WEBVTT - Making Room for Renewables in Sub-Saharan Africa 0:00:01.160 --> 0:00:05.600 Hi everyone. So tanguweeze. It means ginger in Swahili. It 0:00:05.680 --> 0:00:07.640 is the name of a really great ginger beer made 0:00:07.680 --> 0:00:10.680 by Coca Cola that's super popular across subs are in Africa. 0:00:11.240 --> 0:00:14.120 In January fourteen, I was in Dara Salaam in Tanzania. 0:00:14.280 --> 0:00:16.640 I was there doing research on the Tanzanian energy sector 0:00:16.680 --> 0:00:19.480 for a report benf does on emerging markets called Climate Scope. 0:00:20.280 --> 0:00:21.600 I think over the course of the week I had 0:00:21.600 --> 0:00:24.880 at least a dozen tangoeezies. One I had, or maybe 0:00:24.960 --> 0:00:27.400 two or three or four was one evening over the 0:00:27.400 --> 0:00:29.120 course of a long meeting at the pool deck of 0:00:29.160 --> 0:00:32.519 my hotel overlooking the Indian Ocean. The meeting was with 0:00:32.560 --> 0:00:34.960 the representative one of the major development banks, who was 0:00:35.040 --> 0:00:37.640 more than happy to chat for some reason, and since 0:00:37.640 --> 0:00:38.839 I was there to find out as much as I 0:00:38.880 --> 0:00:41.280 possibly could, I was perfectly content to sit there and 0:00:41.320 --> 0:00:44.239 sip the tangoeezi and listen. One thing he said has 0:00:44.280 --> 0:00:47.000 stuck with me all these years later. He said he's 0:00:47.040 --> 0:00:49.839 not interested in funding or building power generation assets in 0:00:49.880 --> 0:00:52.879 Tanzania are subsuri in Africa anymore. He said, there's enough 0:00:52.920 --> 0:00:56.080 of that, there's enough generation, there's enough power plants. He said, 0:00:56.120 --> 0:00:58.600 the only thing that matters, the only thing the region 0:00:58.600 --> 0:01:00.520 needs and the only thing he's going to work on 0:01:00.840 --> 0:01:04.120 this transmission or power lines to get the electrons from 0:01:04.120 --> 0:01:07.880 A to B. Today we've got Antoine, Vania Jones and 0:01:08.040 --> 0:01:11.080 energy analysts from BANFS Europe, Middle East and Africa team 0:01:11.120 --> 0:01:13.600 in to tell us if that's right or not. He'll 0:01:13.600 --> 0:01:15.160 walk us through some of the challenges and some of 0:01:15.200 --> 0:01:18.440 the opportunities across Sub Saharan Africa. Our discussion will be 0:01:18.480 --> 0:01:21.200 based on a report he recently published titled Sub Saharan 0:01:21.200 --> 0:01:25.200 Africa Market Outlook. I will say in our discussion with Antoine, 0:01:25.200 --> 0:01:27.440 we really just scratched the surface. There's a lot going 0:01:27.480 --> 0:01:29.280 on in this reason and a lot to consider for 0:01:29.280 --> 0:01:32.240 those looking at this market. I would encourage Benough clients 0:01:32.280 --> 0:01:33.959 to have a look at this report on BNF dot com, 0:01:34.160 --> 0:01:36.200 the BENF mobile app, or the Bloomberg terminal to get 0:01:36.240 --> 0:01:38.360 further details and for topics we don't cover in this 0:01:38.440 --> 0:01:41.800 short conversation. As always be if does not provide investment 0:01:41.880 --> 0:01:43.640 or strategy advice, and you can hear a full disclaimer 0:01:43.640 --> 0:01:45.759 at the end of the show. If you like the show, 0:01:45.800 --> 0:01:47.440 please go ahead and rate and review us on Apple 0:01:47.480 --> 0:01:50.600 podcast or wherever you listen. I'm Mark Taylor here with 0:01:50.680 --> 0:01:57.280 Dana Perkins and you're listening to Switched on the BENF podcast. Antoine, 0:01:57.280 --> 0:01:59.760 thank you for joining us today. Thank you very much. Dana, 0:02:00.000 --> 0:02:02.080 great to be here. We are going to talk about 0:02:02.200 --> 0:02:05.360 sub Saharan Africa, and I would love for us to 0:02:05.680 --> 0:02:07.680 just kind of set the ground a little bit as 0:02:07.680 --> 0:02:10.760 we get started. How are we defining this region because 0:02:10.760 --> 0:02:14.239 actually it doesn't have a straightforward definition, does it. No, 0:02:14.360 --> 0:02:16.760 it doesn't. And you see a lot of different definitions 0:02:16.800 --> 0:02:18.920 for sub Saha in Africa at being if we take 0:02:18.960 --> 0:02:22.400 a pretty expansive definitions, so everything sort of south of Morocco, 0:02:22.520 --> 0:02:24.960 south of Egypt we count as sub Saha in Africa. 