Renewables Rising in the East African Community
UN Photo/Eskinder Debebe
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The Renewable Energy Policy Network for the 21st Century (REN21), in cooperation with the UN Industrial Development Organization (UNIDO), recently published the 'East African Renewable Energy and Energy Efficiency Status Report’.

The report documents the current status of renewable energy and energy efficiency in the region, looking at policy development, markets and investment.

While trends are generally positive, the report highlights several challenges that need to be addressed if the region’s governments are to ensure energy security and meet energy access needs.

The Renewable Energy Policy Network for the 21st Century (REN21), in cooperation with the UN Industrial Development Organization (UNIDO), recently published the latest in its series of regional reports on the state of renewable energy. The ‘East African Renewable Energy and Energy Efficiency Status Report’ documents the current status of renewable energy and energy efficiency in the region, looking at policy development, markets and investment.  

The East African Community (EAC) is the second-largest single regional market in Africa, and economically one of the fastest growing regions in sub-Saharan Africa. Population growth and rapid urbanization are magnifying the energy challenges of the region. Increasing demands to electrify and to provide access to modern energy services are stretching the region’s limited energy sources.

In 2015, the region saw US$139.8 million of capital raised by off-grid solar companies, representing approximately 50% of all off-grid investment made worldwide (US$276 million).

Despite vast grid extension in recent years, electrification rates in the EAC remain low, particularly in comparison with the rest of the continent. However, not all is “gloom and doom.”

In 2015, the region saw US$139.8 million of capital raised by off-grid solar companies, representing approximately 50% of all off-grid investment made worldwide (US$276 million). This result was driven by several factors, first and foremost by a rapid decline in global prices for photovoltaic (PV) equipment. In addition, favorable government policies and innovative business models contributed to the region’s spectacular market growth.

Investment in the region’s renewable energy sector has traditionally flowed towards hydropower and geothermal projects. However, the success of business models providing distributed renewable energy has changed this dynamic, with the Pay as You Go (PAYG) model emerging as the current leader. For example, Off-Grid Electric raised US$70 million in debt financing in 2015 to kick-start a partnership with the Tanzanian Government to provide solar electricity to one million households over the next three years. Other market leaders in the region, including M-KOPA, BBOx, Fenix International and Mobisol, each raised investments of US$10 million or more in 2015.

The mini/micro-grid sector also has attracted significant investment. Powerhive and Enel Green Power plan to invest US$12 million in the construction of 100 solar-powered micro-grids throughout rural Kenya in the coming years. The cooking sector was boosted with a US$4 million investment to establish a cookstove manufacturing facility in Kenya, with an additional US$800,000 to expand activities elsewhere in the region.

In the on-grid market, renewable electricity currently makes up 65% of the EAC region’s total installed, grid-connected power generating capacity. This is significantly higher than other parts of sub-Saharan Africa, where capacity stands at 28.6% and 23.5% in the ECOWAS and SADC regions, respectively.

While trends are generally positive, the report highlights several challenges that need to be addressed if the region’s governments are to ensure energy security and meet energy access needs. These include: paying greater attention to the cooking and heating sector; focusing on making the use of biomass more sustainable; diversifying the renewable mix in the grid; and supporting regional integration in the power sector. Further, there is far less policy focus on transport and, particularly, heating and cooling, so these sectors are progressing much more slowly.

Renewables are uniquely positioned to provide needed energy services in a sustainable manner – more rapidly and generally at lower cost than fossil fuels. The EAC has a vast renewable energy potential, particularly in hydropower, geothermal, and solar PV, but it has been exploited only marginally so far.

The report covers the Republics of Burundi, Kenya and Rwanda, the United Republic of Tanzania and the Republic of Uganda. It was released at the 3rd International Off-grid Renewable Energy Conference in Nairobi, Kenya, September 2016. 

The full report and infographics can be accessed at: www.ren21.net/eac

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