where are the HOT markets? – Part 1 of 2
* As-Salaam-Alaikum my dear RiA Friend,
At this time of Ramadan, just want to open up the conversation by paying tribute to our muslim brothers and sisters for whom this is a special moment of prayers and reflection on their lives and the way they are helping an contributing to society as a whole. Although not a muslim I remembered that twice before, I took the chance to fast and work on my own spiritual journey at the same time that a friend of mine who is from Morocco. Definitely an interesting experience! In case you feel compel to emulate my exploits, I would urge you though not to stay all day under the sun. You might not last very long. Putting a positive spin to it, you could the HOT record of the shortest fast ever under the sun.
In my article, end of May (No pun intended, RiA still holding strong…and stable), we have confirmed that the momentum is shifting South and the emerging markets are attracting lot of investments. This still hold true but I would like to add a caveat though. According to 2017 Renewables Global Status report published by REN 21 on June 7 and to which I modestly contributed, investment fell 30% to USD 116.6 billion, in 2016 among developing and emerging countries, while that of developed countries fell 14% to USD 125 billion. If you have not done so yet, I would strongly encourage you to get hold of the full report.
Much more details of course will be discussed the coming Emerging PV Markets Finance Summit, to on 19-20 June in London but for the time being, let me quickly brush to you a profile of the different Emerging markets territories and the HOT markets to come.
It is a fact that is often overlooked but the Renewables power supply footprint in Africa is actually starting from a reasonable base. It accounts for 22% of the grid-based power generation according to IEA, 2012. Most of it comes from hydropower but these dams and barrage installations, built around independence time are now either getting too old or are plagued with technical issues. North Africa as a whole have been involved for a few years now in the industry but as far as sub-Saharan Africa is concerned, we could nominate 3 clear heavyweight champions.
With the launch of the REIPPP programme, South Africa has clearly dominated the market and has taken the lead since the start of the programme in 2011. More than 5 GW ( equivalent to 4 to 5 nuclear stations) have now being deployed into the country.
Kenya has also being at the forefront of the renewable industry and is set to become the sixth biggest producer in the World of geothermal power and the first African country to build geothermal energy sources. The country has also benefited from the World Bank lighting global programme that has significantly raised the local awareness about Clean Energy and created an enabling environment. Technology and in particular mobile money solutions pioneered in this country have also had a tremendous impact.
Although in West Africa, Cabo Verde has certainly been one of the beacons of the industry, Ghana,with its favourable energy policies, good governance and size of the market is the other champion. However, with the emergence of the big brother Nigeria, this is all about to change.
2- Hot African Markets
Renewables in Africa and in particular Solar is picking up speed and in the second half of this year and also the best part of 2018 a number of hot markets would certainly attract investors.
Nigeria with the 30-30-30 vision, which stands for 30 GW of power by 2030 and with 30% of renewables would probably be one of the biggest market if not the main one in Africa in the years to come. The country is set to release green bonds in coming weeks and this would certainly boost the Nigerian market even further.
- West Africa
West Africa on it whole as well will be interesting to watch, especially after the launch of the West African Clean Energy Corridor (WACEC) during the African Utility Week Conference in Cape Town last May. The first corridor will purely be 2 GW of Solar PV.
Algeria which is set to launch its 4 GW tender would most likely be as well a market to monitor. On the second day of the summit, there will actually be a special session on Algeria. Do not miss it if one of your target.
One thing I would caution people against in Africa though, is that there a huge difference between projects making newspapers headlines and those coming close to financial close. Do not be surprised as well if some of the projects with good prospects never make it to construction phase. I am sure I do need to develop further as those who are familiar with the place will perfectly recognize what we are talking about.
In the next article, only few days away (be patient), we will explore Asia and Latin America.
I sincerely to meet some of you at the conference next Monday. Do not forget to grab your RiA special offer.
*As-Salaam-Alaikum: “Peace be unto you” in Arabic.
**Maa Salama: “Goodbye” in Arabic.
According to Muslim statistics in Wikiislam, the number of Muslims in Africa is roughly 316 million or 31% percent of the population. Half of them live in North Africa. Pew study in 2010 confirmed that in sub-Saharan Africa, Muslims account for 29% of the population, the rest being split between 57% of Christians and 13% of African practising their local original religions.
Hot Markets to watch in 2017 – 2018
- West Africa
- Global Solar Finance & Investment: Emerging PV Markets, http://globalfinance.solarenergyevents.com/
- Climatescope 2016, http://global-climatescope.org/en/
- BNEF_Mapping the Global Frontiers For Solar Energy Investment
- REN21 – Renewables 2017 Global Status Report