Commitment of the African Development

In the renewable Energy Sector

The Role of the Private Sector Department of the AfDB

Promoting the utilisation of Small size Hydropower in Africa

Youssef Arfaoui
Renewable Energy Expert

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 The presentation will Cover:

. Renewable Energy – Development World Wide

. Rationale for interest in Renewable Energy
. Small size Hydropower (SSHP) Potential in Africa
. Development of SSHP and The role and intervention
of the AfDB
. Conclusion

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‘In 2004, investment in the RE sector reached US$30 billion,
and pushed RE capacity to 160 GW – 4% of global power’ 

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In 2004, the power generated by Small Size Hydropower (SSHP) was 61 GW.

Existing capacity end-2004 Power generation

Small hydropower 61 GW
Wind power turbines 48 GW
Biomass power 39 GW
Geothermal power 8.9 GW
Solar PV, off-grid 2.2 GW
Solar PV, grid-connected 1.8 GW
Solar thermal power 0.4 GW
Ocean (tidal) power 0.3 GW
Total renewable power capacity 160 GW
Hot water/space heating  
Biomass heating 220 GWth
Solar collectors for hot water / heating (glazed) 77 GWth
Geothermal direct heating 13 GWth
Geothermal heat pumps 15 GWth
Households with solar hot water 40 million
Buildings with geothermal heat pumps 2 million
Transport fuels  
Ethanol production 31 billion litres/year
Biodiesel production 2.2 billion litres/year
In 2004 the installed capacity of SSHP in developing countries has toped
40MW, which is 67% of the world total installed capacity.

Developing Countries

Small Size Hydropower

The reasons the AfDB has chosen to focus on
Renewable energy:

 RE addresses the needs and contributes to improve living

standards of the rural poor
 RE is in line with the Strategic Plan of the ADB for Infrastructure,
that considers RE as one of the pillars of sustainable development

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 RE can address the problem of electricity shortage in
Africa

 RE is an untapped natural resource in Africa

 RE is Suitable for the Rural Areas
 RE is Environmentally friendly
 RE is affordable compared to other fossil fuel
resources (the recent increase of oil prices)

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The Private Sector Department of the AfDB focuses mainly to
develop (a) the wind energy area and (b) the small size
hydropower

The Middelground wind farm – 8

30 MW hydropower - Tunisia
Copenhagen - Denmark
The Private sector of the AFDB (OPSM) is committed to
develop and promote the Application of wind energy in
Africa. Therefore OPSM has (a) initiated the wind energy
study for Africa, (b) identified the main barriers, such as:

 Legal and regulatory

 Economic and Financial
 Technical
 Lack of local capacity

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In Addition the PSD of the AFDB has chosen to focus on
the SSHP, where the utilisation will be appropriate for
remote areas far from the national grid and having reliable
running water source.

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From 2000 to 2004, the Average Annual Growth of Hydropower World
Wide is 7% for SSHP and around 2,8% for Large Hydro.

Average annual Growth of Hydropower

P e rc e n ta g e G ro w th a c c o u n te d fo r b y th e

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T e c h n o lo g y

0
Small hydro Large hydro
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Africa has a huge potential in Small size-Hydro power, such as
Madagascar
Site Name River Project Area/Year of Study Stage Estimated
capacity  
Faritany de ANTSIRANANA
  Analalava Antsahatopy Vohemar 1988 Reconnaissance
Bevory-A/manjavona Ramena Ambanja 1988 Préliminaire 6.5 MW
Irodo Irodo Antseranana1981 Reconnaissance
Lokoho Lokoho Andapa 1999 Faisabilité 4 MW
Tsiafampiana Ramena Ambanja 1983 Reconnaissance 6.75 MW
   Dangoro Maintinandry Ambositra 1982 Reconnaissance 14 MW
-Namorona II Namorona 2000 Reconnaissance 16 MW
Dangoro Maintinandry Ambositra 1980 Reconnaissance 33 MW
Faritany de MAHAJANGA
Ambodiroka Betsiboka Maevatanana Marovoay 1988 Faisabilité 19.5 MW
Ambato/boeny, Mahajanga
Ambodiroka Betsiboka Maevatanana Marovoay1982 APD 40 MW
Faritany de ANTANANARIVO
Manankazo Manankazo Ankazobe 1988 Reconnaissance 1.530 MW
Sahofika Onive RI Tana 1981 Préliminaire 105 MW
-Tsinjoarivo Onive RI. Tana 1976 Préliminaire 20 MW
Lohavanana Mangoro RI Tana 2000 Préliminaire 93 MW
Antafofo Ikopa RI Tana 2000 Préliminaire 105 MW 12
Ranomafana Ikopa RI Tana 2000 Préliminaire 70 MW
Potential of Small size-Hydro power in Africa (for Tea factories)

