started working on this idea
even prior to the announcement of the
Power Africa Program, so our interests
quickly aligned.

We are the NGO partner to Power Africa, working

very closely with the Department of Commerces Legal
Advisory Services, USAID and all the USG agencies
involved in the Program.

2015 Africa Energy Yearbook 73

 POLICIES AND BEST PRACTICES FOR AFRICA

a. Rapid growth of the population and

The youth bulge and population increase will
either be a boon for growth or a social disaster.
QUESTION: What do you consider to
be the single most important element
for the private sector to consider when
investing in Africas power sector?
ANSWER: Assurances that long term
(up to 25 years) off-take agreements
will be honored and that there is an
appropriate underwriting guarantor in
the cases where the off taker/utility is
not credit worthy.
QUESTION: Your career has spanned
a range of experiences relating to trade
facilitation, project development,
project finance, and public-private
partnerships in Africa - whats been
your greatest or most inspiring memory
in this sector to date?
ANSWER: I take the greatest pride in
structuring agro-industrial investments
that align the interests of small farmers
with the mills and core farms that we
have put up and invested in. That was
the case with 3 such sugar factories whose
financing I had helped structure, Finchaa
in Ethiopia, Xinavane in Mozambique
and SoSuCo in Burkina. The greatest
satisfaction and ultimately disappointment
has come from the Markala Sugar
Project in Mali, a massive investment in
sugar processing and co-generation of
30 MW of power that I developed with
the Schaffer team and Illovo as the
strategic partner in the period 2004-12.
After many years, we finally structured
a $640 million deal with 17 financial
institutions, a mixture of commercial
and concessional financing to cover the
small holders pulled into the scheme, and
were about to lauch construction of the
factory when the military coup hit Mali.
Following the coup, Illovo lost interest
and pulled out, and this most innovative
project remains in limbo awaiting a clear
position from the new Mali government
as to whether to restart!
QUESTION: What major economic
and social developments do you hope
will underpin the continents growth
over the next 20 years? How will these
best be achieved?
ANSWER: I would list the following
points as the major movers that will
underpin growth in the next 20 years:
equally rapid urbanization in the
next generation, to the point where
population will surpass 2 billion and
start to approach 50% urban.
b. The youth bulge and population
increase will either be a boon
for growth or a social disaster if
economies do not grow and jobs are
not created.
c. To create those jobs, the public
sector really needs to set the right
conditions for and with the private
sector, and that will include finding
creative PPP solutions to financing
massive requirements for power
and infrastructure. Industry is what
creates jobs, and industry needs
power, as well as large markets to scale
(hence the need for real economic
integration).
d. Agriculture will increasingly move
from smallholder subsistence to
commercial farmers (small and large)
and agriculture will be treated as a
business and not a vocation. Africas
abundant arable land will position it
to be an exporter and not importer
of food.
e. Accent will be placed on value-
addition, be it to food items or
natural minerals.
f. Those governments that set the right
environment and incentives for the
private sector to grow will pull ahead
in economic growth over the laggards
that dont get it right and hopefully
will lead by example.
g. The most important underlying factor
to all this is that political stability and
normal transitions of government
take root so that business can count
on long tem rules of the game being
accepted.

I take the greatest pride in structuring

agro-industrial investments that align the interests of
small farmers with the mills and core farms that we
have put up and invested in.

74 2015 Africa Energy Yearbook

 POLICIES AND BEST PRACTICES FOR AFRICA

TRANSITIONAL
ELECTRICITY
MARKET (TEM)
and investor and stakeholder expectations for the
Nigerian Electricity Supply Industry (NESI)

Dolapo Kukoyi, Partner, DETAIL

Dolapo Kukoyi currently heads the firms Power Practice and has ample experience working on
Infrastructure and PPP Projects. She is well versed in the legal aspects of the power sector, and is
one of the leading Power lawyers in Nigeria, having worked for government agencies, regulators
and private parties on various power transactions. Her expertise in the power sector is supported by
years of experience advising clients on infrastructure broadly. The breadth of Dolapos infrastructure
experience cuts across the Gas infrastructure, Railway, Housing and Roads sectors. She was recently
part of a core negotiating team nominated by the Disco Roundtable, which negotiated with
the BPE, NERC and NBET on issues that affect the Bidders in the recently concluded PHCN
privatization. She is also currently advising clients on the ongoing NIPP Privatization.

A. WHAT IS TEM?
One of the objectives of the electricity sector reform, which
commenced in 2001 with the National Electric Power
Policy, is to create efficient market structures, within clear
regulatory frameworks, that encourage competitive markets
for electricity generation and trading. In line with this
objective, the Electricity Power Sector Reform Act 2005
(EPSRA) provides for a phased and strategic implementation
of the power sector reforms until optimal capacity generation
and a full competitive market is achieved. Implementation of
the competitive electricity market will be through a gradual
process of increasing competition designed as four market
stages, namely: Pre-Transition, Transition, Medium Term
and Long Term.
These conditions included but were not limited to1:
i. Development, implementation and testing by the System
Operator (SO) and the Market Operator (MO), of the
systems and procedures required to implement the Grid
Code and the Market Rules;
ii. Formalization of the trading arrangements - Vesting
Contracts (VCs) and the Power Purchase Agreements
(PPAs) between the companies that will participate in the
Transitional Stage Market;
iii. Publication of the Initial Transmission Usage Charge by
NERC;
iv. Constitution of the initial Dispute Resolution Panel
(DRP)2; and
v. Constitution of the Initial Stakeholder Advisory Panel (SAP)3.

The Pre-Transition Stage kick started the end of the monopoly
in the power sector and the commencement of the unbundling
and privatization of the Power Holding Corporation of
Nigeria (PHCN). The Transitional Electricity Market
(TEM) was initially due to commence immediately upon the
handover of the PHCN assets on the 1st of November 2013
(Handover Date), but some of the conditions precedent to
the declaration of TEM were yet to be fulfilled at the time.
1 See Appendix 2 of the draft Market Rules for all conditions precedent to
declaration of TEM
2 The DRP is the panel responsible for arbitrating or otherwise resolving disputes
between (1) the SO or MO or Transmission Licensee and any Participant (2)
the MO and any person who has been denied certification as a Participant;
and (3)Participants to the extent that such disputes are in accordance with the
Market Rules of the Grid Code.
3 The SAP is a panel constituted by NERC, responsible for reviewing the
Market Rules, Grid Code and proposing and/or approving amendments on an
on-going basis and advising NERC on specific technical issues relating to the
operation of the MO Administered Market.

2015 Africa Energy Yearbook 75

 POLICIES AND BEST PRACTICES FOR AFRICA
In addition to the conditions precedent, the deferment of the
commencement of TEM was attributed to other elements
such as the lack of a cost reflective tariff, liquidity challenges
downstream with the Distribution Companies (Discos) and
gas supply challenges upstream in the sector to the Generation
Companies (Gencos).
However, on the advice of the Nigerian Electricity
Regulatory Commission (NERC), TEM has now been
declared by the Minister of Power on the 1st of February,
2015. TEM once effective would imply that the electricity
market (especially its trading arrangements) will now be
wholly contract governed. It is now expected that there
would be a fully cost reflective tariff in place that would
ensure investors full cost recovery and confidence for
financing and investment in the sector based on certainty
of revenues. Letters of Credit required under the PPAs,
Vesting Contracts and Gas Supply Agreements to backstop
payment obligations under these agreements, are meant
to serve as a form of guarantee of revenues for power
supplied by the Generation Companies to the Nigerian
Bulk Electricity Trading Plc (NBET)4 and NBET to the
Discos respectively.
B. THE END OF THE INTERIM RULES?
The Interim Rules were a set of rules developed by NERC
to govern trading and commercial arrangements during
the interim period before the declaration of TEM. The
Interim Rules came into effect on the Handover Date of the
PHCN Disco and Gencos which occurred on 1st November
2013. The first version of the rules was published on 3rd of
December, 2013 and an amended version published on the
22nd of April, 2014. The objectives of the Interim Rules
include:
i. Establishing a framework to govern trading arrangements
during the Interim Period when PPAs between the PHCN
Successor Gencos and NBET and Vesting Contracts
between NBET and PHCN Discos will not be effective;
ii. Managing the probable revenue shortfall in the industry by
determining the revenue allowable to market participants
and service providers during the Interim period;
iii. Establishing the payment arrangements and flow of funds
from Discos through the MO to all beneficiaries;
iv. Establishing the sources of funds required to ameliorate
the probable shortfall in revenues collected by the Discos
during the Interim Period.
The Interim Rules was initially to be effective up until the
28th February 2014, but due to delays in fulfilling certain
4 NBET otherwise known as the Bulk Trader is wholly owned Federal
Government company with a trading license. NBET will be responsible
in the transitional stage for purchasing bulk power from Gencos and IPPs,
and reselling the power to the Discos and eligible customers according to
demand based on a vesting contract it enters into with the Discos and eligible
customers.
76
The Interim Rules were a set
of rules developed by NERC to
govern trading and commercial
arrangements during the
interim period before the
declaration of TEM.
conditions for the declaration of TEM, the Interim Rules
continued in existence until the 31st of January 2015 when
effectively by an order of NERC, TEM was declared.
During the Interim Period, the Discos, Gencos and other
electricity generators continued the existing Pre-Transition
Electricity Market trading arrangements whereby Discos
received invoices from and made payments to the MO for
power received from the Gencos and other sources. The
Discos were given the option of making minimum payments
on invoices from the MO (Baseline Remittance) for the
Interim Period. The Discos were also required to make
payments to the MO for the regulatory charges as well as
service providers charges (MO, SO, TSP and NBET).
The major challenge with this framework was that the market
participants operated more on a best endeavors basis without
any regard for the existing contracts. The Market Participants
were also not being sanctioned for being unable to meet
their contractual obligations. This will not be the case once
TEM becomes has been declared as the Industry Agreements
will be effective and parties to these agreements will be held
accountable to their obligations.
C. CONSTRAINING FACTORS TO
OPERATIONALIZING TEM
I. FULL OPERATION OF TEM
Following the declaration of TEM on 1st February, 2015,
NERC, via its Order No. 13 dated 30th January, 2015, there
were clear indications that TEM would not be operational
by the 1st of February given the varied status of the market
participants.
2015 Africa Energy Yearbook

To illustrate the challenges being faced by the market
Participants, the Discos are required under the applicable
vesting contracts to provide Letters of Credit (L/Cs) as
financial security to NBET for the trading of electricity in
TEM. However, even after the declaration of TEM, not
all of the Discos have provided their L/Cs. As at 20th of
March, 2015, only 8 out of the 11 Discos had posted L/
Cs to NBET (Source: http://www.thisdaylive.com/articles/
afdb-provides-200m-guarantee-for-nigeria-s-coal-to-power-
projects/204604/).
NERC therefore deemed it necessary to issue a Supplementary
Order (Supplementary Order) to provide for the effective
administration and operation of TEM in accordance with the
relevant Rules, Codes and Orders in the NESI catering for the
market participants at their varied levels of readiness for TEM.
Highlights of the Supplementary Order include:
i. The power plants under the National Integrated Power
Project (NIPP)5 whose privatization transactions are yet
to be completed will enter into short-term PPAs with
NBET for an initial 6 months which may be renewed
subject to NERCs approval.
ii. The NIPP Plants are required to meet their existing supply
obligations to international customers up to a maximum
of 300MW. The balance of energy from NIPP Plants
shall be sold to the market through the respective Vesting
Contracts. However, this arrangement shall terminate on
or before 31st December, 2015, after which all energy
shall be sold to offtakers through the Vesting Contracts.
NBET will be responsible for any financial shortfalls that
may arise from trading arrangements with international
customers.
iii. Gencos without effective PPAs shall be paid for their
Delivered Energy and Delivered Capacity by NBET.
iv. Discos that have not provided effective payment
guarantees to NBET and the MO shall have their
revenues escrowed for remittance according to a payment
waterfall to be approved by NERC.
v. Discos without payment security to activate their
contracts 3 months after the commencement of TEM
shall attract sanctions except Kaduna Electricity
Distribution Company that has been granted an
extension for 6 months from the commencement of
TEM.
The Baseline Remittance principle introduced in the Interim
Rules shall no longer apply. Full payment of quantities settled
by the MO based on invoices issued to Discos by NBET and
service providers are now required by all participants; and
failure to comply will attract interest at NIBOR plus 10%.
5 The NIPP is a government initiative to add significant generation capacity
to Nigerias electricity supply system along with the electricity transmission,
distribution and natural gas supply infrastructure required to deliver the
additional capacity to consumers throughout the country. Ten power plant
built under this initiative are currently being privatized.
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
II. RECOVERY OF AT&C LOSSES
Aggregate Technical and Commercial and Collection Losses
(ATC&C Losses) is the sum total of technical, commercial
and collection losses due to the non-realization of total billed
amounts to electricity consumers.
As the recovery of ATC&C losses rests on the potential liquidity
of a Disco or Genco, this problem will continue to limit the
desired effectiveness of TEM if not properly addressed. In
tackling the problem of technical, commercial and collection
losses experienced by Discos, it is important that certain measures
are taken, such as: deployment of adequate and functional
metering systems; replacement of faulty parts, equipment
and transformers; strengthening of preventive maintenance
for effectiveness; and zero tolerance for non-payment of bills
and vandalism of power installations. All these will require a
substantial amount of funding which could potentially be raised
where there is a clear path of revenue recovery.
Although NERC has issued the MYTO 2.1 Tariff Order
to provide a feasible ATC&C loss reduction trajectory, the
recent discount of collection losses from the ATC&C loss
reduction targets further casts shadows on the clear path for
revenue recovery of the Discos.
III. SIX MONTH FREEZE ON RESIDENTIAL
TARIFFS
The MYTO 2.1 also introduces a six-month freeze on tariff
increase for residential consumers who constitute about 80%
of electricity consumers in the country. To tackle the issue of
under-recovery, it is important that the projected shortfall
created by the six-month freeze be provided for through a proper
cost recovery plan. NERC is to ensure that it creates a balance
between the cost of investment, the quality of service and the
tariffs that electricity consumers are willing and able to pay.
IV. SHORTAGE OF GAS SUPPLY
Although Nigeria has the 9th largest Natural Gas reserves in
the world and the largest in Africa, the limited supply of gas
to power plants has continually hindered the generation of
electricity in Nigeria, as most power generation companies are
thermal and dependent on natural gas. One of the proposed
benefits of TEM is the incentive created by the Gas Supply
Agreement to ensure that the Gas Suppliers6 deliver on their
gas supply commitments to the power producers. However,
a major challenge in accessing gas still remains regardless of
TEM creating an enabling environment and fiscal framework
that encourages further investment in the development of
more gas reserves; as well as processing and transportation
facilities. Power generation is also constantly affected by
6 The current Gas Suppliers include Nigerian Gas Company, Shell Petroleum
Development Company Nigeria, Chevron Nigeria Limited, ExxonMobil
Producing Nigeria Limited, Total Exploration & Production Nigeria Limited,
Nigerian Agip Oil Company, PanOcean Oil Corporation, Seplat Petroleum
Development Company, and Nigerian Petroleum Development Company.
77
 POLICIES AND BEST PRACTICES FOR AFRICA
sabotage and vandalism of transportation pipelines used for the
transmission of gas and it appears that the declaration of TEM
cannot directly resolve this situation. On 10th March, 2015,
Vanguard Newspaper quoted the Nigerian Gas Company, who
had reported that Nigeria lost a minimum of N8.04 billion
between January and 10th March 2015, to the incessant
vandalism of the countrys gas pipelines. Also the Minister
of Power disclosed on the 6th March 2015 that Nigerias
3,642MW of electricity dropped to about 3,000MW due to
vandalism of the Escravos-Lagos Pipeline System (ELPS) Gas
Pipeline in Delta State.7
V. FUNDING CHALLENGE
The Discos and Gencos will now need to commit to their
contractual commitments which include rehabilitation of plants,
distribution networks, and ATC&C loss reduction; so therefore,
long term funding will be required. The issues around achieving
a cost reflective tariff for the Discos need to be given major
priority to ensure that the Discos are able to access funding that
would make the rest of the value chain bankable.
VI. DEARTH OF NECESSARY MANPOWER
There is the concern that power generation and distribution
will not attain its desired capacity due to a lack of adequately
trained human resources. Considerable financial and human
resources will have to be utilized in order to recruit and
train individuals that would become experts in the field.
Although long term solutions have been put in place by the
government through the establishment of the National Power
Training Institute of Nigeria (NAPTIN), more efficient
short term solutions will need to be implemented by both
the Government and stakeholders in the Nigeria Electricity
Supply Industry in order to reverse this dearth in skilled
manpower.
D. EXPECTATIONS OF
STAKEHOLDERS FOR TEM
The following are some of the expectations of stakeholders.
Stakeholders for the purpose of this article include the Federal
Government, Regulators, Investors, Market Participants,
Service Providers, Investors and Financiers and Electricity
Consumers.
ENFORCEABLE CONTRACTS
A fundamental expectation of TEM for all stakeholders is
that this phase will ensure strict accountability of the Market
Participants. Under TEM, the Industry Agreements8 will
become effective and Market Participants are obliged to
commence full trading based on these agreements and will be
sanctioned for failing to meet their contractual obligations
to other participants. For instance, Gas Suppliers9 will be
7 http://www.sweetcrudereports.com/2015/03/06/%E2%80%8Epower-
generation-drops-again-due-to-pipeline-vandalism/).
78
penalized / sanctioned in the event of a failure to deliver
on their gas supply commitments to the power producers,
in line with the Gas Supply Agreements they have signed.
Failure of the Gencos to meet their supply commitment
obligations will also be met with consequences as provided
for in their PPAs with NBET including non-payment for
energy not supplied NBET. NBET would not be paid for
power not supplied to the Discos, who will ultimately lose
revenue for failing to supply improved electricity to the end
users.
FULL COST RECOVERY
It is also expected by the Investors that there would be a fully
cost reflective tariff in place that would ensure investor full
cost recovery and confidence for financing and investment
in the sector. A lot of the determinants to ensuring a cost
reflective tariff have been dealt with above.
CERTAINTY OF REVENUES
Related to enforceable contracts is the certainty of revenues.
The Letters of Credit required under the PPA, Vesting
Contracts and Gas Supply Agreements to backstop payment
obligations under these agreements, are meant to serve as
a form of guarantee of revenues for power supplied by the
Gencos to NBET and NBET to the Discos respectively.
The above expectations are desirable, however, in light of the
current realities particularly the need for a cost reflective tariff
and gas supply challenges there is a need for a firm achievable
strategy or plan to address these challenges highlighted.
Without cost reflective tariffs and sufficient supply of gas,
the value chain will be stunted, and power delivery to the
electricity consumers will be negatively impacted.
E. CONCLUSION
Following the privatization of the PHCN Gencos and Discos
in November 2013, the entry of the NESI into TEM has
become imperative to unlock the much needed funding
and growth in the industry. In spite of the myriad of issues
plaguing the industry, steps are being made in the right
direction by the Federal Government, relevant Ministries and
Agencies in ensuring the stability of this very crucial industry
that is key to Nigerias economic growth. A lot of work, as
highlighted above, however still needs to be done by the
NERC, Market Participants and Service Providers to boost
investor confidence in the NESI.
8 Vesting Contracts, Transmission Use of Service Agreements, Grid Connection
Agreements, Ancillary Services Agreement, Power Purchase Agreements, Gas
Supply Aggregation Agreements and Gas Transportation Agreement
9 The current Gas Suppliers include Nigerian Gas Company, Shell Petroleum
Development Company Nigeria, Chevron Nigeria Limited, ExxonMobil
Producing Nigeria Limited, Total Exploration & Production Nigeria Limited,
Nigerian Agip Oil Company, PanOcean Oil Corporation, Seplat Petroleum
Development Company, and Nigerian Petroleum Development Company.
2015 Africa Energy Yearbook
 POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

H.E. HON. JAMES MUSONI, MINISTER OF INFRASTRUCTURE,
GOVERNMENT OF THE REPUBLIC OF RWANDA

Hon. James Musoni is the Minister of Infrastructure in the Government of the Republic of Rwanda. Before his present position, he has served
his Government in important positions, namely; Minister of Local Government (2009-2014); Minister of Finance and Economic Planning
(2006-2009); Minister of Commerce, Industry, Investment Promotion, Tourism and Cooperatives (2005-2006); Commissioner General of
Rwanda Revenue Authority (2001-2005) and Deputy Commissioner General of Rwanda Revenue Authority (2000-2001).
Hon. James Musoni is a leader and a motivator with an established personality on public management affairs. He has spearheaded and
guided a number of reforms in Rwanda that have contributed to Rwandas extraordinary performance in socio-economic transformation that
continue to make Rwanda a best practice show case for public management and good governance on the Continent and the Globe.
Hon. James Musoni has an MBA-Finance from Newport International University, California, USA and a BCom-Finance from Makerere
University-Kampala, Uganda. He also obtained other certificates in different areas including a Certificate in Public Finance Management
Executive Course from John Kennedy Harvard University.

QUESTION: What progress has been
made in terms of the development of
Rwandas infrastructure under your
tenure? Can you take us through some
personal highlights?
ANSWER: Well, I have only worked in
the Infrastructure sector since July last
year 2014 but I have joined the energy
sector at a very exciting time. The reform
of the energy sector specifically former
Energy, Water and Sanitation Authority
(EWSA) that has three companies now
in existence, a strong recruitment drive
and reorganisation of the companies to
promote the culture of excellence remain
among priorities. We are continuing to
roll-out the electricity network under
our flagship programme Electricity
Access Roll-out Programme (EARP),
and developing an interconnection
with Uganda this year which will
see us trading electricity all the way
to Ethiopia. A personal highlight has
been to attend the inauguration of the
recent completed 28 MW Nyabarongo
I hydro power plant,. It means that we
can supply cheaper electricity and are
able to electrify more households, lifting
them out of poverty.
QUESTION: What efforts have been
made by the Rwandan government to
establish effective transmission and
distribution networks for the power
sector? Are there any upcoming plans
to improve or add to these networks?
ANSWER: Presently, we have only a
small network given that our generation
capacity is at 160 MW, although we are
expanding, strengthening and upgrading
all the time as we roll out the grid across
Rwanda and connect with other countries.
There are plans to have interconnections
with Ethiopia, Kenya, Uganda, Burundi,
Tanzania and DRC and work is already
on-going in this area. At the same time,
we currently suffer from 21% grid losses,
and the impact of this will only increase
as our network does as well. Therefore a
grid loss reduction programme is being
initiated to reduce losses by 8%, saving the
equivalent of a 15MW power plant, and
at a cost of $60m represents strong value
for money. The corporatisation of the
utility will add to the great work already
being done.
QUESTION: How important is the
development of infrastructure for the
overall economic growth of Rwanda
and the development of a competitive
private sector?
ANSWER: It is fundamental. Rwanda
has experienced strong levels of growth
over the last 20 years, and we are well
aware that limited access to basic,
affordable and sustainable infrastructure
services is a factor holding us back
from even stronger development. This
is no truer than today with a quickly
expanding private sector, but is still
facing challenges in relation to good
road transport access and high costs of
electricity and fuel.
QUESTION: What are your
aspirations for the future development
of Rwandas infrastructure- are there
any key goals or milestones in place
to work towards?
ANSWER: My aspiration is to see a
thriving business culture in Rwanda
to a good road network, cheaper fuel,
reliable and sustainable water services,
and an affordable and quality supply
of electricity to both households and
businesses. This aspiration is achievable:
steps we are taking such as the reform
which is expected to be completed in
the new two years, the forthcoming
creation and adoption of the Least
Cost Power Development Plan, and
the development of cheap renewable
domestic energy resources and access
to cheap imports from the end of 2015
onwards, will all contribute towards
developing a growth enhancing
infrastructure sector.

2015 Africa Energy Yearbook 79

Now You Can Continue The Discussions Online...
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 PROJECTS

Featured Power Projects

This selection of projects are taken from the Powering Africa: Hub, EnergyNets online community where delegates can access all
content from our investment meetings such as presentations, live session recordings and interviews with industry leaders. The Pow-
er Projects portal allows members to add and amend their own projects and keep up to date on what developments are taking place
elsewhere in Africa. Continue the conversation beyond the conference by engaging with other participants in a private members
area. Register for the hub for free by visiting http://www.engerati.com/hubs/powering-africa-hub

ANGOLA

Project Name: Lomaum Dam Hydroelectric Power Plant Angola

Type of project: Renewable Power
Description: Lomaum Dam Hydroelectric Power Plant Angola is located at Ganda, Benguela, Angola. This infrastructure is of TYPE Hydro Power
Plant with a design capacity of 35 MWe. It has 3 unit(s). The first unit was commissioned in 1964. It is operated by Empresa Nacional de Electricidade
de Angola (E.N.E.). Source: http://globalenergyobservatory.org/geoid/4066
Fuel Source: Hydro | Generation Capacity (MGW): 35 | Offtaker: Utility | Project Status: Completed

Project Name: Futila Thermal Power Plant

Type of project: Conventional Power
Description: Consists of two 35 MW gas turbines. The project scope also included the refurbishment of a substation in the city of Cabinda as part of the
double circuit 60 kV and 30 kV distribution lines needed to transport the electricity to end users. Source: http://www.isoluxcorsan.com/en/project/thermal-
power-plant-in-futila-angola.html
Fuel Source: Gas | Generation Capacity (MGW): 70 | Offtaker: Utility | Project Status: Completed

Project Name: Luachimo dam

Type of project: Renewable Power
Description: Contract signed in 2014 for Dams rehabilitation, increasing its capacity to 24 MW. This will be the first refurbishment to take place on the
dam in all its decades of operation. Source: http://www.efacec.pt/PresentationLayer/efacec_press_01.aspx?tipo=4&area=1&idioma=2&id=496
Fuel Source: Hydro | Generation Capacity (MGW): 9 | Offtaker: Utility | Project Status: Completed

BOTSWANA
Project Name: Morupule B power station
Type of project: Conventional Power
Description: In October 2009 the World Banks Board of Executive Directors approved a US$136.4 million loan for the the Morupule B project and
also approved a Partial Credit Guarantee of US$242.7 million of commercial bank financing for the project. In a media release the World Bank stated
that the financing will help secure a reliable electricity supply for the countrys economic growth and poverty reduction programs. Financing will also
help Botswana prepare a robust low-carbon growth strategy (consistent with the current Tenth National Development Plan: 2009-2016), strengthen
management skills in the power sector, and establish a new, independent electricity regulator. Source: http://www.sourcewatch.org/index.php/Morupule_B_
Power_Station
Budget Size (USD): 100 - 500m | Fuel Source: Coal | Generation Capacity (MGW): 600 | Investors & Development Partners: World Bank
Offtaker: Utility | Project Status: Completed

CONGO (KINSHASA)
Project Name: Inga 3
Type of project: Renewable Power
Description: With support from the World Bank, the Democratic Republic of Congo (DRC) has proposed to develop Inga 3 on the Congo River. The
project will consist of a dam and a 4,500MW hydroelectric plant at Inga Falls. Inga 3 comes as the first phase of the construction of the Grand Inga
hydropower project, located 225 km from Kinshasa, and 60 km upstream of the mouth of the Congo into the Atlantic Ocean. Once completed, the final
project would have a generation capacity of 40,000 MW. Source: http://www.internationalrivers.org/campaigns/the-inga-3-hydropower-project
Budget Size (USD): 1Bn+ | Fuel Source: Hydro | Generation Capacity (MGW): 40 000 | Investors & Development Partners: World Bank
Offtaker: Utility | Project Status: Out to Tender

2015 Africa Energy Yearbook 81

 PROJECTS

EGYPT

Project Name: Helwan South Power Project

Type of project: Conventional Power
Description: South Helwan project is designed to include 3x650 MW supercritical steam thermal power plant for interconnection to the National
Unified Power System (NUPS) through the new 500 KV GIS Switchyard facility. The power block comprises three identical Rankine cycle turbine
generator units, each with a nominal rated capacity of 650 MW. The units are capable of generating rated capacity using natural gas, residual (mazout)
oil, or a combination of both. The three-unit plant arrangement includes an enclosed turbine building, an open boiler structure, a common control room,
and all associated structures and facilities. Source: http://www.pgesco.com/south-helwan-supercritical-power-plant-3x650-mw/
Budget Size (USD): 500 - 1Bn | Fuel Source: Gas | Generation Capacity (MGW): 1 950 | Investors & Development Partners: AfDB
Offtaker: Utility | Project Status: Under Construction

Project Name: Philadelphia Solar 50 MW PV project

Type of project: Renewable Power
Description: Jordanian PV developer and manufacturer Philadelphia Solar has signed a memorandum of understanting with Egypts New and Renewable
Energy Authority (NREA) to build a 50 MW-ac PV plant as part of the first wave of projects offered by the Egyptian government under its feed-in
tariff (FiT) program. Source: http://www.pv-magazine.com/news/details/beitrag/egypt--philadelphia-signs-50-mw-agreement-_100018667/#axzz3YcBarhXo
Fuel Source: Solar | Generation Capacity (MGW): 50 | Investors & Development Partners: Philadelphia Solar, Egypts New and Renewable
Energy Authority (NREA), Egyptian Electricity Transmission Company (EETC) | Offtaker: Utility | Project Status: Feasability

ETHIOPIA
Project Name: Ashegoda Wind Farm
Type of project: Renewable Power
Description: Billed as the biggest wind farm in sub-Saharan Africa, the Ashegoda wind farm features 84 hi-tech wind turbines and is capable of
producing around 400m KWh per year. It is located in Tigray state, about 475 miles north of Addis Ababa. The government of Ethiopia hopes that
projects such as these will drive forward the countrys plans to become a renewable energy leader, achieving a climate-resilient economy by 2025. The farm
has a generation capacity of 120 MW. Source: http://www.justmeans.com/blogs/africas-biggest-wind-farm-is-operating-in-ethiopia
Budget Size (USD): 100 - 500m | Fuel Source: Wind | Generation Capacity (MGW): 120 | Investors & Development Partners: Vergnet
Project Status: Completed

Project Name: Tekez Dam

Type of project: Renewable Power
Description: Completed in February 2009, this 300 MW hydropower plant cost $360million, which was $136 million over budget. Ethiopias largest
public works project, at 188 metres (617 ft) the Tekez Dam was also Africas largest arch dam. EEPCO teamed up with China National Water Resources
& Hydropower Engineering Corporation (CWHEC) to complete the project. Contractors & consulting services were provided by: CWGSC&B, PB
K&D and Howard Humphreys (engineering)Harza Engineering (consultancy) Source: http://en.wikipedia.org/wiki/Tekez%C3%A9_Dam
Budget Size (USD): 100 - 500m | Fuel Source: Hydro | Generation Capacity (MGW): 300 | Investors & Development Partners: EEPCO,
China National Water Resources, Hydropower Engineering Corporation (CWHEC) CWGSC&B, PB, K&D, Howard Humphreys Harza Engineering
Offtaker: Utility | Project Status: Completed

Project Name: Corbetti Geothermal Project

Type of project: Renewable Power
Description: This will be the first independent power project in Ethiopias history. The $4 billion 1,000 megawatt Corbetti geothermal plant will be built
in two 500 megawatt stages over 8-10 years and when it comes online, will be Africas largest geothermal facility. Source; http://oilprice.com/Alternative-
Energy/Geothermal-Energy/Ethiopia-to-Build-Africas-Largest-Geothermal-Plant.html
Budget Size (USD): 1Bn+ | Fuel Source: Geothermal | Generation Capacity (MGW): 500 | Offtaker: Utility
Project Status: Under Construction

Project Name: Gibe Hydropower III

Type of project: Renewable Power
Description: The project will feed the national grid and increase regional interconnectivity, increasing the generation capacity of Ethiopia by 234 per
cent. As of January 2015, according to Ethiopia Electric Power, the US$1.8 billion project was 88% completed, and the first two generators are expected
to be commissioned in June 2015. Once completed, the dam is expected to supply about half of its power to Ethiopia and export the other half to Kenya
(500 MW), Sudan (200 MW) and Djibouti (200 MW). Source: http://en.wikipedia.org/wiki/Gilgel_Gibe_III_Dam
Budget Size (USD): 1Bn+ | Fuel Source: Hydro | Generation Capacity (MGW): 1 870 | Project Status: Under Construction

82 2015 Africa Energy Yearbook

 PROJECTS

GHANA

Project Name: Ayitepa Wind Farm

Type of project: Renewable Power
Description: Set to become Ghanas first utility-scale wind farm, the Ayitepa project could power up to 10% of the countrys electricity demand when
fully operational and is expected to start construction this year. Source: http://www.prnewswire.com/news-releases/mainstream-renewable-power-signs-
deal-to-build-and-operate-ghanas-first-utility-scale-wind-farm-275093541.htm
Budget Size (USD): 500 - 1Bn | Fuel Source: Wind | Generation Capacity (MGW): 225 | Offtaker: Utility | Project Status: Out to Tender

Project Name: Kpone Independent Power Plant (KIPP) project

Type of project: Conventional Power
Description: When it comes on stream in 2017, the KIPP project will be the largest private IPP in the country, accounting for approximately 10%
of Ghanas total installed capacity and approximately 20% of its available thermal generation capacity. As a Combined Cycle Gas Turbine (CCGT)
plant, it will be amongst Ghanas most fuel-efficient thermal power stations. Once in production, KIPP will be become a critical base-load component
in meeting Ghanas growing electricity demand. Source: http://www.businesswire.com/news/home/20141003005027/en/Cenpower-announces-financial-
close-900-MM-project#.VTYeDCFVhBc
Budget Size (USD): 500 - 1Bn | Fuel Source: Gas | Generation Capacity (MGW): 350 | Investors & Development Partners: InfraCo, Sumitomo
Corporation, Rand Merchant Bank, Nedbank, Standard Bank, FMO, African Infrastructure Investment Fund | Offtaker: Utility
Project Status: Final Phase

Project Name: Nzema solar (PV) power plant

Type of project: Renewable Power
Description: Once completed it will be one of the biggest in the world. It will increase Ghanas current generating capacity by 6% and will meet 20% of
the governments target of generating 10% of its electricity from renewable sources by 2020. Scheduled for completion mid-2015. Source: http://www.
blue-energyco.com/africas-largest-solar-pv-power-plant/
Budget Size (USD): 100 - 500m | Fuel Source: Solar | Generation Capacity (MGW):155 | Offtaker: Utility
Project Status: Under Construction

2015 Africa Energy Yearbook 83

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 PROJECTS

KENYA

Project Name: Olkaria II Geothermal Power Station

Type of project: Renewable Power
Description: The facility is located in Hells Gate National Park, on the eastern edge of the Eastern Rift Valley, approximately 88 kilometres (55 mi),
southeast of the city of Nakuru.

