Research on African Renewable  
Energy Development and  
Investment  
( B r i e f V
e r s i o n )  
Global Energy Interconnection  
Development and Cooperation Organization  
(GEIDCO)  
关键技术研究  
Research on African Renewable Energy Development and Investment  
PREFACE  
Energy is an important material basis for economic and social  
development. The use of energy by mankind, from firewood to fossil  
energy such as coal, oil, and natural gas, to power generation from  
renewable energy such as hydro, wind and solar energy, every change  
is accompanied by a huge leap in productivity and major progress in  
human civilization. Energy, as the driving force for the development  
of modern society, is related to the national economy and people’s  
livelihood, as well as to human welfare. The massive development  
and use of traditional fossil energy have led to increasingly prominent  
problems such as resource shortages, environmental pollution, and  
climate change, which seriously threaten human survival and  
sustainable development. In essence, the core of sustainable  
development is clean development. The key is to promote clean  
replacement on the energy production side, and replace fossil energy  
with renewable energy such as solar, wind, and hydropower.  
Research on scientific and accurate quantitative assessment of  
resources is an important basis foundation for large-scale  
development and utilization of renewable energy. At present, the  
global installed capacity of hydro, wind and solar power has exceeded  
30% of the total installed capacity of power sources. Although some  
achievements have been made in the development of renewable  
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energy, there is still huge potential to be developed urgently.  
Therefore, it is of great importance to conduct a fine assessment on  
the resource reserves. On the basis of establishing and improving the  
global renewable energy resources database, the Global Energy  
Interconnection Development and Cooperation Organization  
(GEIDCO) has established an assessment system and digital fine  
assessment models of renewable energy resources, carried out  
systematic calculation and quantitative assessment of theoretical  
potential, technical potential installed capacity and economic  
potential installed capacity of hydro, wind and solar energies from a  
global perspective. An achievement of the Global Renewable-energy  
Exploitation ANalysis platform (GREAN) has been made, thereby  
the accuracy and timeliness of global renewable energy resources  
assessment will be effectively improved, which provides important  
support for large-scale development and utilization of renewable  
energy in relevant countries and regions.  
Research on systematic and efficient macro site selection of  
power bases is an important prerequisite for large-scale  
development and utilization of renewable energy. The site  
selection of renewable energy power bases is related to the economy  
of power station development, which is crucial to the large-scale  
economic development and efficient utilization of renewable energy.  
There are many factors affecting the site selection of power bases,  
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hence the site selection analyses and decision-making process are  
complicated and difficult. The desk top study of site selection is often  
limited by the integrity and accuracy of data. Site selection must rely  
on site survey, which consumes a huge amount of manpower,  
financial resources and time costs. By taking into account such  
factors as global topography and terrain elevation, land covers, water  
systems, natural reserves, geology and historical seismic activity  
frequency, power supply and power grid, population and economy,  
GEIDCO has developed models and tools for macro site selection of  
renewable energy power bases which significantly increase the  
breadth and depth of data collection and analysis processes, thus  
greatly improving the accuracy, economy and effectiveness of the  
desk top study of site selection, and achieving systematic  
achievements in promoting the development of global renewable  
energy resources. The data collected and analysed by such models  
and tools are used as “Reference Book” and “Data Manual” for the  
world’s energy strategy research and policy formulation.  
Focusing on the resource assessment and base development of all  
continents in the world, GEIDCO has finished a series of research  
reports on renewable energy development and investment  
including the global general report and continent reports of Asia,  
Europe, North America, Central and South America, Oceania  
and Africa simultaneously, paying extensive attention to the  
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renewable energy resource assessment and large-scale power  
bases development in all countries.  
This report is one of the renewable energy research series focusing  
on Africa, which fully shows the achievements in the assessment of  
renewable energy resources and the site selection of large-scale  
power bases in Africa. In Chapters 1, 2 and 3, the resource  
assessment and base development research of hydro, wind and  
photovoltaic power in Africa were completed by digital methods.  
Firstly, the methods, models and data of resource assessment and site  
selection are introduced respectively. In terms of hydropower, the  
theoretical potential of hydroenergy resources in major river basins is  
calculated, and cascade hydropower stations development schemes  
of major reaches are proposed. In terms of wind and photovoltaic  
power, on the basis of comprehensive calculation and analysis of the  
main factors affecting centralized development, the theoretical  
potential, technical potential installed capacity and development cost  
of wind power and photovoltaic power in all African countries and  
regions have been quantitatively assessed. Using the GREAN  
platform, the site selection and layout of large-scale onshore wind  
power bases and large-scale solar photovoltaic power bases in Africa  
are proposed, and the assessment of development conditions,  
development scale and the calculation of technical and economic  
indicators are completed. In Chapter 4, based on the development  
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trend of energy and electricity supply and demand in Africa, the  
power transmission direction and mode of large-scale renewable  
energy bases are studied and analyzed by coordinating the regional,  
trans-regional and trans-continental power consumption markets.  
Chapter 5 reviews the energy policies and investment status of major  
African countries, analyzes the typical investment modes of  
renewable energy exploitation projects, conducts case studies in the  
development schemes of large-scale hydro, wind and solar power  
bases in Africa, and proposes suggestions on policies and investment  
modes to speed up clean development in Africa.  
The Global Renewable Energy Development and Investment series  
of reports made by the GEIDCO are committed to providing guidance  
and reference for the large-scale development and utilization of  
renewable energy around the world and accelerating the  
implementation of clean alternatives on the energy supply side. It is  
hoped that this report can provide guidelines and reference for policy-  
makers, international organizations, energy enterprises, financial  
institutions, univerisities and relevant individuals in renewable  
energy resource assessment, strategic research, project development,  
international cooperation, etc. However, there might be inadequacies  
as data and time for research and compilation are limited. Comments  
and suggestions are welcome for further improvements.  
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CONTENTS  
1. Hydroenergy Resources Assessment and Development............................... 2  
1.1 Restrictive Factor Analysis................................................................3  
1.2 Resources Assessment.......................................................................6  
1.3 Power Bases Development................................................................7  
2. Wind Energy Resources Assessment and Development.............................. 9  
2.1 Restrictive Factor Analysis..............................................................10  
2.2 Resources Assessment.....................................................................12  
2.3 Power Bases Development..............................................................18  
3. Solar Energy Resources Assessment and Development ............................ 20  
3.1 Restrictive Factor Analysis..............................................................21  
3.2 Resources Assessment.....................................................................24  
3.3 Power Bases Development..............................................................29  
4. Outbound Transmission of Large Renewable Energy Bases....................31  
4.1 North Africa.....................................................................................32  
4.2 West Africa ......................................................................................34  
4.3 Central Africa ..................................................................................35  
4.4 East Africa .......................................................................................38  
4.5 Southern Africa................................................................................40  
5. Policy Environment and Investment and Financing Suggestions ............41  
5.1 Overview of Countries in Africa .....................................................42  
5.2 Investment and Financing Proposal ................................................48  
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1. Hydroenergy Resources Assessment and  
Development  
Africa is rich in hydroenergy resources, and the total amount is  
among the highest in the world with great development potential.  