0:02:25.400 --> 0:02:28.760 What does energy look like in this region of the 0:02:28.800 --> 0:02:32.600 world right now? So energy looks very different to how 0:02:32.639 --> 0:02:35.440 it looks in a lot of other regions. I mean, basically, 0:02:35.520 --> 0:02:38.120 we have a wide range of countries with different geographies, 0:02:38.160 --> 0:02:42.160 which are very different energy systems, and the technologies they 0:02:42.240 --> 0:02:45.919 use to electrify their populations varies enormously. But one thing 0:02:45.960 --> 0:02:48.399 that really is common across the board is the fact 0:02:48.480 --> 0:02:51.120 that many large segments of the population don't have access 0:02:51.160 --> 0:02:54.320 to actricity, So only about seven countries have more than 0:02:54.400 --> 0:02:57.280 half of their population having access to actricity, which is 0:02:57.320 --> 0:03:00.680 pretty shocking, but otherwise it really very You have countries 0:03:00.680 --> 0:03:03.360 that depend on the hydro countries that really burn a 0:03:03.360 --> 0:03:06.240 lot of coal, and countries that are relying on importing 0:03:06.280 --> 0:03:09.880 costly fuel so oil usually heavy fuel oil diesel, which 0:03:09.919 --> 0:03:12.400 is very expensive. So as we get into this report, 0:03:12.440 --> 0:03:14.800 can you tell us kind of the big questions you 0:03:14.840 --> 0:03:18.160 were hoping to answer in doing the research. So the 0:03:18.200 --> 0:03:21.760 report was commissioned by the Department for International Development of 0:03:21.800 --> 0:03:25.519 the British government and the big question we were given 0:03:25.600 --> 0:03:27.840 to begin with was look into the state of play 0:03:27.919 --> 0:03:30.960 for renewables, so what investments have amazing and where we're 0:03:30.960 --> 0:03:33.520 going just across the board, which is pretty wide question, 0:03:33.600 --> 0:03:36.160 and it got even wider because realized that as we 0:03:36.200 --> 0:03:38.640 went into the subject, we actually had to understand what's 0:03:38.640 --> 0:03:41.000 going on in other sectors and with other technologies because 0:03:41.040 --> 0:03:44.640 obviously everything is linked. So we ended up just trying 0:03:44.640 --> 0:03:48.240 to understand the big trends affecting the power sector across 0:03:48.280 --> 0:03:52.640 the board, looking at everything from electrification to coal and 0:03:52.760 --> 0:03:56.960 to renewables and clean energy investment, and this clearly doesn't 0:03:57.000 --> 0:03:59.840 seem like a report you can do just by you know, 0:04:00.000 --> 0:04:02.400 downloading some data from some site I don't know, in 0:04:02.600 --> 0:04:04.880 doing some modeling on at your desktop. It seems to 0:04:04.920 --> 0:04:07.080 get to get out there and do it. So we're 0:04:07.120 --> 0:04:11.080 very lucky at BENF, especially with our emerging market coverage. 0:04:11.120 --> 0:04:13.880 So we have a yearly project called Climate Scope where 0:04:13.920 --> 0:04:17.040 we send our analysts across the world to collect exactly 0:04:17.080 --> 0:04:19.240 the kind of data that we rede on for this 0:04:19.320 --> 0:04:21.359 kind of report, and that's often hard to get, so 0:04:21.400 --> 0:04:25.119 it involves going to countries and trying to convince people 0:04:25.200 --> 0:04:28.680 basically to give you data and information, do interviews with 0:04:28.760 --> 0:04:30.480 them and see what they can get in return. So, 0:04:30.920 --> 0:04:33.800 for example, I went to Senegal and caught Devoir last 0:04:33.880 --> 0:04:37.600 year and ended up sitting down with as many stakeholders 0:04:37.600 --> 0:04:42.320 as I could, whether it was development agencies or government, 0:04:42.400 --> 0:04:47.880 the ministries, regulators, education agencies and just having conversations about 0:04:47.880 --> 0:04:50.400 what's going on and seeing what kind of data they 0:04:50.440 --> 0:04:52.960 could share. What was the feel was that was it 0:04:53.040 --> 0:04:55.679 that Africa is open for business or subsity in Africa 0:04:55.720 --> 0:04:58.039 is open for business, or is that