AFRICAN DEVELOPMENT BANK
SA’s renewable energy auction system ‘the best in Africa’
African Development Bank president Akinwumi Adesina says auction system provides a platform to support similar projects
SA’s renewable energy auction system is the best in Africa and has provided a platform that can be used to support similar projects in other countries on the continent, says African Development Bank (AFDB) president Akinwumi Adesina.
The AFDB led a group of eight other banks to provide a syndicated A/B loan for $965m to Eskom that hinged on the power utility’s commitment to renewable energy.
Adesina, speaking on the sidelines of the AFDB’s annual meeting, which started in Ahmedabad in India on Monday, said this was the largest syndicated A/B loan done in Africa’s history yet.
"That is well on track and that will help to deal with some of the challenges [SA] has with electricity," he said.
"I’m quite proud of what South Africa is doing in the renewable energy space. Today, the independent renewable energy power project system that was put in place by South Africa ... is the best in Africa and I think it has provided us with a platform which we can use to be able to ... support similar things in other countries."
Adesina, however, did not say whether Eskom had signed the loan agreement yet.
Eskom said in February that negotiations were on track and would be concluded shortly.
This comes as newly appointed Energy Minister Mmamoloko Kubayi announced last week that the Independent Power Producers office, responsible for the renewable IPP programme, would become a subsidiary of the Central Energy Fund, moving it out of Eskom’s hands.
Earlier in May, the energy minister said Eskom had not yet signed 37 outstanding agreements with IPPs.
The state-owned power utility had resisted signing the agreements on the basis that the tariff agreed to was too high and would cripple it in the years to come. It also argued that it had a surplus of energy.
However, Eskom has also been driving SA’s proposed nuclear-build programme.
Adesina said that the AFDB was not supporting nuclear, but he would not rule out the use of nuclear for African countries that had to have capacity for such power.
He believed there were still many other untapped sources of energy on the continent.
"Africa today has a limitless amount of sunlight. About 11 terawatts of electricity can be generated from the sunlight in Africa alone, so we haven’t even scratched the surface on that," he explained.
"Africa has 350 gigawatts of capacity for hydropower, it has 110 gigawatts capacity for wind energy and almost 15 gigawatts capacity for geothermal [energy]," Adesina said.
Those sources of energy needed to be used before looking at nuclear.
The AFDB’s goal was to be the leader in the renewable energy revolution on the continent, a position Adesina says it already occupies.