The UK has grand hopes to extend its links with Africa, particularly in the renewable space where there is clear scope for facilitating investments and supporting increased generation.
The UK hosted the Africa Investment Conference on January 20, online. It hosted a first such event in 2020.
“The UK has much to learn from Africa’s ingenuity and entrepreneurship. Africa is the future and the UK has a huge role to play in realising its ambitions,” UK Prime Minister Boris Johnson said, opening the summit.
The country’s CDC Group plays an important role in supporting projects. CDC head of infrastructure Chris Chijiutomi said the development finance institution (DFI) was the “largest bilateral developer in Africa”, playing a key role in partnering with the private sector.
CDC has exposure to the energy value chain in a number of ways, he continued. The DFI has a 70% stake in energy developer Globeleq.
Chijiutomi said one particular bottleneck for energy projects in Africa was in transmission and distribution, which led CDC to back Gridworks.
“Energy storage and carbon capture and storage (CCS) excite us, that’s an area we want to play more in. Africa is in a position to play a leading role in … shaping the sustainable energy future,” the executive said.
The first step
The role of DFIs is often crucial in allowing a business to launch, M-KOPA’s chief of staff Tsakane Ngoepe said. CDC is an equity investor in M-KOPA, which provides financing for solar home systems and efficient appliances.
“Development finance plays a crucial role in the early stages. In the beginning, when no commercial bank would provide capital, DFIs have stepped in. CDC, and others, have been critical,” Ngoepe said. Once the case has been made, a company can shift over to commercial banks.
The M-KOPA executive picked out electric motorbikes as an area of growing interest in Africa, noting that some DFIs were starting to invest in research in this area.
“[Electric motorbikes] are just starting to be developed. They may be coming online commercially in the next three to five years,” she said. This mode of transportation would require a substantial amount of electrical infrastructure to make viable.
Another transport option discussed was hydrogen. Anglo American Platinum’s CEO Natascha Viljoen said the South African company was working on hydrogen-powered trucks.
“This is the first project of this sort. This will allow us to run 80 carbon neutral trucks at our open pit mine. It will be green hydrogen. A 75 MW PV plant is being installed and that will be increasing to 340 MW over the next couple of years,” Viljoen said.