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Public-Private Partnerships hold promise for addressing Africa’s electricity needs. (Image source: Synergy Consulting)

Synergy Consulting, an independent global firm at the forefront of financial advisory, explains why Public-Private Partnerships (PPP) are vital for addressing Africa’s energy needs around transmission

Power transmission, the vital process of delivering electricity from generation sites to distribution networks and eventually to end-users, stands as the backbone of modern energy systems. This intricate web of infrastructure encompasses high-voltage transmission lines spanning vast distances and substations performing crucial functions like voltage conversion and grid management. However, the realisation of these projects requires robust funding mechanisms tailored to their scale and complexity. The procurement methods can vary, each with their own features and implications.

One prevalent and most used method in procuring such projects is the Engineering, Procurement, and Construction (EPC) approach, wherein the government assumes the responsibility of raising funds for the entire project. For instance, Namibia's NamPower secured substantial debt to finance the Caprivi Link Interconnector, thereby enhancing regional electricity networks. Features of the EPC method include government ownership and control, allowing for infrastructure management and revenue sources. However, it also entails significant balance sheet impacts and fiscal considerations.

Alternatively, the Engineering, Procurement, Construction and Financing (EPC + F) model shifts the burden of project financing onto the contractor, particularly in markets with favorable access to funds. For instance, the Lake Turkana Transmission Line in Kenya received financing facilitated by the contractor, utilising a blend of concessional and commercial loans to realise the project. This model allows for private sector involvement in financing while leveraging their expertise in navigating financial markets.

Public-Private Partnership structuring

PPPs present another avenue for procuring transmission projects, where private entities collaborate with governments to deliver services. Some key considerations involved in the structuring of a transmission line procured on a PPP basis would be:

1. Tariff Model: The basis for determining the transmission utility’s allowed revenues depends on the tariff model adopted by the regulator. The tariff may be on an availability or wheeling basis;
2. Ownership and Maintenance: The selection between PPP models (BOOT, BOT etc.) will depend upon the level of control on the sector required by the government utility, which is usually high in the case of transmission lines;
3. Route Identification: Transmissions lines usually cross lands with different kinds of ownership. Studies like Environmental and Social impact Assessment (ESIA), soil investigation studies, geotechnical studies etc. are necessary to plan an effective right-of-way for the projects;
4. End-user Tariff: The involvement of the private sector introduces a return-on-investment component to the project which might increase the end-user tariff. However, on a Value-for-Money (VfM) basis the value of the transferable risks might offset the increase in tariff;
5. Financing: The financing burden is shifted onto the contractor in a PPP procurement method;
6. Risk Allocation: Each risk should be allocated to the party that is in the best position to first control/reduce it and then manage it.

Addressing Africa's energy needs

PPP involvement holds particular significance in addressing Africa's electricity challenges, where access remains low, and state-owned enterprises encounter sustainability hurdles. Collaborations like Kenya's partnership with Power Grid Corporation of India Ltd (PGCIL) and Africa50 to develop the Kenya Transmission Project underscore the potential for private sector engagement in bridging infrastructure gaps, bringing not only capital but also expertise in project management and risk mitigation. Brazil's extensive transmission line concessions exemplify the success of the PPP model, driving infrastructure expansion and fostering private sector participation in the energy sector.

In conclusion, diverse procurement structures exist for power transmission projects, each offering distinct benefits and challenges. PPPs hold promise for addressing Africa's electricity needs by leveraging private sector resources and expertise to drive infrastructure development and enhance access for millions. As nations continue to pursue energy security and sustainability, innovative procurement models will play a pivotal role in shaping the future of power transmission.

For more details on these and Synergy’s services, visit the company website: https://www.synergyconsultingifa.com/

This article is authored by Synergy Consulting IFA. For more information, reach out to: This email address is being protected from spambots. You need JavaScript enabled to view it.

Trina Solar is engaged mainly in PV products, PV systems and smart energy. (Image source: Trina Solar)

Trina Solar has signed three distributor partnerships in an effort that will see the company significantly expand its operations across the Middle East and Africa

The company has partnered with Noon for Renewable Energy in Lebanon, Al Takamul Engineering in Palestine, and Golden Sun Solar Solutions in Sudan, and is now poised to deliver a total of 110MW modules including Vertex N modules tailored to the region's unique energy landscape.