there's just so 0:04:58.080 --> 0:05:00.920 many challenges, you know, they're hard to over come. So 0:05:01.360 --> 0:05:05.040 it really varies from country to country. So with this project, 0:05:05.040 --> 0:05:09.880 explicitly we look at renewables and renewables investment, and the 0:05:09.920 --> 0:05:12.680 picture really differs from depending on where you look. There's 0:05:12.760 --> 0:05:16.760 some countries like Garder for example, where governments have come 0:05:16.760 --> 0:05:18.640 out and said that they actually think that so it's 0:05:18.680 --> 0:05:22.720 a bit too expensive for their needs, whereas others like 0:05:22.800 --> 0:05:25.960 Senegal is an example, really see the benefits of the 0:05:25.960 --> 0:05:28.840 cost of decreases we've seen in recent years, and I 0:05:28.920 --> 0:05:31.080 really want to use that to help wean themselves off 0:05:31.279 --> 0:05:34.520 more expensive options such as relying on heavy fuelil and 0:05:34.680 --> 0:05:38.640 diesel to power their populations. So as we're looking at 0:05:38.680 --> 0:05:41.640 this as a region, I know it's difficult to take 0:05:41.640 --> 0:05:44.839 a series of independent countries and kind of tease out 0:05:44.880 --> 0:05:47.800 some themes. We're going to do our best here today 0:05:47.839 --> 0:05:49.800 to see, you know, a little bit about what the 0:05:49.839 --> 0:05:54.160 future holds. As you were doing this research and kind 0:05:54.160 --> 0:05:56.680 of looking towards the future, kind of what was the 0:05:57.520 --> 0:05:59.640 bright spot that you saw in here. Let's start with 0:05:59.800 --> 0:06:03.960 up tunity is rather than challenges. Sure, so subside Africa 0:06:03.960 --> 0:06:05.880 is starting from quite a low base in terms of 0:06:06.000 --> 0:06:09.839 renewables investment. And for example, when you look at emerging 0:06:09.920 --> 0:06:13.320 countries across the globe, a hundred and seven gigawatts of 0:06:13.400 --> 0:06:17.440 clean energy was installed over eighteen and when you look 0:06:17.480 --> 0:06:20.480 at South side Africa, that accounted for less than one 0:06:20.520 --> 0:06:23.400 percent of that total figure, which is really not that much. 0:06:23.480 --> 0:06:25.960 So we're starting from a very low base. But what 0:06:26.080 --> 0:06:29.040 we are seeing is is pretty rapid growth, which really 0:06:29.120 --> 0:06:31.839 rivals what we're seeing in the fastest growing regions in 0:06:31.880 --> 0:06:34.400 the world in terms of the rate at which renewable 0:06:34.480 --> 0:06:39.600 energy investments are accelerating. So, for example, we track and 0:06:39.600 --> 0:06:43.159 we have forecasts for solar for as a technology that 0:06:43.200 --> 0:06:46.280 we look at in particular, and we're seeing double the 0:06:46.320 --> 0:06:50.080 amounts of the capacity of solar installed in one compared 0:06:50.160 --> 0:06:53.760 to twenty eighteen, which is a pretty big leap. So 0:06:53.800 --> 0:06:56.880 if you're seeing this rapid growth, where is it coming from? 0:06:56.920 --> 0:07:02.120 Who are doing these projects? So it's interesting because SUBSIG 0:07:02.120 --> 0:07:05.440 in Africa is quite unique in how important donors are 0:07:05.600 --> 0:07:08.800 and that can be development finance institution multilaterals like the 0:07:08.800 --> 0:07:13.000 World Bank, and they often work in partnership with countries 0:07:13.040 --> 0:07:16.880 to set up procurement programs. So these are schemes which 0:07:17.440 --> 0:07:20.640 provide subsidies and support for developers who want to develop 0:07:20.680 --> 0:07:24.840 renewables projects. So when we look at different countries, we 0:07:24.840 --> 0:07:27.560 we raid and see and look at what kind of 0:07:27.640 --> 0:07:30.560 environment they offer for investors. But it's also good idea 0:07:30.600 --> 0:07:33.000 to see where the donors are looking. And one of 0:07:33.040 --> 0:07:35.440 the big things we've seen are some headlines being made 0:07:35.480 --> 0:07:39.080 with record low prices across much of the region through 0:07:39.280 --> 0:07:43.520 procurement programs like renewable energy auctions under skating Soda, for example, 0:07:43.520 --> 0:07:46.520 which was backed by the