Africa has the highest percentage of untapped technical hydropower potential in the world, with only 11% utilised. Although competing with fossil fuels, hydropower is responsible for 86% of all non-fossil fuel energy use, according to the International Hydropower Association’s (IHA) 2019 Hydropower Status Report.
The IHA anticipates Africa’s hydropower installed capacity to grow by about 4,700MW over the next two to three years. This growth will undoubtedly be influenced by numerous factors including that of favourable regulatory framework and capital spending. In this article, we profile projects that are geared up to augment the capacity of hydropower in Africa.
In East Africa, Ethiopia has targeted energy access for all its citizens by 2025. Achieving this goal means the country will need to increase power from 4,566MW to more than 17,300MW by the targeted period. This goal could be attained with the assistance of new hydropower, wind, geothermal and biomass projects. In recognising the significant role that Independent Power Producers (IPPs) can play in speeding up the deployment of hydropower projects, the African Development Bank (AfDB) has stepped in through an investment vehicle to channel the much needed financial support.
The Sustainable Energy Fund for Africa (SEFA), managed by the AfDB, has approved a $995,000 grant to support the rollout of a sustainable procurement framework for IPPs in Ethiopia. The SEFA grant is aimed at encouraging private investments into hydropower projects through Ethiopia’s Renewable Energy Programme. It will strengthen the government’s capacity to undertake bankability and technical analysis including feasibility assessments of projects in the hydro priority pipeline. The grant also provides for environmental and social impact assessments, resettlement action plans, and preparation of bidding documents for hydro projects.
“A well-structured procurement framework is crucial in mobilising the investments necessary to achieve universal energy access in Africa,” stated Wale Shonibare, AfDB’s acting vice-president for power, energy, climate change and green growth. “The SEFA programme will boost private IPPs’ participation, and spur investments into the Ethiopian hydropower sector. The programme also complements the assistance provided by the Bank’s Institutional IPP/PPP Support Project, as well as the Bankfinanced Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project”, Shonibare added.
Hydropower volume growing in Africa
Ethiopia’s ambitious objective holds much promise and will be placed on our watch list. The country could also draw inspiration from neighbouring Uganda, which completed 183MW Isimba hydropower station within a period of five years. Commissioned in March 2019, Isimba is boosting Uganda’s national grid. Considered to be the fourth biggest hydropower project in the country, Uganda Electricity Generation Company (UEGCL) has reassured citizens that this hydropower plant will generate the cheapest electricity in the region. The dam is expected to reduce the cost of power from the current $0.08 per kWh, to $0.05 per kWh making it the cheapest in the region. Another objective on the radar target for UEGCL is the commissioning of the 600MW Karuma hydroelectric power station in December 2019. The overall physical progress of works is estimated at 94.9%.
In Central Africa, the 150MW Zongo II hydropower project was formally inaugurated in June 2018 in the Democratic Republic of Congo (DRC), adding 100MW of installed capacity to the 50MW in operation since 2017. As part of the country’s Modernisation for Growth programme, the Mwadingusha hydropower plant increased its installed capacity from 22MW to 32MW. The DRC’s mining sector is also investing in hydropower technology to provide power supply security for their business activities. In 2018, the 11MW Azambi hydropower project was also commissioned.
Staying with Central Africa, the construction of the 200MW Memve’ele project in Cameroon has been completed and is nearly operational. In addition, the country’s 420MW Nachtigal project, the largest independent hydropower project in sub-Saharan Africa, reached financial close in 2018. The Nachtigal hydroelectric power plant project has benefited from the engagement of the World Bank and Multilateral Investment Guarantee Agency (MIGA) and was developed through IFC InfraVentures, a $150 million global infrastructure project development fund.
IFC InfraVentures will directly invest $68 million in equity, lend up to $124 million for its own account, and mobilise an additional $686 million from 11 development finance institutions and four commercial banks. French utility company EDF and the Cameroon government will also invest equity. The Nachtigal’s total project cost is $1.3 billion. The International Bank for Reconstruction and Development and MIGA are providing guarantees for a total of $289 million and $216 million, respectively. The plant is due to be commissioned in 2023 and is anticipated to create up to 1,500 direct jobs during peak construction, of which 65% will be locally sourced. It will be located on the Sanaga River near the Nachtigal Falls, 65km north-east of Yaoundé, the country’s capital city.
Meanwhile, in Southern Africa, Zimbabwe’s Kariba South Bank expansion project was commissioned in March 2018, adding 150MW of installed capacity to the grid. The newly commissioned unit, together with the unit commissioned in 2017, will significantly reduce the country’s power supply deficit. In Mozambique, the government issued an extension for the Cahora Bassa hydroelectric power station, providing for a new concession period of 15 years in favour of national company Hidroelectrica Cahora Bassa. The Mozambican government has also decided to create a cabinet coordinated by the Ministry of Mineral Resources and Energy, which integrates Hydroelectrica Cahora Bassa and national utility Electricidade de Moçambique to coordinate the development of the 1,500MW Mphanda Nkuwa hydroelectric power plant. The plant will be located about 60km downstream of the Cahora Bassa Dam on the Zambezi River and tenders have been launched for the selection of the transition adviser and project director.
In conclusion, despite the high upfront costs, hydropower provides low-cost electricity over its long lifetime. The global weighted average cost of electricity from hydropower projects in 2018 was $0.047 per kWh, making it the lowest-cost source of electricity in many markets, according to IRENA’s Renewable Power Generation Costs in 2018 report, published in May 2019. In addition, hydropower provides an opportunity to generate significant revenue from exports to neighbouring countries. The technology also supports growth in variable renewables such as wind and solar, through its flexibility in dispatch and storage services, meeting demand when these sources are unavailable, and absorbing energy when there is a surplus. These strengths pave a concrete footpath for hydropower to claim its position in the energy mix race across Africa and to lighting up the continent.