The continued success of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and reduced renewable-energy technology costs are offering international companies in the renewable-energy sector a strong business case to invest in Africa, according to analysis by growth company Frost & Sullivan.

The ‘Large-Scale Renewable Energy Power Development Opportunities in Sub-Saharan Africa’ report found that renewable-energy suppliers are particularly interested in exploring opportunities in sub-Saharan Africa, owing to the surplus of renewable-energy stocks and services globally, the acute power supply deficit in almost every country in the region and the abundant renewable-energy resources on the African continent.

The report also found that the most prominent development opportunities for grid-connected solar, wind and geothermal power projects exist in South Africa, Tanzania, Namibia, Kenya, Zambia, Nigeria and Ethiopia. Côte d’Ivoire and Ghana have also been identified as important countries because of their large-scale solar photovoltaic (PV) potential.

Solar PV is by far the most popular technology in development, followed by wind, geothermal and concentrated solar power (CSP).

“Certain governments across Africa are striving to create clear regulatory and institutional frameworks to rapidly deploy renewable- energy technologies, as they have recognised the potential for large-scale renewable-energy development,” says Frost & Sullivan energy and power systems industry analyst Celine Paton.

She notes that the most prominent challenges to the deployment of large-scale renewable-energy projects include the bankability of projects, limited grid capacity and the affordability of electricity. “Poor long-term planning often compels governments to implement expensive short-term solutions,” Paton adds.

Further, the market requires creative funding schemes to improve the bankability of renewable- energy power projects. However, the Scaling Solar, and Scaling Up Renewable Energy in Low Income Countries programmes of development finance institutions the International Finance Corporation and the Climate Investment Fund respectively are addressing funding challenges.

“Following a global trend, governments in most sub-Saharan Africa countries have established increasingly ambitious renewable-energy targets for their power sectors. Solar, wind, and geothermal technologies will represent the highest growth, slowly eroding the dominant market share of hydropower, which has recently been prone to severe climate change issues,” Paton highlights.

As of June 2015, the pipeline of large-scale solar PV, CSP and wind projects in sub-Saharan Africa, excluding North Africa, South Africa and the African islands, totalled about 14.7 GW. While only 647 MW is currently under construction, there has been significant progress since early 2014, with the commissioning of flagship projects, such as the 306 MW Olkaria I-III-IV geothermal projects, in Kenya; the 153 MW Adama II wind project, in Ethiopia; and the financial close of the 310 MW Lake Turkana wind project, also in Kenya.

The global market trend – in terms of procurement and contracting mechanisms – currently favours a competitive bidding process, similar to the one adopted by South Africa’s REIPPPP. The renewable-energy feed-in tariff approach, which has been widely used in the UK, also continues to be used in emerging markets like Kenya, Uganda, Tanzania, Rwanda, Nigeria and Ghana.

“Overall, strong government sup- port, a long-term vision, astute energy planning and private-sector involvement are essential for the successful implementation of renewable-energy power projects in sub-Saharan Africa,” Paton observes.

She concludes that renewable- energy power developers that leverage these factors and offer innovative financing structures will be the best positioned to take full advantage of the market opportunities in sub-Saharan Africa.