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The Current ADB Interventions in promoting the use of Renewable Energy

 Capacity building and small hydropower projects 10 Countries

(Institutional Strengthening, Feasibility & Pilot projects - EUR 40 million)
 Madagascar Small size Hydro Power: Rural Electrification Project
(6 and 15 MW – total cost of Euro 30 m)
 Renewable Energy Studies for Uganda, Tanzania, Kenya, Gambia
 Gambia Solar PV Project (EUR 15 million)
 Morocco: Solar/Gas Thermal Power Station (250 MW, 30 MW Solar)
(EUR 200 Mio)
 Egypt: Solar/Gas Thermal Power Station (120 to 150 MW)
 Kenya: 30 MW Wind farm (US$60m) to be financed this year,
 Kenya :[ 250 MW, 300MW – under preparation]

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 The Objectives – and the Strategic Plan 2005 - 2010 for the
PSD of the AfDB for the Development and Application of
Small size Hydro power are:

• Design and implementation of adequate

institutional and regulatory framework, specifically
to favour development by private sector
• Study of electrical grid integration
• National capacity building in all aspects relating to
hydropower development
• Development of demonstration projects (of viable
commercial small size Hydropower projects)
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 The Objectives – and the Strategic Plan 2005 - 2010 of the
PSD of the AfDB for the Development and Application of
Small size Hydro power are: (cont’d)

• Raising the interest of private sponsors and other

potential investors in small size hydro power
opportunities in Africa
• Mobilizing required funds for project preparation
• Performing feasibility studies and developing
most promising Small Size Hydropower projects

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Small SSHP projects can benefit from the CDM-
Carbon Trade facility. The present cost of tCO2 is
around Euro 12. (Emission Reduction)

• Therefore The PSD of the AfDB objective is to Assist the

sponsor to prepare all necessary documentation to qualify
hydropower projects to benefit from the Carbon trade
facility (CDM – Kyoto protocol)

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 As guidelines to investors planning investment in SSHP projects, the
Power Generation Costs in 2002 and the projected for 2010 are as
follows:
  Capital costs Low-side generation High-side generation Low-side generation
($/kW) costs costs costs by 2010
(Cents/kWh) (Cents/kWh) (Cents/kWh)

Small hydro power 1,000 - 5,000 2-3 9 - 15 2

Solar PV power 4,500 - 18 - 20 25 - 80 10 - 15

7,000
Concentrating solar 3,000- 10 - 15 20 - 25 6-8
power 6,000
Bio- power 500 -4,000 2-3 10 - 15 2

Geothermal power 1,200 - 2-5 6 - 12 2-3

5,000
Wind power 850 -1,700 3-5 10 - 12 2-4

Source: IEA 2003

 Conclusion

• Renewable energy is an appropriate response to the needs

of the poor / grassroots in Africa.
• The three major areas of focus are:
• Wind energy
• Hydro power
The Bank (OPSM) offers:
• Flexible and tailor made instruments
• Support to sustainable projects, through financial and
technical assistance and institutional capacity building
programs

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In order to allow the PSD of the AfDB to support and participate
in the financing of SSHP projects, the following conditions have
to be fulfilled:

 The contractual arrangements are in place

 The project has to be developmental oriented
 The project is technically feasible
 The sponsors have the required financial and
technical capacity to run the project
 The project is financially and economically viable
 The regulatory framework is favourable for Renewable Energy projects
 The project has a reasonable size

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For further information:

Youssef Arfaoui
Renewable Energy Expert
Private sector Department

y.arfaoui@afdb.org

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Thank you

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