Africa Market Brief

Africa’s installed hydropower capacity is about 25.3 GW, but as its countries develop their hydro resources, by 2030 Africa could see 330 GW in renewable capacity, with hydro accounting for 100 GW.

In Africa, the potential to generate energy from hydropower is immense. According to the International Hydropower Associations’s 2017 Hydropower Status Report, Africa’s current total installed hydro capacity, including pumped storage, is about 33.624 GW.

The report also says several African countries either have or are developing long-term plans to increase hydropower capacity with the following targets for total installed capacity: Angola, 9,000 MW by 2025; Ethiopia, 22,000 MW by 2030; Morocco, 2,000 MW increase by 2020; Mozambique, 5,400 MW by 2025; and Nigeria, 2,000 MW in small hydro by 2025.

The International Renewable Energy Agency, in its Africa 2030: Roadmap for a Future Renewable Energy Future, estimates that by 2030, developed renewables could account for 330 GW of total capacity – more than an eightfold increase over current capacity – with hydro contributing 100 GW.

Additionally, several organizations are seeking the best ways to develop hydro resources and distribute energy more evenly throughout the continent.

The Africa Renewable Energy Initiative (AREI) is Africa-owned and Africa-led.The organization says that under the mandate of the African Union and endorsed by “African Heads of State and Government on Climate Change,” AREI-sponsored studies produced data on how to help achieve its goal of at least 10 GW of new and additional renewable energy generation capacity by 2020 and mobilize the African potential to generate at least 300 GW by 2030.

The World Energy Council’s report, World Energy Issues Monitor 2017 says renewable energies are a priority on the African agenda for power generation in grid-connected areas and also in remote communities and rural areas. The council said Africa is seeing substantial developments in Morocco, South Africa, Ethiopia, Algeria, Egypt, Tanzania, Kenya and the Democratic Republic of the Congo, which are “forming the breakthrough of a renewable energy transition in Africa.”

Key trends

According to AREI, new hydro in Africa has the potential for 350 GW of capacity and recent trends indicate that in most cases, hydro and other modern renewables can be the least costly solutions in sub-Saharan Africa (see Figure 1), compared to oil-based fuels that are substantially more expensive.

The overwhelming trend in Africa is new development, which according to IHA is building on the addition of 3,413 MW of hydropower capacity in 2016. IHA also points to a positive trend in sub-Saharan Africa, where electrification efforts have been outpacing population growth since 2014.

IHA says as part of the Eastern African Power Pool (EAPP), Rwanda is scheduled to begin importing 400 MW of power from Ethiopia and 30 MW from Kenya. EAPP was established in 2005 to foster power system interconnectivity and includes Burundi, DRC, Egypt, Ethiopia, Kenya, Libya, Rwanda, Sudan, Tanzania and Uganda.

Regional interconnections can enable hydropower development in East Africa, and African governments have collectively recognized the need for effective and integrated regional planning and interconnections.

The most important projects driving grid expansion include Ethiopia’s 1,870-MW Gilgel Gibe III and 6,000-MW Grand Ethiopian Renaissance Dam (GERD), as well as the Inga projects in DRC, where there is the possibility to install 40 GW in capacity.

Finance/business situation

According to the 2018 African Economic Outlook report (see Figure 2), “Funding infrastructure in Africa and around the world should not be an issue of financial resources.” The report estimates globally, resources from the public sector in advanced economies and central banks, investors have about $100 trillion in assets under management.

The African Development Bank (AfDB) says as of last year, African regional governments have invested more than US$26.25 billion in infrastructure. China is also a significant player in Africa’s infrastructure investment.

Currently, AfDB sees Asia as leading external infrastructure investment in Africa followed by multilateral development banks: 2018 report figures indicate China has invested US$5.413 billion, followed by AfDB with $3.96 billion and the World Bank with $3.84 billion.

In March, the Export-Import Bank of China approved a US$1.3 billion financing package for Guinea’s 550-MW Souapiti hydropower plant.

