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Africa: Renewable Energy Rising Rapidly

AfricaFocus Bulletin
Jul 14, 2011 (110714)
(Reposted from sources cited below)

Editor's Note

"Global investment in renewable energy jumped 32% in 2010, to a record $211 billion. It was boosted in particular by wind farm development in China and small-scale solar PV installation on rooftops in Europe. ... Significant investment is also starting to be seen in Africa, which posted the highest percentage increase of all developing regions, if the emerging economies of Brazil, China and India are excluded. ... Total investment on the continent rose from $750 million [in 2009] to $3.6 billion [in 2010]." -- Global Trends in Renewable Energy Investment 2011

As noted in another AfricaFocus Bulletin released today and available on the web at, progress at global climate talks is painfully slow and inconsistent, with serious setbacks likely unless there is new momentum by the end of the year. But, as indicated by this new report on renewable energy, there is significant progress on some fronts away from the global negotiations. The new UNEP report on global trends in renewable energy investment, excerpted below, comments:

"There was a sense, in both the second half of 2010 and early 2011, that progress in renewable energy was taking place at a pace that public opinion and policymakers in many countries were simply failing to spot. This progress was both in investment levels and, even more, in costcompetitiveness with conventional power sources."

Another sign of increased momentum on the renewable energy front was the launch of the International Renewable Energy Agency (IRENA), with headquarters in Abu Dhabi. An initial consultation earlier this month resulted in the "Abu Dhabi Communiqué on Renewable Energy for Accelerating Africa's Development," also included in this AfricaFocus Bulletin. While the language of the declaration echoes all too familiar conference boilerplate commitments, it indicates a growing consensus that renewable energy must take higher priority in Africa's development plans. As prices drop, and renewable energy becomes more competitive, private investors as well as policy makers are taking the sector more seriously.

For previous AfricaFocus Bulletins on environment and climate issues, see

++++++++++++++++++++++end editor's note+++++++++++++++++

Global Trends in Renewable Energy Investment 2011

Analysis of Trends and Issues in the Financing of Renewable Energy

United Nations Environment Programme and Bloomberg New Energy Finance, 2011 /

Global investment in renewable energy jumped 32% in 2010, to a record $211 billion. It was boosted in particular by wind farm development in China and small-scale solar PV installation on rooftops in Europe.

Of the major types of investment, there were sharp increases in asset finance of utility-scale projects such as wind farms, in venture capital provision for young firms, and in equity-raising on the public markets by quoted renewable energy companies. Asset finance rose 19% to $128 billion in 2010, venture capital investment increased 59% to $2.4 billion, and public market investment gained 23% to $15.4 billion.

However the sharpest percentage gains were in investment in small-scale projects, up 91% year-on-year at $60 billion, and in government-funded research and development, up 121% at $5.3 billion, as more of the "green stimulus" funds promised after the financial crisis arrived in the sector.

One of the striking features of 2010 was that, in terms of financial new investment (asset finance and investment by venture capital, private equity and public markets, developing countries overtook developed economies for the first time.


Achim Steiner, UN Under-Secretary General and UNEP Executive Director

Investments in renewable energies, from wind and solar power to geothermal and waste-into-energy, continued their remarkable growth in 2010.

A combination of stimulus package funds making their way into the market, the introduction of smart policies like feed-in tariffs and target-setting sparked a record $211 billion of investment in renewable energy.

The more-than-$48 billion new investment in China merits attention in terms of scale and growth. Other highlights of this year's report are rising investments across other parts of the developing world, and the sharp increase in investment in small-scale renewables in countries such as Germany and Italy, where predominantly rooftop solar projects surged to $60 billion-worth of investment, up over 90% from 2009.

Excluding Brazil, Mexico took the lead in Latin America where investments, mainly in wind but also in geothermal, grew close to 350%, triggered in large part by a government decision to raise renewable energy capacity from 3.3% to over 7.5% by 2012.

Argentina, with a target of 8% of its energy to be sourced from renewables by 2016, saw investment grow nearly sevenfold to $740 million. 2010 also saw important investment in Chile, Peru and Venezuela.