Olkaria II went on-stream in 2003 when Kenya Electricity Generating Company (KENGEN) commissioned two 35MW units manufactured and
installed by Mitsubishi Heavy Industries (MHI). In 2010, a third unit of 35MW capacity was installed, bringing the total capacity to 105 Megawatts.[4]

The project was co-financed by the World Bank, the European Investment Bank, KfW of Germany and KenGen. Designed and constructed with
an advantage of newer technology, this state-of-the-art plant is highly efficient in steam utilization. It works on single flash plant cycle with a steam
consumption of 7.5 t/h/MW. The turbines are single flow six stage condensing with direct contact spray jet condenser. The power generated is transmitted
to the national grid via 220 kv double circuit line. Source: http://en.wikipedia.org/wiki/Olkaria_II_Geothermal_Power_Station
Budget Size (USD): 100 - 500m | Fuel Source: Geothermal | Generation Capacity (MGW):105 | Investors & Development Partners: World
Bank, the European Investment Bank, KfW of Germany and KenGen | Project Status: Completed

Project Name: Lake Turkana Wind Power

Type of project: Renewable Power
The Lake Turkana Wind Project will eventually deliver 300 MW of power to the national grid using a wind resource in Northwest Kenya near Lake
Turkana. Costing a massive Ksh76 billion (EUR623 million), the project will be the largest single private investment in Kenyas history. The project is
expected to be fully operational by 2016, by which time it will produce the first initial 100 MW, with the rest of the capacity due to be achieved within
32 months.The importation of fuel for thermal power generation has cost Kenya an estimated $150 million-annually, which will now be saved if the
Turkana Wind Project is to prove successful. Source: http://www.skyscrapercity.com/showthread.php?t=922856&page=7
Budget Size (USD): 500 - 1Bn | Fuel Source: Wind | Generation Capacity (MGW): 300 | Project Status: Under Construction

Project Name: Lamu coal fired power plant

Type of project: Conventional Power
Description: The power station is a proposed 981.5 Megawatt coal-fired thermal electricity-generating plant, to be built in Lamu County, Kenya. Construction is
expected to begin in September 2015 and last approximately 21 months. Once constructed, it will become the largest single power station in Kenya. The power
generated will be evacuated from the power plant to Nairobi, the countrys capital via a new 520 kilometres (320 mi), 400kV electricity transmission line. In the
initial years, the power station will utilize imported coal, mainly from South Africa and later convert to locally sourced coal from the Mui Basin in Kitui County.
Source: http://en.wikipedia.org/wiki/Lamu_Coal_Power_Station

Fuel Source: Coal | Generation Capacity (MGW): 1 000 | Investors & Development Partners: Gulf Energy, Centum Investment, Sichuan Electric
Power and Design & Consulting Company, Sichuan No.3 Electric Power Construction Company, CHD Power Plant Operation | Offtaker: Utility
Project Status: Out to Tender

MALAWI
Project Name: Kapichira Power Station
Type of project: Renewable Power
Description: The Kapichira Power Station is a hydroelectric power plant on the Shire River in Malawi. It has been designed for an eventual power generating
capacity of 128 megawatts (172,000 hp), enough to power over 86,000 homes[1] with 4 x 32 megawatts (43,000 hp) generating sets, however in Phase 1 only
2 x 32 MW generating sets were installed, with civil structures constructed for the later addition of the remaining two units. Phase I of the power station was
officially opened in September 2000. Each unit operates at a nominal head of 54 metres (177 ft) and discharge of 67 cubic metres per second (2,400 cu ft/s).[2]
Source: http://en.wikipedia.org/wiki/Kapichira_Hydroelectric_Power_Station

Fuel Source: Hydro | Generation Capacity (MGW): 64 | Offtaker: Utility | Project Status: Completed

2015 Africa Energy Yearbook 85

 PROJECTS

MOZAMBIQUE

Project Name: Ressano Garcia Power Station

Type of project: Conventional Power
Description: After two years under construction, Electricidade de Mozambique (EdM) and Sasol opened the Ressana Garcia Power Plant, a 180MW
natural gas power station at the end of August 2014. The power station will have 18 gas turbines once fully operational. Although the power plant
is expected to ease power shortages in the region, EDM admitted that the state utility still requires more than US$1 billion investment into power
infrastucture to adequately meet Mozambiques energy needs.*EDM own 51% of the Ressano Garcia power station and the rest is owned by SASOL.
Ressano Garcia power station is the second gas-fired power station at Ressano Garcia. The first one belonged to the Aggreko company, which is a power
company based in Scotland. The Aggreko power is sold to EDM and to the South African and Namibian power utilities, Eskom and NamPower.
Source: *http://www.esi-africa.com/mozambiques-180mw-gas-power-station-opens-doors/
Budget Size (USD): 100 - 500m | Fuel Source: Gas | Generation Capacity (MGW): 180 | Investors & development partners: EDM, Sasol
Offtaker: Utility | Project Status: Completed

Project Name: Mphanda Nkuwa Hydropower Plant

Type of project: Renewable Power
Mphanda Nkuwa Hydropower Plant is a project with strong national relevance which is going to contribute to the social and economical
development of Mozambique and help supplying the energy deficit that the Southern African Development Community (SADC) region is facing.
Located on Zambezi River, between Cahora Bassa and Tete, this hydropower plant will have an annual generation of about 8.600 GW/per year. The
Mphanda Nkuwa hydropower plant site, including the reservoir that is going to be created, will comprise Chita, Changara, Cahora Bassa and Marvia
districts.

A large percentage of power produced by the hydropower plant is going to support the electrification and development of Mozambique, benefiting
the population and its economical activities. The surplus will be exported, reinforcing the role of Mozambique in the regional framework of energy
integration, enabling additional revenues that will help to balance the foreign trade of the country. Another benefit of the Mphanda Nkuwa Hydropower
Plant will be the contribution to the feasibility of CESUL - power transmission line that will connect the Centre of Mozambique to the South - through
the power production based on a renewable resource. Source: http://www.hmnk.co.mz/en)

Budget Size (USD): 1Bn+ | Fuel Source: Hydro | Generation Capacity (MGW):1 500 | Project Status: Under Construction

Project Name: Moatize IPP

Type of project: Temporary Power
Description: Moatize IPP is a coal-fired power station located in the Tete province of Mozambique and owned by ACWA Power Moatize
Termoelectrica SA The project will have a generation capacity of 300MW, 80% of which will be kept by ACWA, and the rest to be sold
back to EDM to feed into the grid. The project is being developed on a BOOT (build, own, operate and transfer) basis, and will become the
only coal-fired power plant in the country. CWAs main shareholders are the Saudi Group Acwa Power, Vale and the Japanese firm Mitsui.
The project is due to be completed in the last quarter of 2016. Source: http://www.acwapower.com/project/16/moatize-ipp.html
Budget Size (USD): 500 - 1Bn | Fuel Source: Coal | Generation Capacity (MGW): 300 | Offtaker: Captive Power
Investors & development partners: ACWA Power | Offtaker: Utility Project Status: Under Construction

Project Name: Ncondezi Power Project

Type of project: Conventional Power
Ncondezi plans to develop Mozambiques first coal fired power plant on the Ncondezi Project area in the Tete Province. This follows the conclusion
of both a Mine and Power DFS which confirmed that a large scale, long life, open pit thermal coal mine and integrated power plant is technically and
economically viable.

This large scale project will be developed in phases, starting with a 300MW integrated mine and power plant (300MW Project), expanding ultimately
to an 1800MW power plant. The Power DFS was conducted by Parsons Brinckerhoff and independently reviewed by STEAG, one of Germanys largest
electricity producers, from an operators perspective.

The power plant will be located about 90kms away from the local transmission network. Construction is planned for 2015, with the power plant targeting
commissioning in H2 2017 and commercial operations in H1 2018. The 300MW project is closely aligned to the Mozambican Governments stated
objective of accelerating the electrification of the country and expanding access to electricity. Currently only 20% of the country is electrified. The power
plant will help Mozambique maximise the potential of its resources in country and will be an important contributor to Mozambiques future development.
Read more: Source: http://www.ncondezicoal.com/power-project.aspx
Fuel Source: Coal | Generation Capacity (MGW): 300 | Project Status: Out to Tender

86 2015 Africa Energy Yearbook

 PROJECTS

NAMIBIA

Project Name: Ruacana Power Station

Type of project: Renewable Power
Description: The Ruacana Power Station is a hydroelectric power plant near Ruacana in northwest Namibia, not distant from the Angola border. The first
three 80 MW Francis turbine-generators were commissioned in 1978 and the fourth Francis turbine-generator at 90 MW was commissioned on 5 April 2012.
Source: http://en.wikipedia.org/wiki/Ruacana_Power_Station
Budget Size (USD): 100 - 500m | Fuel Source: Hydro | Generation Capacity (MGW): 330 | Offtaker: Utility | Project Status: Completed

Project Name: Xaris 250MW Gas Power Project

Type of project: Conventional Power
Description: Xaris Energy Namibia is gearing up to build a 300 MW of gas power capacity behind Dune 7 near Walvis Bay, Namibia, after having won
the N$4 billion NamPower tender to construct the plant. Environmental permits are still pending. The plant will run on imported LNG and is considered
as a short-term critical energy supply project until the Namibias Kudu gas power project starts up in 2018. Source; http://gastopowerjournal.com/home/
itemlist/tag/NamPower#axzz3Y7gQJn9i
Budget Size (USD): 20 - 100m | Fuel Source: Gas | Generation Capacity (MGW): 250 | Investors & Development Partners: Xaris Energy
Offtaker: Utility | Project Status: Under Construction

Project Name: Arandis Power plant

Type of project: Conventional Power
Description: Plant will be 120 MW Heavy Fuel Oil (HFO) and 50 MW Solar Hybrid Power Station. The negotiations on the power plant were
temporarily suspended by NamPower in June 2014, pending the latters completion of its tender for another 250MW power station in Walvis Bay.
Arandis Power spent N$40 million to complete the full bankable feasibility study, including full EIA clearance, construction and operations contracts and
fuel supply agreements, amongst others. Currently, Namibia imports more than 60% of its electricity needs from neighbouring countries. Source: http://
www.namibian.com.na/indexx.php?archive_id=133383&page_type=archive_story_detail&page=1

Budget Size (USD): 20 - 100m | Fuel Source: Oil | Generation Capacity (MGW): 120 | Investors & Development Partners: Arandis Power
Offtaker: Utility | Project Status: Under Construction

Project Name: Kudu Power Project

Type of project: Conventional Power
Description: Development of the Kudu gas field and construction of an 800 MW combined cycle natural gas-fired power station at Oranjemund.
When completed, the power station will feed Namibian and South African power grids. The project will be developed by NamPower, a national energy
company of Namibia. The Kudu Power Station will be the first Combined Cycle Gas Turbine power station of this size in Southern Africa and is
expected to be commissioned by end of 2017. Sources: http://www.nampower.com.na/Page.aspx?p=215 | http://en.wikipedia.org/wiki/Kudu_Power_Project

Fuel Source: Gas | 800 | Generation Capacity (MGW): 3 | Offtaker: Utility | Project Status: Under Construction

2015 Africa Energy Yearbook 87

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 PROJECTS

NIGERIA

Project Name: Aba Power Station (IPP)

Type of project: Conventional Power
Description: Simple cycle gas turbine - a private integrated power project being built by Geometric Power Systems.The Aba IPP is the first independent
and integrated power utility in Nigeria, which comprises a 141 MW gas fired power plant, a 27km gas pipeline, and a distribution utility, within a
ring-fenced distribution network. It is an embedded electricity facility designed to generate and distribute its own electricity. The Project is presently
owned by the Project Developer/Sponsor: Geometric Power Limited, Aba Power Limited, and other investors. Sources: http://en.wikipedia.org/wiki/
List_of_power_stations_in_Nigeria | http://geometricpower.com/projects/aba-phase-i

Fuel Source: Gas | Generation Capacity (MGW): 140 | Investors & Development Partners: Aba Power | Offtaker: Captive Power
Project Status: Completed

Project Name: Azura Edo IPP

Type of project: Conventional Power
Description: The Azura-Edo Independent Power Plant (IPP) is a 450 MW gas-fired open cycle power plant located in the North Eastern outskirts of Benin
City in Edo, Nigeria (the Project). As of July 2013, the plant is estimated to cost around US$[654] million, and to achieve commercial operations by late
2016. Source: https://ifcndd.ifc.org/ifcext/spiwebsite1.nsf/78e3b305216fcdba85257a8b0075079d/ab51ac85a5858ab985257bdd006499d7?opendocument

Budget Size (USD): 500 - 1Bn | Fuel Source: Gas | Generation Capacity (MGW): 450 | Investors & Development Partners: Nigerian Bulk
Electricity Trading PLC, Federal Government of Nigeria (FGN), International Finance Corporation, FMO | Offtaker: Utility | Project Status: Under
Construction

RWANDA

Project Name: Nyabarongo hydropower project

Type of project: Renewable Power
Description: Nyabarongo Power Station is a hydropower plant in Rwanda, completed in October 2014, with a commissioning date in November 2014.
At an estimated cost of US$110 million, the planned capacity installation will be 28 MW. The project involves a dam, with run of river design, across the
River Mwogo, one of the tributaries of Nyabarongo River. Source: http://en.wikipedia.org/wiki/Nyabarongo_Power_Station

Budget Size (USD): 20 - 100m | Fuel Source: Hydro | Generation Capacity (MGW): 28 | Investors & Development Partners: Export-Import
Bank of India, Bharat Heavy Electricals Ltd. (BHEL), Angelique International Ltd | Offtaker: Utility Rwanda | Project Status: Completed

2015 Africa Energy Yearbook 89

 PROJECTS

SOUTH AFRICA

Project Name: Sere Wind Farm

Type of project: Renewable Power
Description: One of the largest wind-farms in Southern Africa. The project is estimated to cost R2.689 billion ($375 million). Sere is Eskoms first
large-scale renewable energy project and forms part of our commitment to renewable energy and reducing our carbon footprint, said the acting chief
executive officer, Brian Molefe. Source: http://en.wikipedia.org/wiki/Sere_Wind_Farm | Source: http://www.southafrica.info/business/economy/infrastructure/
sere-210415.htm# VUD9TyFVhBc
Budget Size (USD): 100 - 500m | Fuel Source: Wind | Generation Capacity (MGW): 100 | Offtaker: Utility | Project Status: Completed

Project Name: Grootvlei Power Station

Type of project: Conventional Power
Description: The first of Grootvleis six units was commissioned in 1969. In 1989 three units were mothballed and in 1990 the other three followed. Due
to the power crisis being experienced in South Africa, Eskom decided to return the station to service. By 2008 two of Grootvleis units were back online,
providing 585MW to the national grid.[2]

Grootvleis units 5 and 6 were the first test facilities for dry cooling in South Africa. Unit 6 has an indirect dry cooling system.

The station consists of six 200 megawatts (270,000 hp) units for a total installed capacity of 1,200 megawatts (1,600,000 hp). Design efficiency at rated
Turbine Maximum Continuous Rating is 32.90%. Source: http://en.wikipedia.org/wiki/Grootvlei_Power_Station
Budget Size (USD): 1Bn+ | Fuel Source: Coal | Offtaker: Utility | Project Status: Completed

Project Name: 75MW Solar Photovoltaic Solar Capital De Aar (Pty) Ltd facility
Type of project: Renewable Power
Description: Cape Town renewable energy company Solar Capital says its 75-MW, R2.1-billion photovoltaic (PV) project in De Aar, in the Northern
Cape, is the first phase of what could eventually evolve to become a 300 MW solar farm. Print Send to Friend 3 0 The project has been named along
with 27 other projects as among the Department of Energys (DoEs) initial batch of preferred bidders for its renewables independent power producer
procurement programme. Altogether a total of 18 solar PV ventures have been listed, with the De Aar project emerging as the largest such development,
along with the Kathu solar energy facility, which also has a proposed nameplate capacity of 75 MW. Source: http://www.engineeringnews.co.za/article/solar-
capital-says-75-mw-de-aar-project-is-first-phase-2011-12-12
Budget Size (USD): 1Bn+ | Fuel Source: Solar | Generation Capacity (MGW): 75 | Investors & Development Partners: South Africa
Mainstream Renewable Power De Aar PV (Pty) Ltd | Offtaker: Utility | Project Status: Out to Tender

Project Name: Kusile Power Station Project

Type of project: Conventional Power
Description: The Kusile power station project, which is located near the existing Kendal power station, in the Nkangala district of Mpumalanga, will
comprise six units, each rated at an 800 MW installed capacity for a total capacity of 4 800 MW. Once completed, Kusile will be the fourth-largest coal-
fired power station in the world.

The Kusile project will include a power station precinct, power station buildings, administrative buildings (control buildings and buildings for medical
and security purposes), roads and a high-voltage yard. Source: http://www.eskom.co.za/Whatweredoing/NewBuild/Pages/Kusile_Power_Station.aspx
Budget Size (USD):1Bn+ | Generation Capacity (MGW): 4 800 | Project Status: Under Construction

Project Name: Medupi Power Station Project

Type of project: Conventional Power
Description: Medupi has achieved a significant stage in its construction by the synchronisation of its 1st unit (Unit 6) on 2 March 2015 to the
National grid. Within the next three to six months, South Africa will see Medupi unit 6s full potential of 794MW being fed into the South African
national grid. While Unit 6 is the first of Medupis six units, it should be noted that all required auxiliary services for the entire power station are ready
to ensure that Medupis total output of 4 764MW is fully synchronised to the South African power grid upon completion and full comissioning.
Source: http://www.eskom.co.za/Whatweredoing/NewBuild/MedupiPowerStation/Pages/Medupi_Power_Station_Project.aspx
Budget Size (USD):1Bn+ | Fuel Source: Coal | Generation Capacity (MGW): 4 764 | Investors & Development Partners: African Development
Bank (AfDB), World Bank | Offtaker: Utility | Project Status: Construction

90 2015 Africa Energy Yearbook

 PROJECTS

TANZANIA

Project Name: Songo Songo

Type of project: Conventional Power
Description: The Songo Songo gas field is located on and offshore Songo Songo island, about 15km from the Tanzanian mainland and 200km south of
the commercial capital, Dar es Salaam. The project serves two onshore and three offshore natural gas wells at the island, the gas from the wells being piped
to a plant on the island.* The discovery well, Songo Songo-1, was drilled in l974 by AGIP, now a subsidiary of Italian oil and gas multinational Eni SpA.
Source: *http://www.offshore-technology.com/projects/songosongo/
Budget Size (USD): 100 - 500m | Fuel Source: Gas | Generation Capacity (MGW): 115 | Investors & Development Partners: AES, CDC
Group Plc, Tanzania Electric Supply Company (TANESCO), Tanzania Petroleum Development Corporation (TPDC), World Bank
Offtaker: Industrial | Project Status: Completed

Project Name: Mwanza Power Plant

Type of project: Conventional Power
Description: Semco Maritime A/S entered an agreement to supply a 60 megawatt power plant with TANESCO. Built near the second largest
city in Tanzania, Mwanza, to ensure the power supply of an area in the north eastern corner of the country. This project is Semco Maritimes first
major energy project in Africa - Africa is one of our major focus areas, since there is a great need for energy in order to create economic growth.
Source: http://www.semcomaritime.com/new-order-for-power-plant-in-tanzania.html
Budget Size (USD): 20 - 100m | Fuel Source: Oil | Generation Capacity (MGW): 60 | Investors & Development Partners: Semco Maritime
Offtaker: Utility | Project Status: Completed

Project Name: Ngaka Thermal Coal Project

Type of project: Conventional Power
Description: This Mine-mouth CTP project is being developed by Tancoal Energy, a JV established by Australias Intra Energy (70%) and the NDC
(30%) in Apr 2008. Intra signed an MoU with TANESCO on 12th March to develop and operate. Facility will supply Songea region via 132kV line and
link in to the Makambako-Songea national grid connection. After completion, the 153bn/- project is expected to connect more than 13,000 people with
power around the Ntunduwaro, Ruanda, Paradiso, Amani and Makoro regions. It is expected that TanCoal will generate over 80 million US dollars in
revenue to the government from the mine. In addition, it would generate royalties (23 million USD) plus revenue from stamp duty, VAT and other taxes.*
Source: *http://allafrica.com/stories/201405290841.html
Fuel Source: Coal | Generation Capacity (MGW): 600 | Investors & Development Partners: Tancoal | Offtaker: Industrial
Project Status: Under Construction

Project Name: Ubungo Gas plant

Type of project: Conventional Power
Description: The Ubongo Gas Plant is using locally available Songo songo natural gas as a source of fuel. The Plant is installed with twelve generating
units each with a capacity of 8.73MW totaling an installed capacity of 104 MW. The available capacity for twelve generating units is 102.5 MW. The
Plant is interconnected with the National Grid through Ubungo National Grid Substation. Owing to severe droughts in Tanzania from 2003-2005,
TANESCO was granted a government loan to finance the power project and meet the demand for power caused by the droughts.
Fuel Source: Gas | Generation Capacity (MGW): 102 | Investors & Development Partners: Lahmeyer International, Tanzania Electric Supply
Company (TANESCO) | Offtaker: Utility | Project Status: Completed

UGANDA

Project Name: Tororo Thermal Power Station

Type of project: Captive Power
Description: Ugandas only locally owned IPP, Tororo Thermal Power Station is owned and operated by Electro-Maxx Limited, a private energy provider in
Uganda, who built the power plant at an estimated cost of US$60 million. In August 2012, Ugandan print media reported that the power station was in the
process of upgrading the plants capacity to 80 MW, at an estimated cost of US$60 million (UGX:148 billion). The upgrade was expected to be complete by
September 2012.[7] The actual upgrade however was from 20MW to 70MW. The upgrade was completed in October 2012 and the plants maximum rated
capacity is 70MW (16.4MW from the old plant running Niigata Engines and a further 53MW from the new plant with Sulzer engines).[citation needed]
Upon commissioning of the plant, Electro-Maxx became the first indigenous independent power producer in Africa for power plants with capacity greater
than 20 Megawatts.[1] The power plant is currently licensed by the Electricity Regulatory Authority (ERA) to provide up to 50MW to the national power grid.
Source: http://en.wikipedia.org/wiki/Tororo_Thermal_Power_Station

Budget Size (USD): 20 - 100m | Fuel Source: Oil | Generation Capacity (MGW): 70 | Investors & Development Partners: Stanbic Bank
Uganda Utility | Project Status: Completed

2015 Africa Energy Yearbook 91

 PROJECTS

ZAMBIA

Project Name: Maamba power station

Type of project: Conventional Power
A mine-mouth, 300MW Coal Fired Power Plant (CFPP) is being established at Maamba.The capacity will be increased to 600MW in the second phase,
depending on the build-up of demand for power in the region. this will be Zambias first IPP coal power station in 50 years. The first 150 MW Unit
was scheduled to be completed by October 2014, and the second 150 MW Unit was scheduled to be completed by January 2015. The capacity may
be increased to 600MW in the second phase, depending on demand for power in the region. The 300 MW plant is planned for operation by 2016.
Source: http://www.maambacoal.com/power.htm
Budget Size (USD): 500 - 1Bn | Fuel Source: Coal | Generation Capacity (MGW): 300 | Offtaker: Utility | Project Status: Under Construction

Project Name: Kariba North Bank Power Station Extension

Type of project: Renewable Power
Description: Expanding the capacity of the existing Kariba North Bank Power Station, one of the three major hydropower stations in Zambia. Raising
capacity from 600 MW to 720 MW. Source: http://en.wikipedia.org/wiki/Kariba_Dam
Fuel Source: Hydro | Generation Capacity (MGW): 360 | Investors & Development Partners: China Exim Bank, Development Bank of Southern
Africa (DBSA) | Offtaker: Utility | Project Status: Completed

Project Name: Kabompo Gorge Hydroelectric Project

Type of project: Renewable Power
Description: Copperbelt Energy proposes to develop a 40 MW hydroelectric power generation scheme at Kabompo Gorge in the Solwezi and Mwinilunga
Districts of Zambia. The project would be a greenfield hydroelectric power station through limited project finance. Source: http://cecinvestor.com/kabompo-
gorge-hydroelectric-project/
Fuel Source: Hydro | Generation Capacity (MGW): 40 | Investors and development partners: Copperbelt Energy | Offtaker: Utility
Project Status: Out to Tender

NOT LISTED HERE?

Send us the details of your project to be added to our Featured Projects list on the EnergyNet Hub and in the
2016 Africa Energy Yearbook.

E: amy.offord@energynet.co.uk
T: +44 (0)20 7384 8068

92 2015 Africa Energy Yearbook


ANTI-
CORRUPTION,
DUE DILIGENCE
AND POWER
INVESTMENTS:
getting more from the process
Walter Courage, Director,
The Risk Advisory Group
Walter Courage is one of the founding members of The Risk Advisory
Group and is a Director. His career was spent in the army which he
joined from The Royal Military Academy Sandhurst in 1961. He
retired in 1996 with the rank of Major General. Much of his service
was spent in Germany, interspaced with postings to UK, Canada and
Libya. Whilst in Germany, he commanded his regiment, followed by
the 4th Armoured Brigade. This was followed by a full tour as Chief
of Staff of the United Nations Force in Cyprus and then back to
Germany as head External Affairs Division.
He is a Transatlantic Board Member of British American Business
Inc and chairman of the EMEA Forum, Chairman Future Digital
Footprint Limited, Director Courage Underwriting Limited,
Director Weee Systems Limited and a trustee of Shotover Estate.
Anti-corruption due diligence is increasingly an established part of the investment process for power investments
in Africa. It is sometimes seen purely as a regulatory requirement and an extra cost burden, when if approached
with a broader perspective, can add real commercial value.
POWER SECTOR INVESTMENT IN
AFRICA
Governments across Sub-Saharan Africa are facing increasing
domestic pressure to increase power capacity in order to meet
the energy needs of their populations. The energy needs
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
Jonny Bray, Head of Business Intelligence
Africa, The Risk Advisory Group
Jonny is head of the Africa-focused business intelligence team
at Risk Advisory Group. He has over eight years experience in
the business intelligence sector and has conducted hundreds
of investigations across sub-Saharan Africa. In this role he has
travelled widely across the continent and developed up an in-
depth understanding of the political, regulatory and commercial
environments in different countries.
Jonny is a regular speaker at Africa-focused events, recently speaking
at a workshop on the Nigerian elections. He has also been quoted
in media articles, including on the subject of the challenges facing
companies transporting goods through African ports in complying
with the UK Bribery Act.
across the region are such that the World Bank estimates that
annual expenditure of $120 to $160 billion will be required
to expand energy access to the whole region by 2030. Though
these sums have not yet been realised, domestic pressure has
resulted in many African governments prioritising investment
93
 POLICIES AND BEST PRACTICES FOR AFRICA
in the sector. As a consequence, increasing sums of money
are being spent to address the energy gap, while international
finance institutions have also provided significant funds to the
sector. Given the demand, there is no shortage of companies
globally competing to be involved in these projects.
However, a multitude of overlapping risks confront
investors in the power sector in Africa. In particular, there
is a widely held perception that the continent presents a
uniquely difficult investment environment from a corruption
standpoint. In Transparency Internationals 2014 Corruption
Perception Index, a global comparative tool, 60 percent of
African countries fell outside the top 100 places. The region
consequently appears on TIs map as a swathe of red and
orange, giving the impression that corruption is inescapable.
ANTI-BRIBERY LEGISLATION
The perceived level of corruption is a particularly important
challenge for investors given the reach and increasing
enforcement of international anti-bribery legislation. The US
Foreign Corrupt Practices Act (FCPA) was passed in 1977 as the
worlds first extraterritorial law to combat the bribery of foreign
officials. Over the past 15 years in particular the FCPA has been
stringently enforced, with corporate penalties in 2014 totalling
$1,566 million, the second highest on record. Many of the most
significant fines have targeted investors in African markets.
In parallel, anti-corruption legislation passed in other
jurisdictions, has become more stringent and placed greater
compliance obligations on companies. For instance, the
2010 UK Bribery Act created a new offence of corporate
failure to prevent bribery, from which a company can
protect itself by having adequate procedures in place to
prevent malpractice.
The emergence of an international compliance regime, which
demands zero tolerance of corruption in company policies
and appropriate due diligence measures, combined with
the seemingly ubiquitous nature of corruption, presents a
particular challenge to companies investing in the region.
However, meeting compliance obligations should not be seen
as a purely tick-box exercise. Corruption is a deeply complex
phenomenon, shaped by local economics and politics, and
manifesting itself very differently across countries and sectors
in Africa.
Investors and actors in the energy sector therefore face distinct
risks. If a business can also go some way to understanding
the driving forces behind corruption risk, the benefit can be
twofold: a deeper appreciation of the commercial context and
a regulatory obligation fulfilled.
THE COMPLEXITY OF THE POWER
SECTOR AND BUSINESS RISK
The power sector in Africa frequently represents a complex
investment environment, marked by intense competition and
94
interaction between a myriad of state and non-state actors,
often operating in an unclear regulatory context. Where vast
public funds are being spent, decision-making in the sector
can be heavily influenced by domestic politics or geopolitical
considerations.
This risk can take various forms. The power sector is
characterised by a significant degree of interaction between
companies and government. An obvious point, but one
where there is a lot of nuance. Government can have
multiple roles in any power project from the commissioning
of a project to its management, acting as partner and/or a
regulator. These roles can be fulfilled by different parties:
the executive, ministries, government agencies and state
companies. In some cases, the functions might all fall under
one roof, in others, the responsibilities might be dispersed.
In either case, there may be a lack of clarity over the mandate
of these different bodies. There can also be differences in
roles as stipulated formally, and what happens behind the
scenes on an informal basis. This can create confusion and
opportunity for malpractice.
Moreover, an unclear regulatory environment frequently
translates into limited transparency in relation to decisions
around the allocation of contracts, with all companies not
always working to the same rule book. The result can be a
preference for politically-connected companies; for national
contractors as a result of indigenisation policies; or companies
from countries providing development assistance. To
compete in such an environment may create internal pressure
for companies to bend their rules to gain a competitive edge.
Finally, consider also the diversity of actors in the private
sector involved in bringing a project from inception to
completion. Delivering a project might entail a company
working with agents, consultants, contractors, intermediaries
and joint venture partners. It is a central, and growing focus of
enforcement agencies, that companies will be held accountable
for corrupt acts where they are an ultimate beneficiary.
Combined with the multiple layers of government interaction,
this can create a complex control and compliance environment.
THE TENDER PROCESS: A MEETING
POINT FOR RISK
In practical terms, these vulnerabilities can lead to potential
exposure to corruption and wider business risk in different
ways. The public tender process can be a meeting point for
all of the drivers of business risk, and more specifically, the
drivers of corruption highlighted above. High-value, high-
stakes, and involving numerous government and private
sector actors, this is an area where the multitude of problems
can combine.
Working through a typical tender process, the graphic below
matches points in the cycle with possible corruption and
wider business risk pressure points:
2015 Africa Energy Yearbook

The potential for a company to be drawn into a difficult
situation can begin at the project conception stage. If
the project is instigated for the wrong reasons, such as an
opportunity for personal political promotion, the dispersion
of patronage, or because of an attempt to provide energy to an
area constituting the governments support base, the risks will
likely be extended throughout the investment cycle. If the
project is conceived for the wrong reasons, the likelihood of
the project being reviewed following a change in government
is further significantly enhanced.
While concerns from a corruption standpoint can
often focus on contractor selection, that process can be
manipulated before it begins. Bias can be built into the
process in the preparation of technical specifications, or
in the selective disclosure of tender information, to favour
particular bidders.
The selection process is a potential venue for malpractice.
Where multiple agencies have input in the decision-making
process, confusion over mandate and responsibilities
can create opportunity for influence-peddling behind
the scenes. Similarly, the involvement of agents as
representatives in negotiations, or where government
contact is handled by joint venture partners, might involve
wrongdoing without a companys knowledge. Transparency
in the selection process is a means to mitigate this risk, but
investors should be wary when transparency is held out as
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
a goal in itself. A selection process which on the surface
is open, may have been pre-determined, such as through
collusion by bidding parties.
If the risks at the project conception and bid phases have not
been adequately analysed and addressed, they will likely flow
into the project execution stage. To illustrate this point, if a
change of government occurs, a wholesale review of major
contracts awarded by the outgoing government is likely to
occur. If a project is seen as too closely associated with the
interests of the outgoing regime then it is likely to find itself
under scrutiny. Similarly, if a company selects a partner or
agent with close connections to the outgoing government,
then the identity of this company could prove an impediment
from the perspective of project execution.
A BROADER APPROACH TO
COMPLIANCE
Direct or indirect participation in a public tender process, or the
provision of financing to projects formed around such processes,
can therefore pose a challenge from a compliance perspective.
How should companies approach managing these risks?
A typical, compliance-driven approach would consist of
well-developed internal anti-corruption policies, outlining
expectations and guidance for employees on corruption
95
 POLICIES AND BEST PRACTICES FOR AFRICA
issues, with due diligence on external parties. Appropriate
due diligence checks on third parties such as agents and
joint venture partners will focus on identifying potential
issues of concern, such as prior sanction by regulatory
authorities, indications of past involvement in malpractice,
or potential links to public officials. This is particularly
important as under existing anti-bribery legislation,
companies are potentially responsible for the actions
of agents or companies acting on their behalf. As such,
adequate procedures must extend beyond the engagement
process. Anti-bribery training and continued monitoring
of partners is also a key on-going aspect of compliance
procedures.
These are the fundamentals of an effective company
anti-corruption programme, and an important part
of demonstrating to regulators that due care has been
taken. However, if undertaken in isolation from broader
research around the commercial, political and regulatory
environment, a purely compliance-driven approach may be
too narrow. As we have discussed, corruption risk for power
sector investment is an issue shaped by a number of factors.
If the business can develop a broader appreciation of these
points, then it will ultimately be better protected against
the risks.
96
Taking the major drivers of corruption risk discussed above,
the table below illustrates where additional intelligence-
gathering might be focused:
Getting insight on issues such as these will allow a business
to place the core components of compliance work into their
proper context. Awareness of the problem areas can also prevent
companies falling into potential pitfalls before they appear.
These are also all questions which have clear commercial
relevance. Proper business planning centres on understanding
the commercial environment and the actions of those around
the business. Better informed about the local environment,
intelligence on these issues will help the business understand
their government and private sector counterparts and provide
the competitive edge of inside knowledge. Knowledge of
these areas will ultimately help companies make the right
commercial calls.
It can be the case that anti-corruption compliance is
approached as though detached from the commercial aspect
of an investment: essentially a regulatory box to be ticked, and
a source of unwelcome costs. However, if properly integrated
into business planning, treated as a collaborative process and
an investment of resources, then the commercial value of this
work is self-evident.
2015 Africa Energy Yearbook
 POLICIES AND BEST PRACTICES FOR AFRICA

LESSONS LEARNED
In Implementing Off-Grid Electrification
Projects in Africa- Ghanas Example

Frank Yeboah Dadzie, Planning Engineer,

Ghana Energy Development and Access Project

Frank Yeboah Dadzie is an expert in off-grid and grid connected solar installation, marketing
and financing. He began his career in renewable energy as a trainer at the Deng Solar Training
Centre, Accra (an ISP certified centre).
From October 2008 to September, 2014, he served as Project Manager for Ghanas biggest off-
grid Solar Project which was aimed at financing solar systems for remote deprived rural dwellers
through an innovative microfinance system supported by the Rural banks. The project financed
over 16500 solar systems to the poorest households of Ghana. This project also stimulated the
market for Solar PV sales in the remotest districts of Ghana.
Frank Yeboah Dadzie is presently the Planning Engineer for the Ghana Energy Development
and Access Project. He is tasked with the supervision of the development of a computer based
GIS supported electrification master plan for Ghana and the Management of project activities
for the development of Ghanas first island based Mini-grid electrification project on four Islands.
Frank Yeboah Dadzie is passionate about his work and is eager to see the day where everybody in
Africa will have access to sustainable energy for all their energy needs.
Map of Islands along Volta Lake

Ghana, a country in West Africa with a population of about 25 million, has an electrification rate of about
72%. Ghana began its national electrification scheme in 1990 (when the electrification rate was 15%) with
an aim to achieve universal coverage by 2020.

A s of 2015, the country has an electrification rate which

is over three times the average for Sub-Saharan Africa.
Ghanas electrification success has been due to donor support
for grid extensions and the Self Help Electrification Project
(SHEP) which connects all communities which can purchase
low voltage poles at a connection fee of less than 1 US dollar
per connection.

