Driving Growth: Effective Renewable Energy Tendering in Africa

Joint report by GET.transform, Power Futures Lab and SRMI explores success factors for private power investment and procurement
solar energy farm in South Africa
(c) GIZ/Glenn McCreath

A new report highlights renewable energy auctions as a powerful tool in accelerating renewables deployment, fostering competition, and enhancing project realisation rates. The report was jointly prepared by the University of Cape Town’s Power Futures Lab, GET.transform and the Sustainable Renewables Risk Mitigation Initiative (SRMI) of the World Bank’s ESMAP programme and has been reviewed by practitioners from development banks and regulatory bodies. Analysing success factors and auction design best practices, the report provides valuable recommendations for stakeholders, including governments, policy-makers, and industry players.

Despite the continent’s abundant energy potential, access to reliable, affordable, and clean energy remains a significant challenge across Africa, hindering economic growth and sustainable development efforts. To bridge the energy gap, African countries are increasingly turning to Independent Power Producers (IPPs), primarily funded by the private sector.

In securing private investment, auctions have gained prominence due to their potential to provide lower technology costs, and align with environmental imperatives and market demand. While renewable energy auctions hold promise in addressing Africa’s power shortages, the report underscores the need for substantial investment and tailored strategies to navigate the continent’s diverse challenges and opportunities. The report delves into the intricate interplay between country-level policies, programme design, and project-specific factors influencing the success of renewable energy auctions.

Key findings underscore the importance of government commitment, private sector trust, planning-procurement alignment, site assessment, grid integration, and procurer capacity in ensuring the success of auctions. Drawing from case studies in South Africa, Mauritius, Botswana, Ethiopia, and Morocco, the paper offers actionable recommendations to strengthen policy and regulatory frameworks,  build institutional capacity, and prioritize lender requirements.

The insights on best practices and success factors have also informed the design of a new support window under GET.transform’s Policy Catalyst. In collaboration with SRMI and the Power Futures Lab, GET.transform has developed a comprehensive initiative to enhance IPP procurement capabilities in Sub-Saharan Africa. The “Effective Renewable Energy Tendering” window targets officials from finance and energy ministries, public utilities, and regulators, aiming to position their jurisdictions at the forefront of renewable energy investment and innovation.

The report and window aim to support a roadmap for African countries, guiding them towards effective and sustainable IPP deployment, ultimately paving the way for a brighter, cleaner, and more prosperous energy future on the continent.