Zhao Lei, head of strategic key accounts at Trina Solar, commented, “We are thrilled to welcome Noon for Renewable Energy, Al Takamul Engineering, and Golden Sun Solar Solutions to our esteemed network of distributors. Their expertise and dedication align perfectly with our mission to deliver cutting-edge solar solutions ensuring faster adoption of solar energy. These partnerships highlight our commitment to expanding our footprint in the Middle East and Africa and accelerate progress towards net-zero future.”

The company was keen to sing the praises of its Vertex n-type family, equipped with n-type i-TOPCon technology that reportedly delivers superior efficiency, exceptional long-term reliability, and lower levelized cost of electricity (LCOE) for solar developers.

The expansion efforts of Trina Solar is part of its global mission to drive renewable energy adoption. It remains dedicated to accelerating the transition to clean energy and realising global net zero ambitions.

Trina Solar also recently made headlines for its newly-formed partnership with WBHO Construction and SOLA to deliver the Merak 1 solar project in South Africa. Discover the full story at: https://africanreview.com/energy/south-african-solar-project-reveals-power-of-strategic-partnerships

US$4bn in capital investments is required between now and 2030 to reach universal access to clean cooking in sub-Saharan Africa. (Image source: Adobe Stock)

The International Energy Agency (IEA) and the African Development Bank (AfDB) hosted the first ever high-level summit on providing clean cooking access in Africa

Co-chaired by Tanzanian and Norwegian government leaders, AfDB and the IEA, close to 60 countries alongside numerous companies and development institutions were represented at the Summit on Clean Cooking in Africa which took place in Paris.

Together, participants sought to take on the challenge that more than two billion people are affected by a lack of access to clean cooking, with more than half living in Africa. Here, cooking is typically conducted over open fires and basic stoves, making use of charcoal, wood, agricultural waste and animal dung as fuel. This can lead to harmful toxic fumes and smoke being inhaled – representing the second leading cause of premature death on the continent – and limits opportunities for education, employment and independence due to the time spent gathering fuel which is also detrimental to the environment.

President Samia Suluhu Hassan of Tanzania, commented, “Ensuring clean cooking access for all in Africa needs adequate, affordable, and sustainable financing for appropriate solutions and innovations; adequate global attention; and smart policies and partnerships. Successfully advancing the clean cooking agenda in Africa would contribute towards protecting the environment, climate, health, and ensuring gender equality. This Summit underscores our commitment to advancing this agenda and providing a framework towards universal adoption of clean cooking fuels and technologies across the continent.”

According to the IEA, the tools for enabling clean cooking access are readily available and affordable but progress in many African countries has lagged compared to other regions. It was against this backdrop that more than 1,000 delegates attended the Summit, to mark a turning point on an issue overlooked for too long. In Paris, approximately US$2.2bn was mobilised for this cause in financial pledges from both governments and the private sector.

Solving the clean cooking challenge

“This Summit has delivered an emphatic commitment to an issue that has been ignored by too many people, for too long,” remarked IEA executive director Fatih Birol. “We still have a long way to go, but the outcome of this Summit, US$2.2bn committed, can help support fundamental rights such as health, gender equality and education while also reducing emissions and restoring forests. And the commitments announced today go beyond the money alone – they set out concrete steps on how governments, institutions and the private sector can work together to solve the clean cooking challenge this decade. Going forwards, we will rigorously track the commitments announced today to make sure they’re met on time and in full – and continue to do our utmost to bring greater resources and attention to this critical issue.”

AfDB President Akinwumi A. Adesina, added, “At the African Development Bank, we are delighted to play a leading role alongside the International Energy Agency (IEA), Tanzania and Norway, to definitively tackle lack of access to clean cooking, that affects a billion people in Africa. In concert with countries, we will increase our financing for clean cooking to US$200mn annually over the next decade, while also scaling-up the provision of blended finance for clean cooking through the Sustainable Energy Fund for Africa (SEFA).”

Following the summit, the IEA has indicated that it will employ a ‘double-lock system’ to ensure that momentum behind clean cooking does not slow in the coming months and years. This will include using effective methods to ensure that pledges and commitments are fulfilled, tracking them carefully to make sure the money is spent in a timely manner and reaches those in need. In addition, the IEA will continue to play a convening role to engage more willing partners and generate new funds to help meet the US$4bn a year in capital investments required between now and 2030.