Ghanas main challenge in electrification supply largely

remains in electrifying its remote dispersed rural communities
in the northern part of Ghana and island communities along
the Volta Lake where economic activities cannot justify huge
investments in grid extensions. Map of Northern Part of Ghana

2015 Africa Energy Yearbook 97

 POLICIES AND BEST PRACTICES FOR AFRICA
BACKGROUND
The Ghana Energy Development and Access Project
(GEDAP), which began in 2007, included a component
for Electricity Access and Renewable Energy to assist the
Government in developing a commercially-oriented and
sustainable framework for increasing access to electricity
throughout the country. It complements the Governments
efforts to achieve its electrification goals through
intensification of unconnected customers in existing
electrified areas, grid extension to new areas, and off-grid
renewable energy options. Since the extension of the national
grid to the remote and island un-electrified communities in
Ghana will involve substantial up-front investment costs by
the Government, one sub-component of the Ghana Energy
Development and Access Project focused on providing
electricity through the installation of stand-alone solar
systems to these community dwellers. The project targeted
remote communities that will not be served by the grid for
at least 5-10 years; these communities were relatively low
income. The project was financed by Global Partnership
for Output Based Aid (GPOBA), Global Environmental
Facility (GEF) and International Development Association
(IDA).
The overall goal of the project was to enable the rural dwellers
to have access to electricity using solar PV systems. This
was to be achieved by obtaining consumer credit through a
Rural/Community Bank and an output-based grant to enable
eligible consumers to pay for a Solar Home System (SHS)
through an accredited dealer. The partial grants were to make
the systems affordable by reducing the amount that had to
be borrowed.
A total amount of 6.53 million USD donor funding was
disbursed under the project, made up of more than 4 million
USD from GPOBA, 1.83 million USD from IDA and 0.7
million from GEF.
GEDAP is not the first project aimed at supplying PV-
generated electricity to rural Ghanaians living in areas not
served by the grid in Ghana. The Renewable Energy Services
Project (RESPRO) operated in Ghana from 1999 to 2003. Its
business model that was intended for use in the project was
Building upon these project lessons, the GEDAP project
was designed to operate through private sector sales to
rural consumers who could be provided with favourable
financing through rural and community banks.
98
one in which consumers would specify the level of electricity
service that they wanted from PV units. The units were
then installed and the consumers would then pay a monthly
fee for the operation, maintenance, and part of the capital
costs for the system. However, the monthly fee collected
was inadequate to meet the operation and maintenance
obligations of the project. Batteries and system components
were neither repaired nor replaced. In addition, some of the
villages that were deemed unreachable with the grid at
the time of the projects initiation were provided with grid
electricity just as the PV systems were being installed, with
the net result that the PV systems had to be moved or else
were never used. The RESPRO project provided a series of
lessons, both positive and negative, that could be built into
future projects. On the positive side, the project proved that
PV technology clearly worked and can provide a lower-
cost electrification alternative to grid connection for very
remote population centers. On the other hand, the issues of
ownership, maintenance, cost-recovery, and financing i.e.,
the business model could play an important role in rolling
out any future, more sustainable PV-based program for rural
Ghana.
Building upon these project lessons, the GEDAP project
was designed to operate through private sector sales to
rural consumers who could be provided with favourable
financing through rural and community banks. Members of
the Association of Ghana Solar Industries (AGSI) had been
operating in Ghana to provide solar systems and components
for many years. While all these businesses served other markets
as their primary business (e.g., stoves or electrical services),
the leading three companies had all received international
recognition for their work with renewable energy, but had
no significant local presence in the target off-grid market in
Ghana.
Financing of solar PV systems was a key issue in designing
a new model because (i) consumers bore the up-front
investment costs; (ii) solar PV companies did not yet have
a presence in rural areas; (iii) financial services in rural areas
were weak and did not include term lending products; and
(iv) the costs of servicing debt for purchase of solar systems
exceeded what people were paying for other sources of energy,
especially at the lower end of the income scale (e.g., kerosene
2015 Africa Energy Yearbook

for lighting). While output-based grants provided by GPOBA
covered part of the cost of solar PV systems in eligible off-
grid communities, this was not sufficient to make the initial
costs affordable for most of the targeted beneficiaries. An
IDA line of credit was available for Rural and Community
Banks (RCBs) to refinance 80% of loans given for a three-
year period.
The ARB Apex Bank, a mini central bank for all Rural
Banks in Ghana, was designated as the implementing
agency for the grant and loan financing, to be handled at
the retail level through Participating Rural and Community
Banks (PRCBs) that serve targeted communities and meet
eligibility criteria.
It was expected that implementation of the project will
improve the access to electricity for about 90,000 rural
dwellers in about 15,000 households. However, the actual
number of households that benefited from the project was
16,822 which was estimated to benefit over 100,000 rural
dwellers.
According to the independent report of the Beneficiary
Assessment of the GPOBA project undertaken by a
research team from the University of Ghana, 93.8% of the
beneficiaries under the project were satisfied with the solar
equipment provided.
The project clearly showed that with good management and
financing plan, it was possible to provide electricity to remote
rural dwellers through solar energy.
In delivering this successful project, many lessons were
learned and these include the following;
1. Rural off grid people need more than just lighting and
are willing to pay for it:
In designing most rural based electrification projects, project
designers have mostly considered lighting as the main need
of the rural people. In this project we found out that that
was largely not the case. Over twenty two (22) different
products ranging from only lighting producing products to
products that allow you to watch a TV or use a radio were
provided. It was noticed that the products that provided
more functionality (ability to watch TV or listen to radio)
2015 Africa Energy Yearbook
POLICIES AND BEST PRACTICES FOR AFRICA
where preferred by beneficiaries although they were more
costly. The main drivers for the sale of the systems were the
ability to watch television and charge mobile phones. There
is a surprisingly high willingness to pay for energy services
from solar home systems in remote, rural areas of Ghana.
All of the vendors participating in the project were surprised
to find the size and depth of the market facing them once
they began serving the remote rural areas. This relatively
high willingness to pay is especially reflected in the high
demand for large solar home systems that can supply or
come supplied with an LED Color-TV, reflecting consumer
aspirations for modern energy services. Sales of these larger
systems exceeded all targets and expectations established at
the beginning of the project.
2. Affordability of Solar Equipment:
During the design stage, solar home systems being sold in
Ghana were considered to be quite expensive when compared
to similar products being sold in East Africa and Asia. While
this was attributed to the incipient nature of the market, the
costs due to consumers fell (in absolute or US $ terms) over
the life of the project. These declines are attributed to the
increasing lighting output obtainable by deploying LEDs
in lanterns and solar home systems; continued declines in
the price of PV panels and the balance of system; and some
improvements in the quality and price of products being
supplied by local suppliers. Nevertheless, little progress was
made in the price reduction of batteries by the end of the
project.
3. No need to re-invent the wheel. New projects need to
learn from earlier project implementers to reduce the
possibility of project failure;
In the first two years of the implementation of the project,
less than 500 systems had been sold. This was largely due to
the project trying to start implementation from the scratch.
Study tours to Sri Lanka and Bangladesh were undertaken by
the project team in the 2nd year and the information received
from the tours were very helpful in refining the project and
finding solutions to the challenges the project was facing.
Application of the lessons from the tours led to a massive
improvement to sales which led to the achievement of the
project targets.
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 POLICIES AND BEST PRACTICES FOR AFRICA
4. Financing Beyond Consumer Loans:
The project was designed to provide credit
to consumers to improve their ability to
afford PV systems. However, what was not
considered at the time of project design
was the relatively limited experience of the
solar PV dealers with obtaining financing
for their own operations. The project team
spent nearly one year working with the
dealers to help them obtain trade finance
and working capital to be able to purchase
systems in bulk and to build up their
retail networks up-country. Without the
financial facilitation, all suppliers would
have remained in a low-level equilibrium
trap and the project would never have
reached or exceeded its targets.
5. Quality after sales service is essential
to the success of such projects;
The provision of electrification through off-grid solutions
does not end with the connection of the client. The client
will require education on the use of the products and quick
response to faults when they occur. Supplying efficient off-
grid systems without efficiently designing how after sales
service will be provided to beneficiaries will lead to a failed
project. Beneficiaries must be clear on the number of days it
will take for a fault to be repaired and what warranties they
enjoy and this has to be provided as promised to make the
project successful.
Ensuring that repairs and maintenance are done correctly is
key for the sustainability of the project. Non-working systems
will lead to poor repayments at the banks.
6. Dedicated Project Manager and Rural Solar Project
officers were key in moving sales forward:
The engagement of a dedicated Project Manager with
technical knowledge and experience in solar PV systems
design, installation and marketing enabled the project team to
correctly anticipate the possible challenges and find suitable
solutions quickly. The rural bank-based dedicated solar project
officers also made a strong, positive impact on the operation
of the project. They improved sales, accelerated the processing
of paperwork, enabled loan recovery and established working
relationships with local dealer representatives.
7. Beyond education, products must be designed to
prevent tampering
In designing off-grid systems, it is necessary to consider the
behavior and the abilities of the prospective beneficiaries.
Beneficiaries must be well educated on the expected
performance of the systems and all their roles in operating
the system. Systems should be designed to be very simple and
require very minimal roles for beneficiaries in the operation of
the systems. Preferably, systems must be designed to prevent
the possibility of tampering by beneficiaries.
100
8. Re-payment plans must be well designed to meet the
cash flow pattern of the target people.
In designing off-grid credit based projects for rural people it
is necessary to design the repayment plans to meet the cash
flow of the expected beneficiaries. Most rural dwellers are not
monthly earners and therefore the application of monthly
repayment plans used for formal salary workers will lead to
low repayment rates.
Repayment periods must be agreed on based on a careful
study of the cash flow of the beneficiaries. It was noticed in
this project that repayment periods should be flexible and
beneficiaries must have the opportunity to choose which
repayment period best fits them.
9. Eliminate all form of Direct Government interference;
One key lesson from this project was that to ensure the
sustainability of the project and ensure high repayment rates,
the involvement of government functionaries should be
minimized. The project should be private sector led. Private
sector institutions should play all key roles in the project.
10. Private sector players must be well screened and selected.
The provision of electricity to remote off-grid communities
is not just a business but a social intervention and therefore
all players in the project must be well screened to identify
their willingness to make the sacrifices required to deliver
such projects. A mindset of using the project for only money
making will lead to difficulties in performing all the many
sacrifices required in delivering such projects.
CONCLUSION
In conclusion, it is important to note that many ingredients
are necessary for the successful implementation of off-grid
projects. Project designers must therefore learn from other
projects to prevent the pit falls and implementation delays
most off grid project encounter.
Email: engineerfyd@yahoo.com
2015 Africa Energy Yearbook
 POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

STEPHEN KARANGIZI, DIRECTOR, AFRICAN LEGAL
SUPPORT FACILITY

Mr Stephen Karangizi has been the Director of the African Legal Support Facility since October 2011. The African Legal Support Facility,
hosted by the African Development Bank, was established to support African Countries in negotiating complex commercial contracts and in
assisting them with creditor litigation.
Mr Karangizi is a lawyer with extensive experience in International Commercial and Trade Law. He was Deputy Secretary General
(Programmes) of the Common Market for Eastern and Southern Africa (COMESA) from 2008 to 2011. He was also the Legal Advisor for
COMESA from 1997 to 2008.
Over a 30 year career as a lawyer, he also served as a Legal Advisor for the Governments of Antigua and Barbuda (West Indies), Uganda and
Zimbabwe after starting off in private legal practice. He is enrolled as a Legal Practitioner of the High Court of Zimbabwe and an Advocate
of the High Court of Uganda.

QUESTION: Why was the Facility
originally established? Were there
any key catalysts which prompted its
existence?
ANSWER: The African Legal Support
Facility (ALSF or Facility) is a public can engage specialist legal representation
international institution hosted by the
African Development Bank (AfDB). We
were originally established as a response
to calls from African Finance Ministers
to assist African countries in vulture fund
litigation.
When establishing the Facility, it was
recognized that one of the key reasons
for vulture fund litigation was poorly
negotiated and drafted contracts. The
underlying reason for this was a lack
of capacity for contract negotiations.
Addressing these key areas is why the
Facility is established.
QUESTION: ALSF has been
supporting African governments
in the negotiation of commercial
transactions since 2010- a relatively
short lifetime. What are the long-term
goals of the Facility, and how will these
be successfully measured?
ANSWER: The long-term goal is to ensure
that governments have the capacity to
negotiate fair and sustainable contracts that
will benefit their countries. These contracts
will in turn lead to improvements in the
countries and the continents economic
and social fortunes.
The current interventions of the ALSF
help to bridge the gaps in legal capabilities
leveling the negotiating playing field. With
the assistance of the ALSF, governments
for negotiation purposes and participate in
innovative capacity building programmes.
Governments are more informed and
cognizant of their contractual obligations.
An informed government has the ability
to plan strategically and formulate
development programmes that best fit
their circumstance and need.
This will be measured by monitoring the
number of projects that are successfully
completed on the continent, the amount
of benefits to local communities and
governments, and the ability of governments
to attract additional investments by having
bankable project documentation in place.
QUESTION: Why is there a need to
provide support and advice to African
governments when doing business with
international investors- what are the
potential risks?
ANSWER: Companies have shareholders,
and governments have stakeholders.
International investors should be interested
in getting a deal that will be fair and
balanced; a deal that all shareholders and
stakeholders will be happy with. Such deals
will reduce the needs for renegotiations and
create a more sustainable environment.
QUESTION: How is eligibility decided
upon- what are the criteria for accessing
the services of the Facility?
ANSWER: Any African country is eligible
to benefit from the services of the Facility.
Transitioning states and ADF (African
Development Fund) eligible countries
receive priority funding.
The Facility is open to all sovereign nations
and international organizations. Currently
there are 59 signatories to the ALSF Treaty
including 52 countries and 7 international
organizations.
QUESTION: What value is ALSF
hoping to gain from attending the Africa
Energy Forum this year? Are there any
particular countries or private sector
partners you are hoping to meet?
The Africa Energy Forum provides an
opportunity for the Facility to highlight
the availability of this valuable resource, not
only to member states but to investors who
seek contractual certainty. We hope to have
an open dialogue with investors to better
understand the challenges they face when
negotiating with African governments.
We also hope to increase awareness of
the pressures governments face in these
negotiations.

2015 Africa Energy Yearbook 101

Building Partnerships Transforming Economies
As Africas power sector increases in capacity, the ripples of these developments are felt throughout the global
economy. With the Power Africa Initiatives objective to double the number of people with access to power in Sub
Saharan Africa over the next 10 years, the much needed investment into the sector will not only increase power
generation but also unlock a wave of opportunities in bilateral trade between Africa and the United States.

Join us again in 2016

For more information about how to get involved in next year's Summit, please contact:
Veronica Bolton Smith | Programme Development Manager | EnergyNet | +44 (0)20 7384 8069
 POLICIES AND BEST PRACTICES FOR AFRICA

POWERING
AFRICA: Small Steps, Giant Leaps
Niamh Kenny, Associate Consultant, Gas & Power, CITAC

Niamh Kenny is an associate consultant with CITAC, specialising in the African power and
gas sectors. Niamh has over 20 years experience as a journalist and consultant in the energy
sector, focused primarily on electricity, although she has also gained extensive knowledge of the
global oil and gas markets through her previous role as executive editor of Energy Intelligence
Groups research department. Prior to joining EIG, Niamh concentrated exclusively on
the power markets. She was a long-serving editor of Financial Times Energys influential
fortnightly newsletter Power in Europe, as well as a founding editor of Power in Latin America,
and consultant editor to Power in Asia. She has also worked with Argus Media, where she was
involved in creating and populating a power plant and utility database. She is a graduate of
Trinity College, Dublin.

Massive generation and infrastructure programmes have proliferated across Sub-Saharan Africa in recent years, as
national governments and international agencies look for rapid solutions to the immense development challenges
facing the regions power sectors - inadequate capacity, frequent outages, electrification and consumption rates
almost inconceivably low by developed world standards.

I n the longer term, the scale of Africas power requirements
will dwarf all but the most ambitious of these, but CITAC
argues that a more effective and less costly initial approach
to boost African supply should entail a prosaic combination
of improvements to plant efficiency, maintenance and fuel
supply, reduction in losses, especially in the distribution grids,
and, above all, the establishment of strong and transparent
regulatory structures. Small steps that could deliver impressive
results.
CHALLENGES
On average, only 32% of people living in Sub-Saharan
Africa have access to electricity, a level that has barely
changed in a decade, compared to over 99% in North
Africa. Excluding South Africa, total installed capacity
across the continent at the end of 2013 was 44.2 GW,
which delivered roughly 172 TWh, an effective average
utilisation rate of only 44%. Load-shedding and
unscheduled black-outs are a common occurrence, despite

2015 Africa Energy Yearbook 103

 POLICIES AND BEST PRACTICES FOR AFRICA

the modest electrification rate, while consumption after

losses was 142 TWh, equal to per capita usage of just 146
kWh. To put these figures into perspective, in 2013, the
UK, with a population only 1/16 the size, alone produced
and consumed twice as much electricity (337 TWh and
307 TWh respectively).

To compound the situation, there is a sharp divide between

some of the better performing economies such as Ghana,
Nigeria and Botswana where electrification rates range from
50% upwards and those such as Malawi, DRC and Chad,
which barely stretch to 10% penetration.

STRONG GROWTH
Despite these headline figures, the power situation in Africa
has improved markedly in recent years power production
has risen by over 30% since 2009, more than twice the rate
of population growth and in line with GDP growth. And
critically, although actual gains have been small, electrification
has gained a new political urgency with economic expansion
in the region. Boosting power supply is now one of the key
priorities of almost every government, for a raft of political
and security reasons, in addition to the more obvious societal
and economic advantages that widening access to power will
bring.
Assessing exactly how much is needed in the short and
medium-term is open to much debate, but using a simplistic
model based on historic power growth and projected GDP
growth indicates that capacity outside of South Africa
will need to rise by 26 GW by 2020 and by more than 60
GW by 2025 just to cover an anticipated 10% per annum
rise in demand. Boosting electrification rates, absorbing
existing levels of suppressed demand and delivering healthy
system margins would require far greater expansion, but it
is questionable if many domestic or commercial consumers
would be able to absorb the tariffs that would be necessary to
underpin considerably higher levels of investment.
are proposed, but these are dominated by large hydro or
integrated fuel-to-power projects, and it is questionable,
if many of these will be underway, let alone completed by
2025. At present, only around 20 GW of planned capacity
looks firm.
Assuming committed and firm projects are completed on
time and have secure fuel supply a concern, particularly
for natural gas this will leave the industry short of 18
GW of capacity on the base case scenario, a level that
implies additional financing needs of at least $27bn for
generation, plus funding to install associated transmission
and distribution infrastructure. Including South Africa, the
shortfall rises to over 20 GW by 2025.
Moreover, this is a minimum shortfall, if ultimate
electrification goals are to be met. Even with an extra 45 GW
in place, Sub-Saharan Africa will still be languishing at the
bottom of the global per capita power consumption league
table by 2025, with average rates of 360 kWh per capita.

Around 23 GW of this expansion is already underway
(36 GW including South Africa) and scheduled to be
operational by 2020, although 70% is concentrated in just
four countries 6 GW in Ethiopia, 4 GW in Mozambique,
3 each in Nigeria and Angola. More than 70 GW of other
projects are also either in the pipeline or planned for
construction within the next decade, and further 100 GW
This fact is one of the key motivations behind multilateral
infrastructure programmes and behind the 2013 US-led
Power Africa initiative. This programme aims to expand
capacity by 10 GW and electricity access by 20mn people
across six partner countries. It will be financed by $7bn of
aid and soft loans pledged by the US via various agencies, in
addition to private sector investment.

Around 23 GW of this expansion is already underway

(36 GW including South Africa) and scheduled to be
operational by 2020.

104 2015 Africa Energy Yearbook

 POLICIES AND BEST PRACTICES FOR AFRICA

amongst which is its woeful

overall efficiency levels.

African hydroelectric stations

demonstrate utilisation levels
close to the regional best, once
rates are adjusted for the effect
of seasonal rainfall. But levels for
thermal generation, at an average
of 35%, are extremely poor and
represent an enormous loss in
potential power deliverability.
Across the OECD, for example,
thermal power utilisation is
around 45%, but this number
reflects heavy seasonal use in the
northern hemisphere. In South
Africa, as in OECD countries
with little seasonal demand
change, the industry operates at
over 60%. To put these numbers
into perspective, a shift in thermal
utilisation to South African levels
would defer around 19 GW of
capacity expansion.

Although some of the utilisation

constraints are beyond the
power of the generators alone
to rectify such as interruptions
to fuel supply and insufficient
transmission capacity others
could be resolved. One of the
There has been a degree of scepticism about this initiative, but main problems is simple lack of maintenance, many plants
whatever its underlying political and commercial motivations, having been wrecked by war or cannibalisation of parts.
there is little doubt that it has been a catalyst for change. The These could be repaired, bringing effective capacity back up
question is whether this, and similar programmes, are likely to to nameplate levels relatively cheaply and quickly. In Nigeria,
deliver the most fruitful and cost-effective solution to Africas for example, half of the nameplate capacity is shut in at any
power problems. The key concern is the extent to which the given time.
funding commitments appear
to be targeted at developing new
capacity, rather than investing
in existing infrastructure and
assistance to regulatory reform.

OPERATIONAL
WEAKNESS
A close look at the power
situation in Africa shows that, as
necessary as additional capacity
is, exclusive focus on this misses
other priorities; notably, the
industrys pressing need to
address some fundamental
operational weaknesses, first

2015 Africa Energy Yearbook 105

 POLICIES AND BEST PRACTICES FOR AFRICA
Transmission and distribution losses are also a major supply
constraint. Average implied losses in SSA are roughly
20% compared to 12% in South Africa or Europe but
are considerably higher in some regions. There are many
technical and commercial reasons for these losses, but some
of the most critical technical issues are lack of maintenance,
vandalism and cable theft. On the commercial side, the
critical problems are power theft, tampering with meters,
inefficient and sometimes corrupt billing procedures.
Simply reducing technical losses to typical international levels
could defer almost 3 GW of capacity expansion.
NOT ALL POWER IS EQUAL
Sub-Saharan Africas chronic power shortfall has tended in the
past to push implementation of effective fuel usage strategy into
a very distant second place to access to supply. But clarifying
what are the optimum generation fuels is a priority for efficient
Sub-Saharan Africas chronic power shortfall has
tended in the past to push implementation of effective
fuel usage strategy into a very distant second...
106
operation. At the most simple level
of cost analysis, this would have
eliminated most oil firing over
the past few years, given the high
price of the fuel. Recent price falls
have transformed the economics
of oil generation, although diesel
remains uneconomic.
Nevertheless, oil generation is likely
to remain necessary in hinterlands
where it is either not feasible
or economic to use other fuels.
Logistics are a key constraint to
fuel choice in Sub-Saharan Africa,
particularly inland, where there is
limited pipeline or indeed transport
infrastructure, but where mines and
raw materials processing industries
are often located. A holistic
approach may still point to gas
generation in centralised locations,
with electricity then transported to
more remote locations - but this
would require enhancement of the
electricity transmission grids.
Much of the recent growth in SSA power has been in
smaller-scale, off-grid renewable generation, notably
solar. But, while renewables are a very effective means of
delivering immediate power to areas without grid access,
and are operationally CO2-free, ultimately these are an
expensive and often unreliable form of power. Enthusiasm
for renewables tends to focus on their minimal fuel costs,
rather than their capital costs, which are usually steep
compared to conventional thermal plants.
COST-REFLECTIVE TARIFFS
A further imperative is to ensure that generation costs and
transmission operations are actually covered by domestic
power tariffs. The power industry is aware of the importance
of this, but there is a long way to go before the industry is on
secure economic foundations. Tariffs to end users in SSA are
on average around 14 US cents/kwh, around the cost of oil-
fired generation at current prices. In the few markets where
2015 Africa Energy Yearbook
 POLICIES AND BEST PRACTICES FOR AFRICA

oil dominates the generation mix, end use tariffs

are higher, but are typically still insufficient to
cover full generation and transmission costs for
diesel.

Costs for gas generation are lower than the tariff

base, particularly if fuelled by local gas. But, while
gas looks to be the obvious medium term route
to expanding generation capacity particularly
in East and West Africa on cost grounds and
through faster project lead-times, many countries
will struggle to secure reliable domestic supplies.
Ghana, for example, continues to endure
shortfalls from the West African Gas Pipeline,
and new supplies from the Jubilee field and from
TEN/Sankofa will be insufficient to supply any
power project beyond those under construction.
Similarly, declining output from Cte dIvoires Foxtrot field
should be partly offset by output from new fields, but will still
leave the country ultimately short of gas.
Imported gas is being touted as the solution, bringing in LNG
from other parts of Africa or even from the Middle East and the
US. Several operators are examining the possibility of installing
regasification facilities or, as a lower risk option, floating
storage and regasification units (FSRUs). However, shifting
to imported LNG would be one of the biggest challenges for
the power sector. The capital intensity of the LNG industry
means that financing across its phases needs absolute security
of offtake and price. Notably, power purchase contracts have to
be aligned with gas purchase contracts.
The massive investment needed will require private sector
involvement and this will be conditional upon market and
regulatory changes, in particular towards liberalising market
entry, asset ownership and the right to operate concessions.
REGULATION IS THE KEY
To pull all the elements of a complex power supply chain
together, from securing fuel supply to delivery of electricity
into homes and industry, there is one overarching issue that
needs to be addressed. This is to ensure a regulatory structure
for the power industry that can deliver investment. There
is a popular view that guaranteeing sufficient investment,
especially from the private sector, will necessitate widespread
deregulation to enable market forces to run the industry. But
in reality, movement towards free-market pricing is the last
thing Sub-Saharan Africas power businesses need. Rather, a
firm and transparent regulatory regime is needed to assure
returns on capital and security for investors.
Competitive markets with unbundled (functionally-
segregated) utility ownership, guaranteed third party access
to the transport infrastructure and pricing driven by supply/
demand fundamentals are a luxury for mature industries and
even here, partly by virtue of the market volatility they create,
do not necessarily deliver appropriate investment signals.
Power pricing in many OECD countries remains regulated
by price structures in one form or another.
Power Africa and other major initiatives are to be welcomed
but this should not distract from the more pressing needs of
the Sub-Saharan African power sector: the need to address
first the industrys structure and regulation; and second, the
basic flaws in its infrastructure and operations, which reduce
markedly the value of any investment in headline generation
capacity expansion.

About CITAC
CITAC Africa Ltd is a UK-based, independent consultancy founded in 1998 to focus on the downstream African
energy sector. It has extensive experience in projects relating to refining, storage, trading and distribution of petroleum
products in English- and French-speaking Africa, and has recently expanded the scope of its operations to cover African
gas and power market fundamentals and analysis. Its services include bespoke studies, subscription and retainer-based
products, including access to its award-winning African Downstream Database, as well as commercial, operational and
financial training courses in London and Africa.

For further information about this article or about CITAC, please contact Karen Chevalier, +44-207-343-0014,
karen@citac.com.

2015 Africa Energy Yearbook 107

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06/02/2015 10:50 19/03/2015 15:25 NA_COVER_0315b.indd 1 19/02/2015 11:39

06/02/2015 10:50 19/03/2015 15:25 NA_COVER_0315b.indd 1 19/02/2015 11:39

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Transports routiers et golocalisation
MALI
dition franaise Ciment routiers
Transports : redistribution des cartes
et golocalisation
BURKINA FASO LES BRICS Mars - Avril 2015 | N 42

GRANDS
dition franaise
ENTRETIENS Ciment : redistribution
BURKINA desFASO
cartes LESgrande
Une BRICS
banque Mars - Avril 2015 | N 42
dition franaise
Carlos Lopes
GRANDS ENTRETIENS
Ciment : redistribution des cartes LESlegrande
pour
Une BRICS
Sud banque Mars - Avril 2015 | N 42

GRANDS ENTRETIENS
Commission conomique pour lAfrique Une grande
pour le Sud banque
Carlos Lopes

BANQUES
pour le Sud

SCURIT
Carlos
Mohamed Lopes
El Kettani
Commission conomique pour lAfrique

BANQUES SCURIT
Commission
Attijariwafaconomique
bank pour lAfrique
Mohamed El Kettani

BANQUES
Mohamed
Attijariwafa bank El Kettani

LES OUTILS OUTILS DINVESTISSEMENT

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 POLICIES AND BEST PRACTICES FOR AFRICA

YEARBOOK PROFILE PIECE

FRANOIS BANGAZONI, CHIEF EXECUTIVE OFFICER, ENERCA

Franois Bangazoni is the Chief Executive Officer of ENERCA in Central African Republic, a position he has held since February 2015.
Before being appointed to this post, he has worked within ENERCA for over 32 years. An economist by training, he holds a diploma of
higher education with a specialization on energy economy from the University of Paris II, Pantheon Sorbonne. He has held several positions of
increasing responsibility; moreover he has had the honour of chairing the committee in charge of the development of the 2011-2015 five-year
plan. The implementation of this plan was disrupted by the crisis that hit Central African Republic, but which at the same time facilitated the
mobilization of funds for some projects currently in execution.
ENERCA is the principal energy company of the Central African Republic. Enerca stands for Energie Centrafricaine. The company enjoys a
monopoly on the production and sale of electricity in the country. It was founded in 1963 and is located in Bangui.

QUESTION: We are excited to welcome
you to the Africa Energy Forum (AEF)
in Dubai this June. Can you tell the
readers of the Africa Energy Yearbook
a little bit more about the reason youre
joining us this year?
ANSWER: In the context of the
mobilisation effort of the different
partners for relaunching the power sector
in the Central African Republic, I chose
to attend this Forum which includes
not only the executive authorities of the
African energy sector, but especially the
world actors of the energy industry. By
taking part in this Forum, our objectives
are:
To present the opportunities that the
Central African Republic offers as a
country endowed with considerable
potential in new and renewable
energies;
To share ideas and to build
relationships that can allow us in the
short and medium term to settle, in a
long-lasting way, the deficit problem
of the production capacities and the
access to electricity in this country;
To identify the technological
evolutions in the power sector with
the aim of finalizing the 2016-2020
five- year plan of the company.
QUESTION: What are your objectives
and what should international investors
know about Central African Republic
before meeting you?
ANSWER: Before being appointed to the
post of Managing Director of ENERCA,
I was in the company for over 32 years. I
have held several positions of increasing
responsibility; moreover I had the honour
of chairing the committee in charge of
the development of the 2011-2015 five-
year plan. The implementation of this
plan was disrupted by the crisis that hit
our country, but which at the same time
facilitated the mobilization of funds for
some projects currently in execution.
QUESTION: What are the current
electricity projects in CAR and what
are the main sources of energy?
ANSWER: Today, ENERCA is operating
several projects with the support of some
technical and financial partners of the
Central African Republic. To name just
a few:
- BOALI 3 Project for an amount of 187
million RMB that aims at installing
10 MW at the foot of the dam on the
MBALI, and at increasing the transport
capacity of 25 MW. This project has been
financed by the Government of Peoples

Regarding the main sources of energy, the Central

African Republic is endowed with a hydroelectric
potential estimated to be more than 2000 GW,
with several identified convertible sites. The
country also owns a high potential in...

2015 Africa Energy Yearbook 109

 POLICIES AND BEST PRACTICES FOR AFRICA
Republic of China. Started in November
2011, it was suspended following the crisis
and will start again very soon;
- Project for the Emergency
Rehabilitation of the Hydroelectric
stations of Boali 1 and Boali 2 for
an amount of 4,14 million Euros
financed by the French Agency for
Development (AFD) aiming at
enhancing the reliability of power
plants and the existing transport
network.
- Emergency Project in response to
the Energy Crisis for an amount of
10,5 million $US financed by the
World Bank (IDA and State and
Peace Building Fund) that completes
the actions to enhance the existing
installations and introduces the
prepayment meters for the Company
improvement cash flow;
- Project for the Interconnection of the
Electricity Networks of the RCA and
the RD Congo from the hydroelectric
system of Boali Phase 1, financed by
the African Development Fund for
an amount of 29,73 million UC. This
project aims at the installation of 10
MW to Boali 2, the interconnection
with RD Congo, the extension of
the distribution network and the
popularization of the prepayment
meters. This project was launched in
November 2014 and must complete
by 2018.
We can also quote the current discussions
with the Saudi Fund for Development
(SFD) regarding the installation of a new
thermal power plant of 10MW and the
studies of the hydroelectric development of
DIMOLI, financed by the Central African
States Development Bank (BDEAC).
Regarding the main sources of energy,
the Central African Republic is endowed
with a hydroelectric potential estimated
to be more than 2000 GW, with several
identified convertible sites. The country
also owns a high potential in traditional
energy because of its exploitable
important forestry resource. With regards
to solar energy, the average irradiation
is 5 kWh / m /j distributed on the
whole national territory with an average
duration of daily sunshine from 10 to 12
110
hours. Lastly, it is also stated the existence
of some sites for the geothermal energy
and a potential in brown coal estimated
to be 23.000 tons.
QUESTION: What is the government
doing to encourage a welcoming
environment for international investors
in the countrys energy sector?
ANSWER: The Government, as a
part of its Emergency Programme of
Economic Recovery, on its three first
pillars which are, Pillar 1: Politics and
Governance; Pillar 2: Safety Restoration
and Peace-building; Pillar 3: Economic
Recovery, emphasizes the improvement
of the business environment with the
aim of restoring the macroeconomic
stability, securing the rebalancing of the
public finances and strengthening the
capacities of public authorities. This is
the reason why procedures for creating
new enterprises have been simplified. The
registration to the Trade and Personal
Credit Register can be obtained in
24hours.
The mobilisation of the investment for
the electric sector aims to improve the
quality of the supply and, consequently,
reduce the cost of this essential factor for
every company. Finally, a revision of the
Investments Charter provisions specifically
in its range of application is in progress
for a better definition of guarantee, rights
and duties of the investors, and the role
of the private sector.
QUESTION: What have been the
barriers to investment in the past and
how has the situation changed today?
ANSWER: Among what was generally
indicated in the main reports in relation
to the difficulties faced by the investors
we can quote:
The enclosing country and the difficult
conditions of transit, entailing an
average delay of the importation
period of more than 2 months.
The absence of marketing and
promotion campaigns of the policy
concerning investment;
The business environment
characterized by a permanent
situation of political and judicial
insecurity emanating some latent
risk of conflicts, high costs of
production factors, a weakness of
infrastructure and a limited and
expensive access to credit.
In the latest years, some reforms
have been promoted to simplify the
companies fiscal environment and to
improve the procedures for creating new
enterprises. The Government has also
implemented important investments in
the field of Road Infrastructure, Energy
and Telecommunications to facilitate
new business and the establishment of
new companies.
In addition to that, measures have
been taken for the revitalisation of
the Joint Committee in charge of the
Improvement of the Business Climate
and of the Permanent Consultation
Framework for Public-Private Sector.
QUESTION: Which specific
technology providers are you looking
forward to meeting?
ANSWER: We would like to meet:
Companies specialized in
manufacturing hydroelectric power
plants from 5 to 30 MW;
Companies involved in the
implementation of power plants
and solar public lighting network
QUESTION: Is there a need for capacity
building with the electricity provider?
If so, what kind of support can the
international community provide?
ANSWER: Our company deals with a
badly prepared generational transition.
Therefore, we have a significant need for
senior and high-level experts in the fields
of engineering, finance and especially
management of development projects.
In conclusion, we need support for basic
training and for the junior executives to
adapt their capacities to the companies
needs.
2015 Africa Energy Yearbook
SUSTAINABLE
SOLUTIONS
FOR AFRICA
 THE WAY
FORWARD
IS CLEAR
To help you make the most effective
policy and investment decisions,
Climatescope provides the clearest
picture yet of global clean energy.

