In spite of recent commendable efforts by African countries to utilize their renewable energy resources to narrow the energy accessibility deficit gap, load shedding and power interruption still cost the economy more that 2% loss of the Gross Domestic Product (GDP) annually. NEPAD ,being the implementing arm of the African Union and being driven by its mandate as Africa’s development agency, follows two parallel practical approaches to increase energy access of the African population to clean energy sources and achieve the goals of sustainable development.
The first approach focusses on accelerating the development and implementation of Africa’s High Priority Renewable Energy Projects through its Initiative Renewable Energy Access Programme (REAP). The second approach is targeting Africa Mega Energy Projects both in Generation and Transmission Lines that are of regional nature and accelerate their development and implementation through the Programme for Infrastructure Development in Africa (PIDA).
Under REAP, NEPAD started by sourcing one to two high priority renewable energy projects from African countries, that are supported as an institution or with partners under Africa’s Sustainable Energy for all Hub (SE4ALL). It then classified the projects according to their level of development. Projects that are not bankable yet, NEPAD provides technical assistance to develop the projects to bankability. Projects that have reached bankability, NEPAD arranges for investor roundtables to raise finance for their implementation. NEPAD also uses its Continental Business Network (CBN) instrument to bring the projects to the attention of the private sector. So far 33 high priority renewable energy projects have been received with generation capacity approaching 5000MW.
NEPAD also identified issues surrounding delays in the development and implementation of renewable energy projects in Africa and comes with the appropriate action to address such challenges. The main challenges can be summarized as follows:
- Lack of developed projects to bankability
- Creating conducive environment for investment
- Inadequate expertise in the public sector
- Lack of Capacity in dealing with Public Private Partnerships, PPP
- Lack of experience in dealing with Independent Power Producer (IPP) and
- Scrutinizing Power Purchase Agreements (PPA)
- Lack of capacity in developing scaled mini grid RE systems
In addressing the above challenges, NEPAD REAP provides capacity building and focussed training programmes targeting, among others:
- Government Offices and Power Utilities and building capacity in developing the Power Purchase Agreement (PPA), tariff negotiation and in dealing with IPP.
- Building capacity in negotiating a fair and balanced PPP.
- Development/Planning of on-grid and off-grid renewable energy systems with the relevant energy stakeholders.
- Building capacity in RE project initiation, development, and implementation.