Africa’s solar build-out targets hinge on cheaper capital and new financing

By Staff Writer

VICTORIA FALLS — Africa is targeting a sharp expansion in solar generation over the next three decades, but officials say high financing costs and weak infrastructure remain barriers to turning the continent’s solar resource into investable projects.

The International Solar Alliance (ISA), meeting in Victoria Falls, Zimbabwe, says the continent could increase solar capacity from about 20-22 gigawatts currently to 150-200 gigawatts by 2030, 500 gigawatts by 2040 and 1 terawatt by 2050.

The targets were outlined as the alliance launched its Solarising Africa strategy, an implementation plan focused on moving projects from policy commitments to deployment. The strategy identifies four major markets; distributed renewable energy, solar-powered agriculture, electric mobility and utility-scale solar. It also highlights four supporting requirements including digitalised utilities, skills, financing ecosystems and local manufacturing. However, the financing question is likely to be critical.

African Union Commissioner for Infrastructure and Energy Lerato Dorothy Mataboge said the continent’s biggest constraint is the cost of capital.

“Our greatest constraint remains finance, and particularly the cost of capital,” she said at the meeting, argueing that public and concessional funding should be used to reduce project risk and attract more private investment.

The rationale behind the alliance’s new Africa Solar Facility, which will operationalise a $200 million fund for distributed renewable-energy projects, comes it as a response to her concern.

Africa50 will support the financing platform, which is intended to build bankable project pipelines and attract concessional, institutional and private capital, according to the alliance. The focus is on projects serving rural communities, farmers, small and medium-sized businesses and other productive users.

The strategy reflects the growing role of distributed energy in markets where extending conventional grids can be difficult or costly.

The International Solar Alliance is also seeking to link its work to Mission 300, the broader effort to expand electricity access to 300 million people in Africa by 2030.

ISA Director General Ashish Khanna said Africa was positioned to move from megawatts to gigawatts of solar, helped by stronger political support and declining prices for solar and storage technologies.

Three Africa-focused initiatives were launched at the Victoria Falls meeting. They include the Solarising Africa strategy, the Africa Solar Facility and a programme under Mission 300 initially focused on the solarisation of agriculture. The agriculture programme could open a new market for solar developers.

The ISA launched a Community of Practice focused on solar irrigation and agrivoltaics, in which agricultural land can be combined with solar generation.

Uganda, Zimbabwe, The Gambia, Ghana, Senegal and Rwanda endorsed the Zimbabwe Declaration on solar water pumps and agrivoltaic solutions.

The alliance also launched a solar-water-pumping e-learning programme aimed at expanding technical knowledge among farmers. The approach is part of a wider effort to move solar investment beyond household electricity access and into productive sectors of the economy.

Zimbabwe’s Energy and Power Development Minister July Moyo said reliable and sustainable energy was critical to the country’s push for food security, industrial development and value addition in mining and agriculture. The country is seeking to use solar power to support economic activity while improving energy security.

Zimbabwean President Emmerson Mnangagwa said the continent should also use renewable energy to develop local industrial capacity. He called for stronger African capabilities to manufacture, adapt, install and maintain solar technologies.

“Africa possesses some of the world’s richest natural endowments,” Mnangagwa said, adding that solar should help countries industrialise and modernise.

The strategy could create opportunities for manufacturers, infrastructure developers and financiers, but the investment case depends on more than falling solar-technology costs.

Developers face the challenge of bringing projects to bankability in markets where financing can be expensive.

Mataboge called for deeper African capital markets and greater mobilisation of pension and institutional money. She also urged stronger project preparation and aggregation, alongside changes in how international financial institutions assess and price risk in African markets.

Seychelles Environment, Climate, Energy and Natural Resources Minister Marie-May Jeremie said solar, storage and stronger electricity grids could improve energy security and reduce dependence on imported fuels. She called for stronger partnerships, credible project pipelines and innovative financing to turn Africa’s solar resource into investable projects.

The African Union is pursuing a more integrated electricity market through initiatives including the Continental Power System Master Plan.

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