Guinea has an installed capacity of about 368 MW and Souapiti, which will be located on the Konkoure River near Conkary, will nearly double the country’s power supply once complete.

Construction is expected to extend through 2020. Guinea is estimated as having one of the larger hydroelectric power potentials in West Africa, with a capacity of about 6,000 MW yet to be developed.

Overall investment in hydropower is also coming from new international players, including Norway’s Statkraft and SN Power in Zambia and Moroccan company Platinum Power, whose leading shareholder is the New York-based investment fund Brookstone Partners.

In March, the World Bank Group approved a US$375 million International Development Association (IDA) credit to support Ethiopia’s goal of achieving universal electricity access by 2025. The access project includes developing the $6.4 billion GERD project, located on the Nile River. The World Bank says Ethiopia has the second-highest available generation capacity in sub-Saharan Africa, with nearly 100% coming from renewable energy generation – mostly hydropower.

The Ethiopia Electrification Program, also approved in March, will directly support the country’s National Electrification Program (NEP), which was launched with World Bank support in November 2017. The IDA credit will help the NEP fund an estimated $1.5 billion investment over the first five years.

In another example of financing in Africa, during the first quarter of fiscal year 2018-2019, two members of the World Bank Group, the International Finance Corp. (IFC) and Multilateral Investment Guarantee Agency (MIGA), approved a plan to refinance more than $400 million of loans to Bujagali Energy Ltd.

The $900 million Bujagali hydroelectric project is the largest private sector investment ever undertaken in the region. The run-of-river project is located on Victoria Nile River near Jinja. Commissioned in 2012, the facility accounts for about 45% of Uganda’s annual electricity generation, according to IFC.

The members will also provide up to $423 million in guarantees in support of the 250-MW Bujagali hydropower project in Uganda. Notable within the deal is MIGA’s commitment to provide political risk insurance of up to 20 years for equity investors.

Regulatory update

Africa does not have a continent-wide singular regulatory agency governing hydro-related activity of the more than 53 sovereign nations. In this absence, financial institutions act as regulatory agencies along the lines of resolving conflict, according to the World Energy Council 2016 report, World Energy Resources Hydropower.

The 80-MW Rusumo Falls hydropower project in the Nile Basin region (Rwanda, Burundi and Tanzania) is an example. In this case, according to the report, the entirety of the project is being developed under the aegis of the AfDB. The region has a history of conflict in addition to low electrification rates and high levels of poverty. The successful implementation of the Rusumo Falls project is expected to contribute greatly towards economic development and political stability.

Germane to all nations, once a hydro project reaches its operational phase, hydropower’s low maintenance costs and no-cost fuel means most capital expenses have already been incurred and revenues are typically stable.

According to the report, regional African cooperation bodies – including the EAPP, West African Power Pool (WAPP) and Southern African Power Pool (SAPP) – have the potential to drive further development of hydropower where domestic resources can be developed for export to neighboring countries with strong demand. WAPP and SAPP are organizations that work in cooperation with the national electricity companies in their regions for establishing a reliable power grid for the region and a common market for electricity.

New development

In addition to GERD in Ethiopia, additional capacity is being developed in several other African countries.

In Angola, the first of six turbine-generator units at the US$4.5 billion 2,070-MW Lauca plant owned by Angola’s Empresa Nacional de Electrcidade began supplying commercial energy to Angola’s public electricity grid on July 2017. The Lauca facility, on Cuanza River, is the country’s largest hydropower project and should help Angola reach its short- and long-term energy goals to increase the country’s social and economic status.

According to information from the U.S. Department of Commerce, Angola’s Ministry of Energy and Water projects that by the end of 2018, the country’s power generation mix will consist of 64% hydropower, or about 4 GW.

Work on Angola’s 2,170-MW Caculo Cabaca hydroelectric plant began in August 2017 and is expected to take 80 months. The US$4.5 billion facility is being built by the China Gezhouba Group Co. Ltd. and continues investments by Chinese financiers and businesses into the African country’s economy.

