Clean Captive Installations for Industrial Clients in Sub‑Sahara Africa

The biggest economies in sub-Sahara Africa have wellestablished industrial sectors. However, most of them face challenges in terms of further growth due to unreliable or expensive grid-supplied electricity. Ghana, Kenya, Nigeria and South Africa are no exceptions. Expansion of their national industrial sector is hindered by shortage of power, high-energy costs and lack of efficient transmission infrastructure. Accordingly, diesel-powered generators are widely used to back-up the grid or mitigate its fluctuations or as substitutes where there is no grid access. This in turn has a twofold effect: it increases the total cost spent on electricity for a firm, thereby reducing its profit margins; and it generates greenhouse gas emissions that accelerate climate change and cause pollution and health problems.

To meet the climate and development goals of the Paris Agreement, the 2030 Agenda, as well as the Agenda 2063 of the African Union, developing countries will strive to engage on a low-carbon development pathway, minimizing their emissions whilst ensuring development of their economies. Renewable energy is a key part of their strategy to do so, with localized solutions for industry holding great potential. This is why the UN Environment Programme, in partnership with its collaborating centre at Frankfurt School of Finance and Management, is implementing “Clean Captive Installations for Industrial Clients in Sub‑Sahara Africa” in four African countries: Ghana, Kenya, Nigeria and South Africa.

This project is part of the International Climate Initiative (IKI) of Germany. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety supports this initiative based on a decision adopted by the German Bundestag. The project aims to demonstrate the economic and financial viability of clean captive energy installations for industries and enhance their adoption of a replicable model in the four partner countries and beyond to the entire continent. Captive renewable energy installations alleviate the pressure of electricity generation from national grids and reduce industrial clients’ needs to rely on private supplementary fossil-fueled generators, which are expensive to run.

These clean captive installations are frequently referred to as second generation of renewable energy business models, as they do not rely on national governments’ incentivizing policies to enhance the deployment of clean energy technologies. The project will strengthen the ability of countries to move towards low carbon-emitting development strategies. It also contributes to several Sustainable Development Goals, including Climate Action (SDG 13), Responsible Consumption and Production (SDG 12), Affordable and Clean Energy (SDG 7), and Industry, Innovation and Infrastructure (SDG 9). The project will raise awareness amongst industry players, financiers and governments, and support dissemination of clean modern energy technology and leapfrogging of the right business models in sub-Sahara Africa.