Climatescope analyzes 55 emerging countries around the world, each ranked against
54 indicators defined by Bloomberg New Energy Finance analysts. We believe the
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Explore global-climatescope.org for more information and learn how you can partner
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THE PROJECT IS SUPPORTED

BY OUR PARTNERS:
 SUSTAINABLE SOLUTIONS FOR AFRICA

SCALING SOLAR:
Making the Sun Work for Africa

Jamie Fergusson, Dan Croft, Senior Yasser Charafi,

Principal Investment
Officer, Global
Renewable Energy,
IFC
Jamie is a Principal Investment Officer
and IFCs global sector lead for renewable
energy. Jamie joined IFC in 2005 and has
extensive experience in a wide range of
environmental finance and climate related
sectors.
His renewable energy experience includes
corporate and project debt, equity and
mezzanine investments in hydro, wind,
solar PV, solar CSP, geothermal and
biomass in Latin America, Africa, South
and East Asia and the Middle East.
During his time with IFC, Jamie has
also structured investments and advisory
services in carbon, water, recycling, energy
efficiency and forestry.
Jamie has a BA and MA in Zoology from
Cambridge University, UK, and both a
Masters in Environmental Economics and
Policy and an MBA from Yale University,
USA.
Investment Officer,
Advisory Services,
IFC
Dan Croft is a Senior Investment
Officer in IFCs PPP Advisory Services
department. Based in Johannesburg,
he advises governments and other
public authorities on the development,
structuring, tendering and execution of
public-private partnerships, focusing
primarily on the energy sector across sub-
Saharan Africa.
Mr. Croft originally trained and worked
as a lawyer in the Energy & Infrastructure
team at Clifford Chance, working in
London, Singapore and Moscow. He
subsequently spent six years at Globeleq
and Empower, working on a wide range of
greenfield, brownfield and operating IPP
projects in Africa.
He has an LLB from Durham University,
an LLM from University College London
and an Executive MBA from London
Business School.
Principal Investment
Officer, Africa
Infrastructure, IFC
Yasser Charafi is a Principal Investment
Officer with IFCs Infrastructure Department
in the Africa region in charge of investments
in power and transport infrastructure. Yasser
specializes in thermal and renewable energy
generation, transmission and distribution
in the power sector as well as fixed
transportation infrastructure (ports, airports
and toll roads) with a focus on large project
finance projects.
Yassers work experience with IFC includes
multiple countries across the Africa and
MENA regions. Prior to joining IFC,
he worked as finance professional and
management consultant based in Paris
and London, advising and mobilizing
financing for a variety of clients from the
US to Western Europe through Latin
America. Yasser holds a Masters degree
in business and development economics
from Harvard University.

Despite the obvious potential for solar power in Africa, very little real investment is happening in most countries
on the continent. A new approach is needed to unlock the unique benefits of this technology speed to build,
long-term stable tariffs, energy diversification, neat matching of air-conditioning loads and to drive a massive
and rapid scale up in private solar power investment. IFC thinks it might have the answer with Scaling Solar,
a holistic, one-stop-shop solution for African Governments that are committed to catalyzing private sector
investment in solar power in the fastest and lowest cost manner possible.

JUST ANOTHER HOT DAY IN AFRICA.

Dakar, Senegal, July 2014. A typical summer day: 35
degrees, 90% humidity, blue skies, and blinding sunlight.
As the audience sat in an air-conditioned hotel attending a
conference on the potential of renewable energy in Western
Africa, the lights (and AC) suddenly went off. Most of the
attendees remained quietly seated and a minute later, the
characteristic humming sound of a diesel generator filled the
room as power was restored. Just another summer power cut:
the countrys oil-fired power stations simply could not cope
with demand and a customary round of load shedding was
just beginningand it was only 11.00 AM.
Power cuts and load shedding are a fact of daily life for most
Sub-Saharan Africa citizens from Mauritania to Madagascar.
And thats for the fortunate few that are connected to the
grid: 70% of Sub-Saharan Africa citizens still dont even have
access to electricity no matter how expensive or unreliable.

2015 Africa Energy Yearbook 113

 SUSTAINABLE SOLUTIONS FOR AFRICA
PLENTY OF SUN BUT NO SOLAR
POWER
Everyone knows Africa has plenty of sunshine. Pretty much
everyone knows that lack of access to affordable, reliable
power is one of the major bottlenecks holding back growth on
the continent. And anyone whos been paying some attention
knows that the cost of photovoltaic equipment has declined
dramatically over the past 10 years and that some countries
can now generate solar power at a cost below US$10 cents/
kWh (an IFC client recently won a tender in Dubai with a
tariff of US$5.8 cents/kWh).
Leveraging the continents vast resources to generate
electricity should be a no-brainer: African countries could
generate clean, renewable, affordable power, lessen their
reliance on imported fossil fuel, attract foreign investment,
and generate much-needed jobs. PV is the quickest power
generation technology to install and could rapidly respond
to the urgent need for more daytime power in many markets.
Solar developers, investors and financiers could tap into a
massive new market where solar penetration is still very low
and economic growth is high.
This compelling story is attracting a lot of attention from
developers, suppliers, donors and governments. But despite
the bluster, very little investment is taking place, except in
South Africa where the hugely successful renewable energy
procurement program has attracted more than US$3 billion
of investments and made it, quite literally, the shining
beacon of the region. Elsewhere? Nothing. Literally nothing.
Probably less than 50 MW in Sub-Saharan Africa, mostly
demonstration plants or pet projects heavily subsidized by
donors.
Meanwhile, Germanys global lead - with an installed base of
35GW - is about to be blown away by China, whereas Italy,
Japan and the United States each have over 12 GW of PV
capacity. Even notoriously rainy Great Britain now has over
3 GW installed.
SO WHATS THE PROBLEM?
IS THERE A LACK OF INVESTOR INTEREST?
Unequivocally no! On any given week, IFC is approached
on average by 2-3 solar investors seeking equity, debt or
guarantees for projects they are attempting to develop in
Africa. Furthermore, these investors cover the entire spectrum
of the industry: world-class leading utilities, established
African power developers, smaller European and North
American developers branching out into new territories,
private equity funds and their newly established platform
companies, and local investors.
Buoyed by the continents increasingly publicized growth
story (Africa Rising) and the slow-down in some
traditional PV markets, there is significant investor and
114
developer interest in Africa. So this is certainly not the main
bottleneck.
Are structural issues with African power markets the main
bottleneck?
Less unequivocally, but still no. Indeed, there is no question that
private investment in African power remains challenging on
many counts multiple, small and unique markets; insufficient
end user tariffs; nascent and inconsistent regulation; off-taker
credit risk; political risk; limited utility and government
capacity; and long negotiated concession agreements.
But these challenges are completely natural at this stage of
market development and over the years, solutions have been
devised to many of the challenges: from affordable political
risk insurance to foreign currency risk management to off-
taker credit guarantees (just as examples, though not the
only ones by far, the World Bank Group can arrange political
risk insurance cover through MIGA, partial off taker credit
guarantees through the Word Bank, and foreign currency
hedging through IFC).
And the market is growing: since the first African IPP
in 1994, over 70 IPP projects have been financed in Sub-
Saharan Africa (excluding South Africa) and the track record
remains reasonably good - all considered.
WHATS MISSING THEN?
IFC has participated in many of the worlds most successful
solar programs, from Chile to South Africa to India and
Thailand. To try and understand why Africa wasnt seeing
such success, we performed an in-depth analysis of over 20
promising potential solar markets in Sub-Saharan Africa (i.e.,
those where solar irradiation is good, and where the electricity
systems economics are favorable to solar for example, when
diesel or HFO is dispatched throughout the day or solar can
allow hydro to be stored for use in evening peak loads), and
came to the conclusion that African countries need to take a
different approach to the ones they have used historically for
thermal and hydro projects.
With small and unstable grids, a Feed-In Tariff free-for-
all will not deliver the right amounts of solar in the right
locations. With so many vertically integrated industry
players (i.e., acting as investor, equipment supplier,
contractor and operator), dynamic equipment pricing and
the relatively small scale of solar projects, direct negotiations
are unlikely to deliver the most competitive tariffs. With the
structuring challenges of African markets, a tender without
agreed project documents does not get the winner very far.
African countries and all the stakeholders within their
power sectors - need to give much clearer and consistent
procurement signals to create a vibrant market for willing
developers and to reap the potential benefits of quickly
installed, low cost solar.
2015 Africa Energy Yearbook

Indeed, in most countries, even those where solar makes
sense, its actually very difficult and very risky for a
developer to figure out where to invest time and resources.
In many cases (Senegal, Mali, Burkina, Kenyaetc.),
developers have been hard at work attempting to develop
projects. But the combination of public procurement
rules, lack of a clear contractual framework, absence of
clear processes and rules for project awards, and industry
stakeholders (utilities, regulators and ministries) pulling
in different directions, has proved, in most cases, to be a
significant bottleneck.
In this context, the larger developers who have the greatest
potential to lower tariffs by driving down installation costs
and accessing lower costs of capital, are staying out of African
markets (its hardly worth a significant investment in time
and resources to develop the 1st solar IPP if its for 10 MW
or 15 MW only).
SCALING SOLAR: A NOVEL APPROACH
Seeking to address these challenges, a new WBG solution has
been designed by an integrated team of IFC, World Bank,
and MIGA staff with support from Linklaters, Norton Rose,
Mott McDonald and with the precious feedback of a select
group of IFC clients interested in the solar market in Africa.
In seeking to devise this new approach, we drew on IFCs PV
investment experience globally and also from Africas home
grown success story. Reflecting back on what made South
Africa and other programs a success, we identified the key
ingredients of scale, transparent competition, a bankable
contractual framework, repetition. Together these delivered
radical tariff reductions (in the case of South Africa, nearly
70% between rounds 1 and 3) and remarkable speed of
financing and installation. But in each case, success relied on
an approach that reflected the idiosyncrasies of the countrys
power sector, regulations, financial markets and legal systems.
Any solution for Sub-Saharan single-buyer markets with
limited IPP track record needs to retain these core ingredients
but be tailored in a way that recognizes the realities of these
markets:
1. Acknowledging that not all Governments in Sub-Saharan
Africa are willing (or have the capacity) to dedicate as
much resources to a renewable energy program that high
middle income countries and BRICs can afford. Smaller
procurement needs may never justify the time and cost of
developing a program from scratch.
2. Catering for the fact that many countries in Sub-Saharan
Africa do not have the deep financial markets and strong
banks that bigger economies do, limiting access to
long-tenor debt and creating significant uncertainty on
available financing terms and structures.
3. Managing issues arising from smaller size grids. Indeed,
in South Africa, India and Brazil, developers were free
to select and develop the sites they chose. This can work
2015 Africa Energy Yearbook
SUSTAINABLE SOLUTIONS FOR AFRICA
easily in a large system where the success or failure of one
given project bears little consequences. But in smaller
grids, where available interconnection points are few,
grids are unstable and the medium term new capacity
needs dont justify multiple developments when only one
can be supportedmuch riskier.
4. Mitigating risk perception by investors and financiers.
Larger, investment grade countries with more credit
worthy off-takers, and more liberalized markets with
alternative buyers and markets for power, serve to
significantly de-risk investment in long-term capital
intensive assets. In most Sub-Saharan African countries,
the credit quality of the one and only off-taker and
political risk are valid concerns which feed directly into
higher tariffs via higher capital costs.
A ONE-STOP-SHOP SOLUTION FOR AFRICAN
POWER MARKETS
Put simply, Scaling Solar is a holistic, one-stop-shop
solution for African Governments that are committed to
catalyzing private sector investment in solar power in the
fastest and lowest cost manner possible.
It aims to provide Governments with speed of delivery (24
months from start of World Bank Group engagement to first
electrons delivered to the grid), the most competitive tariffs,
reputable developers and contractors, high quality installations
and certainty on delivery by a set date. In parallel, it aims to
provide investors and developers with certainty of process,
low transaction costs, a robust and bankable contractual
package and a de-risking of their African investments. Once
delivered across multiple markets it will give both procuring
governments and market participants (investors, advisors,
suppliers) the benefits and economies of scale of a larger
regional market.
HOW DOES SCALING SOLAR ACHIEVE THESE
OBJECTIVES?
a) Initial feasibility studies, site selection and legal due
diligence fronted by the WBG (IFC, IDA) and other
development partners as may be the case. This first
phase would typically aim at identifying the desirable
solar capacity to put on the grid, suitable sites (available
land, no environmental or social issues, proximity
to a suitable interconnection points, irradiation and
geotechnical studies etc.), and conduct a detailed
legal and technical due diligence as required. Speed is
achieved with template terms of reference and a bench
of high quality advisors.
Everything a private investor needs to know to
refine his financial model and submit a competitive
bid would be clear: how many MW, where, what
are the existing conditions at the sites, what is the
fiscal regimeetc. no surprises.
115
 SUSTAINABLE SOLUTIONS FOR AFRICA

b) A streamlined but robust competitive process led by

IFC acting as Transaction Advisor: a well-managed,
streamlined and robust competitive process is key to any
successful delivery. IFCs Advisory unit, with its unparalleled
track record as Transaction Advisor in challenging markets
would perform this role and guarantee the integrity of
the competitive process as well as its timeline. Time is
saved with template financial models and forms of tender
documents.

A robust competitive tendering process

implemented on schedule no surprises.

c) A bankable, fair and balanced contractual set of

documents: a template PPA and Government Support
Agreement has been developed from scratch, with support
from Linklaters in London, benchmarking all relevant
PPAs in similar markets. The overall risk allocation has
been designed and stress tested by Norton Rose, with a keen
sense of balance while ensuring bankability. Templates can
be rapidly tailored to local regulatory and legal specifics.

A fair, balanced and bankable set of documents that,

once versioned to the local market, can be offered
to bidders on a non-negotiable basis ensuring rapid
financial completion and construction post tender
award. No lengthy months and years of further
contract negotiation no surprises.

d) An offer of stapled financing: IFC (through its

Investment Services division) will provide a detailed
project finance term sheet to be offered to all pre-
qualified bidders. Bidders dont have to take it (they are
free to seek financing elsewhere) but have the comfort
and transparency of financing terms in a market that is
likely to have few precedents. The procuring government,
meanwhile, has the comfort and certainty of knowing
that the project is bankable and can be tendered on a
non-negotiable basis.

No lengthy months arranging the financing: clear

terms and a guaranteed financing is available, based
on the tendered project and documents. So no
further PPA and Government Support Agreement
negotiations, lender comments or negotiations no
surprises.

e) Additional risk mitigation instruments: as needed, an

IDA Partial Risk Guarantee would be included in the
bidding package typically to reduce off taker credit risk,
with a terms sheet attached to the tender. Similarly, an offer
of Political Risk Insurance by MIGA for investors seeking
such protection would be attached to the tender as a term
sheet.
Gorge Edozie | Four faces of Agbogho Mmuo 2, 1 Bidders can further de-risk their bids and focus only
For price contact Aabru Art / art@aabru.co.uk/ on submitting the best technical and commercial
+44 7847 244 217 offer no surprises.

116 2015 Africa Energy Yearbook


Figure 1: Scaling Solar - In One Picture
Scaling Solar has been precisely
designed by IFC and the World
Bank Group.
How would it work in practice? First IFC would seek to get
mandated formally by a Government to roll-out this initiative
in the host country, and from there, the process would work
as follows in 24 months from beginning to end:
A NEW ERA FOR SOLAR PV IN SUB-
SAHARAN AFRICA?
The renewable energy revolution is happening and is
reshaping electricity markets worldwide: the pace of change,
the consequential impacts of such momentous transformation
or the end state(s) may be a matter of debate. But no one
is disputing the fact that climate change and renewables
continuously improving economics are two major driving
changes that will continue to transform the electricity
landscape across the world.
Can Sub-Saharan Africa, with its heartbreaking 30%
electrification rate but some of the worlds best solar resources,
afford to stay behind? We think not.
2015 Africa Energy Yearbook
SUSTAINABLE SOLUTIONS FOR AFRICA
Across the continent, IFC infrastructure specialists engage in
daily dialogue with committed African energy policy makers
that have increasingly become convinced that solar PV can
fast track their access to electricity programs, lower system
costs and reduce reliance on imported (and often expensive)
fossil fuels.
But until now, they had was no (ready) answer to the
following: How do we get 50+ MW, at the best cost and in
24 months, on our grid?
But that was until now: Scaling Solar has been precisely
designed by IFC and the World Bank Group to offer a ready-
made solution to this conundrum.
For Governments, policy makers and their partners, the
advantages are clear: a holistic, integrated solution, low
transaction costs, the support of IFC and the World Bank
Group, fast delivery and the certainty that the outcome will
be quality projects, led by reputable investors and at the
lowest cost.
For private investors and financiers, the advantages
are equally clear: drastically lower transaction costs, a
transparent, robust award process with clear rules of
the game and a bankable contractual framework with
a comprehensive financing and risk mitigation package
attached.
Can we hope to see the dawn of a new era for renewable
energy in Sub-Saharan Africa, particularly solar PV, for the
benefit of all stakeholders?
Time will tell: the road to travel is still long, but at least,
Scaling Solar opens a path to get there. And as anyone whos
travelled in Africa knows, clearing a path may well be the
most arduous part of the journey
117
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Solutions for a better world

 SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE

HIS EXCELLENCY AMBASSADOR HENRY MACAULEY,
MINISTER OF ENERGY, SIERRA LEONE

H.E. Hon Henry Olufumi Macauley is the Minister for Energy, Sierra Leone. He also serves as Sierra Leone High Commissioner to Nigeria,
accredited also to Republic of Angola, Republic of Benin, Republic of Cameroun, Democratic Republic of Congo, Republic of Equitorial
Guinea, Central Africa Republic and ECOWAS.
He holds a Masters in Business Administration from Knightsbridge University (2005), an Introduction to the Oil Industry Certificate
from Oxford, Princeton (2003), a Certificate of French Language from Alliance Francaise Paris, France (1985), a Bachelors of Engineering
Electrical (Hons) from Fourah Bay College, University of Sierra Leone (1984) and a WAEC School Certificate from Prince of Wales School,
Freetown, Sierra Leone (1979).
Previous positions include the Chairman of the Ecowater and Energy Services Company Ltd, Chairman of Staco Insurance Company Sierra
Leone Ltd, President of the National Association for Indigenous Businesses, Senior Trader at Partenaire Service a LIndusterie in France and a
Commodities Trader for Intraco Consultants Inc.
During his career he has visibly achieved a strengthening of the relationship between Nigeria and Sierra Leone. He was responsible for
creating the Sierra Leone Nigeria Economic Commission (SLENIG) and the NIGERIA SIERRA LEONE CHAMBER OF COMMERCE.
In addition, he has worked tirelessly and successfully to take Nigerian Companies to Sierra Leone, fostering trade and economic development
between the two countries. This includes the Leading of Business Club Ikeja to Sierra Leone on a Business visit. He has also participated in
various Government/Private Sector negotiations and programs.

QUESTION: Please provide the
readers of the Africa Energy Yearbook
with an overview of Sierra Leones
power sector in 2015.
ANSWER: There has been significant
improvement in electricity supply over the
last few years. However, the demand for
energy far exceeds supply and the sector
is faced with the following challenges:
Outdated transmission and
distribution system resulting in high
line losses, estimated at about 40%
of units generated.
Insufficient generation capacity: Only
about 10% of the population has
access to electricity from the national
power grid.
High seasonal variability in
hydroelectric power production
The Governance structure of
the entire energy sectors is being
overhauled and reformed with:
- A recently unbundled utility
(December 2014)
A. Electricity Distribution
and Supply Authority, EDSA
B. Electricity Generation and
Transmission Agency
- A recently formed (December
2014) Regulatory Commission
Our Energy Sector Strategy defines
our expected installed electricity
capacity growth to 1000MW by
2017/2018, with its associated
improvement in transmission. This
is to provide for the anticipated
domestic and demand growth.
QUESTION: My understanding is
that Sierra Leone has huge potential to
boost its economy through the tourism
sector. If this is still the case, what
opportunities are there for investors
in the power sector considering this
approach and other targeted growth
areas in the country?
ANSWER: Sierra Leones energy
sector offers a number of investment
opportunities in terms of direct investments
and public-private partnerships.
Harnessing Untapped Hydro
Potentials of up to 2,000MW.
Renewable energy potentials,
with solar power generation. The
country boasts significant solar
power potential with 2, 187 hours
of sunshine a year with generation
potentials estimated at between
1,46018/1,800 GWH per annum.
With ongoing industrial and
manufacturing investments in the
extraction of iron ore, the processing
of ore into steel as well as agro-
processing businesses come on stream,
there is need for complementary
thermal power generation. Medium-
term estimates for thermal power are
projected at about 850MW to meet
these requirements, with expectations
of increased demand thereafter.
The production of bio-diesel and
ethanol from palm oil and sugar cane
are investments that the Government
offers additional incentives over and
above general scope of incentives
in the country. The production of
bio-diesel may be integrated with
state-owned oil palm plantations at
Kambia and Mattru in the Bonthe
District, which are available for
private sector participation.
Sierra Leone has ready access to export
markets for energy in the West African
market through the West African Power
Pool, an energy market created through
a regional infrastructure protocol of
ECOWAS. Favourable incentives in
place for private sector participation
in the development of the countrys
segment. Potential external demand in

2015 Africa Energy Yearbook 119

 SUSTAINABLE SOLUTIONS FOR AFRICA
the immediate neighbouring countries
of Liberia and Guinea is estimated at
over 2,3500MW.
There are opportunities for investing
and operating a T&D network, as
an unbundled component in energy
generation and distribution: A
national network of almost 1,500Km
of transmission and distribution.
QUESTION: Sierra Leone has been
very proactive about developing its
power sector. However, one of the major
barriers to investment is the speed with
which projects are developed; what is
the Ministry doing to speed up the
process of project development and
how can investors rely on the data
available to them with regards to GDP
and investor insights?
We have streamlined the review process of
proposals in the Ministry by the creation of an
ANSWER: We have streamlined the
review process of proposals in the
Ministry by the creation of an Energy
Task Force. This group boasts a cross
section of all Government Stakeholders
necessary for input and decision making
on projects. With bi-weekly meetings,
projects are reviewed with increased
speed and full participation and buy-in.
In addition, our Ministry employs
clear and transparent procedures for
private sector participation in the
energy investments, through PPPs.
The institutional capacity, institutional
arrangements for issuance of IPP licenses,
execution of PPP Agreements and general
regulation of the energy sector are being
enhanced and streamlined.
Our indicators are transparent as
Government continues to implement
policies that provide a conducive business
environment for the private sector by
enhancing institutional and regulatory
reforms. In addition, the World Banks
120
Doing Business Report to reduce the
cost of doing business is used as a guide
to reform all relevant sectors:
Initiatives to streamline procedures
for starting a business, by rationalizing
municipal license fees; enabling
online registration of companies; and
decentralizing the work of the Office
of the Administrator and Registrar
General (OARG) by creating one-
stop-shop in all District headquarter
towns. Business procedures applicable
either within the country and/ or
across borders, will be effectively
disseminated through all available
channels.
For paying taxes, we have adopted
a small tax-payer regime; it will
simplify tax return forms to reduce
time needed to complete them. We
Energy Task Force.
will also implement an electronic
filing and payment system.
A Fast-track commercial court has
been set-up to expeditiously handle
commercial disputes, and promote
use of alternative dispute resolution
to enforce contracts.
An expedited procedure for the
issuance of Construction Permits.
Streamlining of export procedures at
the port and border posts.
QUESTION: Can you tell us about
your vision for 2030 what does Sierra
Leone look like then and how will the
energy and industrial footprint of the
country have changed?
ANSWER: We believe that access to
Electricity and Power is a basic right.
By 2030 there will be full penetration
of power to all corners of Sierra Leone.
Our power utilities and supply of
electricity would have matured, with IPPS
dominating the market, providing power
at competitive rates. Our Base Load power
will be renewable Hydro, supported by
distributed Solar and thermal power. We
wold also have deployed off grid solutions
for rural electrification hereby providing
electricity to the entire Country.
QUESTION: What would your
message be to prospective investors
and developers entering Sierra Leone
for the first time?
ANSWER: The EVD created a huge
crises in the sub-region and led to
waves of project staff being recalled and
resultant project delays in all sectors.
Sierra Leone has endeavoured and pulled
through. Prior to the crisis, our economy
was one of the fastest and most robust
in the region, and we are committed to
attaining those levels again.
With the recognition that the energy
sector is the foundation of all development
and access to reliable and affordable
modern energy is an important catalyst
for achieving high economic growth, we
are resolved to attaining those growth
levels again and remain optimistic about
the future!
Sierra Leone is open for business and
opportunities abound for investment
in all economic sectors especially in the
bedrock of energy. We do not think of
this phase as a post-Ebola era, but as a
start of a new and welcoming era for
investment.
Welcome!
Amb. Henry Olufumi Macauley
Minister of Energy
www.energy.gov.sl
2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

A YEAR OF SOLAR
PV IN EAST AFRICA
Laura Kiwelu, Senior Associate, Norton Rose Fulbright
Tanzania

Laura Kiwelu is a Senior Associate at Norton Rose Fulbright based in Dar es Salaam, Tanzania
and specialises in renewable and conventional power projects in Sub-Saharan Africa. Laura
advised Gigawatt Global on all aspects of their 8.5MW solar PV project in Rwanda, which
reached financial close approximately a year after power purchase agreement negotiations
commenced. Laura is currently advising on a first-in-country 40MW solar PV project in western
Kenya, and is advising the developer on a second solar PV project in Rwanda. In Tanzania, as
part of a local team, she is advising renewable developers on wind, solar PV and hydropower
projects, including captive power projects, grid connected projects and off-grid projects. Laura
also previously advised the Zimbabwe Power Company on the expansion of the Kariba South
hydropower project and the Hwange coal-fired project. Prior to her move to Tanzania, Laura
was in Norton Rose Fulbrights energy projects team since qualifying in 2006 and spent three
years on secondment to European power generation company Drax Power as legal counsel.

On a daily basis the sun provides about 10,000 times more energy to the world than we consume. Africa has the
highest concentration of solar irradiation in the world and therefore the potential of solar energy by far exceeds
the potential of all other renewable sources on the continent (including hydropower).

O n these bare facts, one can only conclude that the potential
for solar energy in Africa is enormous. Now to focus on
East Africa, where solar irradiation is estimated at between
4-6 kWh /m/day, while the region has the lowest access to
electricity and the smallest per capita generation compared to
all other regions of the continent. GDP in Uganda, Tanzania,
Kenya and Rwanda is accelerating at an increasing rate, but
so is the risk that, if electricity infrastructure fails to keep up,
it will increasingly act as a ceiling on GDP growth. Climate
change has led to increasingly unpredictable rainy seasons in
East Africa, and with hydropower as the dominant generation
resource, this has meant load shedding and reliance on costly
emergency power solutions during periods of drought. At the
same time the cost of solar photovoltaic (PV) technology has

2015 Africa Energy Yearbook 121

 15831 PEA Brochure Updates_Layout 1 26/02/2015 14:28 Page 5

EnergyNets
Organised by:

EnergyNets to
commitment
commitment
East Africa: to
East Africa:
EnergyNet is an energy business looking to support the aspirations of Africa our objective is to aid the uptake of
electricity increasing economic development and job creation. Additionally, EnergyNets engagement with the East
EnergyNet is an energy business looking to support the aspirations of Africa our objective is to aid the uptake of
Africanelectricity
power transmission sector development
increasing economic enables us to:
and job creation. Additionally, EnergyNets engagement with the East
EngageAfrican power transmission
international sector
investors and enables
provide us to:
opportunities for the development of business partnerships leading to
increased electricity
Engage in East
international Africa.and provide opportunities for the development of business partnerships leading to
investors
increased electricity in East Africa.
Provide an environment in which open and transparent dialogue takes place supporting the uptake of energy projects.
Provide an environment in which open and transparent dialogue takes place supporting the uptake of energy projects.
Host forums in East Africa annually, enabling EnergyNet to invest over US$250,000 in the economy of the country
Host forums in East Africa annually, enabling EnergyNet to invest over US$250,000 in the economy of the country
Recruit local staff at all events and source and print all materials locally.
Recruit local staff at all events and source and print all materials locally.

Organisations we
Organisations wework
work with acrossthe
with across thecontinent:
continent:

Ministry of
Ministry of Minerals,
Ministry of Energy Ministry of Ministry of Ministry of Ministry of Ministry of
Environment
Ministry of Angola Minerals,&Energy
Water Affairs, Energy &
Ministry ofMines, Energy & Water
Ministry of Mines, Petroleum
Ministry of Water Irrigation
Ministry& of Energy & Minerals,
Ministry of
Botswana Burkina Faso Resources, Cameroon Resources and Energy, Energy, Ethiopia Tanzania
Environment Angola & Water Affairs, Energy & Mines, Energy & Water Mines, Petroleum Water Irrigation & Energy & Minerals,
Cote dIvoire
Botswana Burkina Faso Resources, Cameroon Resources and Energy, Energy, Ethiopia Tanzania
Cote dIvoire

Ministry of Ministry of Ministry of Ministry of Minister of Ministry of Tanzania Electric

Industry & Mines, Energy, Ghana Energy & Electricity & Renewable Petroleum, Energy & Energy, Mozambique Supply Company
Gabon Petroleum, Kenya Energy, Libya Mines, Mauritania
Ministry of Ministry of Ministry of Ministry of Minister of Ministry of Tanzania Electric
Industry & Mines, Energy, Ghana Energy & Electricity & Renewable Petroleum, Energy & Energy, Mozambique Supply Company
Gabon Petroleum, Kenya Energy, Libya Mines, Mauritania

Ministry of Namabia Power Utility Ministry of Ministry of Ministry of Public Utility Company, Energy and Water
Mines & Energy, Namibia Company Power, Nigeria Energy & Power, Sierra Public Enterprise, South Africa Utilities Regulatory
Leone South Africa Authority, Tanzania

Ministry of Namabia Power Utility Ministry of Ministry of Ministry of Public Utility Company, Energy and Water
Mines & Energy, Namibia Company Power, Nigeria Energy & Power, Sierra Public Enterprise, South Africa Utilities Regulatory
Leone South Africa Authority, Tanzania

Ministry of Foreign Ministry of Ministry of Ivorian Electricity Mozambique Electricity General Electricity National
Affairs, Ethiopia Energy & Water Energy & Power Production Electricity Supply Corporation Company of Libya Integrated Power
Development, Development, Company Company of Malawi Project, Nigeria
Zambia Zimbabwe

Ministry of Foreign Ministry of Ministry of Ivorian Electricity Mozambique Electricity General Electricity National
Affairs, Ethiopia Energy & Water Energy & Power Production Electricity Supply Corporation Company of Libya Integrated Power
Development, Development, Company Company of Malawi Project, Nigeria
Zambia Zimbabwe

www.energynet.co.uk
www.powering-eastafrica.com

www.powering-eastafrica.com

plummeted to below the cost of thermal power, with the cost
of panels falling by 75% in recent years. Could solar PV, which
would be charged by the sun when river levels are down and
hydro plants are ailing, be an effective instant solution to East
Africas power needs?
East Africa benefits from huge renewable resources, all of
which are under-utilised. Furthermore, East Africa is a focus
for international developers (many with a proven track record
in the US, Latin America, Europe or South Africa) backed by
a plethora of development funds, grants and serious investors
with sizeable pockets. That said, from discussions on the
ground with stakeholders an imbalance between the investment
resource available and the amount of viable pipeline renewable
independent power projects in East Africa is highlighted. The
key cornerstones of a viable project are secure land rights, a
bankable power purchase agreement (backed by government
support arrangement) and a robust regulatory framework
sufficient to safeguard an investment of up to 25 years. Regional
governments clearly have the intent to include solar PV in the
resource mix solar PV has notably appeared on all regional
energy policies however in most instances, developers still
face a number of hurdles in procuring the right to start PPA
negotiations, and then exiting the negotiation process with a
bankable set of project documents.
Notwithstanding such hurdles, the last year has marked
substantial progress in the penetration of solar PV plants in
East Africa. On 5 February 2015 the first utility scale solar PV
project in East Africa was officially inaugurated in Rwanda
an 8.5 MW project developed by Gigawatt Global at the
Agahozo Shalom Youth Village. This is indeed the first IPP to
be operational in Rwanda, highlighting the speed at which
solar PV can be developed, financed and built, and is currently
providing 7% of Rwandas electricity. A second 10MW solar
PV project has since been tendered and awarded to the Goldsol
consortium. Further projects are now following in Kenya where
the feed-in-tariff programme, enhanced by Kenyas IPP track
record, has attracted increasing developer interest and the first
solar PV PPA is imminent. In Uganda, the GETFiT 20MW
solar PV round received 24 expressions of interest before being
awarded to Simba Telecoms/Building Energy and Access Power/
TSK, and a further 30MW is anticipated to be tendered in
the near future. In Tanzania there are various early-stage PV
projects, a template solar PV PPA has been prepared and it is
envisaged that a feed-in-tariff will be launched in 2016.
Focussing on solar PV project negotiations - the Gigawatt PPA
took six months from start of negotiations to execution. This
was due to the commitment of the teams involved and the
facilitating environment of the Rwanda Development Board in
setting aside sufficient time slots for meetings and bringing the
various governmental institutions to the negotiating table. The
Gigawatt team could therefore have one point of focus during
negotiations, rather than having to correspond with several
governmental institutions, and the process was streamlined.
2015 Africa Energy Yearbook
SUSTAINABLE SOLUTIONS FOR AFRICA
Looking at the region as a
whole, the future of solar PV in
East Africa is bright.
Another time intensive stage in solar PV negotiations is dealing
with the concern of the effect of the PV plant on the existing
grid infrastructure, and ensuring a consensus between respective
engineers on the operation of the plant which can then be
documented in the PPA. Aside from the grid, the other issue
faced by developers is getting the utility comfortable with the
current lack of historical data which would enable the generator to
accurately forecast the output of the PV plant (even in comparison
to a wind plant). This then consequentially leads to the issue of
how to calculate deemed delivered energy where the PV plant
is unable to generate. On each of these points, developers have
resorted to independent consultants to provide analysis to the
utility engineers on the key facets of the operation of the plant.
Looking at the region as a whole, the future of solar PV in East
Africa is bright - large-scale competitive tenders in South Africa,
Jordan and Dubai have driven down the cost of solar PV to
unprecedented levels. The lowest tariff seen so far is 5.98 US
cents/kWh achieved by Dubai Electricity and Water Authority
in its November 2014 tender for the 100MW Mohammed bin
Rashid Al Maktoum Solar Park. The average solar PV pricing
for Round 3 of South Africas Renewable Energy Independent
Power Producer Procurement Programme was approximately
7 US cents/kWh, representing a reduction of 68% compared
to Round 1 in 2011. Whilst the cost of deployment of solar
PV in Dubai and South Africa is not directly comparable to
East Africa, the downwards effect of competitive auctioning
on the price of solar PV is clear. Uganda is an early promising
sign of competitive auctions in East Africa, with its tender
(aided by robust template project documents) resulting in a
tariff of 16.37 US cents/kWh. Of this 11 US cents/kWh will
be paid by Ugandan consumers, with the remainder being paid
by public sector development partners. It is anticipated that
Kenya, acting through its Public Private Partnerships Unit,
may be next to launch a competitive tender process. Scaling
Solar, an initiative launched by the World Bank Group on 29
January 2015, has been established to aid solar PV tenders in
Sub-Saharan Africa. The objective of Scaling Solar is to speed
up the deployment of solar PV by the engagement of several
World Bank Group services and use of a standardised template
123
 SUSTAINABLE SOLUTIONS FOR AFRICA

project documents which are backed by World Bank partial risk

guarantees, MIGA insurance and IFC funding; potentially a key
step forward in commoditising solar power on the continent.

