Major Milestone Agreement Reached for Mega Solar in Southern Africa
Partnership finalized at Leaders Summit on Climate
The Biden-Harris Administration selected Power Africa’s climate positive, energy prosperity producing Mega Solar project as a deliverable from the Leaders Summit on Climate.
Mega Solar is a partnership between Power Africa and the Governments of the Republic of Botswana and Namibia, the International Finance Corporation (IFC), the International Bank for Reconstruction and Development (World Bank), and the African Development Bank to support the development of Southern Africa’s largest solar-generation project, which is estimated to result in 2–5 gigawatts of solar power. A memorandum of intent was signed between all partners this month.
Mega Solar’s initial goal is to provide additional power from solar photovoltaic and concentrated solar thermal technologies to meet local demand, an ultimate benefit of the collaborative efforts of the Mega Solar partners in strengthening the institutional and technical capacity as well as legal and regulatory frameworks of the focal countries.
Under the Power Africa Initiative, USAID commits to transforming the Southern Africa region’s reliance on fossil fuels, enabling a path to decarbonization.
“Simply put, this milestone agreement, with Botswana and Namibia demonstrating unprecedented leadership and collaboration, moves Mega Solar from the concept phase to the action phase,” said Mark Carrato, Coordinator of Power Africa. “Unlocked by this partnership is the extraordinary development potential for life and globe changing clean energy, emanating from southern Africa on a pioneering scale of massive productive use,” he added.
Once operationalized by 2030, Mega Solar is expected to generate thousands of jobs both directly and indirectly while averting an estimated 6.5 million tons of CO2 equivalent emissions annually, the equivalent of taking almost 1.5 million cars off the road.
In its outset the project will focus on designing and implementing a multi-phased procurement program that will leverage the experience of the African Union and World Bank Group and AfDB development partners as well as the supportive host Governments of Namibia and Botswana.
The Power Africa Initiative — launched by President Obama in 2013— is making a difference across sub-Saharan Africa by improving lives, supporting economic growth and combating climate change through improved access to clean, reliable, and affordable electricity.
Since 2013, Power Africa has leveraged the combined expertise of the private sector and 12 U.S. government agencies to bring 12,000 MW — representing a $22 billion investment — to financial close.
Already Power Africa has connected more than 20.8 million homes and businesses to on- and off-grid solutions, bringing first time electricity to 98 million people across sub-Saharan Africa.
Power Africa, through its partnerships and comprehensive technical assistance presence, is uniquely positioned to advance the Biden-Harris Administration’s objectives for economic growth and decarbonization across sub-Saharan Africa, a region critical to climate, pandemic and national security agendas.
MEGA SOLAR SIGNATORY / PARTNER QUOTES
African Development Bank
Kevin Kariuki, Vice President for Power, Energy, Climate & Green Growth
The signing of the MOI is an important milestone towards accelerating energy transition in Southern Africa and an excellent example of the potential of cooperation amongst like minded partners. On its part, the African Development Bank will deploy applicable technical and financial instruments, including the Sustainable Energy Fund for Africa, with a view to crowding-in private sector investments in the large-scale solar developments underpinned by this MOI.
International Finance Corporation
Kevin Njiraini, Regional Director for Southern Africa and Nigeria.
As we rebuild our economies and work towards a resilient recovery, increasing access to greener and more sustainable sources of power is critical. IFC is pleased to be working with our partners on this initiative to support the governments of Botswana and Namibia to unlock financing sources and new business models that can make large scale solar initiatives a reality in both countries.
The World Bank
Marie Francoise Marie-Nelly, Country Director for Botswana, ESwatini, Lesotho, Namibia and South Africa
The World Bank is excited to take this next step with our partners in Botswana and Namibia as we work together to realize the full benefits of their strong renewable energy potential by helping to leverage climate finance to mobilize private capital.
STATEMENT FROM BOTSWANA
In an April 13 signing ceremony, Botswana’s Minister of Mineral Resources, Green Technology, and Energy Security (MMGE) Lefoko Moagi expressed optimism about the Mega Solar project, describing it as a quantum leap. Moagi noted that Botswana’s current energy consumption is approaching one gigawatt, so a project up to five times larger than current demand pushes the envelope. Moagi added that Botswana will go from an energy importer to exporting clean renewable solar power to the region through the southern Africa power pool. Moagi and Permanent Secretary Mmetla Masire both described the tangible excitement in the partnership between the United States, Botswana, and Namibia, and Moagi called for all parties to hit the ground running and get into the nitty gritty of operationalizing the project. Moagi added that he hoped the Botswana side of the project would produce employment from the construction phase onward, and that the electricity produced by Mega Solar would power Botswana’s future economic development. Masire thanked all signatories and the MMGE team for their efforts leading up to the signing ceremony.
STATEMENT FROM NAMIBIA
In an April 19 signing ceremony in Windhoek, Namibia’s Minister of Mines and Energy Tom Alweendo said that he was glad that Namibia and partners were finally signing the Mega Solar Memorandum of Intent (MoI) after two years of negotiation. He highlighted that both Namibia and Botswana need more locally generated power, adding that Namibia’s development roadmap, the Harambee Prosperity Plan II, emphasizes the need for clean power generation. Alweendo said that Namibia is focused on increasing its power generation capacity in the next few years, including through other renewable energy projects with independent power producers. Alweendo said he hopes implementing the Mega Solar project will be swift, as it can help Namibia realize its power generation goals and will be complementary to the other power projects Namibia is pursuing.