World Bank. So I think 0:07:46.520 --> 0:07:48.440 I'm gonna have to take us down and nurch. When 0:07:48.440 --> 0:07:50.640 I read this report, it seemed pretty bleak to me 0:07:51.120 --> 0:07:54.400 that there are actually some substantial challenges that face developers 0:07:54.480 --> 0:07:58.120 or countries and trying to procure renewable power. One of 0:07:58.120 --> 0:08:00.360 them makes me wonder, like what is driving the growth 0:08:00.360 --> 0:08:02.240 of renewals because in the report you said that a 0:08:02.320 --> 0:08:05.480 lot of these markets are oversupplied for energy, but there's 0:08:05.480 --> 0:08:08.280 a lot of energy that's unavailable, So actually, could you 0:08:08.320 --> 0:08:10.160 just explain that for us? What does it mean that 0:08:10.200 --> 0:08:13.880 there's an oversupply of energy? And yeah, definitely when you're 0:08:13.920 --> 0:08:16.400 talking about some in some cases half of the country 0:08:16.440 --> 0:08:19.320 not having access to energy, how is that and oversupply, 0:08:19.920 --> 0:08:23.000 So that's a really good question. So there's two levels 0:08:23.000 --> 0:08:25.040 to this. One of them is when you look at 0:08:25.080 --> 0:08:28.120 certain countries, we look at their demands, so the overall 0:08:28.160 --> 0:08:31.880 power that's consumed by the population, and in a lot 0:08:31.880 --> 0:08:34.760 of cases you actually see that there is enough in 0:08:34.880 --> 0:08:38.160 terms of what's called nameplate capacity, so the amount of 0:08:38.160 --> 0:08:41.360 capacity that is represented by power plants that are built 0:08:41.400 --> 0:08:44.800 and are running in the country to to cover that demand, 0:08:44.840 --> 0:08:46.720 which is a bit of surprise to many people. But 0:08:47.120 --> 0:08:48.960 there are two things to bear in mind. The first 0:08:49.080 --> 0:08:52.079 is that the amount of time that those power plants 0:08:52.120 --> 0:08:55.600 are available, it really can vary dramatically, so you can 0:08:55.640 --> 0:08:59.719 have years where, for example, there are droughts and big 0:08:59.800 --> 0:09:03.480 high dragic dams that supply half the country's population just 0:09:03.640 --> 0:09:06.600 aren't able to provide as much accredity as you'd want. 0:09:07.040 --> 0:09:09.079 That's worsened by the fact that a lot of these 0:09:09.360 --> 0:09:12.800 power plants are aging and lacking in investment, which means 0:09:12.800 --> 0:09:16.760 that they really struggle to perform to their full capacity. 0:09:16.960 --> 0:09:19.200 And the other side of this is that demand is 0:09:19.200 --> 0:09:22.840 often constrained by transmission so there and distribution, so there's 0:09:22.880 --> 0:09:26.600 a lot of investment that's required in power grids in particular, 0:09:27.440 --> 0:09:29.719 and this is one of the massive challenges is that 0:09:29.920 --> 0:09:32.679 demand is what we call constrained by the fact that 0:09:32.760 --> 0:09:35.679 not enough transmission is being built, and that's because it's 0:09:35.720 --> 0:09:38.520 a risky business and there really isn't that much private 0:09:38.559 --> 0:09:41.760 investment at the moment. That's something that we're seeing to change, 0:09:41.840 --> 0:09:44.800 but it's seeing changing, but it's taking time and really 0:09:44.800 --> 0:09:48.320 only just taking off. How are you seeing it change? Um? 0:09:48.400 --> 0:09:51.480 For example, countries like kenya Um have a handful of 0:09:51.520 --> 0:09:54.640 projects maybe five sort of power lines that are privately 0:09:54.679 --> 0:09:57.480 back there in the works, but that's again they're all 0:09:57.600 --> 0:10:00.800 under development at the moment. And the British government has 0:10:00.840 --> 0:10:05.120 also created a company called grid Works, which was launched 0:10:05.160 --> 0:10:09.000 last year and serves to invest specifically in power grids. 