Apart from grid connected solar PV, the modular nature of PV

means that it can be truly scaled-up from the ground. Regionally
based entrepreneurs such as Off-Grid Electric and M-KOPA
solar are now providing pay-as-you go residential off-grid
solutions which, together with solar charged kiosk franchises,
are being progressively scaled-up and rolled out in the region.

A further development of solar PV is as a hybrid technology

in conjunction with diesel in supplying power to regional
intensive users. Integrating solar PV within diesel generation
during peak daylight hours has the effect of driving down fuel
consumption and offsetting costs. East Africa - with its energy
hungry cement factories and extensive mining concessions
located in remote areas beyond the grid - is a key market for
this innovative technology. There is potential for IPPs, subject
to an enabling regulatory framework being in place.

Integrating solar PV within

diesel generation during peak
daylight hours has the effect of
driving down fuel consumption
and offsetting costs.

A key accelerator of the penetration of solar PV in Sub-

Saharan Africa will be energy storage, which has the potential
of turning an intermittent resource into a dispatchable resource
particularly lifting the solar generation profile into the evening
peak demand period by way of a time shift. The cost of
batteries required for PV energy storage is predicted to fall
(echoing the fall in panel costs) and analysts have predicted a
worldwide market of at least $19 billion by 2017. A small yet
symbolic 250kW hybrid system (combining PV, batteries, diesel Gorge Edozie | Four faces of Agbogho Mmuo 2, 4
generators and grid interface) is being developed by Enertronica For price contact Aabru Art / art@aabru.co.uk/
and Rossi Impianti in Eritrea, so placing East Africa firmly +44 7847 244 217
on the map for the future deployment of solar PV storage.

124 2015 Africa Energy Yearbook


A STEP AHEAD OF
THE GAME
Site Selection and Constraints Mapping through
Geographical Information Systems (GIS)
Alan Cochran, Senior Consultant:
Impact Assessment & Planning
Practice, ERM
Alan holds a BA Hons in Geography and Environmental Management
and has 9 years experience in environmental consulting. Initially
Alan worked as a specialist in the field of biodiversity where he
developed core competencies in the following areas: biodiversity,
GIS and remote sensing, environmental management; logistics;
monitoring; biodiversity off sets; and ecosystem goods and services.
In the latter part of his career Alan moved into project management
of environmental assessments on large capital projects. He has
worked on over 70 projects across 12 different African countries
throughout the project life-cycle from exploration through pre-
feasibility to feasibility, to operation and closure.
Selecting a site that minimises environmental and social impacts can help to avoid unnecessary permitting
delays, costs and community conflicts and can help you to justify your preferred site(s) and build trust with
project stakeholders.
T he site selection phase of a project is typically plagued by
limited budget and time pressure. At this stage investors
are reluctant to pay for extensive studies that can be costly
and time consuming, often to reveal a negative result or fatal
flaw. This environmental and social constraints exercise can be
used in conjunction with technical and engineering constraints
such as options for evacuation of power, transport links and
fuel availability.
THE BENEFITS OF GIS
Embedding Geographical Information Systems (GIS) at the
concept/site selection stage can save significant time and costs.
A variety of datasets that would not normally be comparable
side-by-side on any one system can be brought together into
one geographical projection on a single platform, optimising the
2015 Africa Energy Yearbook
SUSTAINABLE SOLUTIONS FOR AFRICA
Andrew Bradbury, Partner and
Commercial Director: Sub Saharan
Africa Division, ERM
Andrew has over 20 years experience in the environmental field.
He has focused on the environmental planning and assessment of
major capital projects. His experience covers power (conventional
and renewable), oil and gas, transportation and urban development.
Andrew has led numerous assignments covering environmental,
social and health impact studies, environmental management,
stakeholder engagement, due diligence and training and capacity
building. Andrew has worked in Europe, Africa, the Middle East,
Asia and the Caribbean.
modelling process for a rapid regional assessment. Costs are not
only reduced from the time involved in the decision making,
but also by making use of freely available tools alongside a GIS
platform, such as ESRIs ArcGis.
The phrase a picture paints a thousand words rings true in this
instance. The ability to present information visually in a map
format provides a common picture for all stakeholders within
the project, enhancing engagement and understanding.
Whilst there are a veritable plethora of datasets, tools, and
options out there, the real skill lies in knowing which of these
tools should be used. Central to this are two things; 1) knowing
the level of detail you require in order to make decisions; and
2) knowing which tools are available and how they can be used
in order to generate the answers.
125
 SUSTAINABLE SOLUTIONS FOR AFRICA

Imagery of the entire earths surface

has been captured using either aerial photography
or satellite imagery.

A CHANGING LANDSCAPE Mozambique. ERM recently assisted Regius with an assessment

Over the last 40 years, a body of digital geospatial data has
been accumulating on a global scale, to the point where now
imagery of the entire earths surface has been captured using
either aerial photography or satellite imagery.
Prior to the mid-2000s this data was difficult to acquire
as most satellites were owned by governments or research
organisations. Data was available for purchase at a premium,
but at a project level this could be very costly. Recently there
has been exponential growth in data processing power, software
capability and interconnectivity, and a corresponding torrent
of mapping and analysis - almost all of which is available
online, much of it completely freely. Yet companies are still
struggling to use this captured data at the project concept and
site selection stage.
FINDING THE RIGHT DATA FOR YOU
In the context of environmental and social considerations
for site selection, it is often difficult to navigate this maze of
information and find an approach that is fit-for-purpose. The
first hurdle is to take the time to really understand what data
you actually need to analyse. Which geographical area does it
need to cover? How many communities are in the area? Do
they farm on the land? Which protected species are present
and are their movements important, or just which habitats
are available? The time invested at the start of a project in the
design of the study is of paramount importance.
of three possible solar photovoltaic sites within Mozambique.
This was done by rapid identification of environmental and
social constraints to the project development using GIS and
image processing of remote sensing data. The constraints
analysis Area of Influence (AoI) for the three sites was defined
by a 10km buffer zone around the proposed substation co-
ordinates. In this instance, freely available LANDSAT images
were classified using ERDAS Imagine software in order to
produce a land use / land cover map. This was done using a
combination of image processing techniques (supervised and
unsupervised classifications) and visual mapping.
Each land use / land cover area mapped, was then assigned
a constraints rating based on two main factors; legal drivers,
such as Land Law Regulations and Protection Zones,
and environmental/social drivers such as vegetation type,
commercial/subsistence land use, settlement areas and aquatic
or wetland ecosystems.

OPTIMISING SITE SELECTION

Recently there has been
THROUGH GIS AND REMOTE
SENSING
exponential growth in
Once these details have been determined, the available data processing power,
datasets can be sought out and a pragmatic approach can
be applied. Using a GIS and spatial data to analyse potential software capability and
sites and for options selection can be quick and cost-effective,
providingcompanies with enough information to strategically interconnectivity, and a
move forward with their infrastructure project.

Regius Resources Group Ltd, an ERM client, is focused on

corresponding torrent of
acquiring and developing highly prospective mineral and
energy assets with a focus on minerals, petroleum, power, coal
mapping and analysis.
and synthetic fuels projects in Southern Africa, particularly

126 2015 Africa Energy Yearbook

 SUSTAINABLE SOLUTIONS FOR AFRICA

EXAMPLES OF ENVIRONMENTAL AND SOCIAL CLASSIFICATIONS:

Land Use / Land Cover: Commercial Agriculture

Description: Commercial or large scale crop farming.
Actions Involved: Developing here would typically involve land purchase and
rezoning.
Constraint Level: Moderate-High to High

Land Use / Land Cover: Dense Vegetation

Description: Areas where there is dense bushveld or woodlands. These area are
typically set aside for Machambas and slash and burn subsistence farming is practiced.
Actions Involved: Investigate economic displacement. Potentially
pay the government for lost wood due to the project. Possibility of important
biodiversity features which would need to be investigated.
Constraint Level: Moderate

Land Use / Land Cover: Settlement

Description: Where people live.
Actions Involved: Physical and economic resettlement.
Constraint Level: High

Land Use / Land Cover: Riverine Vegetation

Description: Includes river banks which are typically dominated by woody
species. These areas are important from a biodiversity and social perspective as
they provide both functioning and provisioning ecosystem services.
Actions Involved: Project avoidance. These areas are also covered mostly by
Partial Protection Zones.
Constraint Level: High

The data in each buffer zone for the AoI was then allocated an environmental or social constraint in the GIS dataset according
to the rating scale shown below:

Constraint Description

No-Go Covered by Total Protection Zones.

High Areas covered by Partial Protection Zones, and areas that have high level of
Environmental / Social constraints to overcome.

Moderate-High Areas not falling within any protection zones but still have a considerable level
of Environmental / Social constraints.

Moderate Areas not falling within any protection zones and have a moderate level of
Environmental / Social constraints.

Moderate-Low Areas not falling within any protection zones and have a moderate-low level of
Environmental / Social constraints.

Low Areas not falling within any protection zones and have a low level of Environmental
/ Social constraints.

2015 Africa Energy Yearbook 127

 SUSTAINABLE SOLUTIONS FOR AFRICA

Gbenga Offo | The Quartet | 2014 | Oil on canvas | 130 x 108 cm

For price contact Aabru Art / art@aabru.co.uk/ +44 7847 244 217

128 2015 Africa Energy Yearbook

 SUSTAINABLE SOLUTIONS FOR AFRICA

Google Earth is a universally

Following conversion of the Classification and Constraints
files to Google Earth format, Google Earth, an online tool
that allows users to go anywhere, on any device for free, was
then used by Regius in active site assessment and project
planning. This data could have been supplied to Regius in
any number of formats (GIS, CAD, etc.) but Google Earth is
a universally used and understood tool that provide simple
and easy mapping for anyone. By supplying the data in
Google Earth format, ERM empowered Regius to interact
with the data easily, without requiring any expensive software
or specialists GIS training.
Above: The data progression from LANDSAT datasets, classifications
and constraints, to an interactive Google Earth dataset.
used and understood tool...
Each land cover or land use was then considered in the
Mozambican Environmental or Social context and a rating
rationale was developed. This was then translated into a
constraint rating, which enabled Regius to view the legal,
environmental and social constraints of each proposed site at
the touch of a button.
By mapping the constraints, as opposed to having a single
overall rating for each 10km buffer zone, a project manager can
identify specific geographical areas for further investigation for
legal, environmental or social constraints, which means that
time and effort is focused accordingly.

To find out more about how GIS and remote sensing can enhance your project, please
contact:

ALAN COCHRAN JOHN LEE

ERM, South Africa ERM, United Kingdom
E: alan.cochran@erm.com E: john.lee@erm.com
T: +27 117 984 300 T: +44 1865 384 867

2015 Africa Energy Yearbook 129

 We have investments in more than 85
developing countries, offering our clients a
variety of financial products.
Elvira Eurlings
 SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE

ELVIRA EURLINGS, DIRECTOR OF THE ENERGY DEPARTMENT, FMO

Elvira graduated as an economist at Tilburg University in 1999 in the Netherlands. After having worked at the Ministry of Finance in the
Netherlands for five years, Elvira joined the International Monetary Fund in Washington D.C. where she worked as a senior advisor to the
governments of the Balkan and CIS countries. In 2007, she started her career at FMO as an investment officer in the Europe and Central
Asia division, focusing on corporate clients and financial institutions. In 2010, Elvira was appointed manager of the credit analysis team and
chairwoman of FMOs investment committee. In 2013 Elvira became manager of the Energy team, responsible for transactions in Latin
America and South and East Africa, and in December 2014 was appointed as Director of the Energy department.

BERNHARD VAN MEETEREN, SENIOR INVESTMENT OFFICER,

STRUCTURED FINANCE ENERGY, FMO

Bernhard van Meeteren works with The Netherlands Entrepreneurial Development Bank FMO (Nederlandse Financierings-Maatschappij
voor Ontwikkelingslanden N.V.). Within FMO he and his team focus on providing financing for energy projects with an emphasis on the
Least Developed Countries and on Renewable Energy. The team is considered to be one of the main players in arranging and providing
financing for energy and infrastructure projects in Sub-Saharan Africa. In 2010 the FMO team received the Africa Energy Award for Best
Financial Support to the Power Industry in Africa, while Bernhard was runner-up for the 2010 Award for Leading Africa Energy Personality.
Mr. van Meeteren joined FMO in 2002 after working 16 years with ABN Amro Bank and ING Bank, mainly in Project Finance and Global
Relationship Management. He holds a MSc degree in Civil Engineering from Delft University of Technology in The Netherlands.

QUESTION: What has been the most
rewarding energy project you have been
involved with in your career?
ANSWER BERNHARD: Probably
the most rewarding project has been
Bujagali. I remember the first meetings
on the PPA, a diner in a hotel where
we were the only guests, in the dark
as the electricity grid went down.
Thereafter more than 18 months of
intensive meetings to get the financing
documents agreed, with tough and
difficult negotiations. Since the start
of construction there were monitoring
trips with a large lender group which was
always a nice way of meeting colleagues
from other institutions. Meanwhile
construction progressed, there were
cost-overruns, additional financing was
needed and the project took 14 months
longer than expected to complete. When
I visited the Bujagali project two weeks
ago, it was a smooth operation, the soft
humming of hydroturbines in a clean
power house. You could hardly imagine
that it had cost such an effort to move
that project to where it is now.
QUESTION: In your opinion, what
are the cornerstones of a successful
public-private partnership in Africa?
Can you share with us an example
of one?
ANSWER ELVIRA: Tremendous
efforts are under way to address Africas
overall infrastructure challenges. But the
needs on the ground are still immense.
Infrastructure is one of the key challenges
facing policymakers in the region, and
when well organized and tackled, the
benefits to the economy and growth
of the countries concerned are clear.
Resources from governments and donors
are insufficient to meet the overall
challenges in this area. Hence, smart and
well-designed Public Private Partnerships
(PPPs) can make a significant contribution
to Africas growth momentum.
Many examples in our portfolio,
constituting energy transactions in Africa,
illustrate the successful workings of PPPs
in Africa. Although every transaction
and environment requires a tailor-made
approach, some features are eminent for
its success. Let me mention three of those
critical features.
It first of all starts with a government
supported sector program in which a
priority and clear vision is presented to
boost the infrastructure- energy agenda
of a country. Such a program would
include clear regulatory frameworks
and transparent practices, dealing for
example with concessions. The roles
and responsibilities for public and
private players should be clear, whereas
the public bodies in this framework
need to be financially well equipped or
supported by the government to fulfil
its obligations. Cost reflective tariffs are
important to allow these bodies to act in
a sustainable manner.
Secondly, in order for financiers to play
their role in the funding of any project,
they need strong and knowledgeable
partners; sponsors that have a solid
track record and are familiar with the
local context. Thirdly, financiers such as
development finance organisations like
FMO should aim to provide tailor-made
financing solutions, remaining innovative

2015 Africa Energy Yearbook 131

 SUSTAINABLE SOLUTIONS FOR AFRICA
Tremendous efforts are under way to address
Africas overall infrastructure challenges. But
the needs on the ground are still immense.
and creative while including the necessary
guarantees and arrangements to balance
the risks taken on board.
QUESTION: Supporting private sector
development in developing markets
must mean you often encounter risky
investment environments - how does
FMO adapt to this?
ANSWER ELVIRA: For the last 45 years,
FMO has been investing in the private sector
in developing countries. Our committed
investment portfolio totals EUR 8 billion as
of end 2014. We have investments in more
than 85 developing countries, offering our
clients a variety of financial products as well
as expertise and access to our networks.
That is how we feel we create value. Many
years of sustainable investing in developing
countries, combined with our focus on
When I visited the Bujagali project two
weeks ago, it was a smooth operation, the
soft humming of hydroturbines in a clean
power house. You could hardly imagine
that it had cost such an effort.
Bernhard van Meeteren
132
Elvira Eurlings
key sectors such as the energy sector, has
enabled us to build a strong knowledge
base. We apply this knowledge to all our
activities and actively share our expertise
with our clients and partners. We employ
specialized and diverse staff who bring high
qualifications and credentials necessary
to work within risky environments and
structure transactions with necessary risk
mitigants.
BERNHARD: We support many
energy projects by providing financing.
But providing the financing itself is not
the main issue, as there is plenty available.
The biggest effort goes in understanding
the legal and operational framework in
any African country and finding ways
to deal with the risks that are posed by
such a legal and operational framework.
Those efforts require an understanding
of that environment and a willingness to
spend time with project developers and
government representatives to find an
equilibrium between the various interests
that needs to be found in order to make a
project happen.
QUESTION: You have been coming
to the Africa Energy Forum for a
number of years now- what do you
consider to have been the most
significant changes in the sector
over this time? Have these changes
influenced the perspectives of those
coming to the Forum?
ANSWER BERNHARD: There
are two significant changes to the
first AEFs. The first is the number
of people. The second is that in early
AEFs we were discussing projects that
could be realised, but there was in the
best years only one IPP transaction
realised. At this moment we can not
only discuss many projects that are in
the process of being realised, but we
can also celebrate those projects that
have been realised. The growing pace
of transactions happening is the largest
change of the scene.
QUESTION: Who are you most
looking forward to meeting at this
years Forum in Dubai?
ANSWER ELVIRA: We are looking
forward meeting our clients, partners,
prospective clients and country
representatives. Together with our
colleagues from DEG and Proparco,
we are pleased to participate in various
panels and as speakers in the discussions.
We look forward to another fruitful AEF
this time in Dubai!
2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

POWERING
AFRICAS FUTURE
BY WIND
Kasper Dalsten, Director Global Business Development,
Vestas Wind Systems

Kasper Dalsten is Director of Global Business Development at Vestas Wind Systems. Based in
Madrid, Spain, he covers market entry planning and risk mitigation in emerging markets across
the globe. This includes risk mitigation as well as strategic planning of supply chain localisation
in new markets.
Kasper holds a masters degree in Finance and Development (London) and a masters degree in
Economics (Copenhagen). He started his career in the Danish Ministry of Finance where he
worked on renewable energy policies and competition in the energy sector.
He has significant experience from living and working in Africa. Before joining Vestas in 2011,
he worked in the World Banks Country Office in Uganda. Prior to that he worked as Economic
Attach at the European Unions Delegation to Zimbabwe and as Budget Officer in Ministry of
Finance in Malawi. He therefore has first-hand experience with the economic development and
power sector challenges in Africa.

Vestas estimates that at least 7 GW of wind power could be commercially exploited in sub-Saharan Africa (excl.
South Africa) by the end of the decade

AFRICAS ENERGY DEFICIT
Africas energy deficit is well-known; so is the relationship
between access to affordable and reliable electric power and
economic development. Nonetheless, the facts are so startling
that a few of them deserve repetition:
In sub-Saharan Africa (SSA) as a whole, only 290 million
out of its 915 million inhabitants have access to electricity.
Even more depressing is the fact that the absolute number
of people without access to electricity in SSA is increasing!
(IEA).
Grid-based generation capacity in SSA (excl. South
Africa), with a population of around 860 million, was
around 45 GW in 2012 (IEA). This is roughly the same
as peak demand in Spain (population 47 million) or in
Turkey (population 75 million).
Even then, what is available for active generation is much
less. Thus, power generation in SSA (excl. South Africa)
amounted to just 165 TWh in 2010, roughly the same as
generation in Sweden or in Poland (World Bank).
Average per capita power consumption in SSA (excl.
South Africa) is only around 165KWh/year. This is
equivalent to the energy consumption of a 60 watt light
bulb powered for 7.5 hours a day. In comparison, a fridge
may consume around 500-600kWh/year (World Bank).
The investments needs are immense. By some estimates,
US$490 billion of investments in new generation capacity
and another US$345 billion of investments in transmission
and distribution are needed for the region to meet its
demands by 2040 (McKinsey). Yet, SSA is still largely a
place where investments in the energy sector focuses on the
development and extraction of resources for export (IEA).

2015 Africa Energy Yearbook 133

 SUSTAINABLE SOLUTIONS FOR AFRICA
The lack of access to energy, and electricity in particular, not
only manifests itself in poor economic performances, poverty,
and the regions poor record on social-economic indicators; the
environment suffers too. Four out of five people in SSA rely
on solid biomass, mainly in the form of fuelwood, for cooking
(IEA). This leads to deforestation and the associated soil erosion
as well as detrimental health and safety impact on the population.
So why would wind power offer a solution to these challenges?
Well, first we need to take a closer look at the power sector
of today in SSA.
THE SUB-SAHARAN AFRICAN POWER
SECTOR
Electricity in SSA is expensive. The average tariff in SSA amounts
to US$0.17/kWh (or US$170/MWh). This is about twice the
average tariff paid in other developing countries. On top of that,
own-generation by firms forced to rely on expensive back-up
generators easily costs US$0.30-0.70/kWh (IMF). This reveals
demand as well as willingness to pay for grid-supplied electricity
in SSA. The question, therefore, is why the investments in SSAs
power sector are lagging so far behind demand.
To answer this, we need to assess the typical structure of the
power sector in sub-Saharan Africa.
Firstly, electricity generation in SSA is expensive. Excluding
South Africa, generation costs average US$150/MWh. In
countries mainly reliant on thermal generation, the average
generation costs reach US$210/MWh (IMF). In addition
to inefficient generation companies, this is partly driven by
costly emergency power generation as well as low economies
of scale in generation.
Secondly, SSA utilities are chronically cash-strapped. Despite
tariffs being high, they do not allow for full cost recovery. On
average, electricity tariffs in SSA only cover 70 per cent of the
cost of generating and distributing power. Most countries
apply administered pricing, and in addition distribution losses
(reflecting significant theft during distribution) are high (25%
The PPA for Lake Turkana is
about 25 per cent lower than
the average systems cost.
134
compared to the norm in developed countries of 10%), and
collection rates low (at around 85%) [IMF].
Aside from the perverse effect of subsidising those already
privileged enough to have access to grid connected electricity,
tariffs below cost recovery means that SSA utilities have had
limited opportunities to invest in new generation capacity
and upgrade the transmission and distribution network to
enhance access to electricity.
Thirdly, SSA power sectors are often dominated by vertically
integrated state-owned utilities, not conducive to attract
private investments. Until recently, the state owned utility
would be the only entity investing in generation capacity in most
markets, and we are seeing the results of that in the statistics
above. Only in a limited number of markets have electricity
market reform been undertaken, thus allowing for private sector
investments in new generation and distribution capacity.
In this context, why would wind power be an option worth
considering?
WHY WIND PROVIDES (PART OF) THE
ANSWER
Wind power provides a number of advantages worth
highlighting:
Wind power is affordable. Compared to current electricity
generation costs in SSA, wind power looks like a bargain. The
IEA estimates that the levelised cost of electricity (LCOE) in
SSA from wind power is just below US$100/MWh, obviously
depending on wind resource availability and location.
Nonetheless, this is on par with the LCOE from a combined
cycle gas turbine with gas prices at US$12/MBtu. In any
case, with just a fair wind resource, adding wind power to the
energy mix will only help reduce the average generation costs.
This cost-reducing effect is being demonstrated in practice
by the power purchase agreements negotiated for the 26
MW Cabelica wind farm in operation in Cape Verde,
and the flagship 310 MW Lake Turkana wind farm under
construction in Kenya. These two wind farms are among the
few privately owned utility scale wind power projects in SSA
(excl. South Africa), and in both cases the power purchase
agreements (PPA) signed were significantly lower than the
system average cost of generation. Thus, the PPA for Lake
Turkana is about 25 per cent lower than the average systems
cost. For Cabelica, the PPA is even more favourable, being
50 per cent lower than the average system cost.
Wind power utilises a domestic and free resource. The only
fuel of a wind power plant is the wind. This is obvious, but
the benefits of this are often overlooked or underestimated.
Firstly, wind power is independent of disruptions to the
fuel supply chain. Whatever the conflict in a neighbouring
country, the wind will blow the same. Secondly, the cost of
2015 Africa Energy Yearbook

No matter what happens to
local or worldwide oil or gas
markets, the cost of electricity
generated from a wind power
plant will remain predictable.
electricity from a wind power plant is roughly constant in real
terms over the lifetime of the asset (providing the asset is well
maintained), thus providing a natural hedge against fuel price
volatility. No matter what happens to local or worldwide oil
or gas markets, the cost of electricity generated from a wind
power plant will remain predictable.
Wind power is scalable. There is no shortage of grand yet
unrealised plans to develop nuclear, large hydro, or other resources
to address SSAs power shortages. This is no coincidence, as large-
scale power plants and investments bring with them large-scale
challenges and the need for very large financing packages which
are generally beyond the reach of the SSA governments. In
comparison, wind power is fast and scalable, allowing for gradual
build-outs and flexible solutions (e.g. the 26 MW wind farm on
four different islands in Cape Verde).
These advantages are in addition to the obvious
environmental benefits of wind power. Wind power is
clean at the local and global level. Power generation from
wind power requires no water, a non-trivial aspect in the
region. And while there may be some required changes in
land use as a result of wind power, these pale in comparison
with the social and environmental impact of new thermal or
hydro power generation. A spin off benefit from a windfarm
such as Lake Turkana in Kenya is the improvement in the
transport infrastructure required for the construction and
operation of the project which will provide, for those who
have experienced Kenyan roads, a real and lasting windfall.
We also know the arguments of the critics:
Myth: wind power plants generate power as the wind blows.
Well, this one may be true literally. Nonetheless, the
variability of wind power would pose only very limited
2015 Africa Energy Yearbook
SUSTAINABLE SOLUTIONS FOR AFRICA
challenges to system integration with penetration rates
below 20 per cent, although higher levels of penetration are
definitely possible (cf. Cabelica wind farm in Cape Verde
covering around 50 per cent of demand). More importantly,
in many SSA countries, wind power would work very well as
a complement to existing hydro power plants. And a wind
power plant continues to operate, even when the fuel supplier
has not been paid on time.
Myth: wind power is an unreliable technology unfit for Africa.
Wind power for power generation is a fully reliant technology
wherever the wind is blowing. Vestas standard contracts
guarantee 97 per cent availability and our track record beats
even that. I doubt there are (m)any existing power plants
in SSA which could demonstrate the same. The fact that a
windfarm consists of numerous turbines, over 350 in the case
of Lake Turkana, means that, even if some turbines have to
be shut down for repair or maintenance, the majority will
be generating. This is not true of coal or gas fired generation
which, in a country with limited generation capability, can
cause major problems if generation facilities suffer a forced
outage.
Myth: there is not enough wind in Africa. Some people have
read that the wind does not really blow near the Equator
and may extrapolate from this. Admittedly, there are a few
countries in SSA where wind power may not be commercially
exploitable. However, the majority of SSA countries have
wind spots at least on par with what is largely available in
Germany, which has almost 40 GW of installed onshore wind
power capacityalmost the same as the nameplate installed
capacity in all of SSA excl. South Africa.
Technical estimates indicate that there are enough wind
resources in Africa to power the entire continent seven times
over compared to current consumption (IEA). Every single
region in Africa could source at least four times its current
electric energy consumption from wind power. In other
words, wind scarcity is not a valid argument.
Vestas own estimates indicate that at least 7 GW of wind
power could be commercially exploited in the medium
term in SSA excl. South Africa; and this takes into account
grid integration, distance from grid, local competitiveness
and transport to site.
Whatever the exact number, the continent will surely not run
out of exploitable wind resources in the near term.
SO, IF WIND POWER IS SUCH A
WINNER, WHY ISNT IT HAPPENING
IN SSA?
Well, the good story is that to a certain extent it is.
Investments in utility-scale wind energy capacity in SSA
reached US$2.6bn in 2014, according to Bloomberg New
Energy Finance (BNEF). The lions share of that, however,
135
 SUSTAINABLE SOLUTIONS FOR AFRICA
goes to South Africa. Thus, installed wind power capacity in
SSA in 2014 stood at around 800 MW, with three-quarters
being installed in South Africa, and only around 200 MW in
SSA excl. South Africa.
While BNEF expects installed wind power capacity in SSA
(excl. South Africa) to increase more than ten-fold to 2.4
GW by 2020, this is far from what we at Vestas consider
technically and economically feasible, given the merits and
competitiveness of wind power.
Having pioneered wind power in more than 30 markets, and
with installations in 73 countries around the globe, Vestas
is confident that the technical and regulatory challenges to
wind power can be overcome in any SSA market. While
this requires collaboration between regulatory authorities,
developers, investors and technology providers, these
challenges are not showstoppers.
However, financing of wind power plants in SSA still provides
a significant challenge which has tended to keep wind power
investments at a sub-optimal level. And as of now, it is unlikely
that the private sector and national authorities alone can find
sustainable, robust and replicable solutions to this challenge.
THE CHALLENGE: OFF-TAKER RISKS
In mature markets in Europe and North America, wind
power investments are largely becoming a mainstream asset
class suitable for securitisation. Witness for example the yield
co enthusiasm for wind power plants in North America. The
attractiveness of wind power investments for yield cos reflect
the stable cash flow generated from a portfolio of wind power
plants. This in turn allows for inexpensive access to financing
of new investments.
Unfortunately, such a solution to the financing of wind
power investments is not replicable in SSA, at least outside
South Africa. And the key reason for this is the off-taker risk.
Off-taker risk refers to the trustworthiness of a, say, 20 year
power purchase agreement (PPA) between the owner of a
wind power plant and the off-taker, and in particular the risk
that the PPA will not be honoured throughout the lifetime
of the asset.
In SSA, there is usually only a single buyer of the energy
generated by a wind power plant. Recall that this off-taker is
often a state-owned utility, which is chronically cash strapped.
So, the counterparty of the PPA is a non-credit worthy entity
of a country which may itself not have an investment grade
credit rating, if it has any credit rating at all. Add to that
exchange rate risks and transfer risks, and the political and
commercial risks associated with a 20 year PPA become
insurmountable. In practice this means that save for a few
exceptions, privately financed investments in wind power
plants in SSA outside South Africa will remain subdued.
136
THE SOLUTION
One prescription to this challenge is power sector reform
providing a stable framework for independent power
producers (IPPs) and addressing the insolvency of off-takers.
Some countries in SSA, notably Kenya and Uganda, have
followed this route with some success. Nonetheless, it is fair
to say that recent IPP investments in these countries would
not have materialised without the implicit and explicit
guarantees provided by international financial institutions
(IFIs).
So while we wait for power sector reforms to deliver in
SSA, how may wind power plants provide an affordable
and feasible solution towards addressing the acute shortage
of generation capacity in SSA? Unfortunately there is no
silver bullet, and it is difficult to see how IPP investments in
wind power plants in SSA will take off without PPAs being
guaranteed by IFIs. Several IFIs are already working on
guarantee products which may provide the necessary cover
for investments to happen. However, all too often, these
products are bureaucratic and time consuming. In addition,
often more than one IFI is involved in each deal, which
carries a risk of over-multilateralisation, further slowing
down the process of achieving financial closure of viable
projects.
CONCLUSION
In summary, wind power provides a competitive and
economically and technically feasible solution to address
a significant part of the shortfall in SSA power generation
capacity. The private sector, in partnership with national
authorities, is fully capable of addressing technological and
regulatory challenges to system integration of wind power.
However, off-taker risks can at present only be addressed
through guarantees underwritten by IFIs.
One bold option would be to use international development
assistance to provide a guarantee fund for renewable energy
projects and their underlying PPAs in effect becoming a first
loss taker in the event of default. To accelerate the investments
in wind power plants in SSA, we therefore encourage IFIs
to develop rapid and flexible guarantee instruments, thereby
providing the foundation for powering Africas future by the
wind.
Sources
Bloomberg New Energy Finance (BNEF), H1 2015 Sub-Saharan Africa Market
Outlook, 2015
International Energy Agency (IEA), Africa Energy Outlook, 2014
International Monetary Fund (IMF), Energy Subsidy Reform in Sub-Saharan Africa,
2013
McKinsey & Company, Brighter Africa The growth potential of the sub-Saharan
electricity sector, 2015
World Bank, Africa Development Indicators, 2013; World Development Indicators,
2015.
2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE

VINOD KUMAR KHARE, CHIEF EXECUTIVE OFFICER,
ETHIOPIAN ELECTRIC UTILITY, ETHIOPIA

Vinod Kumar Khare, Chief Executive Officer of Ethiopian Electric Utility (EEU), has more than 32 years of experience in the field of power lines,
substation construction, operation and maintenance, grid operation etc. As Chief Executive Officer of EEU, he is responsible for transformation
of the electrical system of Ethiopia and ensuring compliance with the established APQC (American Process and Quality Centre) Electric Utility
process classification framework. The EEU is all set to achieve world class bench marks.
Prior to this, he served various positions at the Power Grid Corporation of India Limited, specifically leading transmission utility in Western and
Northern Indian Grids. He began his career as an Executive of National Thermal Power Corporation (NTPC), India. He has presented many
research papers in international seminars, and has a B.Sc., B.E.(Electrical), M.B.A. from reputed Indian institutions.

