Eastern Africa Leads $3.6 Billion Boom in Renewable Power

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--In 2010, investment in African "clean" energy projects increased to $3.6 billion from the 2009 figure of $750 million, says a report from the United Nations Environment Program (UNEP) titled "Global Trends in Renewable Energy Investment 2011." This shows the largest increase in renewable energy project investment among the world's developing regions, excluding the three major economies of China, India and Brazil, says the report.

The renewable boom is strongest in eastern Africa. Kenya, Uganda and Tanzania are imposing power rationing, which is inhibiting commercial and industrial development as the countries try to strengthen their economic performance. Another motivator is overdependence on hydropower dams, which have become increasingly unreliable because of drought conditions. Growing demand for electrical power has challenged the supply capacity of many state-owned utilities.

African governments and independent investors have been investing in solar, wind and geothermal power to offset the effect of rising oil prices. Eastern Africa has led the way in these sectors.

Kenyan projects have covered a range of clean energy sources, including wind, geothermal, solar and biofuels. The UNEP report says that investments increased from virtually zero in 2009 to more than $1.3 billion in 2010. Investments were made in wind, geothermal and small hydro projects, with a total power output capacity of 724 MW. Projects also were launched for an annual production capacity of 22 million liters of ethanol.

Kenya's Kinden, which produces 70% of the country's power output with 66% from hydropower, raised $200 million in 2009 through a public infrastructure bond for alternative energy project development and $82 million in April 2011 from Germany's KFW development bank (Frankfurt) for the construction of additional units at the Olkaria geothermal project.

In 2012, Kengen anticipates a $3 million carbon credit payment from the World Bank for the 35-MW Olkaria II Unit 3 development. The majority of Kengen's geothermal, hydro and combined-cycle facilities qualify for carbon trades, as they have little or no CO2 when compared to fossil-fueled power generators.

Tanzania uses gas from the offshore Songo Songo fields, piped 225 kilometers to Dar es Salaam to generate 180 MW and replace diesel fuel. The gas supply is also powering up to 30 industrial plants. Solar power is being provided to 10,000 rural homes.

Uganda is moving to replace diesel-fed power with hydropower projects, including the $860 million Bujagali, which should start supply of its first phase of 50 MW to the grid this year. The state is investing $1.3 billion in the 600-MW Karuma hydropower project, and more medium-size and mini-hydro plants are in the pipeline.

In Rwanda, noxious methane gas will be extracted from Lake Kivu to generate 100 MW of power, which could change the country into a net exporter of power to Uganda and Democratic Republic of Congo.

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