0:10:09.200 --> 0:10:13.000 So there's this recognition that we really need to focus 0:10:13.000 --> 0:10:16.280 on investment in transmission as well as building power plants 0:10:16.280 --> 0:10:20.000 and renewable energy capacity to flow over those transmission and 0:10:20.000 --> 0:10:25.160 distribution power lines. So you're talking about how there's oversupply, 0:10:25.240 --> 0:10:27.000 but maybe that has to do with the fact that 0:10:27.040 --> 0:10:30.240 all of these things are ultimately by these things by 0:10:30.280 --> 0:10:33.440 the way, I mean energy supply, Our individual little islands 0:10:33.440 --> 0:10:35.880 and to themselves, and this could be an opportunity for 0:10:36.120 --> 0:10:37.880 countries to lean on each other and lean on each 0:10:37.920 --> 0:10:41.199 other's energy systems. But what's really standing in the way 0:10:41.800 --> 0:10:47.400 of a more expansive grid connection. So that's completely right, 0:10:47.520 --> 0:10:50.040 and there are a lot of countries that are trying 0:10:50.120 --> 0:10:53.320 to interconnect, so they're trying to build power cables that 0:10:53.360 --> 0:10:56.680 are cross border and so they can draw from each 0:10:56.720 --> 0:11:00.400 other's um well, they can benefit from each other's relative 0:11:00.640 --> 0:11:03.440 you can say strengths in terms of energy production. So 0:11:03.480 --> 0:11:06.680 you might have one country where, for example, in Europe, 0:11:06.679 --> 0:11:08.959 you have countries that proved sort of solo at one 0:11:09.000 --> 0:11:11.640 point that might benefit another country where the wind isn't 0:11:11.640 --> 0:11:13.720 blowing as much and they aren't able to produce. So 0:11:13.760 --> 0:11:17.160 that can be great in terms of maximizing how economical 0:11:17.240 --> 0:11:19.400 your power fleet is. And that's something that we're seeing 0:11:19.400 --> 0:11:23.280 being recognized in Subside in Africa through what's called power pools. 0:11:23.320 --> 0:11:25.720 So there are a number of different power pools that 0:11:25.760 --> 0:11:29.400 are being created and they're basically sort of organizations that 0:11:29.440 --> 0:11:32.440 are being set up to encourage the trade of electricity 0:11:32.480 --> 0:11:35.560 across borders. And one of the most successful and early 0:11:35.640 --> 0:11:38.720 examples of this is a Southern African power pool which 0:11:39.520 --> 0:11:42.000 has been up and running for what for the last 0:11:42.040 --> 0:11:46.680 two decades, and we've seen some ups and downs, And 0:11:47.080 --> 0:11:49.839 basically one of the big issues is the fact that 0:11:49.880 --> 0:11:53.080 a lot of generation fleets remain quite small. There aren't 0:11:53.080 --> 0:11:57.040 that many private actors involved in generation, and there's again 0:11:57.160 --> 0:12:00.120 this lack of investment in transmission assets, which really slows 0:12:00.160 --> 0:12:03.200 down progress in other regions. In your opinion, would you 0:12:03.240 --> 0:12:05.600 say that these power poles and this investment into the 0:12:05.640 --> 0:12:09.040 grid is being treated as a matter of priority above 0:12:09.200 --> 0:12:14.120 or behind building additional capacity, so the issues that politically 0:12:14.200 --> 0:12:17.040 there isn't as much impetus behind a lot of these 0:12:17.040 --> 0:12:20.920 projects because of the fact that very often trading with 0:12:20.960 --> 0:12:26.040 other countries isn't seen as that attractive for administrations that 0:12:26.040 --> 0:12:28.720 want to be seen as providing power to their constituents. 0:12:28.720 --> 0:12:32.199 So very often high levels of high profile power projects 0:12:32.400 --> 0:12:35.120 will get more in the way of political support than 0:12:35.559 --> 0:12:38.960 a transmission line that could help to sell electricity to 0:12:39.000 --> 0:12:42.120 another country to recap there's kind of the issue of 0:12:42.160 --> 0:12:45.440 the power pulls that could be more expansive. There's the 0:12:45.440 --> 0:12:49.559 one of high capacity but low availability or lesson availability. 0:12:49.920 --> 0:12:54.440 There's also the issue of legacy power purchase agreements for 0:12:54.600 --> 0:12:57.520 older plants. But let's talk also about the challenge of 0:12:57.600 --> 0:13:01.480 off taker. So you're in ependive power producer an IPP. 0:13:01.640 --> 0:13:04.280 You want to go build a power plant in some country, 0:13:04.320 --> 0:13:06.679 but you might struggle to get paid. Is that right? 