In this report, the digital assessment and calculation of  
hydroenergy resources in basins of such nine major rivers as  
Congo River, Nile River, Zambezi River, Niger River, Sanaga  
River, Ogooué River, Cuanza River, Volta River and Rufiji River  
are carried out, and the total theoretical potential of hydroenergy  
is about 3790 TWh/a. Considering the resource characteristics  
and development conditions, and using the digital platform, the  
report further carried out the research on the development  
schemes of eight large-scale hydropower bases in basins of such  
major rivers as Congo River, Zambezi River, Nile River and  
Niger River, and the layout scheme of 48 cascade hydropower  
stations and the development scheme of large-scale projects are  
proposed for the reaches to be developed with rich hydroenergy  
resources, with the total installed capacity of 138.81 GW and the  
annual power generation of 826.67 TWh. The research results  
will strongly promote Africa to accelerate the formation of a  
renewable energy-led and interconnected energy pattern, solve  
the energy shortage dilemma, ensure safe and reliable energy  
supply, and achieve sustainable development in Africa.  
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1.1 Restrictive Factor Analysis  
Distribution of Water Systems. There are many water systems  
in Africa, including the Nile, Congo, Zambezi and many other  
world-famous rivers, mainly distributed in central, eastern and  
southern Africa. According to the analysis, there are 43 first-class  
rivers with a basin area of more than 3×104 km2, totally with a  
basin area of 1843×104 km2, accounting for about 60% of the total  
area of Africa. The distribution of major river systems in the  
whole continent is shown in Figure 1-1.  
Hydrological Data. The characteristic parameters of  
hydrological data that are used to describe rivers, lakes and other  
water bodies includes precipitation, evaporation, infiltration,  
water level, runoff, sediment, water quality and other contents.  
They are important basic data in the planning research, design and  
construction stages of hydro projects, and are generally obtained  
by establishing permanent or temporary hydrological stations for  
observation. The African continent in this research, based on the  
basic data of the Global Runoff Data Center, contains the  
observation data of more than 1500 hydrological stations,  
covering not only 43 primary river basins with a basin area of  
more than 3×104 km2, but also some basins along the  
Mediterranean coast of North Africa and Madagascar.  
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Figure1-1 Distribution of Major Rivers in Africa  
Land Covers. The development and construction of large  
hydropower bases should avoid flooding large areas of cultivated  
lands and densely populated urban and villages to protect the  
ecological environment. Thus cultivated lands and urban areas are  
the main restrictive factors of land covers affecting the  
development of hydropower resources. Figure 1-2 shows the  
distribution of the above three covers in Africa. The cultivated  
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land in Africa is mainly distributed in Nigeria and Niger in West  
Africa, and Ethiopia, Sudan, Kenya, Tanzania and other countries  
in the east. Cultivated lands are also widely distributed along the  
Mediterranean coast and Nile Delta in North Africa, Zambia and  
South Africa in south. Distribution of urban areas reflects the  
population aggregation to a certain extent, and the distribution of  
urban areas and cultivated land tends to have better convergence  
in wide-area space.  
Figure1-2 Distribution of Cultivated Lands and Urban Areas in Africa  
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1.2 Resources Assessment  
Overview of Hydroenergy Resources. There are a total of 4863  
rivers in Africa with a theoretical hydroenergy potential of 50  
GWh and above each. The theoretical potential of hydroenergy  
resources is 5668 TWh/a, accounting for 12.3% of global total.  
Africa’s hydroenergy development potential is mainly distributed  
in the Congo River, Nile River, Zambezi River and other large-  
scale basins. In the report, digital assessment and calculation of  
hydroenergy resources in nine major river basins in Africa,  
including Congo River, Nile River, Zambezi River, Niger River,  
Sanaga River, Ogowe River, Cuanza River, Volta River and Rufiji  
River, are carried out. Their distribution is shown in Figure 1-3.  
The basins cover an area of 1182×104 km2, accounting for 64%  
of the primary rivers in Africa and covering the main hydroenergy  
resources to be developed.  
According to the calculation of the digital assessment platform,  
the total theoretical potential of the nine basins are about 3790  
TWh/a. According to the national statistical assessment carried  
out by the countries involved in the basin, the theoretical  
hydroenergy potential is mainly distributed in 31 countries such  
as D.R. Congo, Zambia, Angola, Ethiopia, Congo and Sudan,  
among which the theoretical hydroenergy potential in D.R.  
Congo is the highest, at 1795.01 TWh/a.  
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Figure 1-3 Distribution of Nine Major River Basins in Africa  
1.3 Power Bases Development  
Considering the resource characteristics and development  
conditions, Africa will focus on developing the Congo River, the  
Nile River the Zambezi River and the Niger River in the future.  
Based on the digital platform, the base development scheme of  
the main stream of the basin has been studied, the cascade layout  
scheme of the river reaches to be developed with rich  
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hydroenergy resources has been studied, and the site selection of  
main large-scale hydroenergy projects has been completed. The  
layout of the hydropower bases in Africa is shown in Figure 1-4.  
Figure 1-4 General Layout of Large-scale Hydropower Bases in Africa  
Measurement and calculation show that the eight major  
hydropower bases involve a total of 48 cascades are to be  
developed, with a total installed capacity of 138.81 GW and an  
annual power generation of 826.67 TWh. From the scale of  
hydropower bases to be developed, 118.10 GW is to be developed  
in the upstream and downstream reaches of the Congo River  
Basin, accounting for 85.08% of the four major bases. The scale  
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to be developed in two bases along the main stream of the  
Zambezi River is 11.60 GW, accounting for 8.35%. According to  
the long-term scheme, the total development of eight large-scale  
hydroenergy bases in the future is expected to exceed 190 GW.  
2. Wind Energy Resources Assessment and  
Development  
Africa enjoys abundant wind energy resources and holds great  
development potential. The report evaluated 57 countries and  
regions in Africa, and calculated that the theoretical potential of  
wind energy resources is up to 366.1 PWh/a, and the installed  
capacity suitable for centralized development is 52,208.5 GW,  
which is mainly distributed in the Sahara Desert in North Africa  
and its surrounding areas, the Indian Ocean coast in East Africa  
and some inland areas in Southern Africa, with 140.9 PWh of  
annual power generation. However, the current development  
scale is still less than one ten-thousandth of the technical potential  
installed capacity. Considering the characteristics and  
development conditions of resource, the site selection and  
development schemes of such 12 large-scale wind power bases as  
Martruh in Egypt, Ed Dueim in Sudan and North Horr in Kenya  
were studied and the main technical and economic indicators  
were proposed by using the digital platform, with a total installed  
capacity expected to be 21.40 GW. The research results will assist  
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the development and utilization of wind energy resources in  
Africa, enhance the confidence in infrastructure investment of  
wind power, and promote the clean development process of  
energy resources in Africa.  
