Africa is changing even faster than our

perceptions of it as the continent is fully

integrating into the global economy

The Market
Opportunity
Voices on Africa

If Russia was a once-in-a-lifetime opportunity, sub-Saharan Africa is a second

once-in-a-lifetime opportunity. Africa is going through an enormous
renaissance.
Stephen Jennings, CEO of Renaissance Capital, Moscow

In 40 years, Eurafrica will be home to 2.7 billion people, nearly one billion more
than Chimerica. Africa can solve Europes energy problems.
Prof. Dr. Hermann Simon, Simon-Kucher & Partners

Over the past 15 years, the rate of democratization in Africa has increased
faster than any other world region.
Prof. Michael Bratton, Michigan State University

After decades of slow growth, Africa has a real chance to follow in the footsteps
of Asia.
Economist, Dec 2, 2011

africa

enablers
1

Africa has easily outpaced world growth with

some very strong country performances, driven
by services and industry
SSAs growth rate compared to the world and OECD countries

The Market
Opportunity

Economic growth rate of targeted SSA countries

16%

12%

Mozambique

subsaharan Africa

Ethiopia

12%

8%
8%

world

Kenya

4%

0%
2000

EU

4%

Tanzania

2002

2004

2006

2008

2010

SSA sector contribution to economic growth (US$ billion)

500

Services
0%
2000

2002

2004

2006

2008

2010

Industry

250

Agriculture
Manufacturing

-4%

africa

enablers

0
2000

2002
2

2004

2006

2008

Growth in electricity demand is underpinned by strong

growth in population, urbanization and the urgent need to
put much greater parts of the population on grid

The Market
Opportunity

Demography and electrification

Demographic dividend / cost, intl comparison

Electrification rates SSA

Change in the ratio between working age (15-64 year olds) and
total population 2010 to 2050
Electrification rate (%)

Africa
India
Latin America
World
Asia
Brazil
USA
Western Europe
China
Russia
Eastern Europe
Japan
-30%

-20%

-10%

0%

10%

20%

UN World Population Prospects 2010; Allianz Global Investors Kapitalmarktanalyse

africa

Angola
Benin
Botswana
Burkina Faso
Cameroon
Congo
Cote d'Ivoire
DR Congo
Eritrea
Ethiopia
Gabon
Ghana
Kenya
Lesotho
Madagascar
Malawi
Mauritius
Mozambique
Namibia
Nigeria
Senegal
South Africa
Sudan
Tanzania
Togo
Uganda
Zambia
Zimbabwe
Other Africa
Sub-Saharan Africa

enablers
3

26,2
24,8
45,4
14,6
48,7
37,1
47,3
11,1
32
17
36,7
60,5
16,1
16
19
9
99,4
11,7
34
50,6
42
75
35,9
13,9
20
9
18,8
41,5
17
30,5

Population without
electricity (m)
13,7
6,7
1,1
12,6
10
2,3
11,1
58,7
3,4
68,7
0,9
9,4
33,4
1,7
15,9
12,7
0
20,2
1,4
76,4
7,3
12,3
27,1
37,7
5,3
28,1
10,5
7,3
89,1
585,2

For poor countries, electricity demand grows even faster

than the economy as a whole; leading to US$ 200+ billion
investment need by 2020 in sub-Saharan power generation

400

SSAs electricity demand forecast

300

200

86 GW

required additional
capacity 2020

trendline

72 GW
existing capacity
2008

159 GW

required capacity
2020

electricity (Wh) per GDP (US$ 1)

Electricity intensity and income of 174 countries globally

100

0
0

africa

5,000

The Market
Opportunity

10,000 15,000 20,000 25,000 30,000

per capita income

equivalent to
US$ 200-250
billion
investment

enablers
4

To date, renewable energy in subsaharan Africa is

hydropower; other renewable sources are vastly
underexploited
SSA electricity generation technology mix

The Market
Opportunity

SSA renewable energy generation mix (81 bln. kWh)

other
geothermal
other renewable
Total
renewable

Total
conventional
thermal

hydroelectric

Percentage share of SSA in electricity generation

technologies as compared to Africa and Europe

Percentage share of SSA in renewable electricity generation

technologies as compared to Africa and Europe

other
biomass
wind

other
convent.
thermal
renewable
Europe

africa

hydroelectric
Africa

SSA

Europe

Africa

enablers

SSA
Source: EIA, 2008

Africa has some outstanding wind, solar, geothermal and

biomass resources, with lower or no need for subsidies to
be competitive
Global technology cost ranges
Cost/MW
installed
(Mil. USD)
Wind
Biomass
Geothermal
Solar
Coal
Gas

2
1.5 3
2 4.5
4.2 8.4
1 1.5
0.4 0.8

Cost/ Capacity
MWh
factor
(USD)
(%)
49 - 140
20 - 45
30 - 50
45
50 - 120
75
>200
9 24
35 - 60
34
40 - 63
40

Geothermal resources

africa

Solar resources

Wind resources

enablers
6

The Market
Opportunity

A wall of public sector money is chasing renewable energy

projects in Africa all of them looking for bankable
projects and private sector sponsors
public sector support for RE in Africa
The GEF serves as an operating entity of the financial mechanism of the UNFCCC and is supporting
mitigation projects in developing countries. To date, USD 3 billion of co-financing and grants have
been allocated for mitigation and enabling activities.
DEG has made a point of co-financing investment projects of private companies which help to protect the climate.
Within the last two year, DEG therefore provided finance with an overall volume of more than EUR 500 million.
The AfDB is implementing the Climate Investment Funds (CIF), a pair of financing instruments worth USD 6.4 billion
designed to channel scaled up financingin form of grants, concessional loans and risk mitigation instrumentsto
developing countries.
The USD 600 million Emerging Africa Infrastructure Fund is a PPP able to provide long-term debt or mezzanine
finance on commercial terms to finance the construction and development of private infrastructure in 47 countries
across sub-Saharan Africa.
"We will also continue to strengthen our offers for financing renewable energies n Africa, as the possibilities for
their use there is promising", said Dr Norbert Kloppenberg, Member of the Executive Board of KfW.
GuarantCo credit enhances local currency debt issuance by private, municipal and parastatal entities for
infrastructure projects in lower income countries around the World and achieved its first phase contributed equity
target of $100m in 10/2010
The Africa Enterprise Challenge Fund is a $100 million private sector fund, whose aim is to encourage private sector
companies to compete for investment support for their new and innovative business ideas.
ICCF will make climate friendly investments in the private sector in poor countries, demonstrating to private sector
investors the financial attractiveness of climate-friendly projects with total finance capacity of up to 400 million.

africa

enablers

The Market
Opportunity