More solar power, more know-how
The Senergy facility is scheduled to come on stream in July 2017, but Meridiam and Proparco are already working to develop a second, extremely similar solar power plant just a few kilometres away from the first one. And this new project won’t be the last one, either.
The Senegalese government’s renewable energy goals have won over bilateral and multilateral development finance institutions and aroused interest among independent private power (IPP) producers. “Six solar power plant projects are currently in the development or construction stages in Senegal,” says Papa Mademba Biteye, a technical advisor to the Ministry for Energy and Renewable Energy Development (Meder). “By the end of 2017, they will be generating another 105 MW of power, with 150 MW more to come in 2018 from Senegal’s first wind farm.” On top of those 255 MW, an additional 100 MW will be commissioned in two years as part of the Scaling Solar programme launched by a World Bank subsidiary to support private- sector initiative. Even so, there is still insufficient funding to fulfil Senegal’s ‘green’ aspirations. “The private sector is where the financial resources are,” stresses Mamadou Mbaye, the Executive Director in charge of Energy and Mining at Fonsis. “Our mission is to use the resources allocated by the State to attract private funding for greenfield projects by deconstructing investor apprehensions about financial risk in Senegal. For example, insurance companies make 30% to 40% of their equity investments in North America, versus under 5% in Africa. We need to secure dedicated financing for low-carbon infrastructure quickly. So why not try to line up partial guarantees provided by development finance institutions or via the Green climate Fund to obtain a higher credit rating for Senegal?”
In a similar frame of mind, Senegal’s President has urged public — and private — sector partners “not to overestimate the risk of investing on the continent. Africa has made substantial strides towards good governance and an improved business climate. Risk here is no higher than elsewhere. Besides, with the global economy clearly running out of steam today, Africa shouldn’t be equated with risk, but rather with opportunities to revive the economy and achieve shared growth.” Apart from the funding issue, the future of renewable energy in Senegal will also depend on support for appropriate policies and regulations that can ensure the financial viability of the relevant projects, particularly with regard to drafting power purchase agreements, setting guaranteed feed-in tarifs for IPPs and establishing capped, harmonized rates for the population. And it will mean enhancing the ability of power companies and public services to respond locally to the requirements specific to solar power. The need to incorporate such intermittent energy sources into the national grid is an engineering challenge that escapes no one’s attention in Senegal. And from that standpoint, a project like Senergy will contribute to the transfer of knowhow from Meridiam and Engie’s solar energy subsidiary Solairedirect to the people at Senelec and the Energy Ministry.