EU Boost for Africa’s New Renewable Development

Travellers to Cape Verde will soon spot visible evidence of the tiny African island nation’s big ambitions in renewable energy set against its beautiful volcanic landscape.

By 2012, the 28 MW Cabeolica wind facility should be helping Cape Verde achieve its target of meeting a quarter of its needs from renewable sources.

The technology to power Cabeolica will come from wind turbine manufacturer Vestas of Denmark. The cash needed to make it happen will come from €45 million of loans from the European Investment Bank – the financing arm of the European Union – and the local African Development Bank.

For Cape Verde, this is a triumph of Euro-African co-operation. With their first-rate natural wind resource, the technology is clearly the perfect fit for the islands. However, replicating it with other renewables projects large and small across Africa, and especially the sub-Saharan region of the continent, is a far more daunting challenge.

There are a host of good reasons for the EU to drive renewables development in Africa. These range from an ethical imperative to bring clean energy to some of the world’s poorest people to hard-headed commercial considerations. China sees Africa as a major source of trade in renewable energy technology and is already a major backer of projects on the continent, a fact that EU-based companies are all too aware of.

Brussels’ latest initiative to build strong links with the Africa’s nascent renewables infrastructure was unveiled in the autumn in the form of the Renewable Energy Co-operation Programme (RECP).

European and African Union commissioners meet in Addis Ababa (Source: Africa and Europe in Partnership)

The programme is a joint initiative with the African Union under the umbrella of the Africa-EU Energy Partnership (AEEP), a wider strategic energy pact between the two bodies that has been operational since 2007.

RECP brings to African renewables a flavour of the target-driven approach the EU has adopted within its own borders. Its goals include building at least 5 GW of wind power, 500 MW of solar capacity and 10 GW of new hydropower facilities.

Along with general measures to boost energy efficiency, the partner agencies hope this renewable capacity will contribute to the overall AEEP goal of bringing ‘modern and sustainable energy services to at least an additional 100 million Africans by 2020’.

RECP hopes that renewables development in Africa will benefit from a high-level cementing of ties with Europe, one of the world’s regional powerhouses of clean energy policy and innovation.

Among the methods proposed to help it achieve its goals are stronger links between Africa and the EU’s formidable R&D base; clearer routes for technology transfer; improved data on renewable options on the continent; and promoting better access to finance and ‘renewables-friendly’ policy frameworks.

While its ambitions are significant, RECP will begin with a relatively modest €5 million (US$7 million) of EU funding to support the programme’s three-year start-up phase, which will lay the groundwork for its activities.

In light of the scale of the challenge in Africa, it is fair to ask what RECP hopes to add to the many initiatives already underway involving Europe, both at EU and individual member state level, especially as the African Union (AU) lacks the legislative clout with its national members enjoyed by its colleagues in Brussels. The answer seems to be that RECP is intended to focus the two continents’ collective minds on the job in hand.

Launching the programme, Europe’s commissioner for development, Andris Piebalgs, said that RECP is not itself a new financing instrument for investments but is instead intended to add value to other programmes that involve the EU and its members. Piebalgs made it clear that for the objectives set out in RECP to be met, ‘political will’ is a prerequisite in Europe and Africa alike.

Amanda Luxande, manager of the Southern Africa secretariat of the Renewable Energy and Energy Efficiency Partnership (REEEP), believes pan-continental level co-operation pacts such as RECP can have a positive effect in this regard.

REEEP works in developing nations to help governments to create favourable policy frameworks for renewables, and to promote innovative finance and commercial models that can help kick-start the sector. That means that it is working on the ground to achieve many of the same objectives set out by RECP.

‘High level agreements are critical in securing the political will of governments to accelerate the uptake of RE systems,’ said Luxande. ‘However, such agreements ought to stipulate how they will be implemented on the ground, with what resources, and also define the roles and responsibilities of the different stakeholders.’

Technology transfer is one area where Luxande believes European input could make a significant difference, given the current limitations of specific renewable expertise in Africa.

However, she warned that ‘this can only be an interim intervention. Africa’s long-term vision should be looking to create green jobs, establishing its own manufacturing capacity for RE technologies that are designed to work within this particular climate.’

According to Luxande, the application of inappropriate systems that lack local technical support and maintenance resources has sometimes contributed to a negative perception of renewable energy sources on the continent. ‘Any technological transfer should be accompanied by a transfer of skills in their operations and maintenance,’ Luxande said.

Luxande’s support in principle for RECP was echoed by the Alliance for Rural Electrification (ARE), which also emphasised the need to get the right technologies in place for specific regional needs and to make sure technical support mechanisms are embedded locally.

According to ARE, rural and off-grid renewable projects are currently poorly served by existing arrangements. ‘We need deeper understanding on how to embed renewable energy systems into local communities, safeguarding sustainable operations and management.’

ARE believes there is a mismatch between these actual research needs on the ground and the funding programmes currently available under the EU’s framework, claiming that previous programmes have tended to ignore the off-grid or distributed sector.

It will recommend to RECP that it takes steps to improve this situation, and called on the EU to launch a specialist energy research co-operation programme with developing nations.

ARE said if RECP can help the development of technologies that could be especially useful in an African context – for example energy storage or metering devices for mini-grids – then it could still make a significant contribution, despite its modest beginnings.

‘RECP is a programme with very limited financial resources and manpower. However, ARE believes that it has the potential to become a substantial catalyst with real impact,’ the organisation said.

The cautiously positive reaction of bodies such as REEEP and ARE suggests that those involved in renewables development on the ground are sympathetic to RECP’s aims, if it can more sharply focus the EU’s various other programmes and initiatives on delivering the right technology for the right conditions in the right part of Africa.

Technology is by no means the only issue facing RE implementation in Africa, however, and many industry observers say construction of the right policies and incentives will be key that unlocks the door to growth.

As is often the case in sub-Saharan Africa, many are looking to South Africa to take the lead role in developing a renewable energy infrastructure. The country is currently working through the various legal and regulatory steps needed to complete its REFIT programme of feed-in tariffs.

Scott Brodsky, a partner at law firm Dewey & LeBoeuf in Johannesburg and a specialist in energy project financing, said that while not quite over the finishing line, REFIT has the potential to finally unleash South Africa’s renewables potential.

‘While there are a number of key steps still to be taken, I believe South Africa is well on its way to a successful programme that will see the first projects selected in 2011 and that is set to continue for the next 20 years and beyond,’ said Brodsky.

As well as providing clean energy and jobs, Brodsky said the ‘huge prize’ is on offer of a manufacturing, knowledge and skills base that can benefit South Africa and be exported across the region.

Some African nations such as Kenya have already embraced this approach. According to Brodsky, if the EU and AU under RECP can help the process of putting programmes and incentives in place across the continent to make renewables-based projects viable, it would be making a valuable and lasting contribution.

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