QUESTION: Ethiopia has a vast
capacity for the development of
renewable energy projects. What do
you expect the countrys energy mix to
look like in 10-15 years time? How will
it differ from today?
Present installed capacity of power
generation of Ethiopia is 2258 MW.
Diesel power generation contributes only
112 MW, compared to the 2146 MW
installed capacity coming from renewable
sources of energy.
A major portion of power generation
comes from hydro 1978 MW, wind
power generation capacity is 171 MW
and geothermal capacity is 7 MW. The
current power generation capacity consists
of 95% from renewable energy.
POWER PLANTS UNDER
CONSTRUCTION EXPECTED
TO BE COMMISSIONED IN
COMING YEARS
Hydro Power 9,000 MW
Wind Power 300 MW
Solar Power 300 MW
Geothermal expansion 70 MW
Waste-to-Energy power 50 MW
Co-generation 100 MW
The expected power generation is
estimated to be more than 10,000 MW.
The generation growth is expected to
surpass the growth of demand. The
differential power can be exported and
will also contribute towards the economic
prosperity of the country. In future, diesel
generation is being discouraged; however
the installed capacity is expected to be of
the order of 200 MW. Currently, some
areas are being fed through self-contained
systems (isolated DG set networks), which
will be increasingly connected to the main
electrical grid.
In the coming 10 years, approximately
98% of power from renewable energy
sources is estimated to comprise the energy
mix. More stress is being given to increase
the proportion of wind and solar power
to reduce dependency on hydro resources.
EnergyNet hosted the third Powering
Africa: Ethiopia meeting last November
in Addis. What developments are on the
horizon in 2015 regarding the countrys
power sector?
Some of the Transmission and Distribution
projects are scheduled to be completed this
year (2015), while some generation plans
currently under construction are expected
to start in either full or part generation.
Some of the generating units that are
expected to be commissioned this year
(a total of 1735 MW planned to be added
to the Grid):
5 units of 187 MW each & 2 units
of 375 MW each of Hydro plants
50 MW of waste-to-energy plants
TRANSMISSION NETWORK
The existing Transmission network totals
12652 circuit kilometer (ckm.) It consists
of 400 kV, 230 kV, 132 kV, 66 kV, 45 kV.
(687 ckm, 4223 ckm, 5033 ckm, 2234
ckm, 476 ckm respectively)
The transformation capacity is 7000 MVA.
The following Transmission projects are
expected to be completed by the end of
year 2015:
4 nos. 230 KV sub-stations
Approx. 90 km of double circuit
400 KV lines.
2 nos. of 132 KV GIS sub-stations
450 km of 230 KV lines.
The upgrading of 4 nos. existing 132 KV
sub-stations to 230 KV is expected to
complete this year.
It is worthwhile to mention that last
year the power sector added 2500 MVA
capacity to the transmission network. This
year, substantial MVA capacity shall also
be added.
The existing distribution network comprises
189,000 km of MV/LV lines and more
than 26,000 distribution transformers.
In the last fiscal year, our utility added
more than 700 distribution transformers
and 1200 km of MV/LV lines. This
fiscal year our plan is to add more
than 5000 km of MV/LV lines. This
augmentation shall help us in releasing
300,000 connections for domestic as well
as industrial clients.
The utility is also executing a big upgrading
and rehabilitation project for the
transmission and distribution system, each
worth 116 million US$ and 162 million

2015 Africa Energy Yearbook 137

 SUSTAINABLE SOLUTIONS FOR AFRICA
US$ respectively. The project includes the
construction of 132 KV GIS sub-stations,
rehabilitation / replacement of existing
switchgear and installation of SCADA
systems in some distribution sub-stations.
Due to sustained efforts in the T&D
sector, the average number of interruptions
is being reduced, grid blackouts have
been eliminated and southern region
transmission constraints are minimized.
What have been the barriers to
investments in the past and how has
the situation changed today?
Exports from Ethiopia in general have
been growing, but imports are increasing
more rapidly than exports because of the
recent rapid economic growth. Therefore,
export of surplus electricity is an effective
countermeasure to earn foreign currency.
Ethiopia has high potential regarding
renewable energy sources, but is still to fully
utilize this potential. Evidence indicates
that the nation has the potential to generate
100,000 MW of electric power, but it has
only managed to utilize about 2,200 MW
of it. When the countrys projects currently
under construction are completed, the
figure is expected to rise to 10,000 MW.
BARRIERS IN THE PAST
A. Lack of private equity in power sector
B. Lack of dynamism in tariff regulation
CHANGES THAT HAVE COME
Currently, the government is doing all
it can at all levels of its administration
to invest heavily in renewable sources
of energy all over the country. The
government has conviction that through
capitalizing on renewable sources of
energy, green economy will be realized
and sustainable growth will be achieved.
In November 2013 the Ethiopian
parliament approved the Energy
Proclamation to liberalize the energy
sector. Later on, the Ethiopian Energy
Authority (EEA) was founded, where
foreign companies can register and obtain
licenses to produce electricity and get a
fixed feed-in tariff for the generated power.
The feed-in tariffs will be fixed by the
138
board of directors of EEA and approved
by the Ministry of Energy.
The erstwhile EEPCo presented, at the
end of 2013, a new energy master plan for
the next 25 years. 28 projects with total
investments of 156 billion USD shall be
realized by 2038. By 2016 EEP plans to
increase the power production to 10000
MW. Also, the transmission and distribution
grid shall be extended significantly.
The Energy policy also dedicates a
special section for the encouragement of
the private sector to be involved in the
development of the energy resources of the
country, specifically by being involved in
the construction of energy infrastructure,
a field that has been and still is seen to be
mainly a responsibility of the government.
Ethiopia has opened up the electricity
generation to private players for the first
time in its history. The decision came after
the ratification of a new proclamation by the
House of Peoples Representatives. Before the
new dispensation, the government-owned
utility (erstwhile EEPCO) was solely in
charge of power generation, transmission,
distribution, and sale of electricity
throughout the country. But the new law
allows private power companies interested
in investing in the energy sector to compete
with EEP (Ethiopian Electric Power).
The newly established Ethiopian Electric
Agency (EEA) will control private
investments in the energy sector and is
expected to set tariffs. EEA will be headed
by a board of directors that will review
tariff proposals for the national grid
before being submitted to the Council
of Ministers for approval. This comes after
many organizations, including the World
Bank, asked the Ethiopian government
to open key sectors of the economy to
private companies.
The new proclamation has been taken
as a sign of a new chapter in Ethiopias
economic orientation. The government
plans to generate 10,000 megawatts
of electricity from various sources by
the end of the countrys Growth and
Transformation Plan-1 (GTP-1), a five-
year strategic plan that was initiated in
2010 to improve the economy.
Is there a need for capacity building with
the utility and if so, what support can
the international community provide?
The international community or agencies
can provide capacity building support in
the following areas:
1. Energy management solutions
2. Energy Audits
3. Tariff review & re-structuring
4. Energy efficiency improvement
Besides the above, companies can set up
their subsidiaries in manufacturing of
electrical goods and accessories, which are
currently imported in the country. Easy
availability of these items would add to the
muscle of utilities in providing fast services
to its domestic and industrial clients.
What would be your message to those
wishing to invest in Ethiopias electricity
sector for the first time?
Africa is developing fast and Ethiopia
is the place for investors to be. Average
annual GDP growth rate of Ethiopia
for last 10 years is 10.7%. The countrys
growth is being fuelled by electric utilities.
In the power sector, thrust is being given
on renewable energy. The exploitable hydro
power reserves of Ethiopia are 45000
MW and less than 5% has been utilized.
Similarly, the wind, solar and geo-thermal
reserves are less that 1% utilized (out of
the full reserves). Hence there is a lot of
potential for investors in power generation.
The estimated domestic consumption by
the end of 2015 shall be approx. 2520
MW, and for the year 2037 is 20,700 MW
- an eight-fold increase. To support this
demand, consummate infrastructure in
generation, transmission and distribution
is required.
The Government is inviting & supporting
investors and is interested in Public-Private
Partnership models as well. There is a
dedicated Ethiopian investment agency
to assist the investors. Ethiopian Electric
Utility also has an industrial desk to
support the existing and forthcoming
industries, ensuring them a safe and
reliable electric supply.
2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

CAN RENEWABLE
ENERGY help to address
South Africas energy crisis?
Alastair Campbell, Managing Director,Vantage Green X

Alastair is the Managing Director of Vantage GreenX where he is responsible for the assessment,
structuring, execution and post-transaction monitoring of senior debt lent to projects in the
sustainable energy space. He joined Vantage GreenX in January 2014.
Prior to joining Vantage GreenX, Alastair headed up the renewable energy finance team within
Standard Bank. While there he successfully oversaw the funding of more than R15.5bn of debt
to 15 wind and solar projects in bid dates 1 and 2 of the REIPP procurement program. He has
worked on various infrastructure Project Financings across the African continent in a diverse
range of countries including Mali, Senegal, Ghana, Nigeria, Cote dIvoire, Kenya, Uganda,
Tanzania, Zambia, Mozambique, Zimbabwe, Botswana, Namibia, Swaziland and South Africa.

The evolution of the energy sector and in particular the
renewable energy sector in South Africa over the last three
years has been remarkable and it has had a number of spin-
off benefits.
It has seen the maturation of what, until recently, was a
nascent IPP market, with literally hundreds of developers
coming to the country to participate in the DOE-run
renewable energy IPP procurement program (REIPPPP)
All ancillary service providers which includes lawyers,
financial advisers, technical consultants, contractors and
funders have, in a very short space of time, developed a
deep and thorough knowledge of the sector

2015 Africa Energy Yearbook 139

 SUSTAINABLE SOLUTIONS FOR AFRICA
There has been a significant transfer of skills and
knowledge from international construction firms to local
firms
A number of equipment suppliers have opened up local
manufacturing plants
The electricity tariffs currently being bid in the REIPP
procurement program have come down significantly and
are currently approaching grid parity
The net result of this is that a lot of knowledge and deal-closing
capacity has been created in the local market for the roll out of
renewable energy. With Eskom just having been downgraded
to junk bond status from a credit perspective, the State is going
to find it very difficult to raise additional capital to help South
Africa meet its energy needs. It is therefore quite conceivable
that the financial difficulties currently being experienced by
Eskom will leave the government with no option other than to
accelerate the involvement of the private sector by procuring a
large proportion of the countrys new generation capacity from
Independent Power Producers (IPPs).
It is public knowledge that REIPPPP has been 3-4 times
oversubscribed in each of the bidding windows to date.
This factor, when combined with the chronic power
shortages currently being experienced in South Africa right
now, presents an opportunity for renewable energy sector
developers to play a meaningful role in helping to address
South Africas energy generation shortfall as market interest
far outstrips the MW allocation currently on offer.
The big question is how best to take advantage of this
developer interest in the local electricity sector. The first
requirement is to make it easier for these companies to
do business in South Africa. There are however a number
of market and regulatory impediments that are making it
difficult for IPPs to achieve financial close on a timely basis.
It is public knowledge that
REIPPPP has been 3-4 times
oversubscribed in each of the
bidding windows to date.
140
These are, in no particular order:
1. The financial squeeze that Eskom finds itself in. A large
proportion of Eskoms time, money and effort is being
directed towards the closure of the Medupi and Kusile
projects. More often than not this is to the detriment of
all else going on within the organisation. An unintended
consequence is that REIPPPP projects are being delayed
because not enough money is being spent on a timely basis
to prepare the national grid to accommodate the REIPP
projects coming online.
2. The Integrated Resource Plan (which forms part of the
energy master plan) is now 4 years out out of date and, in
an ideal world, the annual MW allocations for renewable
technologies should be updated to reflect the considerable
amount of market interest that REIPPPP has generated
to date.
3. From a demand side management perspective, delays
in the promulgation of the net metering legislation is
severely hampering financial close on a number of roof-
top projects that could conceivably feed surplus energy
back into the grid.
4. Delays to the close of the first round of deals on the Small
Projects IPP procurement program and the launch of the
Co-Gen and Gas procurement programs are also hindering
the timely procurement of power from the private sector.
5. The fact that Eskom has not yet been unbundled pursuant
to the ISMO bill is considered by many private sector
participants (banks and investors alike) as a significant
obstacle to their participation in the South African
electricity sector.
Despite this list of constraints to doing business in the local
market, there is still a lot of interest in participating in the
various processes being run by the DOE, but it could be so
much more. Given the competitiveness in the market, the
tariffs that have been bid are all within a relatively narrow
band. By definition therefore, most of the projects bidding
in REIPPPP will consequently be competitive and should
therefore be attractive to the DOE.
This has led many thought leaders within the market to
suggest that South Africa could easily procure up to three
times more MWs in each bidding window. This could be
achieved in a number of different ways:
1. DOE could allow all of those bidders that have submitted
compliant bids to be given preferred bidder status, or
2. It could convert the bidding process into a renewable
energy feed-in tariff (REFIT) where bids are all
evaluated against a single tariff and more emphasis is
placed on qualitative evaluation criteria, or
3. The DOE and Eskom should prioritise projects that are
physically located in geographic areas that are constrained
from an electricity supply perspective. These areas
are currently being referred to as Renewable Energy
Development Zones or REDZ. This option appears to
2015 Africa Energy Yearbook

be gaining a lot of support within government. Worth
noting is that awarding preferred bidder status to projects
in these areas will not necessarily result in the lowest
tariffs being achieved as the REDZ arent all located in
parts of the country that have the best solar irradiation or
wind resource in the country.
Sceptics of such an approach argue that if there is an
accelerated roll-out of IPPs in South Africa then there will
not be sufficient liquidity in the debt market, and it will put a
strain on the financial, technical and environmental (human)
resources within the country.
While there is a limit to the total amount of debt that local
banks will put into a single sector, it should be noted that at
present the combined exposure of the local banks is nowhere
near their exposure to say the mining sector which is many
multiples higher. In other words there is still significant capacity
and appetite to lend to projects in the electricity sector.
A further positive consequence of REIPPPP is that it has
brought institutional lenders into the direct lending space
in a meaningful way for the first time. Traditionally, lending
to projects on a limited or non-recourse basis has been the
principal domain of the commercial banks and development
finance institutions. The only time life companies and
pension & provident funds have considered taking debt in
these projects has been in the secondary market which has
usually been in the form of a rated and listed bond.
The two main reasons for this are (i) these institutions have
traditionally been uncomfortable taking construction risk, and
(ii) their investor base has usually only invested in assets that are
able to generate income immediately. On a project financing,
this can only occur once construction has been concluded.
Both of these factors have resulted in these institutions playing
a secondary or sell-down role in the lender market. With the
roll out of the REIPPPP this has changed.
As the REIPP procurement process has matured, the appetite
of pension and provident funds to invest in the sector has
grown and, along with it, so has their understanding of
investing and/or lending into limited recourse project
financings. There are now a number of instances where
pension and provident funds have invested in projects at
financial close (i.e. they have taken construction risk).
This is a positive development in many respects. The first
positive is that it has facilitated a much larger pool of
ZAR liquidity for borrowers, and the second is that this
accumulation of knowledge is a timely development, as it
can only contribute in a positive way to the local lending
market navigating its way through the promulgation of
banking legislation such as Basel III. The capital and liquidity
constraints imposed by Basel III will make it increasingly
difficult for local commercial banks and DFIs to lend and/or
hedge beyond the medium term (i.e. 5-8 years). As Pension
2015 Africa Energy Yearbook
SUSTAINABLE SOLUTIONS FOR AFRICA
and Provident funds are not governed by Basel III, they will
become the sell-down partners of choice for the commercial
banks and DFIs going forward.
On paper therefore, it appears that South Africa already has
the makings of an ideal solution to help it solve its energy
crisis. For the DOE to take advantage of the many willing
and capable renewable energy developers wishing to do
business in this country, it is this writers contention that the
following steps should be undertaken as a minimum:
1. Eskom should be unbundled in the manner contemplated
by the ISMO Bill - there are two reasons for this.
a. Almost all formerly state owned utilities that have
been unbundled have become more effective and
competitive post restructuring. The justification
offered by the South African government for not
unbundling Eskom (which is that it will be able
to preserve its credit rating) no longer holds true.
Restructuring Eskom will send the right message to
the investor and lender market and it will help to
attract new players to the market, and
b. It will remove all of the current ambiguity within the
organisation, thereby enabling the Transmission business
to raise its own capital on a timely basis to fund the
necessary transmission and sub-station upgrades that
are needed to accommodate any new IPPs. As a separate
corporate entity, the transmission business will not have
to fight for what has become an increasingly scarce
amount of internal capital to fund new generation and
transmission assets within the organisation.
2. Net Metering legislation should be promulgated as soon
as possible. It will open the door for a wave of commercial
and industrial customers becoming small IPPs who are
able to contribute meaningfully to the Demand Side
Management program currently being run by Eskom
3. Either a REFIT tariff or a bidding process that prioritises
projects in REDZ should be implemented. Serious
consideration should also be given to the awarding of
preferred bidder status to all compliant bids received
under the REIPP procurement process
4. The financial close window for IPPs should be widened
considerably to allow deals to close whenever they are ready,
but prior to a published long-stop date. This will ensure that
a. there isnt a (human) resource squeeze that happens
for two months every year as every successful bidder
tries to reach financial close in the same week, and
b. there isnt a run on the South African Rand as all the
bidders attempt to hedge their currency risk and swap
their floating rate loans into fixed rate loans
In conclusion, if the steps outlined above are implemented,
it is quite possible that 3-4GW of renewable energy could
be added to the South African grid each year for the next 3
years and in so doing, renewable energy IPPs will contribute
significantly to relieving the energy crisis in this country.
141
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 SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE

JOSHUA CHOGE, CHAIRMAN,

Mr. Joshua Kibet Choge is the Chairman of KenGen Board of Directors. Born in 1958, he holds a Bachelor of Science degree in Mathematics
and Statistics. He is a trained accountant from Strathmore College and has also undergone training by the Chartered Institute of Purchasing and
Supply UK on Procurement Management. He is currently pursuing a master of management and leadership (MML) degree at The Management
University of Africa.
Mr. Choge is also an executive member of The Institute of Directors (Kenya). He has over fifteen years experience in the public sector, having
served in various positions in public sector, including the East African Portland Cement, where he served as Purchasing Manager and also as
Deputy Chief Internal Auditor.
He is the Chairman of the Board of African Inland Church Kapsabet Bible College in Nandi County. Currently, Mr. Choge is the C.E.O of Talent
Foundation International (TFI), a non-governmental organization that targets to identify and develop talent among needy children.

QUESTION: Please tell the readers

of the Africa Energy Yearbook more
about your professional background
and experience of Africas energy
sector. What led to your appointment
as Chairman of KenGen?

ANSWER: I am the Chairman of

the Board of Directors of Kenya
Electricity Generating Company
Limited (KenGen). I joined the KenGen
Board in December 2013, when the
shareholders elected me in at the AGM.
I have been an executive and a member
of The Institute of Directors (Kenya)
with over fifteen years in the public
sector in various positions.

It has been a very exciting time at KenGen

with our ground breaking energy projects. Figure 1:
During my tenure as the Chairman, we
have successfully commissioned the largest
geothermal project in the world, i.e. the
280MW Olkaria Geothermal Project.
It has been a very exciting time
We also successfully commissioned
the installation of new wind turbines
at KenGen with our ground
in Ngong in December 2014 which
increased our wind portfolio from 5.1
breaking energy projects. During
MW to 25.5MW. my tenure as the Chairman, we
I am proud that the 280MW project has
drastically reduced the cost of electricity have successfully commissioned
to consumers with the displacement of
expensive thermal sources of energy. the largest geothermal project in
On this page is an enumeration of the
impact of KenGens 280MW project on the world.
the national energy mix:

2015 Africa Energy Yearbook 143

 SUSTAINABLE SOLUTIONS FOR AFRICA
Figure 2:
QUESTION:
What milestones are in place for
Kenyas energy sector- what does its
energy mix hope to look like in 15
years time?
ANSWER: Kenyas economic growth
is envisioned in the Vision 2030 which
enumerates the strategy of the country
Figure 3:
144
in empowering its citizenry both
economically and socially. In Vision 2030,
Kenyas power demand is projected as
shown below:
The key drivers of this shift in power
demand are the following major industries:
Further to accelerate this aggressive energy
expansion program the Government of
Kenya has developed a 40-month strategy
to bring online + 5000MW. This 40MW
program which emphasises on energy
efficiency and renewable energy, in line
with the existing national Least Cost
Power Development Plan (LCPDP) is
phased with diverse forms of energy
sources projected to go online as follows:
QUESTION:
Why should investors consider Kenya
as a more attractive destination to
invest in a power project than perhaps
other East African countries?
ANSWER: As enumerated in Figure 2.
Kenya is projected to hit a national peak
demand of 26,500MW in year 2030
against the current national capacity
of 2,152MW. Clearly this is a huge
gap and very attractive opportunity
for any investor whose paramount
objective is return on investment. With
the commitment from government,
established legislation and an established
and formal power purchase framework,
investors are guaranteed of returns and
a secure investment in Kenya.
Kenya is projected
to hit a national
peak demand
of 26,500MW
in year 2030
against the current
national capacity of
2,152MW.
2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

QUESTION:
Can you tell us more about the projects
you are currently working on in 2015?
We are presently focusing on
ANSWER: KenGens current expansion
geothermal sources of energy
program is focused on geothermal sources which is more green and
of energy. We are focused on changing our
energy mix from overreliance on hydro renewable but at the same time
sources of energy which are weather
dependent to the more reliable and a capital intensive form of
renewable geothermal sources.

Our current project pipeline at KenGen

generation.
is as follows:
but at the same time a capital intensive
form of generation. Presently, KenGen
targets to increase its generation capacity
with an additional 2,400.4MW by
2018 at a capital cost of about USD 8
billion. This includes the financing of the
geothermal drilling at an estimated cost
of USD 1 billion and development of the
generation infrastructure at an estimated
cost of USD 7 billion. With such huge
financing opportunities, its evident that
KenGen needs a diverse pool of investors
in addition to the existing development
financing partners such as KfW, AfD, JICA,
World Bank and EIB. Partnership with
private sector players is quite important
to KenGen, and that is why we have an
in-house Public Private Partnership Unit
within our Business Development Division
to drive this mode of financing.
Figure 4

QUESTION:
Why is the Africa Energy Forum an
important meeting place for KenGen
to attend? Are there any particular
private sector partners you are hoping
to engage with in Dubai?

ANSWER: KenGen considers the

Africa Energy Forum a critical platform
through which we can showcase our
investment story, gain opportunities
to interact with our peers in the energy
sector and certainly attract potential
investments to partner with KenGen as
it builds its generation capacity.

As earlier mentioned, we are presently

focusing on geothermal sources of energy
which are more green and renewable Figure 5

2015 Africa Energy Yearbook 145

Organised by:

M O ZA M BIQUE
5-6 may 2016, Maputo
Maintaining Momentum in Mozambiques Power Sector
Key speakers from 2015 include:
Antonio Carlos Alberto Yum Willem Theron, Natlia Camba,
Osvaldo Saide Member of the General Manager, Chemical Engineer,
Director, New and Board Southern African Institute of
Renewable Energy, Electricidade de Energy Unit National
Ministry of Mineral Moambique (EDM) Eskom Petroleum (INP),
Resources and Mozambique
Energy, Mozambique
Companies Who attended in 2015
Acwa Power International Africa Finance Corporation (AFC) African Infrastructure Investment Managers (Pty) Ltd Aggreko Associao Lusfona de Energias Renovveis
(ALER) Banco Unico BCI - Banco Comercial e de Investimentos Bechtel Ltd Black & Veatch Bloomberg Africa TV BTC/Funae Cabelte Mozambique Camargo Correa
Canas Engenharia, S.A. Chancellor House Holdings Clarke Energy Ltd Cofely Fabricom - GDF Suez CTA confereration of economic association of mozambique Cummins
Africa DBSA Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH Dietsmann Technologies Eastern Africa Power Pool ECV Mozambique Lda EDM -
Electricidade de Moambique, E.P. EDP Internacional Empresa Nacional De Hidrocarbonetos De Mocambique ENI East Africa ESBI International Eskom FDL Generators
FirstMetical Fluor GAUFF GmbH & Co Engineering KG GE Oil and Gas GLOBAL ALLIANCE Hidroelectrica de Cahora Bassa Infrastructure Development Management Ltd.
(IDM) Ingerop South Africa Pty Ltd Innovent Institute of National Petroleum (INP) Interfax Europe Ltd International Finance Corporation Koch Engineering & Construction
LDA MAN Diesel & Turbo South Africa (Pty) ltd Manitoba Hydro International Ltd METKA SA Midal Cables International Lda Millenium Bim Ministry of Mineral Resources
and Energy Ministry of Transport Mozambique MITSUBISHI CORPORATION Mota-Engil Africa Moza Banco Ncondezi Energy Nedbank Capital Norton Rose Fulbright
Old Mutual Alternative Investments Overseas Private Investment Corporation (OPIC) Pimenta Law Firm Powertech Transformers PTA BANK Quantum Power R&C Globe
Renaissamce Heavy Industries Renaissance Turkey ROVUMA CONSULTORES Lda Russell & Associates Sarens (Pty) Ltd Sasol Chemical Industries SelfEnergy Mozambique
Servitrade Siemens AG - Fossil Power Generation Division SMBCE SoEnergy International Sotechnisol Entreposto Source Capital Standard Bank Structa Mozambique
TODAREDE Solues para Redes, S.A. Tractebel Engineering Trino Energy University of Mondlane Vieira de Almeida & Associados, Soc. de Advogados R.L. Yenigun

Thank you for

organizing such a
fantastic event.
Very useful indeed
Daniel Donato
Commercial Specialist, U.S. Commercial Service
U.S. Embassy Maputo Mozambique

For more information about how to get involved with next years meeting,
contact amy.offord@energynet.co.uk or call +44 (0)20 7384 8068

www.poweringfrica-mozambique.com
 SUSTAINABLE SOLUTIONS FOR AFRICA

MOZAMBIQUE:
A Future in Renewable Energy?

Paula Duarte Rocha, Partner, Mozambique Legal Circle

Growing at around 7% each
year, the countrys economy
is one of Africas strongest
performers. Foreign companies
have increasingly chosen to
invest here, particularly in
mining ventures.
Paula Duarte Rocha is a partner with Mozambique Legal Circle Advogados (MLC Advogados)
founded in 2012 by a team of highly reputable lawyers of Mozambican nationality. In the
context of an international association with Morais Leito, Galvo Teles, Soares da Silva, the
Mozambican law office MLC Advogados is a member of the MLGTS Legal Circle, a network of
alliances with leading law firms in Angola, Macau (China), Portugal and Mozambique.
Even before she finished her degree in law Paula started her career as a legal assistant in GAPI and
then as a Legal Assistant to Mrs. Maria Joo Dionsio Santos, partner at Pimenta, Dionsio &
Associados. Later she provided multidisciplinary legal consultancy at the Tax and Legal Services
Department of PricewaterhouseCoopers, cooperating with national and foreign investors. She
was also an Associate Lawyer and Senior Legal Advisor at MGA Advogados & Consultores.
More recently Paula was Managing Partner and Lawyer at Ferreira Rocha & Associados,
Sociedade de Advogados. Throughout this professional experience she intervened in all areas of
practice: advising national and foreign private companies in respect to public sector laws, public
tenders and contracts, as well as advising foreign entities in the compliance with all Mozambican
tax, labour and commercial obligations.

Mozambiques ability to attract large investment projects

in natural resources is expected to fuel continued high
growth in coming years. Revenues from these vast resources,
these statements about Mozambique mirror the reality in the
Mozambican legal services industry.

including natural gas and coal capacity, could overtake
donor assistance within five years.
After a slowdown in investments in the second semester of
2014, pending the presidential elections, experts say that
Increasingly committed to the goals of better lawmaking
and better regulation in the natural resources sector, the
Government of Mozambique has been on the path to achieve
sustainability and competitiveness.

2015 Africa Energy Yearbook 147

 SUSTAINABLE SOLUTIONS FOR AFRICA
Mozambican renewable energy potential (wind, solar,
hydro and biomass) is huge and in the light of the global
economic situation, with the decline in coal prices and
new downturn in the oil industry, along with the US
shale gas revolution, consideration should be given to
a progressive shift allowing the country to adapt to this
new economic situation and combine solutions for a
sustainable economy.
Market trends and forecasts from two years ago are now
wholly inaccurate. An economy such as Mozambiques
becomes particularly vulnerable if it remains solely in the
hands of the natural resources coal and natural gas free
market.
Wind, solar and biomass technologies are still incipient in
the country notwithstanding the approval of the National
Policy and Strategy for Biofuels in February, 2009, which
focuses on ethanol from sugarcane, sorghum, coconut and
biodiesel from jatropha. The hydropower technology, though
with the Cahora Bassa dam having potential to dominate
the energy sector in the region may be seen as the first
strategic bet for lucrative prospects in the future.
A number of legal instruments are already in place.
Investment Law, Environment Policy, Land Policy and
Strategy, Forest and Fauna Policy and Strategy, Electricity
148
Law, Environment Law, Energy Strategy, Biofuels Policy
and Strategy, Renewable Energy Policy, Renewable Energy
Strategy, etc. support the Mozambican Governments
renewable energy policy development and strategy, creating
new investment opportunities.
Supplementing the renewable energy policy development
and strategy, Mozambique now has a Renewable Energy Atlas
developed with FUNAE (Fundo Nacional de Energia) a
public institution established to promote rural electrification
and rural access to modern energy services in a sustainable
manner.
On one hand, the renewable energies Atlas is a management
support tool that will allow FUNAE to diversify its project
portfolio. On the other hand, it will give greater consistency in
project cost estimation. The results obtained by the Atlas will
allow FUNAE to implement projects in each region according
to its potential.
This renewable energy Atlas not only confirms the huge
renewable potential of the country, but it also shows where
one can best take advantage of the Mozambican renewable
energy potential.
Private investors in Mozambique can thus explore a variety
of renewable energy sources, boosting the economy and
reducing the dependency on coal and natural gas exports.
2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE

ARJAN VISSER, FOUNDER,

Arjan Visser is the founder of Electricity4all. He worked for five years as a strategy consultant (specialization: power sector) with Accenture in the
Netherlands. He then decided to move to Malawi with his wife leveraging his skills and experience to advise governments, donors, NGOs and
private companies in Southern Africa. He was the co-author of a 350$M investment proposal for the US Government to invest in the energy
sector of Malawi; and he valued, designed and coordinated a large-scale energy efficiency program in Malawi reducing electricity peak demand
by ~15%. He founded Electricity4all in 2011 to address the need for more initiatives focused on increasing access to electricity in off-grid areas.
Electricity4all won the SEED Africa Award 2014 for setting up a business to improve access to electricity in Southern Africa. The SEED Initiative
identifies and supports promising small-scale social and environmental entrepreneurs around the globe, entrepreneurs who while working towards
a greener economy also tackle poverty, marginalization and social exclusion.

E4A is a company based in Malawi aimed at increasing access to electricity in areas where the grid is not likely
to be expanded to in the coming years by offering affordable, clean and sustainable power solutions to households
and small-to-medium enterprises.

QUESTION: Why is there a need for
these systems in Malawi?
ANSWER: Less than 10% of the
population in Malawi has access to
electricity and with the current rate
of electrification, the majority of the
population will not gain access to
electricity in the coming years.
People without electricity mostly use
inefficient, expensive and unhealthy
sources of energy (such as paraffin,
used car batteries, low-quality torches
and candles) for their household and
business activities. Most small and
micro businesses need to close before
it gets dark and do not have facilities
to keep their fresh products cooled.
School pupils have insufficient light
to continue studying in the evening
and rural clinics lack basic lighting
for their operations and cooled storage
for their medicines. The current main
sources of lighting (i.e. paraffin, candles
and firewood) produce a number of
by-products when they are burned
including greenhouse gases like carbon
dioxide, and can be detrimental for
the health when used indoors.
Disposable batteries and packages of
paraffin/candles can be harmful for
the environment when not disposed of electricity to power the whole house/
safely. Furthermore, there is a lack of enterprise.
awareness amongst people in the rural Unaffordable: A high-quality system
areas about the benefits of affordable with sufficient capacity to power
off-grid power solutions, and the range the whole house/enterprise is too
of electrification options offered in expensive.
Malawi is very limited. Poor after-sales services: The supplier
of the system does not offer good pre-
The average Malawian faces a number and after-sales services such as advise,
of challenges when purchasing a system installation, maintenance, repair and
that can power their whole house and/ warranty services.
or enterprise.
QUESTION: What does E4A offer?
Low-quality: A system to power the
whole house/enterprise he can afford
does not last long enough. ANSWER: E4A offers a wide range of
Low-capacity: A high-quality system stand-alone power systems (including
he can afford does not supply enough energy efficient appliances) that
People without electricity
mostly use inefficient, expensive
and unhealthy sources of
energy for their household and
business activities.

2015 Africa Energy Yearbook 149

Expert webinars

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Engerati to help solve tomorrows energy problems today

Over 1,500 conference presentations, up to the minute insight articles and

regular expert webinars keep you on top of the latest thinking

Where energy professionals network with over 20.000 members putting an

expert only a click away

Our network is free to join allowing you to access information from the latest
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 SUSTAINABLE SOLUTIONS FOR AFRICA

are protected against overload and
easy to install and maintain. The
components of the system are sourced
from various suppliers to ensure high-
quality products (i.e. low failure rate
and long lifetime) can be offered at
prices affordable for the majority of
the population in urban areas and
major trading centres of Malawi. The
systems range in capacity from small
systems providing basic electricity
(e.g. for lighting, phone charging and
watching television) to large systems
providing electricity for customers with
a relatively high-energy consumption
(e.g. for powering rural health
clinics, schools and small-to-medium
businesses). E4A has the in-house
knowledge to design systems that
suit the customers particular energy
demand and optimize the lifetime
of the system. E4A guarantees the
customer access to professional after-
sales support by providing high-quality
installation, maintenance, repair and
warranty services. E4A offers credit
facilities in cooperation with financial
institutions for customers who want
to purchase a solar system but want
to pay in installments. Payments can
be made in installments as E4A works
with financial institutions to offer
credit facilities to selected customers.
QUESTION: What is the impact of
your work?
There are several social, environmental
and economic benefits of our work.
Social Impact
Indoor pollution is reduced as peopleno
longer rely on firewood for lighting
anymore. The reducedconditions
of the community as indoor air
pollution due to the indoor burning
of polluting fuels have been associated
with respiratory infections amongst
children and adults.
Education and information dissem-
ination is improved as people will have
more opportunities to study during the
night and watch television.
The increase in the number of
productive hours creates new job or
study placements.
Security is improved as lights can be used
that are brighter than the lights currently
and mostly used in the villages.
Environmental Impact
Furthermore, the usage of disposable
batteries containing toxic elements and
packages of paraffin / candles is reduced
contributing to a toxic-free and cleaner
community.
Economic Impact
Users have more opportunities for
income generation as the battery kits
can be used to increase revenues of their
existing businesses (e.g. to extend the
business hours when it is dark or to
keep agricultural products longer fresh
by cooling them in a fridge) or to start
a new business for which electricity is
required (e.g. barbershop, computer
centre and bar/restaurants). Users also
have an opportunity to reduce their
expenditure on energy.

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with us and
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 The biggest challenge is
demonstrating to host countries
and off-takers that there is no
tradeoff between developing
sustainable power projects and
making sure that the electricity
generated can be afforded by the
152 communities. 2015 Africa Energy Yearbook
 SUSTAINABLE SOLUTIONS FOR AFRICA

YEARBOOK PROFILE PIECE

REDA EL CHAAR, CHAIRMAN,

Reda is a Chartered Alternative Investment Analyst, before founding Access, Reda worked for ACWA Power where he established and led the
implementation of the renewable energy strategy.
Reda led many precedent setting projects that eventually served as a guiding platforms for the wider adoption and implementation of renewable
energy projects in several countries. He has been involved in over 6,000 MW of power projects. Reda is passionate about bringing renewable
energy projects into new unsaturated markets where renewable energy is an economical alternative to conventional power.
Prior to joining ACWA Power Reda held various positions at Unilever and Price Waterhouse Coopers.

QUESTION: Please tell the readers development process by avoiding costly

of the Africa Energy Yearbook more mistakes. By doing so, we are able to
about your professional background achieve our goal of bringing projects to
and experience of Africas energy sector. successful completion and ensure that
What aspect of your role do you most we become a reliable long term power
enjoy? producer in the host nation.

ANSWER: Prior to founding Access QUESTION: Access is based in Dubai,

three years ago, I worked for ACWA
Power where I was responsible
for developing and implementing
ACWA Powers renewable energy
strategy. My first experience within
the renewable energy sector in Africa
was the landmark Ouarzazate 1 solar
concentrated power plant in Morocco.
The most exhilarating aspect of my role
is the continuous pursuit of innovative
development approaches (such as the
Access Co-development Fund) that
enable the realization of precedent
setting projects which eventually serve
as a guide for the wider adoption and
implementation of renewable energy
projects.
QUESTION: What are the main
challenges you frequently encounter
across with regards to developing
sustainable and affordable power assets
in Africa?
ANSWER: The biggest challenge is
demonstrating to host countries and off-
takers that there is no tradeoff between
developing sustainable power projects
and making sure that the electricity
generated can be afforded by the
communities, businesses and the country
in general. It is no longer true that power
We chose Dubai
as our head office
due to its superior
connectivity to
Africa.
generated through renewable energy
sources (especially solar power) comes
at a premium to conventional power.
Today, renewable energy (including
hybrid power) is the most economical
and timely alternative for most African
countries.
QUESTION: How does Access work
with local partners to achieve its goal?
ANSWER: In every step of the
development process we seek to align
ourselves with the appropriate local
partners and stakeholders that are able
to demonstrate a deep understanding of
the market and allow us to de-risk our
where the Africa Energy Forum is
taking place this year. What do UAE-
based companies have to offer Africa?
ANSWER: We chose Dubai as our head
office due to its superior connectivity to
Africa. From Dubai we are able to provide
quick and reliable functional support to
our on the ground development teams.
QUESTION: What will be your key
message to the delegates who attend
this years Forum?
ANSWER: Africas power sector and wider
economy could be transformed by the
billions of dollars of financing available
for Africa. However, this funding cannot
have an impact without well-resourced and
experienced developers willing to take early-
stage project risk and turn good concepts
into bankable projects. As such, investment
into the early stage development of projects
forms the corner stone for the realization
of the African growth opportunity.
Access Infra Africa has designed the ACF
to serve as a unique platform to bridge
the gap between local, early stage project
developers/originators and the expertise/
funding required to bring such projects
to fruition.