2.1 Restrictive Factor Analysis  
Distribution of Wind Speeds. Africa holds great potential for  
wind energy development. The distribution of wind speeds is  
shown in Figure 2-1. Countries with an annual average wind  
speed of more than 6 m/s have rich wind resources, including  
such northern coastal countries and those around Sahara as Egypt,  
Libya, Algeria, Tunisia, Western Sahara, Mauritania, Niger, Chad  
and Sudan, such eastern coastal countries as Somalia, Ethiopia,  
Kenya and Tanzania, and such southern countries as South Africa,  
which is conducive to the development of large-scale wind power  
bases.  
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Figure 2-1 Distribution of Wind Speeds in Africa  
Distribution of Conservation Areas. In general, site selection  
and development of large-scale wind power bases should avoid  
all types of conservation areas. Most of the East Africa has a  
savanna climate. The vast tropical grassland provides a natural  
place for various animals to inhabit. There are a wide variety of  
wild animals, with numerous natural ecosystem, wildlife, and  
natural resources conservation areas, with a total area of up to  
347×104 km2. Figure 2-2 shows the distribution of conservation  
areas in Africa considered in the research.  
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Figure 2-2 Distribution of Main Conservation Areas in Africa  
2.2 Resources Assessment  
Assessment on theoretical potential. According to the wind  
speed data at the height of 100 m, the theoretical potential of wind  
energy resources in Africa are 366.1 PWh/a, accounting for 18%  
of the global total, and parts of eastern, northern and southern  
Africa are among the regions with the greatest potential for wind  
energy resources development in the world.  
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Assessment of technical potential installed capacity. After  
comprehensive consideration of resources and various technical  
constraints, the technical potential installed capacity of wind  
power suitable for centralized development in Africa is estimated  
to be 52,208.5 GW, and the annual power generation is about  
140.9 PWh/a.  
In terms of distribution, Africa’s technically exploitable wind  
energy resources are mainly distributed in the northern region  
from the Sahara to the Mediterranean coast, including  
Algeria, Libya, Sudan, Mauritania, Mali, Niger and Egypt,  
accounting for more than 70% of the continent’s total. The above  
areas are basically below 1000 m above sea level, mainly with  
bare ground and a small amount of shrubs. Except for the  
conservation areas in Morocco, Tunisia, Niger and Algeria, most  
of the areas are very suitable for the construction of large-scale  
wind power bases. Most parts of centralAfrica, such as Cameroon,  
D.R. the Congo, Angola and other countries, have poor wind  
resources and dense tropical rain forests, making it impossible to  
build centralized wind power bases; Nigeria on the southern edge,  
Ethiopia and Tanzania on the east edge of the Sub-Sahara Desert  
have widely distributed cultivated lands, some regions do not  
have the conditions for centralized large-scale wind power base  
construction. Eastern Africa is rich in flora and fauna resources  
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and has many conservation areas, some regions are not suitable  
for the construction of centralized wind power bases. In general,  
affected by factors such as resource endowments, land covers,  
conservation areas, etc., most of the land areas in Africa have the  
conditions for centralized development and construction of wind  
power bases.  
The installed capacity per unit land area and its annual power  
generation are important indicators to characterize the technically  
exploitable resource conditions of wind power in a region.  
However, the installed capacity is greatly affected by the terrain  
slope. In comparison, the ratio of annual power generation to  
installed capacity, that is, the number of installed capacity full-  
load hours (capacity factor), can better reflect the advantages and  
disadvantages of regional resources, development conditions and  
technology. Please refer to Figure 2-3 for the distribution of  
technical available areas for wind power generation in Africa and  
their full-load hours.  
According to technical indicators, the average full-load hours for  
the technical potential installed capacity of continent-wide wind  
power are about 2700 hours (with an average capacity factor of  
about 0.31). Among them, the full-load hours of wind power are  
about 4000- 4500 hours in northern Kenya, northern Chad, the  
border between southern Libya and Chad and Niger, the Red Sea  
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coast in eastern Sudan, the Indian Ocean coast in eastern Somalia,  
the Atlantic coast in Western Sahara, and the Mediterranean coast  
in northeastern Libya. The development conditions are favorable,  
with the maximum value occurring near North Horr in northern  
Kenya, exceeding 5500 hours.  
Figure 2-3 Distribution of Africa’s Wind Power Technical Available Areas and Their  
Full-load Hours  
Assessment on development cost. According to the estimation  
of the cost level of onshore wind power technology and  
equipment by 2035, considering the transportation and grid  
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infrastructure conditions, the average cost for centralized wind  
power development in African is 4.12 cents, the average  
development cost of each country is between 2.88 and 7.03  
cents/kWh. According to the current global average tariff level of  
about 8 cents, nearly 100% of Africa’s technical potential  
installed capacity meets the economic requirements. Under the  
condition of global wind average development cost of about 5  
cents, the calculation shows that the economic potential installed  
capacity of wind power in Africa is expected to be about 42.6 TW  
according to the cost level by 2035, accounting for 82% of  
technical potential installed capacity. See Figure 2-4 for the  
distribution of development costs for wind power resources in  
Africa.  
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Figure 2-4 Distribution of Wind Power Development Costs in Africa  
In terms of economic indicators by country of wind power  
development in Africa, countries and regions with excellent  
resource conditions and relatively good transportation and grid  
infrastructure have low cost and better economy for wind power  
development. On the whole, most of the wind power resources  
that can be developed in Africa have good development economy,  
but there are 22 countries and regions including Algeria, Burkina  
Faso, Sudan and Chad have the wind power development cost  
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higher than 8 cents, which indicates that these countries have  
areas where development is restricted due to cost.  
From the perspective of the most economical development  
regions, the lowest LCOE of wind power in Sudan, Western  
Sahara, Egypt, Eritrea, Kenya, Djibouti, Morocco, Mauritania,  
South Africa, Libya, Ethiopia, Algeria, Tunisia, Tanzania, Chad  
and other countries and regions is less than 2.5 cents, with good  
development economy, with the lowest development cost  
occurring in the west of Tokar, Red Sea in eastern Sudan, at 1.68  
cents. From the point of view of the average economic level of  
wind power development, the average development cost in  
Western Sahara is the lowest, at 2.88 cents, ranging from 1.74 to  
5.07 cents.  
