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01 Aug 2018

The politics of Renewable Energy in East Africa

Energy Access
The politics of Renewable Energy in East Africa

Less than a quarter of East Africa’s population has access to electricity – the lowest electrification rates in the world. This, combined with the region’s vast natural resources, represent a major opportunity for renewable energy investors. Solar irradiation levels are high due to proximity to the equator, wind speeds are some of the strongest on the continent, hydropower resources are plentiful, and the Great Rift Valley is a promising source for geothermal power.

Until recently, renewable energy projects in sub - Saharan Africa were mostly limited to hydropower projects due to the prohibitively high generation costs of other power sources. Consumer electricity tariffs in the region are low, as are consumption levels outside of major urban areas, which has reduced the profit potential. However, as generation costs have plummeted the economics have shifted. Solar plants in southern Africa are estimated to pay for themselves within three years, and costs for utility - scale onshore wind and geothermal projects are now level with fossil fuel projects. This gives renewable energy companies an opportunity to gain a foothold in a market that is only expected to expand, due to rapid population growth and rising GDP levels.