ground mounted solar power plants in africa in south sudan and zimbabwe

Utility-Scale Solar PV Plants

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Utility-Scale Solar PV Plants

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Renewable Resources and Alternative Energy
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Alternative Energy
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
15% - 20% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
< USD 50 million
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Affordable and Clean Energy (SDG 7) Climate Action (SDG 13)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Reduced Inequalities (SDG 10) Life on Land (SDG 15)

Business Model Description

Set up utility-scale solar photovoltaic (PV) plants as an independent power producer to generate electricity for sale to the Eswatini Electricity Company (EEC)’s transmission system under a power purchasing agreement (PPA).

Expected Impact

Lower dependency on energy imports, reduce carbon emissions and support economic productivity.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

Disclaimer

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Region
  • Eswatini: Lubombo
  • Eswatini: Shiselweni
  • Eswatini: Manzini
  • Eswatini: Hhohho
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Renewable Resources and Alternative Energy

Development need
Eswatini imports 80% of its energy from South Africa and Mozambique (26). The high dependency on energy imports contributes to the government’s fiscal deficit and increases Eswatini’s exposure to energy supply risks, namely supply security and price shocks, highlighting the need for increased domestic energy production capacity (1).

Policy priority
The Kingdom of Eswatini Energy Masterplan 2034 aims to reduce dependency on energy imports by advancing domestic energy production through the utilization of available renewable energy resources, such as biomass and solar, and to ensure sustainability, efficiency, accessibility and affordability of all energy sources (1).

Gender inequalities and marginalization issues
Although national electricity coverage in Eswatini is 87%, several rural inhabitants, especially smallholder farmers and small business owners, do not have access to electricity or cannot afford high tariffs (2, 3, 4).

Investment opportunities introduction
Eswatini is well endowed with renewable energy resources, which incentivizes investments in renewable resources and alternative energy, including scaling-up renewable energy power plants, especially solar PV and biomass, that will provide low-cost energy (1, 4).

Key bottlenecks introduction
Limited private participation in energy generation, lack of regulatory and fiscal incentives for investors, high infrastructure costs and lack of adequate institutional and private sector capacity to plan, prepare and implement viable renewable energy projects prevent uptake of renewable energy (2, 6).

Sub Sector

Alternative Energy

Development need
Eswatini's domestic energy supply is mostly derived from hydropower and sugar cane-based cogeneration, making the supply vulnerable to external factors such as droughts. Energy demand is expecting an 18.76% increase by 2034, placing further pressure to pursue alternative energy sources such as renewables (1).

Policy priority
Eswatini's National Energy Policy (5) and Nationally Determined Contributors (NDC) (9) commit to increase the share of renewables to 50% of the national energy mix and to increase household access to clean and affordable energy to 100% by 2030.

Gender inequalities and marginalization issues
Although the access rate to electricity is relatively high at 87%, rural electrification rate stands at 83% compared to urban regions with above 95% (4). 90% of the total rural energy for cooking and heating in Eswatini is primarily collected and used by women (5, 9).

Investment opportunities introduction
Substantial investment opportunities exist for solar PV and bagasse generation as seen in electricity authority's intention to roll out three more 15 MW solar projects and a 40 MW biomass plant (10).

Key bottlenecks introduction
Limited financial resources of the primary utility company to implement solutions constrains alternative energy production. Additionally, the current tariff system is not based on cost of service delivery and electricity access is constrained by high tariffs (7).

Industry

Solar Technology and Project Developers

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Utility-Scale Solar PV Plants

Business Model

Set up utility-scale solar photovoltaic (PV) plants as an independent power producer to generate electricity for sale to the Eswatini Electricity Company (EEC)’s transmission system under a power purchasing agreement (PPA).