2.3 Power Bases Development  
According to the assessment results of wind energy resources in  
Africa, considering the characteristics of resources and  
development conditions, large-scale wind power bases in Africa  
should be laid out in regions with high technical indicators and  
low development cost. According to the distribution of the main  
strategic power transmission channels of Africa’senergy  
interconnection, in the future, North Africa will develop wind  
power bases in Martruh of Egypt, Misurata of Libya, Gabes of  
Tunisia, Ghardaia of Algeria and Zag of Morocco, with a  
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development scale of 10.00 GW by 2035. East Africa will  
develop such bases in the Red Sea and Ed Dueim of Sudan, Jijiga  
of Ethiopia and North Horr of Kenya, with a development scale  
of 4.40 GW by 2035. Southern Africa will develop such bases in  
Luderitz of Namibia, Fraserburg of South Africa and Orapa of  
Botswana, with a development scale of 7.00 GW by 2035.  
Based on the digital site selection model and software, the above  
12 wind power bases are studied with regard to the development  
conditions, installation scale, engineering assumption, power  
generation characteristics and investment level, and a preliminary  
development scheme was put forward. The total installed capacity  
of the above 12 wind power bases is about 21.40 GW and the  
annual power generation will be 68.13 TWh/a. According to the  
long-term scheme, the total development scale is expected to  
exceed 50 GW in the future. According to the forecast results of  
cost for Africa’s onshore wind power by 2035 and investment  
estimation based on the basic situation of the project, the total  
investment of Africa’s wind power bases is about 20.03 billion  
USD, and the LCOE range is 1.75-3.61 cents/kWh. See Figure 2-  
5 for the overall layout of large-scale wind power bases in Africa.  
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Figure 2-5 Layout of Large-scale Wind Power Bases in Africa  
3. Solar Energy Resources Assessment and  
Development  
Africa enjoys abundant solar energy resources and holds great  
development potential. The report assessed 57 countries inAfrica,  
and calculated that the theoretical potential of solar photovoltaic  
resources is up to 63,464.5PWh/a, and the installed capacity  
suitable for centralized development is 1374.8TW, which are  
mainly distributed in the Sahara Desert and its surrounding areas  
in the northern part of Africa, the Atlantic coast areas in the south  
and some inland areas in East Africa, with 2670.2PWh of annual  
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power generation and a great development potential. Considering  
the characteristics and development conditions of resources, the  
site selection and development schemes of such 21 large-scale  
photovoltaic power bases as Minya in Egypt, Ouargla in Algeria  
and Al Jawsh in Libya were studied and the main technical and  
economic indicators were proposed by using the digital platform,  
with a total installed capacity expected to be 93.80 GW. The  
research results will assist the development and utilization of  
solar energy resources in Africa, enhance investment confidence  
in solar photovoltaic generation infrastructure, and promote the  
clean development process of energy resources in Africa.  
3.1 Restrictive Factor Analysis  
Distribution of Global Horizontal Irradiance. Africa holds  
great potential for solar energy development, and the distribution  
of global horizontal irradiance of solar energy is shown in Figure  
3-1.  
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Figure 3-1 Distribution of Global Horizontal Irradiance of Solar Energy in Africa  
Egypt, Libya, Algeria, Western Sahara, Mauritania, Mali, Niger  
and Chad along the Sahara region in northern Africa, Sudan,  
Somalia, Ethiopia, Kenya and Tanzania in the east, Namibia,  
Angola, Botswana and South Africa in the south and other  
countries have excellent solar energy resources. The average  
annual global horizontal irradiance in the region is above 2200  
kWh/m2, which is conducive to the development of large-scale  
photovoltaic bases.  
Distribution of Terrains. Terrain conditions have great influence  
on the development of renewable energy resources such as  
photovoltaic resource, mainly including altitude and terrain slope.  
In terms of altitude, the weakening of atmospheric scattering in  
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high altitude areas is conducive to photovoltaic power generation,  
but glaciers and permafrost are mostly distributed in plateau areas  
over 4500 m, so such areas are difficult to develop photovoltaic  
projects at the current technical level and have poor economy. At  
the same time, the plateau ecology is fragile and it is difficult to  
restore the surface vegetation after large-scale project  
construction. Generally speaking, there are mainly plateau areas  
within 2000m above sea level in Africa, and the high- altitude  
land area affecting the centralized photovoltaic power  
development is very small. Figure 3-2 gives a schematic diagram  
for distribution of altitudes in Africa.  
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Figure 3-2 Distribution of Altitudes in Africa  
3.2 Resources Assessment  
Assessment on theoretical potential. According to the global  
horizontal irradiance data of solar energy, the theoretical potential  
of solar photovoltaic resources in Africa is 63,464.5 PWh/a,  
accounting for 30% of the global total, the north, south and some  
parts in the east of Africa are among the regions with the most  
potential for photovoltaic resources development in the world.  
Assessment of technical potential installed capacity. After  
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comprehensive consideration of resources and various technical  
constraints, it is estimated that the scale suitable for centralized  
development of solar photovoltaic resources in Africa is 1374.8  
TW, and the annual power generation is up to 2670.2 PWh.  
In terms of distribution, photovoltaic resources in Africa are  
mainly distributed along the Sahara region and along the Atlantic  
coast of southern Africa. Algeria, Sudan, Libya, Mali, Chad,  
Mauritania, Niger, Angola and Egypt account for more than 60%  
of the total amount of the continent. The above areas are basically  
below 2000 m above sea level, mainly with bare ground,  
herbaceous vegetation and a small amount of shrubs. Except for  
the conservation areas in Niger, Namibia, Ethiopia and Tanzania,  
most of the areas are very suitable for the construction of large-  
scale photovoltaic power bases. In the Congo Basin in central  
Africa, Gabon and D.R. Congo are mostly densely distributed  
tropical rainforests with poor radiation conditions, making it  
impossible to build large-scale photovoltaic power bases. The  
coastal area of The Gulf of Guinea in West Africa is mostly  
distributed in forests and tropical rainforests, so it is not suitable  
for the construction of large-scale photovoltaic power bases. The  
eastern Ethiopian plateau and part of the East African plateau are  
covered by large terrain ups and downs, and there are many  
conservation areas, so it is not suitable for the construction of  
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centralized photovoltaic base. On the whole, under the influence  
of resource endowment, ground cover, topography, conservation  
areas and other factors, most of the land in Africa except the  
central part has the conditions for the centralized development  
and construction of photovoltaic power bases.  
Similar to the technical indicator of wind power, the ratio of  
annual power generation per unit land area to installed capacity,  
that is, the number of installed capacity full-load hours (capacity  
factor) can reflect the advantages and disadvantages of regional  
photovoltaic resource technology development conditions. Please  
refer to Figure 3-3 for the distribution of technical available areas  
for photovoltaic generation in Africa and their full-load hours.  
According to the technical indicators, the average full-load hours  
of technical potential installed capacity of photovoltaic power  
generation in the whole continent are about 1940 hours (the  
average capacity factor is about 0.22), among which, the full-load  
hours of photovoltaic technology are around 1900-2000 in Egypt,  
Chad, Sudan, Libya, Niger, Algeria and other countries, the  
Atlantic coasts of eastern Ethiopia, southern Namibia and western  
South Africa, and the Atlantic coasts of Western Sahara. The  
development conditions are favorable, with the maximum value  
occurring near Karasburg in southern Namibia, exceeding 2100  
hours.  
