Out-Law News 2 min. read
27 May 2015, 10:55 am
Renewable energy ‘mini-grids’, stand-alone solar photovoltaic (PV) systems, solar PV-based net metering with storage and utility-scale solar PV/wind power generation facilities, all feature in Ghana’s plans said the African Development Bank (AfDB), one of five multilateral development banks that implement CIF-funded projects and programmes.
Funding for the Ghana projects will come from CIF’s programme for ‘Scaling Up Renewable Energy in Low Income Countries’ (SREP).
The AfDB said: “Ghana is committed to drawing on its wealth of renewable resources to build a sustainable energy sector. Ghana has already adopted a set of energy policy targets, including providing universal access to electricity by 2016 and achieving a 10% contribution of renewables in the electricity generation mix by 2020.”
Akshai Fofaria of Pinsent Masons, the law firm behind Out-Law.com, said: “Ghana faces a real challenge in getting this renewables plan off the ground. It needs to show investors that they can earn a reasonable return, as well as making sure that companies are not put off by the hazy regulatory environment, internal governmental capacity or the creditworthiness of the power purchasing utilities.”
Ghana’s deputy power minister John Jinapor said the potential of stepping up the development of renewables in the country was “enormous... not only because of the funding to be provided, but because it will help increase investor confidence, reduce regulatory, institutional and contractual barriers, and provide needed technical support and capacity”.
According to the AfDB CIF annual report for 2014 (15-page / 2.94 MB PDF), CIF ‘African pilot countries’ are running one regional and 24 national investment plans, “through which AfDB is channelling more than $1 billion for low-carbon and climate resilient programmes and projects”.
The report said the Menengai geothermal development project in Kenya, which the bank said is Africa’s largest geothermal producer, is among those to have already been approved for a SREP contribution of $25m, in addition to $120m from the AfDB.
Plans by France’s Total group to invest up to $100m in building solar energy farms in Ghana were confirmed last year by the senior business development manager of the group’s renewable energies division, Frederic Ciamous.
Ciamous said two 20 MW solar electricity generating facilities will be built in the north of the country, backed by consortium partner French renewable energy firm Neoen and with support from international financing institutions such as the World Bank.
In September 2014, Irish-based international wind and solar company Mainstream Renewable Power signed an agreement with Swiss wind farm developer NEK Umwelttechnik to buy the 225 megawatt (MW) AyitepaWind Farm on Ghana’s east coast. Mainstream said the project, which represents a total investment of $525m, is expected to reach financial close in 2015 and start generating power early in 2016.
Earlier this year, Mainstream Renewable Power and the UK-listed private equity group Actis launched a $1.9bn “pan-African renewable energy generation platform” to boost electricity production across the region within the next three years through investments in new wind and solar plants.
Actis said the launch of Lekela Power would provide between 700 MW and 900 MW of new generating capacity by 2018.