In Asia, Pakistan and Thailand saw investments tripling and quadrupling respectively. In Pakistan $1.5 billion worth of wind was financed and in Thailand $700 million-worth of investment flowed, mainly into large-scale photovoltaic projects.

Significant investment is also starting to be seen in Africa, which posted the highest percentage increase of all developing regions, if the emerging economies of Brazil, China and India are excluded.

In Egypt, renewable energy investment rose by $800 million to $1.3 billion as a result of the solar thermal project in Kom Ombo and a 220MW onshore wind farm in the Gulf of Zeit. In Kenya, investment climbed from virtually zero in 2009 to $1.3 billion in 2010 across technologies such as wind, geothermal, small-scale hydro and biofuels. Small but significant advances were also made in Cape Verde, Morocco and Zambia.

Renewable energies are expanding both in terms of investment, projects and geographical spread. In doing so, they are making an increasing contribution to combating climate change, countering energy poverty and energy insecurity, stimulating green jobs and meeting the Millennium Development Goals.

The UN climate convention in Durban later in the year, followed by the Rio+20 Conference in Brazil in 2012, offer important opportunities to accelerate and scale-up this positive transition to a low carbon, resource efficient Green Economy in the context of sustainable development and poverty eradication.

Executive Summary

Global investment in renewable power and fuels set a new record in 2010, and the margin over totals for previous years was wide, not narrow. Investment hit $211 billion last year, up 32% from a revised $160 billion in 2009, and nearly five and a half times the figure achieved as recently as 2004.

The record itself was not the only eye-catching aspect of 2010. Another was the strongest evidence yet of the shift in activity in renewable energy towards developing economies. Financial new investment, a measure that covers transactions by third-party investors, was $143 billion in 2010, but while just over $70 billion of that took place in developed countries, more than $72 billion occurred in developing countries.

This is the first time the developing world has overtaken the richer countries in terms of financial new investment - the comparison was nearly four-to-one in favour of the developed countries back in 2004. It is important to note that in two other areas not included in the financial new investment measure, namely small-scale projects and research and development, developed economies remain well ahead.

However the balance of power in renewables has been shifting towards developing countries for several years. The biggest reason for this has been China's drive to invest: last year, China was responsible for $48.9 billion of financial new investment, up 28% on 2009, with the asset finance of large wind farms the dominant part of that. But the developing world's advance in renewables is no longer a story of China and little else. In 2010, financial new investment in renewable energy grew by 104% to $5 billion in the Middle East and Africa region, and by 39% to $13.1 billion in South and Central America.

The developing world - at least outside its most powerful economies - may not be able to afford the same level of subsidy support for clean energy technologies as Europe or North America. However it has a pressing need for new power capacity and, in many places, superior natural resources, in the shape of high capacity factors for wind power and strong solar insolation. It, also, is starting to host the development of a range of new renewable energy technologies for specific, local applications. As Chapter 10 recounts, these range from rice-husk power generation to solar telecommunications towers and are becoming the technology of choice, not a poor substitute for diesel or other fossil-fuel power options.

A second remarkable detail about 2010 is that it was the first year that overall investment in solar came close to catching up that in wind. For the whole of the last decade, as renewable energy investment gathered pace, wind was the most mature technology and enjoyed an apparently unassailable lead over its rival power sources. In 2010, wind continued to dominate in terms of financial new investment, with $94.7 billion compared to $26.1 billion for solar and $11 billion for the third-placed biomass & waste-to-energy. However these numbers do not include small-scale projects and in that realm, solar, particularly via rooftop photovoltaics in Europe, was completely dominant. Small-scale distributed capacity investment ballooned to $60 billion in 2010, up from $31 billion, fuelled by feed-in tariff subsidies in Germany and other European countries. This figure, combined with solar's lead in government and corporate research and development, was almost enough to offset wind's big lead in financial new investment last year.

No energy technology has gained more from falling costs than solar over the last three years. The price of PV modules per MW has fallen by 60% since the summer of 2008, according to Bloomberg New Energy Finance estimates, putting solar power for the first time on a competitive footing with the retail price of electricity in a number of sunny countries. Wind turbine prices have fallen 18% per MW in the last two years, reflecting, as with solar, fierce competition in the supply chain. Further improvements in the levelised cost of energy for solar, wind and other technologies lie ahead, posing a bigger and bigger threat to the dominance of fossil-fuel generation sources in the next few years.