0:13:06.920 --> 0:13:10.280 That is right, And we perform a yearly update of 0:13:10.400 --> 0:13:13.439 how we see off taker risk, which is basically the 0:13:13.559 --> 0:13:15.520 risk that you don't get paid in time or in 0:13:15.600 --> 0:13:18.600 full when you sign a power purse agreement with an 0:13:18.600 --> 0:13:21.720 off taker. And when you look at Africa, the picture is, 0:13:21.960 --> 0:13:24.240 like you said, pretty bleak. It's not great. There are 0:13:24.240 --> 0:13:26.760 a lot of countries where it is very risky to 0:13:26.880 --> 0:13:28.840 enter into these agreements and it means that you have 0:13:28.920 --> 0:13:32.600 to invest in various forms of guarantees and insurance which 0:13:32.640 --> 0:13:36.680 make projects more expensive and also excuse the playing field 0:13:36.679 --> 0:13:39.880 towards bigger projects. And that's basically down to the fact 0:13:39.880 --> 0:13:44.200 that effectively most of the region's utilities are bankrupt. And 0:13:44.240 --> 0:13:47.240 that's for various reasons. But there's only really the World 0:13:47.240 --> 0:13:49.880 Bank has done a comprehensive report on the subject that 0:13:49.920 --> 0:13:52.960 you found that it's only really in Uganda that UM 0:13:53.200 --> 0:13:56.240 utilities are able to cover their operating expenses, which is 0:13:56.280 --> 0:13:59.000 really one of the big hurdles facing the sector. But 0:13:59.040 --> 0:14:03.160 it means that donors and very multi lasteral institutions have 0:14:03.200 --> 0:14:05.720 a role to play in terms of supporting these projects 0:14:05.720 --> 0:14:07.719 and creating the frameworks, and that's something that we are 0:14:07.760 --> 0:14:11.160 seeing over the last few years. Or what is different 0:14:11.200 --> 0:14:13.280 in Uganda that the utility is able to coverage cast. 0:14:13.720 --> 0:14:16.800 So the young power sector was reformed towards the back 0:14:16.920 --> 0:14:19.520 end of the ninety nineties and what we call sort 0:14:19.520 --> 0:14:24.480 of liberalized unbundled, which means that the historic monopoly on 0:14:25.160 --> 0:14:27.520 the operations of the power sector, so you had one 0:14:27.560 --> 0:14:31.160 company that was doing everything from producing power to selling 0:14:31.160 --> 0:14:34.680 it to customers, and those various businesses got broken up 0:14:34.760 --> 0:14:37.600 and we're actually, after a few hiccups and a lot 0:14:37.600 --> 0:14:40.160 of political pushback, like it hadn't been a smooth ride, 0:14:40.680 --> 0:14:45.360 managed to find a way of operating efficiently. And that's 0:14:45.400 --> 0:14:48.760 something that that really is an exception and is down 0:14:48.760 --> 0:14:51.560 to a lot of factors that are particular to Uganda, 0:14:52.160 --> 0:14:56.320 um but liberalization and breaking up monopolies isn't always the 0:14:56.360 --> 0:14:59.520 way forwards. We saw in Nigeria also had a very 0:14:59.600 --> 0:15:03.640 comprehen and breakup of its historic utility and creating many 0:15:04.160 --> 0:15:08.600 local distribution companies called discoes, but actually we see that 0:15:08.640 --> 0:15:11.040 most of them are also bankrupt, and it shows that 0:15:11.280 --> 0:15:13.400 this idea that liberalization is the way forward does have 0:15:13.440 --> 0:15:15.280 a lot going for it, but it's not a panacea 0:15:15.400 --> 0:15:20.200 to the region's problems. When we talk about Africa and 0:15:20.760 --> 0:15:24.480 Sub Saharan Africa specifically and providing access to people who 0:15:24.600 --> 0:15:29.000 don't currently have access to energy. There has been some 0:15:29.040 --> 0:15:32.760 discussion around this view that maybe the grid could look 0:15:32.840 --> 0:15:35.760 very different and maybe the way these central utilities that 0:15:35.840 --> 0:15:38.560 we're used to seeing where we're sitting right now in 0:15:38.640 --> 0:15:40.720 Western Europe or where Mark and I are from in 0:15:41.080 --> 0:15:44.280 the United States, that that's not the way that things 0:15:44.320 --> 0:15:46.200 need to be done, and that maybe we could have 0:15:46.400 --> 0:15:50.240 a very fragmented, just locally handled grid from here to there, 0:15:50.280 --> 0:15:54.680 which doesn't support the ability to trade power across lines 