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Figure 3-3 Distribution of Technical Available Areas for Photovoltaic Generation in  
Africa and Their Full-load Hours  
According to the estimation of the cost level of photovoltaic  
technology and equipment by 2035, considering the  
transportation and grid infrastructure conditions, the average cost  
for centralized photovoltaic power development inAfrican is 2.89  
cents, the average development cost of each country is between  
2.09 and 7.02 cents/kWh. According to the current global average  
tariff level of about 8 cents, nearly 100% of Africa’s technical  
potential installed capacity meets the economic requirements.  
Under the condition of global PV average development cost of  
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about 3.5 cents, the calculation shows that the economic potential  
installed capacity of solar power in Africa is expected to be about  
971.5 TW according to the cost level by 2035, accounting for 71%  
of technical potential installed capacity. See Figure 3-4 for the  
distribution of development costs for photovoltaic resources in  
Africa.  
On the whole, the highest electricity cost in most countries and  
regions is less than 8 cents, which indicates that Africa as a whole  
has good conditions for large-scale development. Among them,  
some regions of Algeria, Namibia, Sudan and other countries  
have extremely high electricity costs, which are closely related to  
their local poor transportation and grid integration conditions.  
From the point of view of the average economic level of  
photovoltaic power development, the average development cost  
in Zimbabwe is the lowest, at 2.09 cents/kWh. Namibia comes  
next, with a national average development cost of 2.15 cents/kWh  
and the lowest domestic development cost of 1.72 cents/kWh,  
ranking first in Africa.  
From the point of view of the most economic development  
regions, there are 33 countries and regions including Namibia,  
South Africa, Egypt, Angola, Botswana, Eritrea, Ethiopia, Kenya,  
Tanzania, Sudan, Morocco, Somalia, Zimbabwe, Western Sahara,  
Libya and other countries have a minimum development cost of  
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less than 2.0 cents/kWh and a good development economy. The  
lowest development cost is 1.72 cents in the south of Karasburg  
in Namibia.  
Figure 3-4 Distribution of Development Costs for Photovoltaic Generation in Africa  
3.3 Power Bases Development  
Large-scale photovoltaic power bases in Africa should be laid out  
in regions with high technical indicators and low development  
cost. According to the overall local electricity demand and the  
layout of the main strategic power transmission channels of  
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Africa’s Energy Interconnection, in the future, eight photovoltaic  
bases in North Africa will be developed, including Minya and  
Aswan in Egypt, Ouargla and Laghouat in Algeria, Al Jawsh in  
Libya, Zag and Zagora in Morocco and Remada in Tunisia, with  
a development scale of 53.00 GW by 2035. In West Africa, the  
focus will be on the development of five photovoltaic bases in  
Agadez of Niger, Kayes of Mali, Rosso of Mauritania,  
Ouagadougou of Burkina Faso and Kano of Nigeria, with a  
development scale of 14.80 GW by 2035. In EastAfrica, the focus  
will be on the development of four photovoltaic bases, namely,  
Dongola and Ad-Damir in Sudan, Dire Dawa in Ethiopia and  
South Horr in Kenya, with a development scale of 8.00 GW by  
2035. In Southern Africa, the focus will be on the development of  
four photovoltaic bases in Karasburg of Namibia, Tshabong of  
Botswana, Pretoria of South Africa and Lubango of Angola, with  
a development scale of 18.00 GW by 2035.  
Based on the digital site selection model and software, the report  
presents the development conditions, installation scale,  
engineering assumption, power generation characteristics and  
investment level of the above 21 photovoltaic bases, and puts  
forward a preliminary development scheme. The total installed  
capacity of the 21 photovoltaic bases is about 93.80 GW and the  
annual power generation will be 181.35 TWh/a. According to the  
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long-term scheme, the total development scale is expected to  
exceed 220 GW in the future. According to the forecast results of  
Africa’s photovoltaic cost in 2035 and investment estimation  
based on the basic situation of the project, the total investment of  
Africa’s photovoltaic bases is about 47.974 billion USD, and the  
electricity cost range is 1.85-2.32 cents/kWh. See Figure 3-5 for  
the overall layout of large-scale photovoltaic power bases in  
Africa.  
Figure 3-5 Layout of Large-scale Photovoltaic Power Bases in Africa  
4. Outbound Transmission of Large Renewable  
Energy Bases  
Based on the development trend of energy and power supply and  
demand in Africa, and combined with the distribution and  
development pattern of renewable energy and mineral resources,  
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the report presents the power transmission direction and  
transmission mode of large-scale renewable energy bases in  
Africa by coordinating the regional, cross-regional and inter-  
continental power consumption markets, and fully considering  
such factors as power delivery capacity, power transmission  
distance and power grid structure development. The research  
results have important and positive significance for promoting the  
development of renewable energy power bases, speeding up the  
construction of domestic power grids and the interconnection of  
transnational power grids, and realizing the wide- area optimized  
allocation and efficient utilization of renewable energy resources  
in Africa.  
4.1 North Africa  
北部非洲区位优势明显、产业基础较好，通过实施经济  
多样化发展计划，推行促进就业、提高生产力等相关政策，  
发展潜力巨大。未来，北部非洲将重点开发区内大型太阳能  
和风电基地，配合适当规模储能和燃气发电，推动区内各国  
电力供应清洁低碳化发展。同时，充分利用亚非欧三大洲交  
汇的地理区位优势，打造区域清洁能源枢纽平台，受入西亚  
和非洲其他区域清洁能源电力，并跨地中海外送欧洲。北部  
非洲清洁能源基地远期输电方案如图 4-1 所示。  
North Africa has obvious geographical advantages and a good  
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industrial base. It has great development potential through the  
implementation of economic diversification development plans  
and relevant policies promoting employment and improving  
productivity. In the future, North Africa will focus on developing  
large-scale solar energy and wind power bases in the region, and  
equip appropriate-scale energy storage and gas power generation  
to promote renewable and low-carbon development of power  
supply in all countries in the region. At the same time, it should  
be made full use of its geographical advantages at the confluence  
of Asia, Africa and Europe to build a regional renewable energy  
hub platform to receive renewable energy and power from other  
regions in West Asia and Africa and to transmit them, across the  
Mediterranean, to Europe. The schematic diagram of long-run  
transmission scheme for renewable energy bases in North Africa  
is shown in Figure 4-1.  