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

< USD 50 million

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

Eswatini has a high global horizontal irradiance of 4-6 kWh / m2 / day

Eswatini has relatively abundant solar potential throughout the country with an estimated global horizontal irradiance of 4-6 kilowatt-hours (kWh) per square meter per day, as measured in 2014; the lowest intensity occurs during June-September and is still adequate for both solar PV and water heating (23).

According to figures provided by Eswatini Energy Company (EEC), the current market size for renewables overall is 20% of maximum demand of E 1.7 billion, namely E 34 million (USD 2.2 million) (31). This includes solar, biomass and hydropower energy.

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

15% - 20%

ROI
Describes an expected return from the IOA investment over its lifetime.

10% - 15%

According to The Sustainable Energy for All program, solar power projects in Eswatini are expected to have an IRR of 16-18%, as measured in 2014 (13).

According to Eswatini Energy Company (EEC), the expected ROI for the Lavumisa 10 MW Solar Plant, the first utility-scale PV plant in the country, is 10-11% (31).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Long Term (10+ years)

Most solar plants pay off their system within five to ten years (14). For smaller farms with a capacity of 5-6 MW, payback period is around 8 years, large-scaled plants are expected to break even in 10-12 years (29).

According to EEC, the investment timeframe for Lavumisa 10 MW Solar Plan is 11-12 years (31).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

> USD 10 million

Market Risks & Scale Obstacles

Market - Highly Regulated

Eswatini's policy and regulatory environment is not complete and streamlined for renewable energy projects and requires project developers and investors to deal with various ministries with overlapping mandates and large quantities of bureaucratic red tape (29).

Business - Supply Chain Constraints

Eswatini's land tenure system makes it difficult for investors to obtain formal ownership of land for solar plants. Additionally, investors face rising input costs due to shipping costs doubling in the aftermath of COVID-19 (29).

Capital - CapEx Intensive

Utility-scale solar PV plants require significant upfront investment to start operating and eventually generate return.

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Eswatini imports 80% of its power from the Southern Africa Power Pool, with both South Africa and Mozambique experiencing power shortages, reducing the supply to the country (22). The energy sector in Eswatini accounts for 39% of the country's total GHG emissions (27).

Eswatini's energy sector is vulnerable to external shocks as a result of its heavy reliance on energy imports and energy sources such as hydro and biomass that are impacted by drought and other climatic factors, highlighting the need for more reliable sources of energy (15).

Even though access to the electricity grid was relatively high at 80% in 2020, domestic energy generation is insufficient to meet national demand with a peak capacity shortfall of 170 MW, generated largely from hydropower, which is vulnerable to unreliable rainfall patterns and droughts (32).

Gender & Marginalisation

Around 90% of Eswatini's rural population relies on fuel from wood for heating and cooking, which contributes significantly to GHG emissions and is detrimental to human health, solidifying the need for clean and affordable energy for low-income households (5, 9).

90% of rural population meet their energy needs for cooking and heating with firewood. The primary collector and user of firewood are women, presenting a significant opportunity cost in terms of the amount of time spent (2, 9).

Expected Development Outcome

Utility-scale solar PV plants reduce Eswatini's dependency on energy imports and contribute to the overall reduction of GHG emissions (9).

Increasing solar energy in the energy mix of Eswatini increases the domestic generation capacity, making it less dependent on external factors, and complements the country's available renewable energy resources (15).

Increased access to clean energy sources and decline in energy costs from domestic generation reduces reliance on wood fuel and charcoal for cooking and heating, and enables restoration of indigenous forests, ecosystems and land in Eswatini (9).

Gender & Marginalisation

Utility-scale solar PV plants reduce the electricity costs and reduce energy poverty, especially for rural and marginalized households (9).

Increased access to clean and affordable energy through utility-scale solar PV plants reduces the use of traditional household fuels, especially wood, charcoal and dung, by rural and vulnerable households, reducing health risks and emissions (15).

Maintenance of infrastructure of utility-scale solar PV plants that span over large areas introduce much needed employment opportunities to Eswatini's vulnerable population groups, particularly in rural areas where most solar PV operations are planned (12).