Prioritising clean cooking has been identified as a priority for the IEA in 2024. Find out more at: https://africanreview.com/energy/iea-prioritises-clean-cooking-access-in-africa

The agreement was witnessed by Prime Minister of Egypt, HE Moustafa Madbouly and HE Mohamed Shaker, Minister of Electricity and Renewable Energy of Egypt. (Image source: Infinity Power)

Infinity Power, Hassan Alam Utilities and Masdar, have signed a land access agreement with the Egyptian Government to mark another step towards the construction of a 10GW onshore wind farm

The project is expected to be one of the largest in the world and will make use of a 3,025 sq km area of land acquired by the consortium in the agreement. Necessary development studies to progress the project will now be conducted on the land which is located in West Suhag, including resource measurement campaigns, geotechnical and topographic surveys, as well as environmental studies to ensure minimal environmental impact.

Once conducted, eyes will then turn to beginning construction of the US$10bn project in a process that is expected to deliver significant benefits to local communities.

Amr Allam, Co-CEO of Hassan Allam Holding, commented, "In a significant move towards a more sustainable future for Egypt, the signing of the land access agreement for the 10GW wind farm project alongside our esteemed partners, Infinity Power and Masdar, marks a pivotal moment. This initiative underscores our commitment to clean energy and environmental responsibility, and we are proud to be part of this transformative project that will have a positive impact on our nation's energy landscape and beyond."

The agreement was signed by Mohamed Ismail Mansour, chairman of Infinity Power; Karim Hefzy, chief operating officer at Hassan Allam Utilities; and Mohamed Asaad Taher, senior manager, business development and investment at Masdar. It was witnessed by the Prime Minister of Egypt, HE Moustafa Madbouly and HE Mohamed Shaker, Minister of Electricity and Renewable Energy of Egypt.

"We are excited to be moving to the next step of the development of our 10GW wind farm in Egypt and cannot wait to see it progress,” said Mansour. “Not only will this project deliver substantial benefits during construction and operation, creating jobs for local people and investing in their local communities, the impact of the energy uplift will be amazing to see. This source of clean, affordable energy will save Egypt money, reduce emissions and power industry across the country.”

The initial project agreement to develop the 10GW wind farm was signed between the Consortium and the Egyptian Electricity Transmission company on the sidelines of the UN climate change conference, COP27. When delivered, it is expected to cut around 9% of the country’s annual carbon emissions and will produce 47,790GWh of clean energy per year. It will represent a significant step forward in the country’s objective of sourcing 42% of its energy from renewables by 2030 whule saving an estimated US$50bn in natural gas costs per year.

The break to load shedding has been a welcome relief for South African businesses. (Image source: Adobe Stock)

Continued suspension of load shedding is raising hopes that South Africa could be over the worst of its energy troubles which have plagued the country over the last few years

On 12 May, Eskom posted an optimistic update celebrating the “notable and consistent improvements in generation performance that have enabled the continued suspension of load shedding, which has not been implemented for 46 days.”

This streak, it continued, can be attributed to the planned maintenance during the summer period and the implementation of the Generation Operational Recovery Plan which commenced in March 2023. In improving generation performance, Unplanned Capacity Loss Factor (UCLF) has reduced from 11,036MW to 10,474MW week-on-week, a performance better than the winter forecast this year which expected unplanned outages to range from 14,000MW to 15,500MW.

The statement also outlined that there has been no increased usage in the Open-Cycle Gas Turbines (OCGTs) this week, and a total of 1,520MW of generating capacity is planned to be returned to service soon.

A positive outlook from the President

President Cyril Ramaphosa, added his own jubilant voice here in newsletter published on 13 May. In the correspondence, the President stated “It is too early to say that load shedding has been brought to an end. However, the sustained improvement in the performance of Eskom’s power stations – as well as the new generation capacity we have added to our energy system – gives us hope that the end of load shedding is in sight.

“A renewed focus by Eskom on maintenance and the return to service of several units is now showing results. Losses due to unplanned outages have reduced by 9% between April 2023 and March 2024, adding the equivalent of 4,400MW of capacity to our national grid. Better maintained and more reliable power stations have increased the country’s Energy Availability Factor (EAF), which is the amount of electricity available from our power stations at any given time. The EAF has been above 60% since April, compared to 53% over the same period last year.”

While the risk of load shedding will likely remain in the background for the foreseeable future, these announcements come as a positive step for a country that has been living in the shadow of an energy crisis which has stifled economic prospects and business potential for years. Certainly, announcements such as the onset of Africa’s largest battery energy storage system and new renewable providers entering the market will help the country in its efforts to return to energy stability.

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