In addition to the Lauca and Caculo Cabaca facilities, Cuanza River is already the location of other major hydroelectric projects. The 260-MW Cambambe, 700-MW Cambambe 2 and 520-MW Capanda, with Cambambe 2 and Lauca part of a wider plan to produce a total of 9 GW of energy from hydropower and other energy sources by 2025.

In Morocco, the state remains the main player in large-scale hydropower projects. According to Platinum Power, it says it is the first private power operator in Morocco to have obtained both hydraulic concessions and the provisionary authorizations for three of its hydroelectric projects in the basin area of Beni-Mellal. In 2016, the company received authorization to raise about $319 million to develop the 18-MW Boutferda, 8-MW Tillouguit Amont and 30-MW Tillouguit Aval facilities. Completion of the plants, by 2030, would bring Morocco’s collective annual production to 250 GWh.

Eneo Cameroon SA, a public-private partnership that generates and distributes electricity in Cameroon, is developing the US$846 million, 350-MW Makay hydropower facility, also through Platinum Power. The project, which will be commissioned in the second half of 2023, is located on Nyong River in Cameroon’s Central Region. The country has about 13,700 MW of hydroelectric potential.

Tanzania is developing the 2,100-MW Rufiji project on Rufiji River at Stiegler’s Gorge, in Kibaha that will more than triple its current 562 MW of installed hydropower capacity. Invitations to bid on various elements of the project were issued in September 2017.

Uganda Electricity Generation Company Ltd. has chosen Artelia EAU & Environment of France as the new owner’s engineer for its 183.2-MW Isimba hydro project, in association with Ugandan company, KKATT Consult Ltd. The new contract is reportedly to have a value of US$4 million and Isimba is located 4 km downstream from Simba Falls on the Nile River. When complete, the project is expected to cost US$567.7 million, of which 15% will come from the government of Uganda and 85% from an Export-Import Bank of China loan.

Small hydro

According to AREI, as Africa increases renewable energy technologies, focus should be placed on developing pico-, micro-, small- and medium-scale hydro to meet the needs of poor people.

The 1.6-MW Kupinga small hydropower station is now generating electricity on the Rusitu River in Manicaland province of eastern Zimbabwe. The Zimbabwe Energy Regulatory Authority issued a 25-year operating license for the hydro project in 2014. Old Mutual, a Zimbabwe-based financial group, funded about US$5.7 million for the project, developed by joint venture company Kupinga Renewable Energy Private Ltd.

Asia and Europe-based companies are also developing small hydro in Africa.

A deal brokered by Russian company Rosatom, through its subsidiary Ganz Engineering & Energetics Machinery and its partner Blue World Power Energy & Resources, will result in a project up to 1 MW in capacity in Barberton, Mpumalanga, South Africa.

A US$200 million investment from the European Union’s Energy for Growth and Sustainable Development program will help Tanzania increase its access to electricity through the construction of small hydropower plants and other renewable projects. The EU report titled, Empowering Tanzania, says only about 500 MW of Tanzania’s 4,700 MW of hydroelectric potential has been exploited.

In Morocco, the National Office for Electricity and Water (ONEE) has identified 125 sites appropriate to develop small or micro-sized power stations (i.e., capacity of 100 kW to 1,500 kW), for a total capacity of about 300 MW. The Morocco Federal Ministry of Economic Affairs and Energy and the Moroccan-German Energy Partnership estimate hydro will increase to 3 GW by 2030.

Pumped storage

According to the International Renewable Energy Agency’s Electricity and Renewables: Costs and Markets to 2030 report, pumped hydro storage is the largest single source of electrical storage capacity in the world, with 169 GW of power operational in mid-2017 (up from 162 GW at the end of 2016) and accounting for 96% of global installed capacity.

Africa currently has about 3.376 GW in pumped storage hydropower capacity mainly in South Africa that include the 1,332-MW Ingula, 100-MW Drakensberg, 180-MW Steenbras, 400-MW Palmeit; and the 465-MW STEP Afourer I and II in Morocco.