Primary SDGs addressed

Affordable and Clean Energy (SDG 7)
7 - Affordable and Clean Energy

7.2.1 Renewable energy share in the total final energy consumption

7.1.1 Proportion of population with access to electricity

Current Value

68% of domestic energy production is from renewables, but when including energy imports / total energy consumption, only 7,7% is derived from renewable resources (25, 30, 7).

Eswatini has 76% national electricity coverage (84% in urban and 55% in rural areas) (3).

Target Value

Achieve 50% share of renewables in total energy consumption by 2030 (1, 5, 9).

Achieve 100% access to clean energy at household level by 2030 (3).

Climate Action (SDG 13)
13 - Climate Action

13.2.2 Total greenhouse gas emissions per year

Current Value

Eswatini’s net GHG emissions in 2018 were estimated at 3,240.10 Gg CO2e (9).

Target Value

Achieve a 9.08% (665,800 tons) reduction in total GHG emissions in 2030 compared to a baseline scenario (9).

Secondary SDGs addressed

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure
Reduced Inequalities (SDG 10)
10 - Reduced Inequalities
Life on Land (SDG 15)
15 - Life on Land

Directly impacted stakeholders

People

The population benefits from lower electricity costs and reduced dependency on wood fuel for cooking and heating.

Gender inequality and/or marginalization

Low-income rural households are directly impacted by reduced energy tariffs and reduced dependency on wood fuel for heating and cooking.

Planet

The environment benefits from a reduction of overall carbon footprint of Eswatini, reducing the energy sector's contribution to climate change.

Corporates

Solar PV project developers, component providers and investors expand their low-carbon businesses.

Public sector

The government benefits from a reduced dependency on energy imports, consequently lowering annual public expenditure and strengthening fiscal consolidation.

Indirectly impacted stakeholders

Planet

The planet enjoys improved land and forestry management as less people rely on fuelwood for their energy requirements.

Corporates

Companies will reduce carbon footprint and energy costs and cost of doing business through solar PV installations.

Outcome Risks

Poor disposal of dismantled solar PV e-waste in landfills may contaminate soil and threaten the environment due to the potential hazardous material in solar panels (36).

Larger utility-scale solar facilities may cause soil degradation and habitat loss due to the-scale of land area required for installing solar farms (35).

Impact Risks

Insufficient high quality data of the impacts that occur may be available, with the first utility-scale solar PV plant having come into operation in October 2021 (17).

External factors, such as weather and component price fluctuation, may disrupt the expected impact (16).

As solar PV is a new technology in Eswatini, a lack of skilled workers to maintain and manage the plants may reduce the expected impact.

Impact Classification

C—Contribute to Solutions

What

Utility-scale solar PV plants lowers Eswatini's dependency on energy imports, reduces carbon emissions and supports the country's economic productivity.

Who

The general population, energy poor households, solar PV supplier and service providers, and the planet benefit from utility-scale solar PV plants.

Risk

While the model of utility-scale solar PV plants is proven, data availability, external factors and workforce skills require attention.

How Much

Utility-scale solar PV plants realize the solar irradiance rate of the country standing at 4-6 kWh per square meter per day (23) and help to meet the goal to reduce total GHG emissions by 9.08% by 2030 (9).

Impact Thesis

Lower dependency on energy imports, reduce carbon emissions and support economic productivity.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

National Energy Policy, 2018: Seeks to create a framework for the energy sector that is robust and aligned to global trends. It is expected to create a conducive environment for investments in the energy sector, particularly large-scale solar PV projects (5).

National Energy Policy, 2018: Seeks to create a framework for the energy sector that is robust and aligned to global trends. It is expected to create a conducive environment for investments in the energy sector, particularly large-scale solar PV projects (5).