2015 Africa Energy Yearbook 153

 ARTISTS

WITH SPECIAL THANKS TO

ARTS ENERGY PARTNER:

AABRU ART | 2 Sloane Court East, London SW3 4TF

www.aabruart.co.uk/art art@aabru.co.uk +44 7847 244 217 Facebook.com/AabruArt

Aabru Art is a London based firm dedicated to evolving, sourcing, promoting and
selling Modern and Contemporary West African Art. The company and its founder
and chairman Anshu Bahanda work closely with the artists to develop their careers,
raise awareness and provide high quality artworks to the international buyer. The
company has been the focal point of Modern and Contemporary Art for the past 5
years and is offering consultancies for both corporate and private collectors, events
organisation and an overall professional support for companies and individuals in
the African art world.

This year, Aabru Art presented its third edition of Transcending Boundaries the
largest selling Modern and Contemporary West African Art show in London,
featuring paintings and sculptures by 35 artists from Africa. These artists are
masters in their region and are quickly emerging internationally.

Every time I think life is beginning to slow down, Aabru Art has a way of making
us run - faster than I thought was possible. I never imagined we would be dealing
with so many artists in a single show! We are also taking 5 artists work to the Venice
Biennale and have opened an office in Dubai based on interest from the region.

The last 2 Transcending Boundaries were about the boundaries we had transcended
- it was about Aabru Art giving a voice to our artists to show the world what
they had achieved. This Transcending Boundaries is different - its about the
boundaries that have yet to be transcended at many different levels and in many
different layers... The kidnappings; the social issues; the broken system; the cultural
traditions; the struggles, hopes and dreams of many... Can we give them a voice?
Can we embody the best of art where it can be used as a catalyst for change? Can
we make a difference?

Anshu Bahanda
Aabru Art Founder

154 2015 Africa Energy Yearbook

 ARTISTS

BRUCE ONOBRAKPEYA
Dr. Bruce Onobrakpeya was born on August 30, 1932 at Agbarha-Otor, Delta State. He
graduated from the Nigerian College of Arts, Science and Technology, Zaria 1957 1962.
He also holds a Diploma in Fine Arts (Dip. F.A.), moderated by Goldsmiths College, London
University and a Post Graduate Arts Teachers Certificate (ATC) from the Institute of Education,
London University.

Bruce is a prolific artist. He is a printmaker, painter, teacher and scholar. He is also the initiator
and chairman of the Harmattan Workshop Series, Agbarha-Otor, Delta State, Nigeria which has
been running since 1998. He has participated in over 68 exhibitions in Africa, Asia, Europe and
the United States and was one of the artists participating in Aabru Arts Transcending Boundaries
2015 in London.

Onobrakpeya has received over 30 national and international awards and appointments which
include the MFR (Member of the Order of the Republic of Nigeria) 2002; Living Human
Treasure Award by Federal Government of Nigeria in collaboration with UNESCO 2006 and
the most recent the SPANFEST Excellence Award Lifetime Achievement Award in the Art,
2013 and National Museum of African Art Smithsonian Institution Washington DC Award in
Recognition of Widespread Achievements in the Arts, 2014.

His works are well known around the globe and are in many private and public collections. He
has also illustrated several books and his works appeared on many books and journals as Cover
illustrations. He is perhaps the most published African artist and has also featured in some film
productions and documentaries.

His piece Gala Day Under The River I is a pictorial inspiration of spirits inspired by the story
taken from the novel My Life in the Bush of Ghosts written by a Nigerian writer Amos Tutuola.

For more information on the artist or his work, please contact Aabru Art
(W: www.aabruart.com; E: art@aabru.co.uk; T: +44 7847 244 217)

Gala Day Under the River I | 2006 | Plastograph on paper | 107 x 79 cm

2015 Africa Energy Yearbook 155

 ARTISTS

DISEYE TANTUA
Born in Amassoma, Bayelsa State in 1974, Diseye attended the Rivers State University of
Education, now Ignatius Ajulu University and holds a degree in Fine and Applied Arts
(painting), 2001.

He has exhibited extensively within Nigeria, Europe and United States, is a recipient of several
awards and a member of several prestigious art societies and groups, which include the Guild of
Professional Fine Artists of Nigeria and The Society of Nigerian Artist. He is a full time studio
artist, experimenting with what he calls Afro Pop Art.

Undoubtedly one of the finest painters of his generation, he is viewed as blazing the trail of modern
African Pop Art. His drawings like calligraphy are mostly a selection of traditional proverbs made
popular by headboards, bumper write-ups and street signs. The artist works closely with Aabru
Art and exhibited at Transcending Boundaries 2015 exhibition in April.

His work Monkey by grade, Shoe by size is an example of one of his popular slang used as a teaser
or advice. He refers to the haves and have nots a financial situation in his present environment.
Most of his paintings, which are witty, funny and hilarious, also carry a deep, strong message.

For more information on the artist or his work, please contact Aabru Art
(W: www.aabruart.com | E: art@aabru.co.uk | T: +44 7847 244 217)

Monkey by grade, Shoe by size | 2014 | Mixed Media | 122 x 92 cm

GEORGE EDOZIE
George Edozie was born on the May 11, 1972 in Enugu state Nigeria. He studied Fine and
Applied Arts at the University of Benin where he majored in Painting in 1996.

George has had 5 solo exhibition and over 76 group exhibitions within and outside Nigeria.
His last solo exhibition titled Shifting the Paradigm hosted by the Museum Of Contemporary
Art North Miami Florida, was listed among the 4 best exhibition at the Art Basel Miami 2014.
He is the co-author of the book 101 Contemporary Artist, A Celebration of Modern Nigerian
Art, a member of Society of Nigerian Artist, and Guild of Professional Fine Artists of Nigeria.
George Edozie is one of the sculptors collaborating with Aabru Art and his piece was a part of
the Transcending Boundaries show in London this year.

He sees art as a universal language, which cuts across different cultures or race. He believes a good
work of art should carry a strong message, record history and act as a mirror of society that the
work is created in. He conveyed this in his piece Four Faces of Agbogho Mmuo 2 for which
a strong link between the artist and his work allows one to relate to the artist though his works.

For more information on the artist or his work, please contact Aabru Art
(W: www.aabruart.com | E: art@aabru.co.uk | T: +44 7847 244 217)

Four Faces of Agbogho Mmuo 2 | 2015 | Mixed Media Fabric Sculpture | size range 164 x
59 cm - 190 x 50 cm

156 2015 Africa Energy Yearbook

 ARTISTS

JULIET EZENWA MAJA-PEARCE

Juliet Ezenwa Maya-Pearce was born on July 30, 1968 in Delta State. She graduated with a degree
in Fine Arts and Education at the Bendel State University in 1990. She worked as an artist assistant
at the Sam Ovraiti Arts Studios. Since 1995, she is a full time artist with a purpose of producing art
that is and will remain relevant. She is a member of the Guild of Professional Fine Artists of Nigeria
and the only woman artist that has participated in Transcending Boundaries 2015 largest selling
Modern and Contemporary show in London by Aabru Art. Her paintings reflect her interest in
the environmental degradation - a consequence of oil exploration and her work in the forefront of
campaigns for upholding the right of children and girls.

Her artwork Lost Innocence is one of the works produced to examine the trado-cultural reasons for
the practice of Female Genital Mutilation (FGM) in Africa; and to evaluate its impact so far. The
practice of FGM in some cultures is an approved norm, because it is seen as a means of curbing
teenage promiscuity, at the same time promoting virtue. In the process, young virgins are expected
to partake in the maidens dance wearing nothing but a few strings of beads. Young girls, aged 10
15 year, unaware of their bodies but basking in the approving attention of their families, parade
themselves for their parents, guardians and society. Science has proven that the victims often suffer
from psychological and emotional trauma resulting in the need for sexual emancipation.

For more information on the artist or his work, please contact Aabru Art
(W: www.aabruart.com | E: art@aabru.co.uk | T: +44 7847 244 217)

Lost Innocence | 2014 | Acrylic on Canvas | 56 x 64 cm

GBENGA OFFO
Gbenga Offo worked in advertising before starting his work as a full time painter. He studied
at the renowned Yaba College of Technology and is an established member of the Guild of
Professional Fine Artists of Nigeria (GFA).

He has exhibited extensively locally and internationally and is recognized for his playfulness with
the geometry of the human form. Every one of his works is a story and his choice of figurative art
in an environment increasingly contending with debates around conceptual art and installation
methods is a measure of free will.

The artist believes that art is a profession, like any other and if you keep on applying yourself and
keep looking for areas unattended to, you can create your own market and indeed, build wealth.
Gbenga has been an Aabru Art artist for the past three years and has participated in first and third
edition of Transcending Boundaries 2015.

The Quartet is an artwork depicting a Jazz band and the colours represents the force that holds
this piece together; its movement, its fluidity, its brightness; the sheer freedom it evokes. Jazz
itself is about improvisation, but as you listen, you begin to relate to it, you begin to connect with
it. It is the same with this piece the more you look the more you see.

For more information on the artist or his work, please contact Aabru Art
(W: www.aabruart.com | E: art@aabru.co.uk | T: +44 7847 244 217)

The Quartet | 2014 | Oil on Canvas | 130 x 108 cm

2015 Africa Energy Yearbook 157

 ARTISTS

SAM EBOHON
Sam Ebohon is from Edo State but was born in Lagos, Nigeria. He graduated from the Yaba
College of Technology in 1990 with a Higher National Diploma. In the year 2000 he also added
a degree from the Federal College of Education Akoka, Yaba to his list. Ebohon is a member of
the society of Nigerian Artist and the prestigious Guild of Professional Fine Artist of Nigeria.

He started his full time painting career immediately after finishing school and has experimented
with his paintings in the hope of a style that stands him out. His works are characterized by
cress-cross linear strokes, which tend to abstract his paintings thereby giving it a voice that is
refreshingly new in intensity and boldness coupled with the most exquisite symphony of vision.

He has collected numerous awards in his native country and abroad which include a first price in
the 2009 edition of the Caterina de Medici painting award and competition, which took place in
Florence, Italy. He has participated in numerous exhibitions around the world and is very much
respected among his peers, colleagues, collectors and critics alike. Ebohon has been collaborating
with Aabru Art from the beginning and has showcased his paintings at two editions of Aabru
Arts Transcending Boundaries in United Kingdom. Portrayed in his Figuration, Ebohon believes
the human form is a gallery that exhibits the essence and meaning of creation in its entirety. It
creates unimaginable landscapes that in turn elicit profound emotions capable of producing
more than the mind can phantom.

For more information on the artist or his work, please contact Aabru Art
(W: www.aabruart.com | E: art@aabru.co.uk | T: +44 7847 244 217)

Figuration | 2011 | Oil on Canvas | 128 x 125 cm

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 DIRECTORY

Conventional thermal Power

Company: AEM Atlas Copco Portable Air Ltd Broadcrown Ltd
Head Office: Dessau, Germany Aartselaar, Belgium Stafford, UK
Type of generator: Customized synchronous Portable compressors and generators High and medium speed reciprocating engines
and asynchronous generators for all kinds of Diesel Diesel/Gas
application 12-1250kVA 6kVA-30MVA
Fuel: Angola, Botswana, Congo. D.R, Egypt, Kenya Angola, Cote dIvoire, Ethiopia, Ghana, Kenya
Size: Up to 5 MVA Elsie Vestraets 0044188 9272200
List 5 top countries of operation: 3234506117 info@broadcrown.co.uk
Worldwide elsie.vestraets@be.atlascopco.com www.broadcrown.com
Contact: Reiner Storch www.atlascopco.com
Position: CEO/Head of Sales Department
Telephone: +49 340 203-210
Email: r.storch@aemdessau.de Bruno S.r.l.
Website: www.aemdessau.de Autogen Technologies Incorporated Grottaminarda, Italy
County Tyrone, Northern Ireland Perkins, Cummins, John Deere, Volvo, Honda
Open-set, sound attenuated, standard or be-spoke Diesel
generators 2-2000kVA
A.E.Z S r.l. Diesel 0390825 421005
Crespellano, Itlay 10kVA-4MW export@brunogenerators.it
Any 00442 887747500 www.brunogenerators.it
Up to 2000kVA sales@autogen-technologies.com
Beatrice Tassi www.autogen-technologies.com
39051739099
beatrice.tassi@aezitaly.com C Woermann GmbH & Co.KG
www.aezitaly.com Hamburg, Germany
Balton CP Ltd Prime and Standby Deutz engines
Watford, UK Water and air-cooled
High speed reciprocating engines 10-2000kVA
Altaaqa Global Diesel Ghana, Nigeria, Angola
Dubai, UAE 5kVA- 2,000kVA 04940 3281110
Rental Power Plant Ghana, Kenya, Nigeria, Rwanda, Senegal info@c-woermann.de
Gas, Diesel, Dual Fuel 00441923 228999 www.c-woermann.com
10 MW to 500 MW tk@baltoncp.com
Southern Africa, Eastern Africa, North Africa, www.baltoncp.com
Central Africa, West Africa, Middle East
Robert Bagatsing Calsion Power System Co. Ltd
Marketing Manager Dangguan City, China
+971 56 1749505 Barloworld Power MTU, Cummins, Volvo, Leroy Somer
rbagatsing@altaaqaglobal.com Boksburg, South Africa Diesel
www.altaaqaglobal.com Diesel and Gas 20kw-3,000kw
Diesel/Gas 086769 22713999
4kW - 16MW angelo@calsion.cn
South Africa, Angola, Namibia, Mozambique, www.calsion.cn
AksaJenerator Sanayi A.S Botswana, Zambia, Malawi
Istanbul, Turkey Graeme De Villiers
Portable, marine auxiliary and Onan marine Assistant General Manager Caterpillar Electric Power
gensets (011) 898 0000 Illinois, USA
Diesel/Gas gdv@barloworldpower.com Any
Up to 2,500kVA www.barloworldpower.com Diesel, gas, FHO
Algeria, Nigeria Any
090212 4786666 Across Africa
export@aska.com.tr Robert Rankin
www.aksa.com.tr Bredenoord Handelsmy Tertiary Manager AME, Electric Power Projects
Apeldoorn, The Netherlands 41 22 849 4758
Diesel cat_power@cat.com
5-2000kVA www.cat-electricpower.com
Ascot International 31553018501
Gela, Italy hm.schimmel@bredenoord.com
Single/ dual-use gensets www.bredenoord.com
Diesel Caterpillar Power Generation Systems
10-1500kVA 13105 NW Freeway, Suite910 Houston, Texas
0390933 913003 USA
www.ascot-italia.it Briggs & Stratton Corperation Medium speed diesel engines and equipment,
Dubai, U.A.E turnkey diesel power plants
Portable, home and standby generators Up to 150MW
Diesel Heavy fuel oil, diesel oil, liquid bio fuels, natural
Atlas Copco Ghana Ltd 7-45kW gas
Algeria, Angola, Botswana, Egypt, Ethiopia Diesel engines from 1 to 14MW, gas engines upto
Accra, Ghana 97142994944
Portable gensets 10MW
bascodxb@emirates.net.ae Cape Verde, Guinea Conakry, Mali, Mauritania,
Diesel www.briggsandstratton.com
12-1250kVA Burkina Faso
Ghana Sven Kluge
Sales Manager
Kluge_Sven@cat.com
www.catpowerplants.com

2015 Africa Energy Yearbook 159

 DIRECTORY

Coelmo S.r.l Dresser-Rand (Guascor Power) GE Energy

Acerra, Italy Zumaia, Spain USA
Industrial, Marine and Building Site gensets Internal combustion engines (1,200 - 1,500 - Steam, heavy-duty gas or aeroderivative gas
Diesel/Gas 1,800 rpm) turbines
3-3,000kVA Propane, Associated Petroleum Gas, Flare Gas Air-cooled, hydrogen-cooled, liquid-cooled
039081 8039731 from Oil Fields, Rich Natural Gas, Natural Gas, Up to 191 MVA
sales@coelmo.it Animal Manure and Biomass Biogas, Landfill and Global
www.coelmo.it Waste Water Treatment/Sewage Biogas, Syngas, http://www.ge-energy.com/contact.jsp
Gas from Tyre Processing, Dual Fuel (Natgas- http://www.ge-energy.com/index.jsp
Diesel) and Diesel
250 - 1200 eKW
Compagnia Technica Motori S.p.A Nigeria, Egypt, South Africa, Mozambique,
Cesano Boscone, Italy Tunisia and Middle East Countries for Oil & Gas GE Transportation
Gensets powered by Mitsubishi and Volta Penta Applications (Flare Gas) Erie, PA, USA
Diesel Engines Samuel Garca Baquern Reciprocating Engine
Diesel Africa - Area Manager Diesel
85-3,800kVA +34 943865200 1Mw-5Mw
03902 450581 sgbaquerin@dresser-rand.com South Africa, Algeria, Nigeria, Angola, Egypt
ctm@ctm.it www.dresser-rand/guascorpower.com David Zimmerman
www.ctm.it Global Sales Manager
859 360 3759
dave.zimmerman@ge.com
Elcos S.r.l.
Cummins Power Generation Grumello, Italy
Minneapolis Diesel/Gas
Cummins 1-3,000kVA Gemap 2 S.r.l.
Diesel/Gaz Andrea Doddi Caraglio, Italy
Up to 3.5MW 039 0372 7233313 Iveco Fit- Lomborini-Perkins-Scania
Angola, Mozambique, Nigeria, South Africa, andrea.doddi@elcos.net Gasoline, Gasoil, Gas
Libya www.elcos.net 1-2000kW
Alaa Abdul Samad 0390171 619744
Business Development manager gemap2@gemap2.com
Tel. 971566865926 www.gemap2.com
alaa.abdulsamad@cummins.com Energy Warehouse Africa CC.
Cummins.com Gauteng, South Africa
Lovol and Volvo engines Genmac S.r.l.
Diesel/ gas Gualtieri, Italy
DEUTZ DIESELPOWER 15-500kVA Various Diesel/Gas
Johannesburg, South Africa 02711 918 7000 2kW-1000kVA
3 phase deon@energywa.co.za 039 0522 222311
Diesel info@genmac.it
30 - 1000kVA www.genmac.it
South Africa
Steven Moss Eurosystems S.p.A Divisione Filippini
Sales Support Gruppi Elettrogeni
0027 11 923 0692 Boretto, Italy Geopower Africa
steven@deutz.co.za Deutz, Perkins, Cummins, Iveco and Lombardini Lanseria, South Africa
www.deutz.co.za Diesel/Gas Coelmo
2-2000kVA Diesel
Morocco, Nigeria, Tunisia < 3MVA
Fernanda Antunes South Africa, Mozambique, Zambia, Botswana,
Doosan koda Power s.r.o. 039 0522 688 141 Zimbabwe
Pilsen, Czech Republic fernanda.antunes@filippini.org Howard Ramsden
Steam Turbine www.filippini.org Director
Gas/Fosil/Biomass/Nuclear/Solar +27 (0)73 672 2502
Up to 400 MW/Up to 800 MW/Up to 400 MW/ howard.ramsden@terrapower.co.za www.
Up to 1200 MW/Up to 120 MW geopowerafrica.co.za
Egypt, Algeria, Morocco, Poland, Germany, India, FG Wilson (Engineering) Ltd
Chile, Turkey Belfast, Northern Ireland
Michal Koack Open and enclosed generating sets Diesel/gas
CFO 6.8-2,200kVA Ghaddar Machinery Co.
420 378 185 407 Across Africa Sidon, Lebanon
michal.kosacky@doosan.com 004428 90495000 Perkins, Leroy Somer engines
www.doosanskoda.com sales@fgwilson.com Diesel
www.FGWilson.com/Africa Nigeria
09617 220 000
info@ghaddar.com
G&J Technical Servixes Ltd www.ghaddar.com
Obetsebi Lamptey Circle, Ghana
Perkins, Scania and Mitsubishi engines
Diesel Green Power Systems S r.l.
10-2500kVA Caprazzino di Sassocorvaro, Italy
Ghana Range of manufacturers
0233 300 689178 Diesel/ gas
gjtech4u.com.gh Up to 2200kVA
www.gjtechghana.com 03907 227 26411
giovanni@greenpowergen.com
www.greenpowergen.com

160 2015 Africa Energy Yearbook

 DIRECTORY

Greenheart Energy (Pty) Ltd Iberdrola Ingenieria y Construccion Khatib Machinery Company-KMCO
London, United Kingdom Madrid, Spain Beirut, Lebanon
Any FV Power Plant Perkins, Cummins, Lister and Volvo
Diesel, Biodiesel, HFO, Gas >15 MW Diesel
+1 MVA North Africa, Central Africa, Southern Africa 9-2000kVA
South Africa, Kenya, Namibia, Angola Miguel Garagorri Angola Nabil
Mike Eyre Business Development +34913833180 El Atat
Director mgmi@iberdrola.es 961 1 451452
+44 (0) 7802 437389 www.iberdrolaingenieria.com info@kmco.com.lb
mike@greenheart.co.uk www.kmcolb.com
www.greenheartenergy.co.za
IMS Cape
Western Cape, SA Kirloskar Oil Engines Ltd.
Grupos Electrogenos Gesan S.A Perkins, Cummins, MTU, Scania, Volvo Pune, India
Zaragoza, Spain Diesel Air and water-cooled
Honda, Vanguard, Perkins, Volvo, Mitsubishi, 10-3000kVA Diesel
MTU +27 21 507 7200 15-600kVA
Water and air-cooled diesel and gas 2-3100kVA bmccracken@ims.zest.co.za Ethiopia, Kenya, Nigeria, SA, Tanzania
034902 110316 www.zest.co.za/ims Milind Panadare
info@gesan.com +9120 25810341
www.gesan.com milind.panadare@kirloskar.com
www.kirloskar.com
Interpower International Ltd.
Pickering, UK
GUASCOR POWER Range of manufacturers
Zumaia, Spain Diesel Kohler Power Systems
High Speed Reciprocating internal combustion 4-4000kVA France
engines 01751 476103 EPA-compliant generator sets
Natural Gas, Biogas, Diesel info@interpower.co.uk Diesel
250 - 1200 eKW 5-3250kW
Nigeria, Egypt, South Africa, Mozambique, Angola
Marroco 0033149 178300
Samuel Garca Baquern JCB Power Products Ltd. powersystems.emea@kohler.com
Africa - Area Manager Staffordshire, UK www.kohlerpowersystems.com
+34 943865200 Singler and three phase, open and canopy
sgbaquerin@guascor.com Diesel/gas
www.guascorpower.com 8-2700kVA
Algeria, Angola, Botswana, Kenya,Nigeria Laser Industries S.r.l. Unipersonale
18895 590312 Pederobba, Italy
generator.sales@jcb.com Single units, parallel and cogeneration power
HATZ Motorenfabrik www.jcbgenerators.com plants
Ruhstorf, Germany Diesel/gas/HFO
Mono and multi-cylinder engines Diesel Up to 3000kVA
2.2kVA-60kW 0039 0423 688135
Algeria, Burkina Faso, Cameroon, JMP Developments export@laserindustries.it
Cote dIvoire, Egypt Essex, UK www.laserindustries.it
0049 8531 3190 low hour, ex-standby generators
marketing@hatz-diesel.de Diesel/gas/FHO
www.hatz-diesel.de up to 2500kVA
1799 599209 Lister Petter Ltd.
jmpdvmt@aol.com Gloucestershire, UK
Open or canopied, 50 and 60Hz Diesel
HIMOINSA 208-150kVA
San Javier, Murcia Spain 0044 1453 544141
Portable, professional, heavy John Deere Power Systems sales@lister-petter.co.uk
Diesel/Gas France www.lister-petter.co.uk
Diesel/Gas 3,4,5 and 6 cylinders
3 - 3000 KVA 8KW - 3,5 MW Diesel
Angola, Lybia, Mozambique, Sudafrica, Argelia, 21-460kW
Equatorial Guinea Angola, Egypt, Morocco, Nigeria, SA M.R.M. International Generators Ltd.
Guillermo Elum +33238 826119 Suffolk, UK
Sales And Marketing Director jdengine@johndeere.com Cummins, Perkins, John Deere, Lister, Volvo,
+34 968191128 www.johndeere.com/gendrive MTU, Scandia and Caterpillar
elum@himoinsa.com Diesel
www.himoinsa.com 2-5000kVA
0044 1473 310000
Jubaili Bros (Engineering) Ltd. generators@mrmint.co.uk
Lagos, Nigeria www.mrmint.co.uk
Iberdrola Ingenieria y Construccion Perkins, Leroy Somer and FG Wilson engines
Madrid, Spain Diesel
CCGT (Supplier) 10-2200kVA
Gas +234 12710 9559 Mahindra Powerol
>100 MW jb.ikeja@jubailibros.com Mumbai, India
North Africa, Central Africa, Southern Africa www.jubailibos.com Diesel
Miguel Garagorri Up to 500kVA
Business Development +34913833180 Congo R.D., Gabon. Kenya, Niger, Tanzania
mgmi@iberdrola.es 009122 6648 3824
www.iberdrolaingenieria.com www.mahindrapowerol.com

2015 Africa Energy Yearbook 161

 DIRECTORY

MAN Diesel & Turbo Metallwarenfabrik Gemmingen GmbH Prime & Standby Generators
Augsburg, Germany Gemmingen, Germany Cape Town, RSA
35/44G, 51/60G Honda, Briggs & Stratton, Mitsubishi, Deutz Cummins, MTU, Volvo Lister, Deutz, Perkins,
Gas Diesel/gas John Deere
Sizes 13,975mm x 4,540mm x 3,845mm, 205-500 kVA Diesel
18,558mm x 6,530mm x4,700mm Nigeria 5 kVa to 10 MW
Europe, Africa, USA, Saudi Arabia, Asia +49 7267 806 158 South Africa, Angola, Namibia, Nigeria,
Michael Masters hoerdt@metallwarenfabrik.com Mozambique
Sales Engineer, Power Plant www.din-stromerzeuger.de Gareth Greenlees
+61 2 8874 0729 Director
michael.masters@au.man.eu Mikano International Ltd. (+27) 21 9339560
www.mandieselturbo.com.au Ikeja, Nigeria gareth@greenbro.co.za
Basic and sound-proof www.greenbro.co.za
Diesel/gas
Mantrac Ghana Ltd 9-5000 kVA
Accra, Ghana Niger
+2341 4602 1405 PW Power Systems
High speed and medium speed reciprocating Glastonbury, CT USA
engines info@mikano-intl.com
www.mikano-intl.com Aero-Derivatice Gas Turbines
Diesel, Gas, HFO Natural Gas or Diesel Fuel
5-12,000 kVA 25 to 120 MW
Ghana USA, Algeria, Venzuela, China, Argentina
Walid Fakhry MODIL
Power systems division manager Vic Abrahamian
Maputo, Mozambique Area Sales Director
+233 (0) 244 324880 Diesel
fokontoh@mantracghana.com 15 to 1000 kVA +972 50 5511210
www.mantracpowersystems.com Filipe Barbedo Info@pwps.com
Manager www.pwps.com
+258 823013490
filipe@tdm.co.mz
Mantrac Kenya Ltd
Nairobi, Kenya Radiant Engineering FZC
Caterpillar Shariah, UAE
Diesel, Gas, HFO MWM GmbH Perkins, Cummins, Lister Petter engines
5-12,000 kVA Mannheim, Germany Diesel
Kenya 400-4300 kW 5-2,000kVA
Ken Kamau Germany, Spain, Russia, China, India, Turkey 07916 5 574426/50 8260902
Sales Manger 496213840 sales@radianteng.net
+254 20 530903 ext. : 5204 info@mwm.net www.radianteng.net
kkamau@mantrackenya.com www.mwm.net
www.mantracpowersystems.com
Rolls Royce
Pelican Engineering Co. Ltd.
W. Yorkshire, UK London, United Kingdom
Mantrac Nigeria Limited Open, canopy, container sets Andrew Beadle
Lagos, Nigeria Diesel/gas General Sales Manager Africa/Middle East
High speed and medium speed reciprocating 40-2750 kVA +44 123 425 1057
engines +44 1924 227722 andy.beadle@rolls-royce.com
Diesel & gas gensets@pelican-eng.co.uk www.rolls-royce.com
7kVA to 14,000 kVA
Nigeria, Ghana, Tanzania, Kenya, Uganda www.pelican-eng.co.uk
Hicham Alkareemy
General Sales Manager .+2348160000441 Saccal Enterprises
HAlkareemy@mantracnigeria.com Power Link Machine (Shanghai) Co. Ltd. Beirut, Lebanon
www.mantracnigeria.com Shanghai, China Perkins, Deitz, Lister ans Cummins engines
Perkins, Cummins, Powerlink Diesel
Diesel Up to 2,000kVA
Mantrac Sierra Leone Ltd 10-2000 kVA Across Africa
Freetown, Sierra Leone Applications suitable for harsh outdoor conditions +961 1 700370
High speed and medium speed reciprocating 08621 5785485 gm@saccal.com.lb
engines info@powerlink.cn www.saccal.com
Diesel/gas/HFO www.powerlinkgenset.com
5-12,000 kVA
Sierra Leone Sakr Power S.a.L.
Sahr Kpakima Powersource Projects Ltd.
Surrey, UK Jbeil, Lebanon
Sales Engineer High/medium speec reciprocating engines
+232 22 223317 Diesel
7.5-2000 kVA Diesel
skpakima@mantrac-sl.com 11-5300kVA
www.mantracpowersystems.com +44 1428 684980
sales@power-source-pro.co.uk Nigeria, Sudan
www.power-source-pro.co.uk +961 9 442000
sales@sakr.com
Marelli Motori S.p.A www.sakr.com
Arzignano, Italy
Prime, Hydro/marine, diesel/gas/water Pramac Lifter Afrique SARL
Diesel/gas Dakar, Senegal
10-8000 kVA Portable/stationary SDMO Alger
South Africa Diesel Alger, Algeria
+39 0444 479 711 1-3000 kVA 1200, 1500, 3000 rpm
sales@marellimotori.com Angola, Cameroon, Congo D.R, Cote dIvoire, Gasoil, Gas
www.marellimotori.com Nigeria 1 up to 3000 kVA
+221 33869 3121 Jean-Jacques Gunnec
afrique@pramac.com Northern Africa Sales Manager
www.pramac.com +231 21 68 12 12
jean-jacques.guennec@sdmo.com
www.sdmo.com

162 2015 Africa Energy Yearbook

 DIRECTORY

SDMO Johannesburg Siemens Steinmller Engineering GmbH

Johannesburg, South Africa Johannesburg, South Africa Gummersbach, Germany
800, 1200, 1500, 3000 rpm Gas turbine, Steam Turbine Steam Generator
Petrol, Gasoil, Gas oil and gas 25MVA- 1.270MVA Biomass
1 up to 3000 kVA Southern Africa + East Africa Up to 100 MWth
Nigeria, Senegal, South Africa, Angola, Kenya Ute Redecker South Africa
David Raison Head of Siemens Energy Jens Kster
Southern Africa Sales Manager +27 (11) 652 2072 Head of Waste to Energy Department
RSA +27 83 233 5561 - FR(roaming) +33 631 Ute.Redecker@siemens.com +49 2261 789 50 620
59 47 01 www.siemens.com/africa jens.koester@siemens.com
david.raison@sdmo.com www.steinmueller-engineering.com
www.sdmo.com

Siemens Steinmller Engineering GmbH

Offenbach a.M., Germany Gummersbach, Germany
SDMO Nigeria Oil and gas
Lagos, Nigeria Firing Systems for Large Steam Generators
Gas turbines from 150 up to 340 MW, Refinery Residues (Heavy Oils), Low calorific
1200, 1500, 3000 rpm Power Plants in open cycle, combined cycle,
Gasoil, Gas gases
cogeneration, etc. Up to 400 MWel
1 up to 3000 kva Across Africa
Daniel Roudaut South Africa
Marcus Nelle Hans-Ulrich Thierbach
West African VP Sales
Sales Manager Head of Firing Systems / Boilers
+49 (69) 8072349 +49 2261 789 50 393
+234 805 6666 444 marcus.nelle@siemens.com
daniel.roudaut@sdmo.com hans.thierbach@siemens.com
www.siemens.com www.steinmueller-engineering.com
www.sdmo.com

Siemens Sterling Generators Pvt. Ltd.

SDMO Industries Brussels, Belgium Sharjah, UAE
Brest, France Oil and gas Power plant turnkeys
Gensets and power plants Gas turbines from 5 up to 340 MW, steam Diesel
Diesel, Petrol, Gas, Heavy fuel turbines from 0.5MW up to 1900 MW. 30-3000kVA
from 1kVA to 5MW Power Plants in open cycle, combined cycle, +971 50 9436981
France, Russia, Algeria, South Africa, Nigeria cogeneration, etc. sales@sterlinggenint.com
Patrick Le Guen West Central Africa www.sterlinggenerators.com
Export Director Habib Benfarhat
+33 298 41 41 41 Director Business Development
patrick.leguen@sdmo.com +32 2536 2267
www.sdmo.com habib.benfarhat@siemens.com T.W. Generators Ltd.
www.siemens.com Hertfordshire, UK
New and used reciprocating engines
Diesel
Semco Maritime 10-1250kVA
Esbjerg, Denmark Sojitz Corporation +44 1296 668420
All Tokyo, Japan sales@twgenerators.co.uk
Diesel, HFO, Crude and Gas IPP Developer www.twgenerators.co.uk
20-200MW Any (hydro, renewable, fossil fuel etc)
Africa, Central America, Middle East Any
Jacob Rikard Nielsen KSA, Oman, Ghana, Nigeria, RSA
Regional Sales Manager Takatsune Hirayama Tecnogen S.p.A.
+971 50 88 21 439 Deputy General Manager Pontenure, Italy
jarni@semcomaritime.com +44 20 7337 7943 Diesel
www.semcomaritime.com hirayama.takatsune@sojitz.com 2-2000kVA
www.sojitz.com +390 52351 2440
export@tecnogen.com
www.tecnogen.com
Siemens
Johannesburg, South Africa Smith Power Equipment
Steam turbine Gauteng, South Africa
Steam Silent/ultra silent Teskan Generator
0.1-250MW Istanbul, Turkey
Diesel
Germany, Czech Republic, India, Spain, China Diesel/gas/marine
10-85kVA 9-330kVA
Kiran Abraham Across Africa
Business Unit Manager - Industrial Power Kenya
+271 1284 2000 +902 16312 0550
0027-11-652-2858 mail@smithpower.co.za
kiran.abraham@siemens.com info@teksanggenerator.com
www.smithpower.co.za www.teksangenerator.com
www.siemens.com/africa

Steinmller Engineering GmbH Tessari Energia S.p.A.

Siemens Gummersbach, Germany
Johannesburg, South Africa Padova, Italy
Steam Generator Diesel
Gas turbine Municipal Waste and biomass
Oil and gas 4-3000kVA
Up to 100 MWth +390 49828 5240
5-50MW South Africa
Sweden, Norway,Germany, India, China exportsales@tessarienergia.it
Jens Kster www.tessarienergia.it
Kiran Abraham Head of Waste to Energy Department
Business Unit Manager - Industrial Power +49 2261 789 50 620
+27-11-652-2858 jens.koester@siemens.com
kiran.abraham@siemens.com www.steinmueller-engineering.com
www.siemens.com/africa

2015 Africa Energy Yearbook 163

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Toshiba Unatrac Ltd Visa S.p.A.