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Figure 4-1 Schematic Diagram of Long-run Transmission Scheme for Renewable  
Energy Bases in North Africa  
4.2 West Africa  
West Africa is rich in oil, gas and mineral resources and has  
outstanding demographic dividend and obvious port advantages,  
showing huge development potential. In the future, West Africa  
can use its advantages in resources and location to implement the  
co-  
development  
of  
electricity-mining-metallurgy-  
manufacturing-trade. Based on mineral exploitation and smelting,  
three major economic zones along the Gulf of Guinea, the western  
coast and the Niger River will be built. The priority will be put on  
developing aluminum, steel and manganese ore processing  
industries to drive the development of downstream industries  
such as construction, household appliances and transportation,  
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accelerating the regional industrialization of West Africa and  
driving the rapid growth of energy and power demand. West  
Africa will become an important power load center for Africa,  
and the schematic diagram of long-run transmission scheme for  
renewable energy bases in West Africa is shown in Figure 4-2.  
Figure 4-2 Schematic Diagram of Long-run Transmission Scheme for Renewable  
Energy Bases in West Africa  
4.3 Central Africa  
Central Africa is rich in mineral, forest and hydroenergy  
resources and has a rapidly growing population. In the future,  
large-scale hydropower development in the Congo River, Sanaga  
River, Ogooué and other river basins can be implemented to build  
Africa’s “energy heart” and metallurgical base, so as to realize the  
coordinated development of resource radiation economic circle  
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and harbor economic belt of the Congo River. On the premise of  
meeting the needs of its own industrialization and access to  
electricity by the population with no access to electricity,  
renewable power will be transmitted to other regions to realize  
the transformation of resource advantages into economic  
advantages. The schematic diagram of long-run inter-regional  
power transmission scheme for Congo River Hydropower Base is  
shown in Figure 4-3. The schematic diagram of long-run  
transmission scheme for renewable energy bases in CentralAfrica  
is shown in Figure 4-4.  
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Figure 4-3 Schematic Diagram of Long-run Inter-regional Power Transmission  
Scheme for Congo River Hydropower Base  
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Figure 4-4 Schematic Diagram of Long-run Transmission Scheme for Renewable  
Energy Bases in Central Africa  
4.4 East Africa  
East Africa has obvious geographical advantages, outstanding  
demographic dividend and a good base for industrial park  
development. It is a region with fast overall development in  
Africa. It has rich renewable energy resources such as  
hydroenergy, solar energy, wind energy and geothermal energy.  
In the future, East Africa can give full play to the advantages of  
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labor force and industrial parks and consolidate the  
manufacturing base in an all-round way. It can promote the co-  
development of manufacturing, logistics, modern service  
industries and other industries and create a model for  
international capacity cooperation by building the Red Sea  
Economic Belt, Indian Ocean Economic Belt and East African  
Rift Valley Economic Corridor. The schematic diagram of long-  
run transmission scheme for renewable energy bases in East  
Africa is shown in Figure 4-5.  
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Figure 4-5 Schematic Diagram of Long-run Transmission Scheme for Renewable  
Energy Bases in East Africa  
4.5 Southern Africa  
In the future, Southern Africa will rely on its geographical  
advantage of connecting the two oceans to coordinate mineral  
development and industrial park construction. It will focus on the  
development of industries such as steel, electrolytic aluminum,  
refined copper, automobiles and chemical engineering to create  
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three major economic zones along the Zambezi River, Atlantic  
Coast and Indian Ocean Coast, forming a new pattern of land-sea  
co-development. The schematic Diagram of Long-run  
Transmission Scheme for Renewable Energy Bases in Southern  
Africa is shown in Figure 4-6.  
Figure 4-6 Schematic Diagram of Long-run Transmission Scheme for Renewable  
Energy Bases in Southern Africa  
5. Policy Environment and Investment and Financing  
Suggestions  
Africa is one of the regions with the most potential for renewable  
energy development in the world. In recent years, many African  
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countries have formulated renewable energy development  
strategies, actively promoted the reform of the electricity market,  
and continuously improved the business environment and relaxed  
renewable energy investment access. Through a comprehensive  
analysis of renewable energy investment and financing policies  
in Africa, suggestions such as innovating “electricity-mining-  
metallurgy-manufacturing-trade” joint investment and financing  
mode, forming a benefit distribution mechanism of risk sharing  
and benefit sharing, utilizing funds from international  
development financial institutions such as the World Bank,  
International Monetary Fund, China Development Bank, China-  
Africa Development Fund, China-Africa Production Capacity  
Cooperation Fund and other international development financial  
institutions to promote the implementation of large-scale projects,  
etc., were put forward, so as to improve the local investment  
environment, promote the development of renewable energy in  
Africa, and realize the coordinated development of people’s  
livelihood, economic development, and environmental protection.  
5.1 Overview of Countries in Africa  
The overall business environment in African countries is  
lower than the global average. However, the business  
environment in several African countries has been improved  
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significantly in recent years. According to the Doing Business  
2020 issued by the World Bank, only 9 of the 55 African countries  
and regions ranked in the top 100 in the world, and most of them  
ranked lower. Among the countries rich in renewable energy  
resources, Morocco, Kenya, South Africa, Zambia, Namibia and  
Egypt ranked among 60th-120th in the global business  
environment, while Tanzania, Nigeria, Guinea, Ethiopia and D.R.  
Congo ranked among 159th-180th. Morocco, Kenya, Egypt and  
Nigeria have significantly improved their business environment  
compared with 2019, rising from 60th, 61st, 120th and 146th to  
53rd, 56th, 114th and 131st respectively.  
African countries are more and more focusing on  
development of renewable energy resources, creating better  
investment opportunities for renewable energy projects. To  
solve the shortage of energy supply, response to climate change  
and other problems, several African countries have issued  
strategic plans for development of renewable energy resources.  
Among African countries rich in renewable energy resources,  
Egypt, Morocco, Nigeria, Tanzania, Namibia, Kenya, Ethiopia  
and South Africa have all formulated medium and long- term  
plans for development of renewable energy resources to guide  
domestic and foreign investors in development of renewable  
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energy resources and accelerate the development process of their  
own renewable energy industries. D.R. Congo, Guinea and  
Zambia have no clear plans for development of renewable energy  
resources yet.  
Some African countries are active in promoting the power  
system reform, conduct deregulation and raise the  
diversification level of the power market. Egypt, Morocco,  
Nigeria, Namibia and Zambia have relatively high levels of  
electricity marketization. Market competition is introduced at the  
sides of power generation, distribution and retail, and the  
electricity market is characterized by obvious diversification.  
Guinea, Kenya, Tanzania and South Africa are in the primary  
stage of electricity market reform. Only the generation side is  
open to private investors, allowing independent power producers  
to participate in the competition in the power generation market  
and implementing a market model of the integration of  
transmission, distribution and retail. Sudan and Ethiopia still  
follow the traditional vertically integrated mode, and relevant  
businesses are mainly monopolized by state-owned power  
companies.  
