Jul 21 2010
A recent study on Financing Clean Energy Projects in Sub-Saharan Africa by Frost & Sullivan denote the availability of more than $200.00 million as private finance from sponsors who are willing to invest in clean energy projects. The technologies covered under the report include biomass power, wind energy, solar energy and undersized hydro power projects.
According to Cornelis van der Waal Program Manager in Frost & Sullivan, the Sub-Saharan Africa area is yet to comprehend the full potential of developing renewable energy projects. He cited the non availability of appropriate funding for the slow progress made in the renewable energy sector. He added that the currently followed policies and rules allows improved investment from public and private sectors and even help in moving some of the investor costs to that of the public sector.
As per the study the key obstacles faced in financing the renewable energy projects include deficient lucidity in fixing the objectives, immature strategies and regulations and lack of funds for the projects.
Van der Waal further explained in the study how the private equity (PE) investment is yet to gain momentum in the Sub-Saharan Africa in spite of the fact, that all over the world the private equity and venture capital witnessed a growth during the year 2008. He added that renewable energy companies are still meeting the challenges in raising private finance even in countries that witness high level of PE investment.
As per Van der Waal the renewable energy projects can be sustained only by private investment and government funding and concluded by saying that government should introduce lenient tax measures, subsidies and easy quota strategies to reduce the investment costs on renewable energy.
The report concludes talking about the two international funds viz. technology development fund and a technology deployment fund that look forward to investing on low carbon technologies in developing countries. The funds are planning to influence private capital for the purpose of helping industrialists in sub Saharan Africa to infuse confidence among the patrons for the development of technology and to assist in the formation of public and private joint ventures.