$211 Billion Investment

Total investment in renewable energy in 2010 was $211 billion, up from $160 billion in 2009 and $159 billion in 2008. Within the overall figure, financial new investment - which consists of money invested in renewable energy companies and utility-scale generation and biofuel projects - rose to $143 billion, from $122 billion in 2009 and the previous record of $132 billion in 2008.

A sharper increase however has been evident in the other components of the total investment figure - namely smallscale distributed capacity, and government and corporate R&D. These jumped to $68 billion in 2010, from $37 billion in 2009 and $26 billion in 2008, reflecting mainly the boom in rooftop PV, but also a rise in government-funded R&D, as spending increased from "green stimulus" announced after the financial crisis.


A third challenge for renewables came from outside scepticism. This manifested itself both in the stock market - where clean energy shares under-performed wider indices by more than 20% on pessimism about future profit growth and in international politics, where the mood postCopenhagen and post-Climategate was cooler than in some previous years. In fact, more progress towards emission reduction was achieved than expected at the December 2010 meeting in Cancun; and the consensus among climate scientists about man-made global warming actually strengthened during last year. However neither has - yet catapulted clean energy back to the top of government agendas.

There was a sense, in both the second half of 2010 and early 2011, that progress in renewable energy was taking place at a pace that public opinion and policymakers in many countries were simply failing to spot. This progress was both in investment levels and, even more, in costcompetitiveness with conventional power sources.


Africa achieved the largest percentage increase in renewable energy investment among developing regions excluding the big three economies [China, India, Brazil]. Total investment on the continent rose from $750 million to $3.6 billion, largely as a result of strong performances from Egypt and Kenya.

In Egypt, renewable energy investment rose by $800 million to just over $1.3 billion, but this was the result of just two deals, a 100MW solar thermal project in Kom Ombo, and a 220MW onshore wind farm in the Gulf of El Zeit region. The country's next move in renewable energy is scheduled to be the tender for several hundred MW more of wind projects in the Gulf of Suez region.

In Kenya, the advance was more broadly based. Investment rose from virtually zero to more than $1.3 billion, including funding for wind, geothermal and small hydro capacity of 724MW, and for 22 million litres per year of ethanol production. Geothermal was the highlight, with local electricity company KenGen securing debt finance for additional units at its Olkaria project.

Smaller advances in renewable energy were made by several other African countries, including Zambia, Morocco and Cape Verde. In Morocco, there could be a step-jump in renewable power investment with a 150MW wind farm near the northern city of Taza and a 500MW solar thermal project at Quarzazate in the country's south. Both of these have reached the tendering or pre-selection stage. South Africa is likely to be one of the most important locations in the continent for renewable energy over coming years, with December 2010 seeing the government in Pretoria receiving 384 applications from companies seeking to build up to 20GW of renewable power capacity. Local utility Eskom was in line by the spring of 2011 for a $365 million loan from the African Development Bank to help pay for a 100MW solar thermal plant in the Northern Cape and a 100MW wind farm in the Western Cape.

Abu Dhabi Communiqué on Renewable Energy for Accelerating Africa's Development Adopted at IRENA-Africa High-Level Consultation

10 Jul 2011

IRENA-Africa High-Level Consultations on Partnership on Accelerating Renewable Energy Uptake for Africa's Sustainable Development, 08-09 July 2011

International Renewable Energy Agency (IRENA) / Direct URL:

We, Ministers of Energy and heads of delegations of African countries and the African Union Commission and the Conference of Energy Ministers of Africa (CEMA), met at the invitation of IRENA in Abu Dhabi, UAE, 08-09 July 2011, hosted by the UAE Government. Participants included regional economic communities, national bodies, international partners, UN-Economic Commission for Africa, EU-Africa Energy partnership, World Bank, UNIDO, UNEP, UNHabitat, Global Environment Facility, Paris-Nairobi Climate Initiative, key energy companies, NGOs research agencies and others.