To attract external investment, most African countries have  
relatively loose access policies for foreign investment. Egypt,  
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Morocco, Nigeria, D.R. Congo, Zambia, Ethiopia and South  
Africa have relatively loose access conditions for foreign  
investment. Foreign investors can enjoy the same investment  
policies as their own enterprises and can engage in investment  
activities such as company establishment, enterprise merger and  
acquisition, competitive bidding in Africa. Kenya, Guinea and  
Namibia have relatively strict access policies for foreign  
investment. For example, Namibia has stipulated that the  
shareholding ratio of foreign investors should not exceed 70% in  
renewable energy projects that implement a fixed feed-in tariff.  
BOT (Build-Operate-Transfer) mode is widely used in  
renewable energy investment projects in African countries,  
and the marketization degree of open bidding is improving.  
The BOT investment mode is encouraged for renewable energy  
projects in African countries. Development contractors of the  
projects are determined mainly through competitive bidding. The  
successful bidder signs a 20-25 year power purchase agreement  
with a local power company. To relieve the financial subsidy  
pressure of governments and reduce the energy consumption cost,  
most African countries are gradually reducing or eliminating  
electricity subsidies, and the determination method of feed-in  
tariffs is changed from government pricing to competitive  
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bidding. Different from most countries, Tanzania does not allow  
foreign investors to invest in power grid projects in BOT mode  
because of the involvement of national sovereignty. Zambia has  
not formed a well-developed BOT investment mechanism.  
Some African countries have given the tax preference policies  
and other supportive fiscal policies to renewable energy  
investment, but it is difficult to obtain the electricity subsidy  
and preferential loans. With the exception of Namibia, most  
African countries have formulated tax preference policies for  
renewable energy projects. Tax supporting policies focus on tax  
relief such as business tax, income tax and value-added tax, as  
well as a decrease in import tax of generation equipment. In terms  
of electricity subsidy, except for Kenya, which can definitely  
provide the electricity subsidy for renewable energy projects for  
20 years, most African countries have reduced or abolished  
electricity subsidy in recent years due to financial difficulties, or  
introduced competition mechanism to replace subsidy system.  
For example, Guinea and Nigeria have explicitly stopped the  
electricity subsidy, and Egypt and South Africa have replaced the  
subsidy mechanism with the competition mechanism. In terms of  
loan policies, it is difficult for foreign-funded enterprises to  
obtain local loan support in Africa. Except for Egypt’s clear  
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provision of preferential financial loans (the interest rate is 4%-  
8%) for renewable energy projects, Nigeria, Namibia and other  
countries have set high-interest rates and strict review system for  
foreign-funded enterprise loans.  
Most African countries have loose land-use policies and tight  
foreign labor policies, and implement the strict environmental  
impact assessment system. In order to attract foreign investment,  
most African countries have relaxed their land management  
measures, allowing foreign-funded enterprises to acquire land  
ownership and use rights by purchasing and leasing within the  
local territories, with the land lease term of 25-99 years. D.R.  
Congo, Zambia, Ethiopia and South Africa have explicitly  
proposed to prohibit foreigners from buying their own land and  
to only allow obtaining land use rights by leasing. Namibia  
theoretically allows foreigners to lease its land, but the traditional  
tribal leaders have the right to distribute land, making it difficult  
to lease the public land. Africa’s labor-management departments  
have generally tightened their policies on the management of  
foreign workers. All of them have implemented strict work permit  
review system to restrict foreign workers from entering their own  
markets, or set a maximum proportion limit on foreign workers.  
In terms of environmental protection policies, except Namibia’s  
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policy is relatively loose, other African countries have  
implemented a strict environmental impact assessment review  
system for renewable energy investment, and the investment  
enterprises will be punished accordingly in case of failing to carry  
out an environmental assessment as required.  
5.2 Investment and Financing Proposal  
5.2.1 Innovating  
the  
“Electricity-Mining-Metallurgy-  
Manufacturing-Trade” Joint Investment and Financing  
Most African countries are rich in mineral resources, but their  
industrial structures are single, their economies are highly  
dependent on exports of mineral resources, and their profit  
margins are low. The development of the downstream industrial  
manufacturing industry faces a huge power gap. The development  
of renewable energy bases and power grid projects in Africa can  
effectively promote the industrial development of Africa and  
upgrade the industry chain, but it faces problems such as difficult  
power consumption, difficult financing and high risks. The power  
infrastructure and industry projects such as mining, smelting and  
manufacturing are mutually restricted, which hinders the  
industrial development of Africa.  
The “electricity-mining-metallurgy-manufacturing-trade” joint  
investment mode is based on the close upstream and downstream  
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connection and high dependency between power infrastructure  
projects and industrial projects such as mining, smelting and  
manufacturing. The upstream and downstream project  
participants jointly set up a joint investment company to promote  
the overall project investment and financing of the industry chain  
as a whole, improve the return on investment of weak links and  
reduce the consumption risk and transaction credit risk faced by  
individual projects. The “electricity-mining-metallurgy-  
manufacturing-trade” joint investment mode combines the  
individual sub-projects in the power and mineral resources  
processing industry chain into a comprehensive industry chain  
project. The investors of the related upstream and downstream  
projects jointly set up a joint investment project company by  
means of contribution, joint guarantee, etc., which is responsible  
for the uniform coordination, planning, construction, operation,  
management and future income distribution of the overall project.  
The core is to build a community of interests among main  
investors, financial institutions and other upstream and  
downstream enterprises, coordinate the interests of all parties,  
improve mutual trust among all parties and reduce information  
asymmetry, while improving the overall credit level and financing  
capacity and spreading the investment risks in a wider range.  
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The joint investment project company is the investor of the whole  
industry chain. Its investment direction focuses on renewable  
energy development projects and resource processing and  
smelting projects. It also participates in investing in mineral  
resources development projects, cross-border power grid projects,  
cross-border trade and other closely related projects. There are  
two main sources of profit. One is the investment income from  
the resource processing and smelting projects, which constitutes  
the main source of profit. The second is the investment income  
from participating in renewable energy development projects and  
power grid projects. In addition, the joint investment company  
focuses on the industry chain development and labor demand in  
the host country to develop cross-border trade, build urban  
complexes, drive the appreciation of land resources and obtain  
additional sources of profit.  
5.2.2 Making Full Use of Funds from International  
Development Financial Institutions  
It is proposed that the government of the country where the  
project is located, large-scale international energy and power grid  
enterprises, and international development financial institutions  
jointly initiate the establishment of a clean development fund,  
making full use of the funds of international development  
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financial institutions such as the World Bank, the International  
Monetary Fund, the Non-Development Bank, China-Africa  
Development Fund, China-Africa Industrial Cooperation Fund.  
