Ethiopia

Ethiopia

Market Status: Sub-Saharan Africa - Hope and uncertainty as countries take first steps

AFRICA: Sub-Saharan Africa is showing promise, with a number of projects across the region looking set to come off the drawing board and big players starting to move in.

South Africa

South Africa is leading the area's foray into wind, with 45MW of generating capacity launched in the second quarter of 2010.

The $178 million wind farm being developed by Belgium's Electriwinds just outside Port Elizabeth in the south had its first turbines installed in May. The project is expected to meet about 10% of the electricity demand of the windy city of Port Elizabeth.

The Belgian firm is one of several wind developers that moved into South Africa last year in anticipation of the introduction of feed-in-tariffs designed to boost wind generation to 400MW by 2012. These had been delayed because the country lacked a standardised regime for power-purchase agreements.

Electriwinds has partnered with Coega Development Corporation, a state-owned firm based in Eastern Cape Province, to develop a 250MW $375 million project.

Foreign wind giants have spotted the country's potential, with India's Suzlon announcing plans to open a local office and install 800MW of wind by 2013. China Longyuan Power Group, a subsidiary of China Guodian, has announced an investment of $450 million in overseas expansion in 2011, including at least five wind power projects in South Africa. Cape Town-based developer G7 Renewable Energies is considering developing four wind farms (see table).

But this progress has been overshadowed by the country's dominant power utility, Eskom, delaying the installation of 100MW of wind energy due to a lack of financing. Eskom had a deadline for expansion of its generation capacity to 200MW, but the utility has not made much progress in installing even the first 100MW.

Kenya

The prospects for wind power are improving in Kenya, after the delayed 300MW Lake Turkana wind farm had a dramatic change of fortune in January. The government agreed to provide $760 million support from the finance ministry. This replaces the financial guarantees rescinded by the government in October, which caused lenders, led by the African Development Bank, to withhold a $628.2 million loan - 70% of the project cost.

Kenya inaugurated its first wind farm last year, the 5MW Ngong Hills project near the capital, Nairobi. The farm is the first phase of a development plan by the Kenya Electricity Generating Company to generate 26MW from the site by the end of 2012. Spain and Belgium are providing funding towards the project, which could double in size once HydroChina International completes a feasibility study.

Namibia

In Namibia, the government has signed an agreement with a consortium of local and international wind developers to build a 40MW $150 million project. Japan's Sojitz Group, Korea's Midland Power Corporation and Namibia's United Africa Group announced they had obtained the approval for the plant at Luderitz, with the project scheduled for completion in the first quarter of 2013. The wind farm will generate at least 5% of the country's electricity demand and is part of Namibia's strategy to meet the anticipated 300MW increase in electricity demand, which has been fuelled by an unprecedented expansion of the uranium mining industry, the country's main consumer of electricity.

Namibia is close to confirming its wind potential and generating sites after telecommunications firm MTC allowed the Polytechnic of Namibia to use its towers for high-altitude wind-measuring equipment.

Nigeria

Another African country to get off the starting blocks in 2011 is Nigeria, which will see its first wind farm start operating in the northern city of Kano later this year. The 51MW project is being developed by the Manufacturing Association of Nigeria and the first 30MW will be linked to the grid by summer.

Contracts have been signed for a project in the state of Katsina, also in the north. Nigeria has a wind capacity target of 10MW by 2013. The country has identified other potential wind energy sites, including at Sokoto and Kebbi, both in the north-west. A recently published wind map for the country indicates that other viable sites for wind include Lagos on the southern coast as well as Jos in central Nigeria.

Renewables target demands fast Nigerian wind power growth

Ethiopia

Ethiopia is expected to start generating wind power in June this year, when a 30MW $287 million project begins operating. Funding from French bank BNP Paribas and Agence Francaise de Developpement comprises a mix of commercial and reduced-rate "concession" loans, which have longer repayment terms and lower interest rates than those regularly available on the market.

Although no capacity was installed in 2010, Ethiopia took several steps to pave the way for building up significant wind power output in the next few years. Construction began on the Ashegoda wind project in Tigray province, the biggest wind project in Sub-Saharan Africa at 120MW. The country also signed a deal with US-based Terra Energy Developers for a 400MW wind farm in Debre Berhan, 130 kilometres north of Addis Ababa.

Ethiopia received another major boost last year when German investment firm Deutsch Unternehmensfinanzierung announced it would raise $120 million for a wind farm.

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