MEGA SOLAR — FREQUENTLY ASKED QUESTION (FAQ)
1. What is the Mega Solar Initiative (“Mega Solar”)?
Mega-solar projects — large-scale installations capable of producing upwards of thousands of megawatts (MW) of power — are generating much-needed electricity in countries all over the world. Power Africa’s Mega Solar initiative is a multi-donor collaboration which seeks to accelerate the procurement of 2–5 gigawatts (GW) of solar power in Southern Africa over the next two decades.
FACT SHEET: HERE
2. What countries are targeted for solar project development?
To date, Power Africa has targeted Namibia and Botswana for the development of utility-scale solar projects to substitute imported carbon-intensive electricity with clean, reliable and affordable power from utility-scale solar facilities. Through the Southern African Power Pool, excess power from the Mega Solar project can be exported across the region to support grid reliability, improve climate resilience in the power sector and reduce regional dependence on coal-fired power plants.
3. What type of solar technologies are involved?
Mega Solar focuses exclusively on utility-scale Solar photovoltaic (PV) installations and concentrated solar power (CSP) technologies.
4. Which donors are involved in Mega Solar?
Mega Solar’s coordination is led by the U.S Agency for International Development (Power Africa) which has signed a Memorandum of Intent (MOI) for Large-Scale Solar Development in Southern Africa with its partners that include the following: Government of the Republic of Botswana, Government of the Republic of Namibia, African Development Bank, International Bank for Reconstruction and Development, and International Finance Corporation. Going forward, other partners are expected to support the Mega Solar effort, beyond the initial signatories of the MOI.
5. Who sets Mega Solar Priorities?
The priorities for Mega Solar are decided upon at the country-level and set by each the Government of the Republic of Namibia and the Government of the Republic of Botswana. Collaborating partners of the Mega Solar MOI and other donors intend to provide technical assistance and other resources to support the governments in achieving their individual priorities for large-scale solar procurements.
6. Do Namibia and Botswana have demand for 2–5 GW of Solar Power?
No, the first phase of Mega Solar will focus on the procurement of 300–500 MW for local demand in the focal countries. Subsequent procurements are anticipated for projects slated for energy export.
7. Where are the project sites located in Namibia and Botswana?
Multiple potential sites have been identified for development; however, the selection of actual project sites has not been finalized.
8. Why Namibia and Botswana?
Simply put, abundant sunlight. Botswana and Namibia offer the potential to capture around 10 hours of strong sunlight per day for 300 days per year and have some of the highest solar irradiance potential of any country in Africa, which translates to highly productive concentrated solar power (CSP) and photovoltaic (PV) installations.
Also, open spaces and low population density. Both countries have sizable areas of flat, uninhabited land not currently used for productive economic activity, which is conducive to building land-intensive solar PV and CSP installations.
Botswana and Namibia were selected as the ideal countries for Mega Solar following a concept study undertaken by USAID in 2019. The concept study concluded that Botswana and Namibia were the most suitable focal countries given their rankings on three central criteria: (i) high solar resources potential reflected by the highest direct normal irradiance for CSP and global horizontal irradiance potential for solar PV of any country in Africa, (ii) ample, flat land availability without human settlements or economic activity at time of the study, and (iii) relatively positive fundamentals for establishing a more conducive legal and regulatory environment.
9a. How can the focal countries expect to benefit?
Large-scale solar developments will ultimately help Namibia and Botswana diversify their energy mix, while simultaneously providing low-cost, reliable power generation for local consumption and potential export. Other potential benefits include reduced dependence on energy imports, local economic development and job creation stemming from construction and operation services, local content and project ownership.
9b. How can the Southern Africa region benefit?
Through the Southern African Power Pool, excess power from the Mega Solar project can be exported across the region to support grid reliability, improve climate resilience in the power sector and reduce regional dependence on coal-fired power plants.
10. What is the role of the private sector?
Early stage of Mega Solar will focus on providing support to governments to launch competitive procurements. It is envisioned that there will be opportunities for IPPs, subject to decisions of the governments of Namibia and Botswana.
11. What is the expected timing for the first RFP?
The timing of the first RFP is TBD.
12. Why has Mega Solar not happened sooner?
A historic lack of public-private partnerships outside of South Africa to develop such projects has left much of the region’s vast solar power potential largely untapped. Perception of solar as cost prohibitive was also a factor. The levelized cost of energy generated by large scale solar plants is around $0.068/kWh, compared to $0.378 ten years ago and the price fell 13.1% between 2018 and 2019 alone, according to figures released by the International Renewable Energy Agency.
13. What are the next steps based on the Milestone Mega Solar Agreement?
Given the signing, bilateral engagements with the two Governments will now develop their joint stated priorities and timing. This phase moves past the conceptual to stakeholder engagement and technical feasibility, to include project site selection, with the ultimate goal of implementing a procurement phase which would entail detailed legal and regulatory due diligence and the design of country specific transaction documentation to attract competitive privately funded grid connected solar projects
14. How do you calculate/project the carbon equivalent of greenhouse gas to be averted?
Power Africa’s Mega Solar project once online is expected to avoid more than 6 million tons of CO2 annually (middle range estimate).
Calculations for current emission reduction are based on online projections using USAID’s CLEER tool.
Calculations for MegaSolar emission reductions also used the CLEER tool based on the following assumptions:
Maximum of 5,000 MW of solar capacity will go online.
50% will be in Namibia and 50% will be in Botswana
40% will be fixed tilt photovoltaic
40% will be tracking pv arrays
20% will be concentrated solar power