The clean development fund is positioned as a market-oriented  
fund dedicated to investing in the early stage of large-scale  
renewable energy base projects in Africa. Development-oriented  
financial institutions and commercial financial institutions jointly  
contribute as limited partners, to give play to the leverage of  
development funds and attract other international investors and  
investment institutions to participate. The clean development  
fund can give full play to the flexibility, efficiency and integration  
capability of resources of the market-oriented fund operation, and  
reduce the development costs of the project; and it builds a  
platform for enterprises, financial institutions and various  
investment and financing entities to connect the projects with  
funds, and provides financing support for projects.  
Besides, as the investment income of large-scale renewable  
energy base projects has typical J-curve characteristics, i.e.  
investment in the early stage and construction period of the  
project is almost only capital and does not generate a return, and  
the steady return on investment is gradually generated after the  
project is operated. Selective investment in the initial stages of  
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key renewable energy projects is conducive to playing a leading  
and demonstration role, driving African countries to carry out a  
strategic layout of comprehensive clean development, and rapidly  
promoting the feasibility study, start-up and implementation of  
large-scale renewable energy base projects.  
5.2.3 Innovating the Guarantee Mode  
For African countries having low government credit level and  
having difficulty in directly providing a credible guarantee for the  
project, it is proposed to sponsor the project jointly by the  
government of the host country and international development  
financial institutions such as the World Bank, International  
Monetary Fund, China Development Bank, China-Africa  
Development Fund, China-Africa Industrial Capacity  
Cooperation Fund. The large-scale international energy  
enterprises, large-scale power users and market-oriented financial  
institutions jointly participate in and contribute to the  
establishment of guarantee reserves, and provide the guarantee of  
rate of return and electricity payment for the project in place of  
local government credit guarantee, which is conducive to  
spreading the investment risks among multiple project  
stakeholders and improving the project financing capacity. For  
African countries having relatively high credit level and certain  
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government guarantee capacity, such as Morocco and South  
Africa, it is proposed to set a government guarantee budget, and  
determine the guarantee as important budget content in the annual  
government budget to prevent the government from over-  
indebtedness.  
The “floating return on investment” guarantee mode is adopted in  
an innovative way to replace the “fixed return on investment”  
guarantee mode which is commonly used in the international  
investment, i.e. the guarantor and the investor negotiate to  
determine the fluctuation range of the return on investment. When  
the return on investment is within the fluctuation range, the  
investment income shall be owned by the investor; when it  
exceeds the upper limit, the excess shall be owned by the  
guarantor; when it is lower than the lower limit, the guarantor will  
subsidize it. This method can effectively encourage the guarantor  
to participate actively and spread investment risks.  
5.2.4 Promoting the Power Consumption  
It is proposed that the renewable energy base project parties sign  
“take-or-pay” purchase and sale agreements with large-scale  
power enterprises in Africa, and stipulate that the generators have  
the obligation to “ship-or-pay” to improve the stability of the  
project’s future income. This method is suitable for African  
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countries with mature industrial clusters and strong demand for  
electricity. It is conducive to giving consideration to the needs of  
both the electricity retailer and the electricity buyer, improving  
the project financing capacity, and realizing the risk sharing  
between the project developer and users of large-scale enterprises.  
It is proposed that the countries where the renewable energy base  
projects are located and their neighboring countries speed up the  
interconnection of cross-border power grids through  
intergovernmental consultation and negotiation, push the  
formation of cross-border power markets and promote cross-  
border power trade. This method is suitable for countries with  
abundant renewable energy but low local power consumption. It  
can improve the efficiency of power resource allocation and the  
profitability of large-scale renewable energy base projects by  
expanding the scope of power consumption. For power importing  
countries, the cross-border power trade can effectively reduce the  
power consumption costs and ensure the energy supply.  
5.2.5 Strengthening the Investment and Financing Risk  
Prevention  
Some African regions have such problems as wars, terrorist  
attacks and frequent regime change. The political risks are  
prominent. It is proposed that the investors, local governments,  
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enterprises and international financial institutions should build a  
community of interests and strengthen the political risk  
assessment. First, cooperate with the local governments and  
conduct a joint venture with local enterprises. Local governments  
and enterprises should also participate in the project, hold certain  
equity and future income rights, build the community of interests,  
give full play to the superior resources such as information on  
local partners, and public relations, and reduce the political risks  
by introducing diversified investors in the international  
community and the investment countries. Second, attach  
importance to social forces and weaken political complexion. Pay  
attention to communication and coordination with civil  
organizations, non-governmental organizations and the media,  
communicate with multiple stakeholders, show sufficient respect  
for local public opinion, and actively fulfill social responsibilities.  
Third, based on the risk rating reports regularly issued by  
authorities (such as China Export & Credit Insurance  
Corporation), timely grasp the political risks in the target market,  
design a reasonable project operation mode, and adopt the  
political risk insurance and other measures to manage the specific  
political risks.  
Most African countries obtain the foreign exchange income by  
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depending mainly on the export of natural resources and  
agricultural products; therefore, the exchange rate is greatly  
affected by the fluctuation in prices of bulk commodities.  
Investment with local currency has a great impact on the  
realization of stable investment income. It is proposed that  
investors should pay attention to the prevention of exchange rate  
risks. First, make the financing and investment currencies  
consistent as far as possible. For example, for the financing funds  
obtained in USD, Euros, Japanese yen and RMB, the required  
equipment and raw materials shall be purchased in the financed  
currencies as far as possible during the investment, and the  
electricity charges shall be collected in the same currencies  
through negotiation with large-scale power industry enterprises.  
Second, use the foreign exchange management tools reasonably.  
Many derivative financial products, such as forward settlement  
and surrender exchange, foreign exchange futures, foreign  
exchange option, monetary exchange and foreign exchange swap,  
can be used for hedging, so as to achieve the purpose of offsetting  
the profits or losses of derivative financial instruments with the  
profits or losses of projects, thus handling foreign exchange risks.  
Africa is one of the regions with the greatest development  
potential in the world. It is rich in mineral resources and  
56  
Research on African Renewable Energy Development and Investment  
renewable energy resources, with rapid growth in the labor force  
and broad prospects for economic development. In recent years,  
Africa has entered a new stage characterized by industrialization  
and regional integration. It faces both arduous sustainable  
development tasks and rare development opportunities. Therefore,  
it is an urgent need to develop renewable energy resources,  
improve the investment policy environment and innovate the  
investment and financing modes in Africa. This chapter sorts out  
the overall policy environment of the African region and the main  
policies of key countries, and puts forward the investment and  
financing proposal for development of renewable energy in  
Africa, including innovating the “Electricity-Mining-Metallurgy-  
Manufacturing-Trade” joint investment and financing, forming a  
benefit distribution mechanism of risk sharing and benefit sharing,  
and using funds from international development financial  
institutions, so as to achieve the goals of widening the financing  
channels, improving project credit level and reducing investment  
risks, and promote the implementation of large-scale renewable  
energy base projects in Africa as soon as possible, thereby  
achieving the clean development.  
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