Our discussions were guided by the February 2009 African Union Assembly of Heads of State and Government decision to: "develop renewable energy resources in order to provide clean, reliable, affordable and environmentally friendly energy,"
(Assembly/AU/Decl. 9-XII) and the November 2010 Maputo Declaration of the Conference of Energy Ministers of Africa to "promote renewable energy in a joint effort with others to … address all issues relating to climate change…"

We were also informed by the Special Report on Renewable Energy Sources and Climate Change Mitigation of the Intergovernmental Panel on Climate Change, as well as IRENA's report, Scenarios and Strategies for Africa, which provide compelling evidence of the serious energy challenges faced by the region.

At a time of economic growth and opportunity in Africa, meeting energy needs and addressing the challenge of energy access and energy security is an issue of primary significance for Africa, in order to mitigate the negative effects of price volatility, supply insecurity and environmental degradation.

We also recognize the significant potential of renewable energy to accelerate African low carbon development and address climate change mitigation and adaptation. Achieving these outcomes will require:

  • Assessment of existing conditions and needs and building regional cooperation in order to address those needs and opportunities
  • Strengthening national, regional and continental policy frameworks to stimulate investment in and ensure sustainable deployment of renewable energy
  • Supporting research and development on RE technology and innovation within the continent and through South-South cooperation.

The African continent sees great promise in working with IRENA, whose Assembly has given it a strong mandate regionally and globally to support member states in accelerating the adoption of renewable energy.

Considering the above, we have agreed the following:

  • We are launching a concerted effort among all participating governments, agencies, non-governmental bodies and the private sector to promote intensified utilization of Africa's vast renewable energy resources for accelerating Africa's development, considering the need to:
    1. ensure that IRENA's policy for Africa responds to the priority concerns of the continent,
    2. ensure a well-integrated IRENA programme for Africa, which will cooperate closely with the AUC, CEMA, RECs, national governments and all other partners,
    3. develop a concrete and practical approach to supporting the knowledge, technology, capacity and policy needs of African countries.
  • A crucial first step will be to better understand the opportunities and constraints in our countries and regions by mapping "Renewable Energy Readiness", a collaborative process that will provide a rapid, objective assessment of the status of renewable energy opportunities, and identify pathways to address gaps. We urge governments and other stakeholders to participate in design and implementation of this initiative.
  • We will further engage with IRENA, as the key intergovernmental forum on renewable energy, in providing a platform for charting collaborative action strategies for accelerating implementation of African policies, and initiatives on renewable energy, focusing in particular on:
    1. Improving policy frameworks to ensure investment grade public/private financing, while taking into account special measures needed to ensure social inclusion
    2. Brokering services in capacity building including for entrepreneurs in renewable energy
    3. Cooperation on technology and innovation to enhance endogenous human and physical capacity to accommodate expanded renewables deployment
    4. Fostering regional and local level renewable energy technology production and service industries
    5. Supporting communication campaigns to promote uptake of renewable energy
  • Participants urged IRENA, in its messages to the international community at CoP-17, Rio+20 and other major events, to build on this communiqué and emphasize the following:
    1. Providing strategic support for renewable energy in the context of the Green Economy, including assessment of the impact of market distorting subsidies that inhibit the deployment of renewable energy; targeted studies on employment implications of expanded renewables deployment, policies for employment creation through renewable energy and related themes,
    2. advocating increased international support to Africa on technical capacity building, policy advisory services, investment financing tools and industrial strategies for accelerating renewable energy up-take, while ensuring adequate provision of domestic resources
    3. Using the 2012 International Year of Sustainable Energy for All to carry forward Africa's renewable energy strategies.
  • We agree to work towards formalizing IRENA's strategic presence in Africa and concretizing institutional arrangements for cooperation with African regional bodies and strategic partners in the sector; furthermore, we urge all African states who have not done so to become full members of IRENA.
  • We shall extend full cooperation and support to IRENA to ensure it fulfils its critical mandate to accelerate the adoption of renewable energy globally, and to work together to make Africa a lead region in the transition to renewable energy.

AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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