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In West Africa, it is estimated that 57% of the population has no access to electricity, underperforming the continent’s average of about 50%. Although comparable to the continental average, the difference with the developing world (23%) is striking. Considering that the region has become one of the fastest growing places on the continent, energy is considered a substantial bottleneck. While we have no up-to-date estimate about the cost of energy shortage on the region’s growth, we can infer its importance considering that the electricity demand/supply gap in West Africa is currently greater than 40%.
As noted in the third issue of the West African Monitor focusing on energy in the region, West Africa is rich in energy resources: it has great hydropower energy potential, strong winds that could allow for wind energy deployment, high solar radiation resource, as well as considerable reserves of oil and gas (it represents half of the continent’s reserves). Analysis in the West Africa Monitor highlights the fact that many countries in the region exhibit regulatory and policy gaps which impede proper exploitation of these natural resources. This theme is explored in a research paper published by the African Development Bank’s Alli Mukasa, Emelly Mutambatsere, Yannis Arvanitis and Thouraya Triki, which examines the financial and political aspects of wind-sector development on the continent.
The aforementioned article provides the first-ever comprehensive overview of the continent’s wind energy sector, describing how Sub-Saharan Africa’s wind energy markets have evolved over the years. Delving into the structural characteristics affecting the development of wind energy projects on the continent, it identifies a number of social, political, economic and environmental issues affecting wind energy development. The analysis is based on a unique database of 94 wind projects and suggests that wind energy markets in Africa tend to be small, concentrated and nascent.
In Sub-Saharan Africa, Mukasa and colleagues estimate that only 43 megawatts have been installed and another 230 MW are underway as of 2011. Examining individual projects in detail, it is interesting to note a shift from the use of concessional funding toward non-concessional funding and an increasing participation of the private sector in the financing of these projects. In this respect West Africa stands out: among the completed projects in Sub-Saharan Africa from the database, the only one operating on a commercial scale is that of Cabeolica in Cabo Verde, the country with the highest installed capacity of 28 MW followed by South Africa (8.6 MW from two pilot projects). Despite this notable mention, West Africa remains behind the rest of the continent with very few completed or ongoing and planned projects (Figure 1).
Figure 1: Percentage of completed or ongoing & planned projects by region
The paper analyses the many factors that explain the overall lack of dynamism in the sector, some of which pertain to the cost disadvantage faced by wind energy compared to conventional energy resources. For West Africa, however, it is interesting to note that there is a generalized lack of clearly outlined renewable energy promotion policies and legal frameworks. Still, as noted in the paper, the existence of legal frameworks does not guarantee sector development as the North African experience has shown. Hence, while the presence of legislation is important, the real determining factor is related to the quality of such legislation.
Furthermore, observing funding trends across the continent, the presence of incentives through clearly defined regulation becomes all the more important. Indeed, as highlighted above, concessional funding is being phased out only to be replaced by non-concessional investments. Interestingly, there is no obvious correlation between sources of official development assistance (read fully concessional funding) for pilot projects and sources of private investment into commercial operations implemented at later stages, suggesting that official development assistance is generally not utilized to pursue new markets. If this is the case, West African countries must find alternative ways to attract investments in wind energy, like Cabo Verde did.
 Since the paper was published, the Ashegoda wind project (Ethiopia) came on stream with 120 MW late 2013.