Southern Africa

According to consultants Frost & Sullivan, the market for renewable energy equipment in Southern Africa is likely to see revenue increase by a factor of 10 to $262.3m by 2015. This forecast augers well for South Africa, which is anxious to get their renewable energy industry off the ground. The Government has set a production target of 10 TWh of renewable energy by 2013. GA_googleFillSlot( "AllAfrica_Story_InsetA" ); Earlier this year, the National Energy Regulator of SA (Nersa) released feed-in tariffs for the various renewable energy tariffs - a mechanism to promote investment in renewable energy that forces a renewable energy purchasing agency to buy electricity from renewable energy generators at predetermined prices. Despite the ambitious government targets, SA has seen little investment in renewable energy projects. The Darling wind farm in the Western Cape is the country's most significant investment in renewable energy. A proposed 100 MW wind farm is one of the projects Eskom was forced to put on hold because of the global financial crisis.

The renewable energy market in South Africa is expected to grow exponentially in the next few years, thanks to the announcement of the renewable energy feed-in tariff in March 2009. According to a market forecast published by Frost & Sullivan, there is considerable potential for producing electricity using renewable energy (RE) in Southern Africa, but projects have been limited to off-grid, small-scale applications. The new analysis from Frost & Sullivan, the Southern African Renewable Energy Equipment Market, states that the industry earned revenues of $28.4 million in 2008, and forecasts this to increase nearly tenfold by 2015, to reach $262.3 million. This will include projects to develop energy from solar photovoltaic, solar thermal, wind power and biomass sources, the analysis said. "The growth of the wind power market and large-scale concentrated solar power projects will be driven by an increasing number of joint ventures," notes Frost & Sullivan Research. Analyst Sipha Ndawonde adds "Such ventures will be between project developers with local knowledge and private equity investment firms, backed by the support of international original equipment manufacturers." With more difficult access to global credit and more countries reporting negative economic growth rates, private equity investment companies have become more selective and strategic about the sectors in which they invest. Sustainable energy project portfolios have, however, soared to more than $1 billion dedicated to financing RE projects in Southern Africa, Frost & Sullivan said in the analysis. "This is an indication that investors view RE and energy efficiency projects in Southern Africa as having favourable returns and representing a solid investment decision," Ndawonde said, further adding that "An abundance of natural resources combined with a stable political environment, reasonable economic growth rates and growing interest from private equity firms means that large-scale RE projects are set to penetrate into the Southern African countries of South Africa, Botswana and Namibia." The Southern African Renewable Energy Equipment Market is part of the Energy & Power Growth Partnership Service programme, which also includes research in the following markets: 360 Degree Perspective of the African Power & Energy Industry, Strategic Analysis of the Cameroonian Electricity Industry, Strategic Analysis of the DRC Electricity Industry, Investment Opportunities for IPPs in West Africa and, Investment Opportunities for IPPs in East Africa.