0:15:54.760 --> 0:15:57.920 unless you've got great connection, really really organized. How would 0:15:57.960 --> 0:16:00.440 you say those two scenarios compare with one other, because 0:16:00.440 --> 0:16:02.200 they are at arts. You either have to go big 0:16:02.240 --> 0:16:05.520 and organize or you have to go really fragmented, do 0:16:05.560 --> 0:16:09.240 you not, So it's non either or Some countries treat 0:16:09.280 --> 0:16:11.760 it as an either rule and in countries like got 0:16:11.800 --> 0:16:14.240 de Voir, for example, the build out of the grid 0:16:14.280 --> 0:16:17.640 has been quite successful of the main transmission grid, and 0:16:17.720 --> 0:16:21.320 that means that there's less um sort of political interest 0:16:21.520 --> 0:16:25.120 in creating a framework that be favorable for more distributed options. 0:16:25.200 --> 0:16:27.400 When we talk about distributed options, that can be anything 0:16:27.440 --> 0:16:31.520 from a small solo home kit which would power a 0:16:31.600 --> 0:16:34.880 household and really not any big appliances in a lot 0:16:34.920 --> 0:16:38.000 of cases, to a mini grid, which could power whole community. 0:16:38.360 --> 0:16:40.800 And they're very different in terms of business cases and 0:16:41.160 --> 0:16:44.200 in terms of the level of subsidies or financing that 0:16:44.280 --> 0:16:47.560 they need. In Uganda, for example, the government has been 0:16:47.960 --> 0:16:51.880 creating concessions, so sort of staking out areas that are 0:16:51.880 --> 0:16:55.120 to be electrified, specifically by mini grids, and provide a 0:16:55.120 --> 0:16:58.160 subsidy as well for that to happen and cover connection 0:16:58.240 --> 0:17:02.120 costs and expenses that really make it make projects viable 0:17:02.160 --> 0:17:05.640 because a lot of these projects, like most historical electrification 0:17:05.760 --> 0:17:09.440 experiences throughout the world, I really rely on government funding. 0:17:10.200 --> 0:17:12.600 So let's say I'm looking at the subsecurrent African market 0:17:12.680 --> 0:17:15.479 to potentially build a product there. What do we need 0:17:15.520 --> 0:17:18.360 to know? We've outlined the challenges, but we've also outlined 0:17:18.359 --> 0:17:20.639 that there's demand, so what do I need to know 0:17:20.680 --> 0:17:24.040 before I jump in? So you need to be tracking, UM, 0:17:24.160 --> 0:17:27.800 what tenders are being put out, what auctions are being held, 0:17:28.200 --> 0:17:31.600 what kind of criteria UM those auctions are being held under. 0:17:32.280 --> 0:17:34.119 It's also a good idea of understanding the sort of 0:17:34.119 --> 0:17:37.400 longer term trends that are happening in these markets. So 0:17:37.800 --> 0:17:41.320 if you're looking at rural electrication distributed options, it's really 0:17:41.400 --> 0:17:43.679 useful to look at a lot of these countries have 0:17:43.760 --> 0:17:47.360 established of roadmaps for utrification which can really help investors 0:17:47.400 --> 0:17:51.360 understand what they're expecting in terms of many goods being 0:17:51.359 --> 0:17:55.320 built or in terms of the role for for grid extensions. 0:17:56.080 --> 0:17:59.560 Other than that, targets are often missed and progress towards 0:17:59.600 --> 0:18:01.919 them is off and lacking, but they do provide a 0:18:01.960 --> 0:18:04.320 good idea of what's going on. But one of the 0:18:04.359 --> 0:18:08.080 biggest indicators of where opportunities lie are is where investment 0:18:08.160 --> 0:18:10.399 is happening today. So that's something that we try and 0:18:10.440 --> 0:18:13.800 help our clients with and is something that is worth tracking. 