Sub-Saharan Africa Market Outlook 2020
Clean energy is spreading across sub-Saharan Africa, buoyed by policy
incentives (Figure 1), donor-backed auction schemes and derisking
mechanisms. Overcoming pervasive project risk and a lack of local finance, a
number of markets are seeing their first utility-scale solar projects. Yet
governments are struggling to afford existing power purchase agreements and
will have to make hard choices if they are to find room for renewables.
• Investment in renewables is growing fast – 18 countries received more than $10 million in
clean energy funding in 2018, after 23 did so in 2017. That compares to a maximum of 12
countries getting that much annually in the prior 10 years.
• A large pipeline of PV projects is to be built in markets that have little grid-scale solar. Some
1.2GW is expected to come online in 2021 outside of South Africa, more than twice the
amount commissioned in 2018.
• Auction programs with multilateral-backing have proven successful. Scaling Solar awarded
nearly 0.4GW of PV capacity over 2015-18, or 39% of the total installed outside of South
Africa over the same period. But the low tariffs yielded by generous derisking frameworks
could lead governments to develop unrealistic pricing expectations.
• Capacity surpluses in several markets belie low plant availability. Even when there is a need
for new capacity, offtakers’ ability to procure new power can be hamstrung by existing
expensive, long-term power purchase agreements. Notably, South Africa and Ghana are both
attempting to renegotiate contracts signed with independent power producers.
• Solar home systems, commercial and industrial solar and renewable-hybrid microgrids are
growing fast, but require specific economic and policy conditions to be commercially viable.