14.07.2022

Unlocking clean captive installations

To meet climate and development goals, sub-Saharan Africa is striving to minimize emissions whilst ensuring economic development.

Clean captive installations – renewable energy installed by industrial or commercial organizations on their sites have a big role to play.

Industrial sectors in Sub-Sahara Africa depend on unreliable grid-supplied electricity or expensive diesel generators. However, increasing efforts to back captive renewable energy installations are helping them find clean and reliable renewable energy sources on-site while at the same time contributing to the fight against climate change.

With its project Clean Captive Installations for Industrial Clients in Sub‑Sahara Africa the International Climate Initiative (IKI) is working in South Africa, Nigeria, Kenya and Ghana – in specific areas where the grid is unreliable, with frequent outages, high energy costs and lack of infrastructure.

In these countries, captive diesel generators are widely used for backing up the grid, mitigating fluctuations and replacing grid electricity where it is not available. However, diesel generators contribute to climate change and increase the cost of doing business. 

Pilot projects on renewable energy in Africa 

With this project, the IKI demonstrates the appeal of renewable energy captive installations (CCI) in the industrial sector and among private sector financiers, overcoming market barriers and perceived risks. Four pilot projects have just gotten underway: three in Kenya and one in Ghana. Two more pilot projects are set to be implemented in Nigeria and South Africa. 

Ghana: solar energy for hospitals

The project in Ghana, for example, will finance the development of captive solar power plants in four private hospitals within the Christian Health Association of Ghana (CHAG), with a targeted cumulative capacity of 870kWp. It aims to overcome the high cost of electricity faced by hospitals and the health care sector, creating value for them and reducing the burden on the grid operator. 

The pilot project will receive support in assessing financial and economic viability, and technical assistance for financial structuring. By highlighting business models that appeal to private sector financiers, the project aims to unlock private sector finance for similar applications. Lessons learnt will be shared. Increased experience will diminish risks perceived by industrialists and financiers and thus mature the market for captive installations. 

Enhancing public-private partnerships 

Moreover, by gathering development companies and government representatives on the topic of CCI, the project is strengthening governance with respect to public-private initiatives to support clean energy investments. Awareness at the regional level is increasing, as the four countries become aware of synergies, mutual interests and the benefits of regional leadership. 

Governments are being provided with an opportunity to have a concrete example of climate action and private sector engagement initiatives, which contribute to their Nationally Determined Contributions under the Paris Agreement. Development companies, meanwhile, have the chance to see the benefits of supporting countries in achieving their climate goals. 
 

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