Tokyo, Japan Slough, UK Fontanelle, Italy
Synchronous Caterpillar Diesel
Fossil Diesel, Gas, HFO Up to 2,000kVA
Any 5-12,000kVA Algeria, Morocco, South Africa, Tanzania
Egypt, South Africa Egypt, Nigeria, Ghana, Sierra Leone, Kenya, +390 42250 9102
Hiromi Nagano Tanzania, Uganda visa@visa.it
Group Manager Bill Haxworth www.visa.it
Sales Manger
+44 1753695555
powersystems@unatrac.com
TOTALSUPPORT LTD www.unatrac.com Westac Power Ltd.
Portharcourt - Nigeria Aldershot, UK
MicroTurbine Diesel, natural gas, LPG
Natrual gas, propane, low-btu gas, diesel, kerosine Up to 2565kVA
30-2000KW Vibropower (UK) Ltd. +44 1252 785170
Nigeria, Kenya, Cameroon, Ghana, Uganda Peterborough, UK rtanner@westac.co.uk
Ubani Nkaginieme Diesel www.westac.co.uk
CEO 27-2200kVA
+234 8035055005 Keith Wall
ubani@totalsupportenergy.com +44 1733 230010
www.totalsupportenergy.com keithwall@vibropower.com
www.vibropower.com

Sam Ebohon | Figuration | 2011 | Oil on Canvas | 50 x 49.5 Inches

For price contact Aabru Art / art@aabru.co.uk/ +44 7847 244 217

164 2015 Africa Energy Yearbook

 DIRECTORY

Temporary power
Company: Advanced Diesel Engineering Barloworld Energia Barloworld Energia Mozambique
Head Office: Pontfract, U.K Luanda, Angola Maputo, Mozambique
Type of generator: Silent generators for primary, Standby Generators Standby Generators
standby and emergency power Diesel/gas/HFO Diesel/gas/HFO
Fuel: Diesel 30kVA - 100MW 9,5kVA - 100MW
Size: 15-3300kVA Angola Mozambique
List 5 top countries of operation: Orlando Ferrao Joao Ferreira
Contact: G Attley Operations Manager Country Manager, Power
Position: CEO/Head of Sales Department +244 222460220 +258 84 477 5780
Telephone: +44 1977 608111 oferrao@barloworld-angola.com jferreira@barloworld-moz.com
Email: g.attley@adeltd.co.uk
Website: www.adeltd.co.uk
Barloworld Namibia Barloworld Power Zambia
Walvis Bay, Namibia Kitwe, Zambia
Aggreko International Standby Generators Standby Generators
Dubai, UAE Diesel/gas/HFO Diesel/gas/HFO
Power gensets 30kVA - 100MW 30kVA - 100MW
Diesel/gas/HFO Namibia Zambia
20 kVA up to 1250 kVA Warrick Gibbens Arne Thorkildsen
Across Africa Snr. Project Manager Power Manager
James Shepherd +2711 898 0280 +26021 2211311
Managing Director - Southern East Africa wgibbens@barloworldpower.com athorkildsen@barlows.com.zm
+971-4-8086200
james.shepherd@aggreko.ae
http://africa.aggreko.com
Barloworld Power Boksburg BIA
Boksburg, South Africa Brussels, Belgium
Standby Generators Diesel
Aggreko International Diesel/Gas/HFO 8KvA>
Dubai, UAE 13kVA- 16MW Mauritiana, DRC
Container Power gensets South Africa, Angola, Namibia, Botswana, Zambia Cedric Leturcq
Diesel Andy Strombeck General Manager
500 kVA up to 1250 kVA General Sales Manager - Turnkey +3210471544
Across Africa +2711 898 0232 cle@biaoverseas.com
Robin James astrombeck@barloworldpower.com www.biaoverseas.com
Business Development Director
+971-4-8086200
robin.james@aggreko.ae Barloworld Power Botswana Car & General (Kenya) Ltd
Gabarone, Botswana Nairobi
Standby Generators Cummins
Aggreko International Diesel/Gas/HFO Diesel
Dubai, UAE 22kVA - 100MW 8 Kva >
Gas Power Gensets Botswana Kenya, Uganda, Ethiopia, Tanzania
Gas Marius McAslin Seychelles, Rwanda, Burundi
1375 kVA Across Africa Power Manager B.S. Balaji
Andy Walker +267 395 1781 General Manager - Engineering
Head of Business Development Mining Global MMcAslin@barloworld-equipment.com +254 2 0554500
+971506252240,00 bsbalaji@cargen.com
andy.walker@aggreko.ae www.cargen.com
Barloworld Power Johannesburg
Johannesburg, SA
Standby Generators
APR Energy Caterpillar Electric Power
Diesel/gas/HFO Illinois, USA
Jacksonville, FL USA 30kVA - 700kVA
Dual-fuel Mobile Gas Turbines, Diesel Power Any
South Africa Diesel/gas, HFO
Modules, Natural Gas Power Modules Shane Cadles
Dual-fuel / Diesel / Gas Any
Retail Sales Manager Across Africa
1.5-30 MW +2711 898 0240
Angola, Libya, Botswana, Gabon, Senegal Robert Rankin
Scadles@barloworld-equipment.com Territory Manager AME, Electric Power Projects
Ranjit Singh www.barloworldpowersystems.co.za
Managing Director of Europe, Middle East & +41 22 849 4785
Africa cat_power@cat.com
+971 52 888.8172 www.cat-electricpower.com
+1 904 223 2278 Barloworld Power Malawi
Ranjit.Singh@aprenergy.com Lilongwe, Malawi
www.aprenergy.com Standby Generators CTBV Lte
Diesel/Gas/HFO Port Louis - Mauritius
11kVA - 800MW Thermal power generator
Malawi Bagass and coal
Patrick Khamula 2 turbines. Each one is 35.5 MW Mauritius
Power Manager Geoffroy Mattlinger
+265 1870666 Director
Pkhamula@barloworld-malawi.com +2304226563

gmattlinger@ctbv.net

2015 Africa Energy Yearbook 165

 DIRECTORY

Cummins Africa RDO GE Transportation Mantrac Sierra Leone Ltd

Johannesburg Erie, PA, USA Freetown, Sierra Leone
Cummins Reciprocating Engine Caterpillar
Diesel, Gas Diesel Diesel/gas/HFO
1000 kVA> 1Mw-5Mw 5-12,000kVA
Satish Jayaram South Africa, Algeria, Nigeria, Angola, Egypt Sierra Leone
Business Development Director - Power Projects David Zimmerman Sahr Kpakima
Africa Global Sales Manager Sales Engineer
+27 11 844 7800/7816 859 360 3759 +232 22 223317
satish.jayaram@cummins.com dave.zimmerman@ge.com skpakima@mantrac-sl.com
www.cumminspower.com www.mantracpowersystems.com
www.cummins.com
Jozi Power Limited
Johannesburg, South Africa Mantrac Tanzania Ltd
Cummins Ghana Ltd Reciprocating Engine Dar es Salaam, Tanzania
Accra Diesel Caterpillar
Cummins Fleet of 1MW containerised gensets Diesel/gas/HFO
Diesel South Africa, Sierra Leone, Liberia, Namibia and 5-12,000kVA
8 kVA> Tanzania Tanzania
Ghana, Liberia, Sierra Leone Leslie Dann James Serre
Meshach Kwegyir-Aggrey Director Sales Manager
CPG Leader +27 072 386 4315 +255 0222 860 160 ext.: 5204
+233544334788 leslie.dann@jozipower.com jserre@mantractanzania.com
meshach.kwegyir-aggrey@cummins.com www.jozipower.com mantracpowersystems.com
www.cumminspower.com
www.cummins.com

Mantrac Egypt Mantrac Uganda Ltd
Cairo, Egypt Kampala, Uganda
Cummins South Africa (Pty) Ltd Caterpillar Caterpillar Diesel/gas/HFO
Johannesburg Diesel/gas/HFO 5-12,000kVA
Cummins 5-12,000kVA Uganda
Diesel Egypt Ali Rajab
8 kVA> Magdy Sawiris Sales Manager
Southern Africa Sales Manager +254 414 304 135
Johan Joubert +2 02 300 4049 arajab@mantracuganda.com
General Manager - Power Generation msawiris@mantrac.com.eg mantracpowersystems.com
+27 11 321 8733 mantracpowersystems.com
johan.joubert@cummins.com
www.cumminspower.com
Moambique Diesel-Elctrica
Mantrac Ghana Ltd Maputo, Moambique
Accra, Ghana Himoinsa
Cummins West Africa Ltd Caterpillar Diesel
Lagos Diesel, Gas, HFO from 7Kva to 2000Kva Mozambique, RSA
Cummins 5-12,000kVA Miguel
Diesel Ghana Silva
8 kVA> Felix Ofosu Kontoh Managing Director
Nigeria Sales Manager +258 82 3036170
Koullis Schizas +233 (0) 244 324880 msilva@dieselelectrica.co.mz
General Manager fokontoh@mantracghana.com
+234 807 899 0161 mantracpowersystems.com
koullis.schizas@cummins.com
www.cumminswestafricaltd.com NEP (UK) Ltd.
Surrey, UK
Mantrac Kenya Ltd Prime, power and standby opensets and canopies
Nairobi, Kenya Diesel/gas
Genrent International Caterpillar 5-2500kVA
Nicosia, Cyrpus Diesel/gas/HFO UAE, KSA, Egypt, Egypt, Oman
We use: 5-12,000kVA Paul Barter
(1) Gas and Diesel Gensets; Kenya Int. Sales Manager
(2) Gas turbines Ken Kamau +44 1932 242 242
Diesel/gas/HFO Sales Manger info@nep-uk.com
Gensets: 250KW - 2 MW +254 20 530903 ext. : 5204 www.nep-uk.com
Turbines: 25/50 MW kkamau@mantrackenya.com
Brazil, Chile, Nigeria, Angola, Poland mantracpowersystems.com
Hana-Muriel
Dr. Setteboun Prime & Standby Generators
VP Business Development & Finance Cape Town, RSA
+972-3-9720500 Mantrac Nigeria Ltd Cummins, MTU, Volto Lister, Deutz, Perkins,
hanas@fkgen.com Lagos, Nigeria John Deere
www.genrent-international.com Caterpillar Diesel
Diesel 5 kVa to 10MW
500kVA to 2500kVA South Africa, Namibia, Angola, Nigeria,
Nigeria, Ghana, Tanzania, Kenya, Uganda Mozambique
Tony Papau Gareth Greenlees
Project Manager Director
.+2348060401050 (+27) 21 9339560
Tpapai@mantracnigeria.com gareth@greenbro.co.za
www.mantracnigeria.com www.greenbro.co.za

166 2015 Africa Energy Yearbook

 DIRECTORY

Ruf GmbH & Co. KG

Zaisertshofen, Germany
Manufacturerer of briquetting systems
Andreas Jessberger
Sales Manager
08268/ 90 90-20
info@brikettieren.de
www.brikettieren.de

Rural World Resources International

Bamenda, Cameroon
Gas engine, Producer Gas, biogas
< 100KW
Cameroon
Dr. Matt Fombong
Director
+237 99827697
ruralworldresources@yahoo.com

SDMO Johannesburg
Johannesburg, South Africa
800, 1200, 1500, 3000 rpm
Petrol, Gasoil, Gas
1 up to 3000 kva
Nigeria, Senegal, South Africa, Angola, Kenya
David Raison
Southern Africa
Sales Manager
RSA +27 83 233 5561 - FR(roaming) +33 631
59 47 01
david.raison@sdmo.com
www.sdmo.com

Semco Maritime
Esbjerg, Denmark
All
Diesel/gas/HFO/crude
20-200MW
Africa, Central America, Middel East
Jacob Rikard Nielsen
Regional Sales Manager
+971 50 88 21 439
jarni@semcomaritime.com
www.semcomaritime.com

Unatrac Ltd
Slough, UK
Caterpillar
Diesel/gas/HFO
5-12,000kVA
Egypt, Nigeria, Ghana, Sierra Leone, Kenya
Bill Haxworth
Sales Manger
+44 1753695555
powersystems@unatrac.com
unatracpowersystems.com
Christophe Jacquin
Managing Director
33-160-158115
christophe.jacquin@aggreko.fr
Willem Schoeman
General Manager, Southern Africa 28 072 386
4315
willem.schoeman@jozipower.com
www.yy-md.com

Gorge Edozie | Four faces of Agbogho Mmuo 2, 2

For price contact Aabru Art / art@aabru.co.uk/ +44 7847 244 217

2015 Africa Energy Yearbook 167

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 DIRECTORY

Wind power
Company: ALSTOM Greenheart Energy (Pty) Ltd Director
Head Office: Barcelona, Spain London, United Kingdom +27 (0)73 672 2502
Type of generator: 1.25 MW howard.ramsden@terrapower.co.za www.
Size: 1.67 to 3MW South Africa, Kenya, Namibia, Angola terrapower.co.za
List 5 top countries of operation: Mike Eyre
Contact: Laurene Hommet Director
Position: Sales department, +44 (0) 7802 437389 The Wind Factory International BV
Alstom Wind mike@greenheart.co.uk Amsterdam, The Netherlands
Telephone: +34 93 489 09 38 www.greenheartenergy.co.za 600W, 1,4kW, 5,8kW, 10kW, 80kW, 250kW,
Email: 900kW
laurene.hommet@power.alstom.com Kenya, Madagascar, Tanzania, Gambia, South
Website: www.power.alstom.com Africa
Iberdrola Ingenieria y Construccion
Pieter Klimp
Madrid, Spain
Managing Director
Wind FarmSupplier
+31-203422137
Ammonit >50 MW
info@thewindfactory.com
Berlin, Germany North Africa, Central Africa, Southern Africa
www.thewindfactory.com
Wind turbines and accessories Miguel Garagorri
South Africa, Kenya, Europe Business Development
Henner Schienitzk +34913833180
+49-30-6003188-0 mgmi@iberdrola.es VERGNET
hs@ammonit.com www.iberdrolaingenieria.com Ormes - France
www.ammonit.com from 200 kW to 1 MW (Wind Diesel Systems)
Ethiopia, Nigeria, Kenya, Angola, Mauritiana
Leopold Faye
Selam Awassa Business Group PLC Sales Manager
Bergey Windpower Hawassa, Ethiopia .+33 238 52 39 70
Norman, OK USA 0-2kW l.faye@verget.fr
1kW, 7.5kW, 10kW Ethiopia, East African Region www.vergnet.fr
Kenya, South Africa, Angola, Morocco, and Atkelt Girmay
Tunisia General Manager
Scott Merrick +251916581694 Vestas
Sales/Customer Service selamabg@ethionet.et Madrid, Spain
(405) 364-4212 www.selamawassa.org Any
smerrick@bergey.com Present in 70 countries on 5 continents
www.bergey.com Lance Marram
Semco Maritime Vice President Business Development
Esbjerg, Denmark +34 91 362 83 79 9379
El Sewedy Cables All +34 610 506 850 (Mobile)
Cairo, Egypt Africa, Central America, Middel East, africaenergyforum@vestas.com
1.65 MW, 2.5 MW Jacob Rikard Nielsen www.vestas.com
Amr Abdoun Regional Sales Manager Melissa Lyras
Business Development
Sales Director +971 50 88 21 439
+34 91 362 8425
+202 2690 43 11 jarni@semcomaritime.com
+34 664 301 110 (Mobile)
a.abdoun@elsewedy.com www.semcomaritime.com
www.elsewedy.com

Winglette
Siemens Harrismith, South Africa
Fortis Wind Energy Munich, Germany 3kW
Hoogkerk, The Netherlands 2.3 MW -3.6 MW Hans van Eeden
800W, 1.4kW, 5kW 10kW South Africa, Nigeria, Tunisia, Morocco, Algeria, Chief Engineer
Mocambique, Mauritania, Kenya, Maroc Kenya +270 58622 1838
Johan Kuikman Alain De Cat info@winglette.com
General Manager Sector Cluster Lead www.winglette.com
+31 (0) 50 5515 666 +234 (1) 4480220
info@fortiswindenergy.com alain.de_cat@siemens.com
www.fortiswindenergy.com www.siemens.com/africa African Windpower
Cape Town, South Africa
AWP 3.7
GE Energy superwind GmbH Namibia, Uganda
Frankfurt, Germany 50321 Bruehl / Germany +27 84 4444118
+49 (0) 69 45 09 09 110 350 W wtdist@mweb.co.za
martin.reuther@ge.com Morocco, RSA www.africanwindpower.com
Klaus Krieger
Director
kk@superwind.com Suzlon Wind Energy S.A. (Pty) Ltd
Goldwind Africa www.superwind.com
Cape Town, South Africa Pune, India
Permenant magnet direct drive wind turbines Asia, Australia, Europe, South Africa, South
1.5MW and 2.5MW America
Silas Zimu
South Africa Terra Wind Energy
CEO
Daniel Kurylo Lanseria, South Africa
011 784-7768
Director 2.5 megawatt
Silas.Zimu@suzlon.com
+27(0) 71 2095030 South Africa, Mozambique, Zambia, Botswana,
www.suzlon.com
danielkurylo@goldwindafrica.com Zimbabwe
www.goldwindglobal.com Howard Ramsden

2015 Africa Energy Yearbook 169

 DIRECTORY

Hydropower
Company: AEM OSSBERGER GmbH+ Co
Head Office: Dessau, Germany Otto-Rieder-Str. 7, 91781 Weissenburg, Germany Toshiba
Unit size: Up to 5 MW/MVA 5 kW up to 3,3 MW Tokyo, JPN
List 5 top countries of operation: Worldwide Rwanda, Angola, Cameroon, South Africa Any
Contact: Reiner Storch Mr. Helmut Erdmannsdrfer Egypt, South Africa, Kenya
Position: CEO/Head of Sales Department MD Hydro Hiromi Nagano
Telephone: +49 340 203-210 +49 (0) 9141 977 0 Group Manager, Business Strategy & Planning
Email: r.storch@aemdessau.de he@ossberger.de Div. Power Systems Company
Website: www.aemdessau.de www.ossberger.de hiromi.nagano@toshiba.co.jp
www3.toshiba.co.jp/power/index3.htm


Rural World Resources International
ANDRITZ HYDRO GmbH. Bamenda, Cameroon Tsega Mekonnen General Metal and Machining
Vienna, Austria <100KW Cameroon Works PLE
1 to 800 MW Dr. Matt Fombong Addis Abeba, Ethiopia
Austria, Germany, Canada, India, China Director 0-50kW
Jens Putz 237 99827697 Ethiopia, East African Region
Head of Marketing & Communications ruralworldresources@yahoo.com Tsega Legesse
+43/50805-52675 Owner
jens.paeutz@andritz.com +251911454528
www.andritz.com tsega_l@yahoo.com
Sea Power International AB
Stockholm, Sweden
Ethiopia
Entec Inge Pettersson Telemenia Ltd.
St. Gallen - Switzerland CEO Airpoert City, Israel
Up to 250 kW +46 850586541 Depends on specific turbines. We install Pelton
info@seapowerinternational.se and Francis turbines
Indonesia, Nepal, Vietnam, Laos, UK, Switzerland www.seapowerinternational.se Albania, Ethiopia, Cote dIvoire, Uganda
Martin Boelli Hana-Muriel
Sales Manager Dr. Setteboun
+41 (0) 71 228 10 20 VP Business Development & Finance
info@entec.ch Siemens +972-3-9720500
www.entec.ch Munich, Germany hanas@fkgen.com
All sizes can be offered depending on project www.genrent-international.com
South Africa, Nigeria, Tunisia, Morocco, Algeria
Ute Meinikheim
Gilbert Gilkes and Gordon Ltd Sector Cluster Lead
Kendal, UK +234 (1) 4480220 VS TURBO (PVT) LTD
Hydro Turbines and Ancillery equipment ute.menikheim@siemens.com Head Office - Colombo, Sri Lanka 1 - 25 MW
Hydro www.siemens.com/africa Uganda, Kenya
Up to 20MW Udaya Siriwardena
UK, North America, Africa, Sri Lanka, Japan Plant Manager
Andrew Eaton +94 11 2533444 (Head Office)
Semco Maritime nishan@v-s-hydro.com
Hydro Sales Engineer Esbjerg, Denmark
+44 1539 720028 www.v-s-hydro.com
All
Africa, Central America, Middel East
Jacob Rikard Nielsen
Regional Sales Manager
Greenheart Energy (Pty) Ltd +971 50 88 21 439
London, United Kingdom jarni@semcomaritime.com
1.25 mW www.semcomaritime.com
South Africa, Kenya, Namibia, Angola
Mike Eyre
Director
+44 (0) 7802 437389 Selam Awassa Business Group PLC
mike@greenheart.co.uk Awassa, Ethiopia
www.greenheartenergy.co.za 0-300kW
Ethiopia, East African Region
Atkelt Girmay
Technical Manager
Konar - Generators and Motors Inc. +251911649994
Zagreb, Croatia selamabg@ethionet.et
Up to 400 MVA; 25kV www.selamawassa.org
Ethiopia, Morocco, Guinea, Tanzania, Nigeria
Roko Bodulic
Sales Manager
+385 1366 7495 Telemenia Ltd.
+94 77 3500424 (Mobile) Airpoert City, Israel
rbodulic@koncar-gim.hr Depends on specific turbines. We install Pelton
www.koncar-gim.hr and Francis turbines
Albania, Ethiopia, Cote dIvoire, Uganda
Hana-Muriel
Dr. Setteboun
VP Business Development & Finance
+972-3-9720500
hanas@fkgen.com
www.genrent-international.com

170 2015 Africa Energy Yearbook

 DIRECTORY

Solar power
Company: AEG Power Solutions FLABEG Holding GmbH PRECIMA (Junkers)
Head Office: Cape Town, South Africa Nmberg, Germany Casablanca, Morocco
Unit description: Solar Inverters, Power Solar mirrors for concentrated solar power and Solar Thermal (Junkers brand)
Controllers concentrated photovoltaics 150, 200, 300 L
Unit size: 3,000 - 9,000 Liter/day (200 Wp/unit) Up to 2GW Morocco
5 top countries of operation: Egypt, Morocco, China, USA, India Khalid Berrada
Contact: Trevor De Vries Thomas Deinlein Director
Position: Managing Director Head of Marketing & Communication +212 5 22 35 05 08
Telephone: +27 21 555 8100 +49 911 96456 245 contact@precima.ma
Email: trevor.de-vries(@)aegps.com Thomas.deinlein@flabeg.com www.precima.ma
Website: www.aegps.com/en www.flabeg.com

Fraunhofer Institute for Solar Energy Scatec Solar

Access Power MEA Oslo, Norway
Systems
Dubai, UAE PV - Development, EPC and IPP
Freiburg, Germany
Solar Photovoltaics 100p
Egypt, Namibia
Utility Scale South Africa-West Africa-USA -Japan-Europe
Dr. Matthias Vetter
Uganda, Kenya, Egypt, Rwanda, Ghana Head of Department Terje Osmundsen
Vahid Fotuhi +49 (0) 761/4588-5600 Senior VP
Director of Origination matthias.vetter@ise.fraunhofer.de +47 95 92 62 77
+971 4 453 9508 terje.osmundsen@scatecsolar.com
vfotuhi@access-power.com www.scatecsolar.com
http://www.access-power.com
Isofoton
South Africa
Photovoltaic modules, cells, Isokit solar, HCPV, SMA Solar
AUTARCON GmbH Isotracker Niestetal, Germany
Kassel, Germany Power output ranges between 150 and 260W Solar Inverter, Off-Grid Inverter, Wind Energy
Solar PV driven pumping and treatment stations contact@isofoton.com Inverter, Fuel Cell Inverter, Backup Systems
for the decentral supply of drinking water www.isofoton.com/en/index-en Off-grid systems up to 300 kW
3,000 - 9,000 Liter/day (200 Wp/unit) Michael Wollny
Ghana, Gambia, Namibia, Brazil, India Director Business Development Off-Grid
Philipp Otter Solutions
Project Coordinator Juwi Holding AG
Wrrstadt in Germany International development +49 561 9522 4122
+49 (0) 561 5061 868 92 Michael.Wollny@SMA.de
otter@autarcon.com of renewable energy projects (wind, solar)
Germany; subsidiaries in 14 countries amongst www.sma.de
www.autarcon.com
them South Africa
+49. (0)6732. 96 57 - 0
BOSCH Solar Energy South Africa kontakt@juwi.de Soitec
Midrand, South Africa www.juwi.com Freiburg, Germany
Solar Photovoltaic (Bosch brand) Concentrating Photovoltaic (CPV) power plants
Custom-made (no limit), off-grid, 28.1 kWP per system for utility-scale power plants
on-grid and mini-grid South Africa, Namibia, KG Electric US, South Africa, North Africa, Italy, France
Johannesburg, South Africa +49 (0)761-2141080
Botswana, Mozambique, Angola
Solar PV panels, Solar water pumps, inverters and contact-solar@soitec.com
Andreas Wagner
control equipment www.soitec.com
Sales Manager
+27 82 922 6187 27 11 7083530
andreas.wagner@za.bosch.com info@kgelectric.co.za
www.bosch-solarenergy.com www.kgelectric.co.za Solarkiosk
Berlin, Germany
Autonomous business solar units for off-grid areas
MAG Switzerland Across Africa
BOSCH Thermotechnology South Africa Schaffhausen, Switzerland Andreas Spiess
Midrand, South Africa Solar module manufacturing lines CEO
Solar Thermal (Bosch brand) Sebastian Haupt +49 (30) 4401 3309
150, 200, 300 L and large-scale applications Technology Manager www.solarkiosk.eu/?page_id=20
South Africa, Namibia, Botswana, Mozambique, Solar www.solarkiosk.eu
Mauritius +41 526313347
Eduardo Gouveia sebastian.haupt@mag-ias.com
Sales Manager www.mag-ias.com
+27 72 597 7753 Solarspring
eduardo.gouveia@za.bosch.com Freiburg, Germany
www.bosch-thermotechnology.com Solar Driven (PV and Solar Thermal) water
MAGE Solar treatment systems for off-grid use
Ravensburg, Germany photovoltaic system Tunisia, Egypt, Namibia, Morocco, India
components: Modules, mounting systems, inverters Marcel Wieghaus
FK Generators and Equipment +49 (0)751 / 560 17-0 Chief Executive Officer
Airpoert City, Israel info@magesolar.de +49 (0)761/6105082
PV panels contact@solarspring.de
240-280 Wp per panel www.solarspring.de
Brazil, Namibia,Chile, Albania, Israel Molar Solar Systems
Hana-Muriel Duisburg, Germany
VP Business Development & Finance Photovoltaics
+972-3-9720500 +49(0)203-75 99 98-0
hanas@fkgen.com info@mola-solar-systems.com
www.fk-generators.co.il www.mola-solar-systems.com

2015 Africa Energy Yearbook 171

 DIRECTORY

Sovello GmbH
Bitterfeld-Wolfen, Germany
Photovoltaics
180 MW Nominal capacity per year (300MW
planned)
Germany, Italy, Spain, UK, France Sylvia
Schmenk
Director Sales
+49 3494 6664 0
info@sovello.com
www.sovello.com

STENDO s.r.l.
Rome - Italy
Consulence
Italy UK Israel South Africa
Stefano Cecutta
Owner
+390695945492
stefano@stendo.com
www.stendo.com

Solar Power Africa

South Africa
Solar panels, inverters, solar trackers, charge
controllers
+27 (0)11 070 7577
info@spafrica.co.za

Semco Maritime
Esbjerg, Denmark
All
20-200MW
Africa, Central America, Middel East
Jacob Rikard Nielsen
Regional Sales Manager
+971 50 88 21 439
jarni@semcomaritime.com
www.semcomaritime.com

Setsolar
Cape Town, South Africa
Photovoltaic modules, system components, solar
water heating
+21 535 1794


SunPower
San Jose, USA
High efficiency PV solar solutions for residential,
commercial and ground applications
USA, Japan, Italy, Germany, South Africa
Franois Le Ny
Director of Utility & Power Plants Key Accounts,
EMEA
+33 6 73 28 39 70
francois.leny@sunpowercorp.com

YANDALUX GmbH
Hamburg, Germany
PV plants and components, solar home systems,
solar powered pumps, solar telecom shelters,
telephone kiosks, village power plants, hybrid
plants Alexander Sipua
Director African Affairs
+49-40-25309890
info@yandalux.com
www.yandalux.com

Gorge Edozie | Four faces of Agbogho Mmuo 2, 3

For price contact Aabru Art / art@aabru.co.uk/ +44 7847 244 217

172 2015 Africa Energy Yearbook

NOTES
NOTES
NOTES
NOTES
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industrial solutions, helping to generate a more stable and viable investment option for our partners in Africa.
Our up-coming meetings in 2015 include:

POWERING AFRICA: NIGERIA 14 15 September 2015 | Abuja

PA: SERIES Powering Africa: Nigeria 2015 is a two-day private sector-led summit on structured nance, development nance and private equity for
Nigerias Discos, Gencos and power sector leaders.
The programme will feature interactive dialogue between Gencos and Discos, private sector banks, multilateral investors and DFIs, government
and developers to discuss the changing investment landscape placing the critical role of the private sector at the heart of the agenda. The
platform will showcase the vast opportunities that await investment in Nigerias newly reformed energy sector as well as oer solutions to
overcome nancial challenges, deliverables and risks that will ensure the reliability of supply for Nigeria. Participants will also have the
14-15 SEPTEMBER opportunity to attend the black tie gala dinner, honouring some of Nigerias most prolic deal makers.
ABUJA
www.poweringafrica-nigeria.com

PA: SERIES
POWERING AFRICA: GHANA 17 18 September 2015 | Accra
The Powering Africa: Ghana summit will provide a platform for investor insights on the future direction of the power sector in Ghana. The agenda
will focus on the country's electricity landscape following the division of the energy and power ministries, the critical issues facing the government
G H A N A and investors, and the future project pipeline which is rapidly growing under the leadership of the Minister for Power. Meet with 250 decision-
makers including DFIs, banks, developers and EPCs to discuss what is needed to fully support and enable the transformation of Ghanas electricity
sector in the medium to long term.
17-18 SEPTEMBER
ACCRA www.poweringafrica-ghana.com

SOUTH AFRICA: GAS OPTIONS 1 2 October 2015 | Cape Town

The South Africa: Gas Options meeting is a focused 2 day investment meeting taking place from 1-2nd October 2015.
The meeting will take a detailed look at the opportunities available for gas developers and private sector investors as a result of the countrys
growing power demands. Debate solutions to the challenges of raising nance, delivering an ecient transmission infrastructure and the
supporting industry, and the global LNG trends which could realise the countrys vision of a stable and sucient power supply.
1-2 OCTOBER
CAPE TOWN www.southafrica-gasoptions.com

AFRICA INFRASTRUCTURE & POWER FORUM 15 - 16 October 2015 | Beijing

EnergyNets 4th Africa Infrastructure & Power Forum is the annual gathering for Chinese investors and African developers to do deals and develop
Africas infrastructure and power sector.
Taking place from 16-17th September in Beijing, China, the Forum will welcome government representatives, utilities companies, nancial
investors, project developers, technology providers and the advisory sector.
15-16 OCTOBER
BEIJING
www.africa-infrastructure-forum.com

PA: SERIES POWERING AFRICA: FINANCE OPTIONS 5 6 November 2015 | Cape Town
The 9th Annual Powering Africa: Finance Options meeting is an executive briefing designed for CEOs and senior-level directors active in
the energy, finance and consulting sectors and focused on the financing of projects across Africa. The meeting will get to the heart of the
issues and opportunities surrounding project nance, allowing participants to directly engage with key decision-makers over the course of the
concentrated 2 day retreat. This meeting is restricted to two delegates per company to preserve the roundtable format and high quality
networking opportunities.
5-6 NOVEMBER
CAPE TOWN www.poweringafrica-finance.com

PA: SERIES POWERING AFRICA: TANZANIA 3 4 December 2015 | Dar es Salaam

EnergyNet are delighted to present the 3rd annual Powering Africa: Tanzania meeting this November in Dar es Salaam. This meeting will provide
detailed insights into the investment opportunites in Tanzanias power sector in 2015, following on from the success of the 2014 meeting where
senior ocials from the Ministry of Energy & Minerals, TANESCO, EWURA, TPDC and the Dar es Salaam Stock Exchange invited regional and
international power experts to join them in timely discussions regarding the future role of the recently unbundled state utility TANESCO.
3-4 DECEMBER www.poweringafrica-tanzania.com
DAR ES SALAAM

PA: SERIES

Coming
up in 2016: 27-29 JANUARY 17-19 FEBRUARY 21-24 JUNE
WASHINGTON CAIRO LONDON

www.energynet.co.uk
Hydropower for Africa
Hydropower for Africa
Renewable and sustainable energy for the future
Renewable and sustainable energy for the future
Algeria
Mali Mansouriah
Morocco Egypt
Matmata
Manantali Algeria
Darguinah
Mali Mansouriah Tunisia New Naga Hammadi
Morocco
Ahmed El Hansali Egypt
Manantali Darguinah Sidi Salem Aswan
Matmata
El Borj Tunisia New
Ahmed El Hansali Sidi Salem AssiutNaga Hammadi
Tanafnit Aswan
El Borj El Hansali
Ahmed Assiut Ethiopia
Tanafnit
Daurat
Ahmed El Hansali Beles
Ethiopia
Gilgel Gibe
Daurat
Burkina Faso Beles
Bagre Gilgel Gibe
Burkina Faso
Bagre Guinea Uganda
Garafiri Nalubaale Kenya
Guinea Uganda
Kiira
Nalubaale Kindaruma
Cote dIvoire Garafiri Kenya
Masinga-Dam
Ayame Kiira Kindaruma
Cote
TaabodIvoire Masinga-Dam
Ayame Tanzania
San Pedro Lower Kihansi
Taabo TanzaniaFalls II
San Pedro Togo Pangani
Nangbeto Lower Kihansi
Togo Malawi Pangani Falls II
Nangbeto Tedzani 1-3
Ghana Nigeria Malawi
Akosombo Gabon Kainji 11/12, 5/6 Wovwe
Ghana Kinguele Nigeria Tedzani 1-3
Kpong Gabon Shiroro Wovwe
Akosombo Kainji
Jebba11/12, Cameroon
5/6 Mozambique
Kpong Kinguele Shiroro
Eda I-III Mawusi
Jebba Cameroon Mozambique
Corumana
Congo Song Loulou Mawusi
Eda I-III Madagascar
Djou Song Loulou Corumana
Congo Mandraka
Djou Democratic Madagascar
Andekaleka
Republic of Congo Mandraka
Democratic
Inga II Andekaleka
Republic
Ruzizi I of Congo
Inga Zambia
RuziziII II Victoria Falls
Ruzizi
Nzilo I Angola Zambia
Ruzizi II Kariba North
Zongo Cambambe Victoria Falls
Nzilo Angola
Bukavu
Zongo
Lauca
Cambambe Lesotho Kariba North
Sebeya Matala Muela
Bukavu
Koni Lauca South Africa Lesotho
Sebeya Matala Mantsonyane I & II
Steenbras Muela
Koni Namibia South Africa
Drakensberg Mantsonyane I & II
Ruacana Steenbras
Vanderkloof
Namibia Drakensberg
Ruacana Vanderkloof

ANDRITZ HYDRO is a global supplier We have a passion for Africa: with a

ANDRITZ
of HYDRO is a equipment
electromechanical global supplier
and We havepresence
market a passion
for for Africa:
over 100 with a
years,
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services (From
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With over 170for ANDRITZ
bished HYDRO
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hydropower capacity - large hydro, ser-
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We focus on the best solution - from
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to wire.
generation. water to wire.

ANDRITZ HYDRO GmbH

Eibesbrunnergasse 20, 1120 Vienna, Austria
ANDRITZ HYDRO GmbH
Phone: +43 50805 0, Fax: +43 50805 51015
Eibesbrunnergasse 20, 1120 Vienna, Austria
contact-hydro@andritz.com
Phone: +43 50805 0, Fax: +43 50805 51015
www.andritz.com
contact-hydro@andritz.com www.andritz.com