Three new plants being developed, if completed by 2030, would increase Africa’s pumped storage capacity by 4,550 MW.

The 2,400-MW Ataqa (also called Attaqa) pumped storage project is being built on the upper west coast of Africa in Egypt, located on Attaqa Mountain in Suez.The development has been licensed and the authority has received security and environmental approvals. The cabinet allocated the required land for building the project in March 2017.

Ataqa is expected to cost US$2.6 billion, with an anticipated 2024 completion date.

The Lesotho Highlands Development Authority is moving forward with work on Phase II of its Lesotho Highlands Water Project in Maseru, Lesotho, South Africa. Phase II comprises two main components, a water transfer component to augment the delivery of water to South Africa and a hydropower component to increase electricity generation capacity in Lesotho and help meet the country’s electricity requirements.

The hydropower component is the 1,200-MW Kobong pumped storage scheme, using the existing Katse Reservoir as the lower reservoir and constructing a new upper reservoir in the Kobong valley via building the 101-m-high Kobong Dam and a 6.3-km-long power tunnel.

Phase II is expected to be substantially complete by the end of 2024 and is being financed through a US$712 million investment from South Africa’s Cabinet.

ONEE is investing in the development of pumped storage projects in Morocco, where the potential for such plants is estimated at about 6 GW by 2030, which include: 350-MW Abdelmoumem, 300-MW El Menzel II and 300-MW Ifahsa.

In January, Vinci Construction, as part of a consortium, won a US$339 million contract to construct the turnkey Abdelmoumen energy storage project. It will be delivered as part of Morocco’s renewable energy development and integration plan, owned by the Office National de l’Electricite.

Marine and hydrokinetic energy

According to Stellenbosch University Centre for Renewable and Sustainable Energy Studies (CRSES), South Africa’s potential for harnessing tidal current energy is particularly promising at the Knysna Heads and the Langebaan Lagoon. CRSES said its quantitative scientific research resulted in data that indicate the Western Cape has the highest wave power generation potential.

In March, Ghanaian renewables developer TC’s Energy contracted Sweden’s Seabased for the design, manufacture and installation of a 100-MW wave energy project off the coast of Ada Foah, in Greater Accra Region of Ghana.

In addition, near the beginning of 2018, Israel-based Yam Pro Energy signed a US$180 million memorandum of understanding with Shapoorji Pallonji Group to build the first phase of a 150-MW wave energy facility on the coastline of Accra, in Ghana, on West Africa’s Gulf of Guinea.

Yam Pro Energy said the initial 10-MW phase 1 of the project is scheduled for completion within the next three years.

According to the Africa-EU Renewable Energy Cooperation Program, Ghana has 22 small- and 17 medium-sized unexploited wave energy sites with capacities ranging from 15 MW to 100 MW and a combined total capacity of about 800 MW. According to data from the Solutions Project, study begun in 2011 by researchers from Stanford University, if Ghana can transition to 100% clean, renewable energy by 2050, wave energy will account for 1.4% of it.

Currently, Ghana’s total installed hydro capacity is about 1,584 MW.

Rehabilitation and upgrade work

With regard to Africa’s need for rehabilitation and upgrade at its hydropower facilities, the exact scale and scope of the need is difficult to quantify for many reasons. Chief among them, according to IHA, is Africa’s absence of a regulatory framework to monitor safety of hydro infrastructure and in particular a lack of enforcement around dam safety guidelines.

The 2018 Hydropower Status Report says, “In order for African countries to progress in terms of building the capacity and knowledge to implement successful operation and maintenance practices into their respective hydropower facilities, good practice guidelines need to be developed with the assistance of hydropower operators from developed countries,” to ensure O&M practices can be adopted.

Some O&M practices include: developing long-term O&M plans, inclusion of long-term O&M contracts; well-planned O&M programs to motivate strategies and methodologies in place to invoke capacity building; communication between owners and stakeholders responsible for corporate social responsibility and emergency preparedness; and policy that addresses the need for standardization of equipment.

