South African power auction model may be rolled out across Africa
The Development Bank of Southern Africa (DBSA) said it’s seeking to roll out a tendering model across the continent for the supply of power from renewable energy that’s attracted more than R200-billion in private investment into South Africa.
The Independent Power Producers Office, established by the state bank in 2010, has held a series of auctions that led to the rapid roll out of wind and solar power plants in the coal-dependent nation, giving rise to the largest renewable energy industry in Africa.
While the auctions were paused for several years, South Africa now has over 6 000 MW of generating capacity operated by companies including Scatec, Enel Green Power and Electricite de France.
“We can take some of those learnings into the rest of Africa and see how we can set up similar structures,” Mpho Kubelo, the DBSA’s chief risk officer, said in an interview at the company’s offices near Johannesburg on Monday. “Conversations are still at very early stages. So as our guys go into the continent and do business development, they will sell the idea to a number of countries.”
The DBSA, along with other development banks, is trying to kickstart energy projects in a region where 600-million people, or about half the population, have no access to electricity.
At the same time countries on the continent, with their abundant wind and solar resources, are in a position to develop more renewable capacity rather than rely on fossil fuels.
The DBSA has held talks with Botswana over developing a power auction system, Kubelo said, without giving more detail.
The plan to market the power auction model is part of a bigger drive by the DBSA to explore opportunities outside South Africa.
The bank is considering helping to finance a power transmission line between Angola and Namibia, and set up trade finance and guarantee products to support trade across Africa, officials said.
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