0:18:13.800 --> 0:18:15.800 So we see a lot of progress in the most 0:18:15.880 --> 0:18:19.760 promising markets recently happening in markets like Kenya and Senegal, 0:18:19.840 --> 0:18:22.320 which have been watched for a long time, but are 0:18:22.359 --> 0:18:25.640 really starting to bear their fruits today. And that's that's 0:18:25.720 --> 0:18:28.920 really one of the big challenges is understanding that things 0:18:29.000 --> 0:18:31.840 can change quickly and that markets that were dormant for 0:18:31.880 --> 0:18:35.840 a long time can also really light up. So remind 0:18:35.840 --> 0:18:37.560 me again, what were the two countries that you went to. 0:18:38.080 --> 0:18:41.200 I went to Senegal and just over the last year 0:18:41.240 --> 0:18:43.280 for this specific project. So I want to know a 0:18:43.320 --> 0:18:46.120 little bit about your personal experience. What was it like 0:18:46.280 --> 0:18:48.600 going and trying to get this information given that it 0:18:48.640 --> 0:18:52.080 wasn't a massive data download from a computer. So it 0:18:52.160 --> 0:18:56.040 really varies on how excited the government is in terms 0:18:56.080 --> 0:19:00.760 of attracting investment in renewables um and understanding that really 0:19:00.840 --> 0:19:04.320 getting there, getting this information out to investors, which is 0:19:04.400 --> 0:19:07.760 ultimately what we do, is is worth their while. And 0:19:08.080 --> 0:19:11.760 Incote de Voi, there's a lack of enthusiasm. They really 0:19:11.800 --> 0:19:14.879 they they've got quite a substantial power fleet already, it's 0:19:14.920 --> 0:19:17.760 running quite well compared to their neighbors, and there's something 0:19:17.800 --> 0:19:20.600 of a regional powered giant, whereas in Senegal it's a 0:19:20.680 --> 0:19:24.600 market that's changing very fast, that really does need renewables, 0:19:24.640 --> 0:19:29.080 and alongside investments with renewals and future interest in gases, 0:19:29.160 --> 0:19:33.000 understanding the value of having investors have information at their 0:19:33.040 --> 0:19:37.520 fingertips and drawing them in. So from my personal experience, 0:19:37.560 --> 0:19:39.840 it was very different sort of trying to talk to 0:19:40.640 --> 0:19:44.280 maybe less enthusiastic Iborians and then going to Senegal where 0:19:44.520 --> 0:19:47.159 there was more of a recognition that there was a 0:19:47.160 --> 0:19:51.000 lot to be done, and one from explicitly talking about 0:19:51.119 --> 0:19:53.679 offering up data and and being willing to answer some 0:19:54.240 --> 0:19:57.840 quite difficult questions sometimes and then going into this you 0:19:57.920 --> 0:20:01.359 probably had assumptions. So what we're the thing that was 0:20:01.480 --> 0:20:03.800 kind of most interesting or changed your mind the most 0:20:03.880 --> 0:20:07.040 in the process of the research. So something that's really 0:20:07.080 --> 0:20:10.400 interesting is over the last year we've seen headlines being 0:20:10.400 --> 0:20:12.920 made with these renewable energy auctions that have been held 0:20:12.920 --> 0:20:15.360 in substit in Africa and countries like Zambia and Senegal 0:20:15.400 --> 0:20:18.399 and hit really low prices for solo So we're talking 0:20:19.280 --> 0:20:21.840 four dollar cents per killer what hour or less, which 0:20:21.920 --> 0:20:25.280 is pretty competitive at an international level and really surprising 0:20:25.280 --> 0:20:28.160 when you look at the risk profile some of these projects. 0:20:28.840 --> 0:20:31.080 And what surprised me was actually that a lot of 0:20:31.119 --> 0:20:35.400 developers were quite wary about these numbers and a bit 0:20:35.440 --> 0:20:39.280 frustrated because they saw that when they went to governments 0:20:39.320 --> 0:20:43.720 and tried to suggest power projects and tried to take 0:20:43.760 --> 0:20:46.520 part in local tenders, they were being asked for those 0:20:46.560 --> 0:20:50.199 same prices as we're being hit in these big international 0:20:50.240 --> 0:20:53.280 auction schemes. And that was something that was very difficult 0:20:53.320 --> 0:20:55.760 because it isn't reasonable when you don't have the same 0:20:55.800 --> 0:20:58.840 sort of de risking frameworks that the World Bank Skating 0:20:58.880 --> 0:21:03.520 Solo Framework has and m is ultimately something that needs 0:21:03.560 --> 0:21:05.800 to be really understood as we go forward. So there's 0:21:05.800 --> 0:21:08.719 a lot of momentum in the sector and in the region, 0:21:09.080 --> 0:21:10.800 but that also needs to be put into context and 0:21:10.800 --> 0:21:13.800 that's what we try and do. Antoine, thank you very 0:21:13.880 --> 0:21:16.680 much for joining us today. Thank you very much, Diana, 0:21:16.840 --> 0:21:20.399