In spite of these challenges, rehabilitation and maintenance work is taking place in Africa.

Three of six turbine-generators being modernized at the Mwadingusha plant in Central Africa’s DRC have increased the plant’s capacity from 11 MW to 32 MW. Mwadingusha’s remaining three generators are due to be upgraded and fully operational by the end of 2019.

The completed rehabilitation and modernization program is expected to bring the plant back to 71 MW, its nameplate capacity when initially commissioned in 1930. Ivanhoe Mines said the plant’s additional power generation will increase its ability to develop the Kamoa-Kakula Copper Project, the world’s largest, undeveloped, high-grade copper discovery.

In Kenya, an upgrade project being undertaken by the Kenya Electricity Generating Co. will increase the capacity of its 7.4-MW Wanjii hydropower project by about 20%. KenGen is using a modernization plan developed by Voith GmbH, which will replace the plant’s turbines, generators, control system and electromechanical equipment as part of the overhaul.

Wanjii is located on the Mathioya and Maragua rivers in Kenya’s Muranga region. Its four original Francis-type turbines and generators were commissioned by Morgan Smith in the mid-1950s and work is scheduled for completion by the middle of 2019.

Malawi also is rehabilitating, and upgrading, its aging plants. For example, state-owned Malawi Electricity Generation Co. (EGENCO), Mitsubishi Corp. and Calik Enerji signed agreements in mid-2017 to increase the capacity of the 93-MW Tedzani hydropower complex by 18 MW, according to EGENCO.

The Tedzani complex comprises three power stations: Tedzani I and Tedzani II, each at 20 MW and 52.7-MW Tedzani III.

The Tedzani IV powerhouse will add 18 MW of capacity to the complex and is being implemented with US$52 million in funding from the Japanese International Cooperation Agency and local funding. Under the agreement, Mitsubishi began construction in October 2017, with project commissioning expected in 2020.

In January, the Tanzania Electric Supply Co. (TANESCO) issued multiple tenders for equipment supply for its180-MW Kihansi hydropower plant. These included supplies of complete deflector servomotor assembly and servomotor assembly for main injector, as well as upgrading of the excitation system for Units 1, 2 and 3. In November 2017, TANESCO issued a tender for consultancy services for design of the main valve cylinder gate for these three units.

TANESCO intends to add two 60-MW turbine-generator units and a large water storage dam to increase installed capacity at the site to 300 MW.

Civil/dam safety work

Although Africa lacks a continent-wide framework governing civil/dam safety work, countries could emulate South Africa’s system. South Africa’s Dam Safety Office (DSO) was established in 1987 and in 2012 published Government Notice R. 139: Dam Safety Regulations.

DSO promotes the safety of new and existing dams, implementation and administration of dam safety legislation and policies; management of the dam safety program; and enforce/facilitate compliance with the dam safety legislation by dam owners.

Civil/dam safety work taking place in Africa is being completed at a number of hydro facilities.

French engineering firm Razel-Bec was awarded a contract by Zambia and Zimbabwe in September 2017 to perform dam safety repairs at the 1,830-MW Kariba hydroelectric plant, located in on the Zambezi River between the two African countries.

Erosion under the project’s 128-m-tall by 579-m-long dam has created swelling along its face. If the dam face fails, it threatens more than 3.5 million people in Zambia, Zimbabwe, Mozambique and Malawi.

The repairs will be overseen by binational operator Zambezi River Authority using a US$294 million funding package. The financing includes money from ZRA, the African Development Bank, European Union, Swedish government and World Bank Group.

KenGen is also moving forward with its efforts to raise the dam wall by 2 m at the 40-MW Masinga hydroelectric project on Tana River, the longest river in Kenya. The increased height of the Masinga project’s 200-ft-high by 7,200-ft-long embankment dam wall is expected to increase the total storage capacity of the Tana River impoundment, which is currently 1.2 million acre-feet.

Gregory Poindexter is associate editor for Hydro Review.