Independent Power Producers (IPP) Policy, 2015 : Aims to increase the utilization of local renewable energy resources, including solar besides biomass, by establishing an enabling environment to promote the establishment of sustainable renewable energy and IPP generation sources (18).

Competitive Bidding Method of Procurement for Power Projects of 2019: Acts as a transparent framework of procuring energy projects from independent power producers (IPPs) and creates an enabling system to allow them bid for renewable energy projects, such as solar and biomass (9).

Energy Efficiency and Conservation Policy of 2019: Seeks to secure energy supply through locally available resources such as solar. It is a high-level roadmap for implementation, covering regulations, financing, institutional responsibilities and monitoring and evaluation (26).

Financial Environment

Financial incentives: The government has committed to invest E 800 million (USD 6.65 million) for 40 MW solar plants through independent power producers, as part of the Post COVID-19 Recovery Plan (33).

Fiscal incentives: As part of the Special Economic Zone Act (2018), investors benefit from a 20-year exemption from all corporate taxation (followed by taxation at 5%); full refunds of customs, value-added tax, and other taxes payable on goods purchased and unrestricted repatriation of profits (22).

Other incentives: The S10 Lifeline Tariff cushions lower usage customers against high prices; it is an attempt to increase energy security and advance poverty alleviation (28).

Regulatory Environment

Eswatini Electricity Act, 2007: Reforms and consolidates the laws regulating the generation, transmission, distribution and supply of electricity in Eswatini and sets obligations to hold licenses (1).

Eswatini Energy Regulatory Authority Act, 2007: Allows the establishment of Swaziland Energy Regulatory Authority with the mandate to administer the Electricity Act (1).

The Grid Connection Code for Renewable Power Plants Connected to the Electricity Transmission System or the Distribution System, 2014: Specifies minimum technical requirements for renewable energy plants wishing to connect to the grid (19).

Swaziland Electricity Company Act, 2007: Provides for the establishment of the Eswatini Electricity Company (EEC) under the Companies Act and performance by that company of the powers and functions presently performed by the EEC relating to the generation, transmission, distribution and supply of energy (20).

Legal Notice No. 324 the Public Procurement Act, 2020: Regulates the procurement of goods, works and services by procuring entities, including for solar PV projects, to ensure transparency, accountability and promote diverse private sector participation in public procurements (34).

Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Globeleq, Sturdee Energy South Africa, Frazium Energy, Innovent SAS, JCM Umber, Sola Group-Ubombo Sugar Consortium, African Clean Energy Developments (ACED), T Colle Jabil Consortium, Green Yellow Indian Ocean, ib Vogt GmbH and Eswatini Sustainable Energy Ltd.

Government

Ministry of Energy and Natural Resources, Eswatini Electricity Company (EEC), Eswatini Energy Regulatory Authority (ESERA).

Multilaterals

Southern Africa Development Community (SADC), Africa Development Bank, United Nations Development Programme (UNDP), United Nations Capital Development Fund (UNCDF), Green Climate Fund (GCF), International Renewable Energy Agency (IRENA).

Non-Profit

United States Agency for International Development (USAID).

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
rural

Eswatini: Lubombo

Several areas in Lubombo are identified as zones for utility scale polar PV plants in the Eswatini Energy Masterplan (1, 23), being the region with most abundant solar potential.
rural

Eswatini: Shiselweni

Several areas in Shiselweni are identified as zones for utility-scale solar PV plants in the Eswatini Energy Masterplan (1, 23). The region also has the lowest rate of access to energy (23).
semi-urban

Eswatini: Manzini

Frazium Energy, which is part of the Australian-German Frazer Solar group, is installing a 100 MW solar and storage power project in Manzini using 75,000 solar panels (11).
semi-urban

Eswatini: Hhohho

Globeleq, a leading Independent Power Producer (IPP) in the region, has secured the preferred bidder status for two solar PV projects (Balekane and Ngwenya of 15 MW capacity each) located in Hhohho (24).

References

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