Africa battles to get big solar projects on grid

Saturday August 6, 2016

Solar panels at a solar carport at the Garden City shopping mall in Nairobi on September 15, 2015./file

In an expanse of sand 100 kilometres north of Senegal's capital, two men set to work digging up tree stumps to clear space for what could soon be the biggest solar plant in West Africa.

In less than a year, says developer Senergy PV SA, this shrubby lot will be covered with 96,000 gleaming solar panels from China, injecting up to 30 megawatts into the grid.

Yet three years after a deal was signed to build the plant, there were still no building materials in sight, just a couple of bulldozers bumping over dunes near Santhiou Mekhe village.

Sunshine is plentiful, solar panels get cheaper by the year and demand for power is skyrocketing, but the newness of the technology, bureaucratic hurdles and investor fear of uncharted territory have held back the rollout of solar plants across Africa.

Solar is less than 1 per cent of Africa's power generation. Outside of South Africa and Algeria there are only a few utility-scale solar photovoltaic (PV) plants on the continent, the largest being a 20 MW plant in Ghana.

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Reuters collected data on over 3,500 MW of projects that have been commissioned in the past six years - roughly equal to the combined output of Senegal, Uganda, Mali and Cameroon.
In Kenya and Burkina Faso, plants scheduled to open in 2014 are still awaiting construction. In Nigeria and Ghana, projects that began in 2010 and 2011 have yet to find finance.

"We are seeing the same trends everywhere in sub-Saharan Africa," said Silvia Macri, analyst at IHS Markit.

"There's no experience with these projects, and not much clarity around the political framework."

Lenders want dependable cash flows, but in many countries weak legal frameworks, unclear land rights and poor transmission infrastructure make this hard to guarantee, Macri said.

Kenya unveiled a renewable energy scheme in 2012 and was inundated with proposals. No plants are yet under construction.

Now it is considering an auction process to attract lower price bids, leaving developers in the lurch, said Tomas Adcock, chief operating officer at solar firm Kenergy Renewables.

"Investors are anxious about investing in projects that may never be built," Adcock said.
Kenya's Ministry of Energy did not respond to a request for comment. Developers in several countries described a lack of clear policies, pressure to pay bribes, and negotiations that dragged on for years.

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