Development of Wind Energy in Africa

This paper describes how Africa’s wind energy market has evolved over the years and the structural characteristics affecting the development of wind energy projects on the continent; providing what we believe is the first mapping of the continent’s wind energy market . Results from a hand collected database suggest that wind energy markets remain small, concentrated and have been developing using a phased approach. While we observe an increasing trend in the number and size of projects being implemented, we show that wind energy contribution to the energy mix in Africa will remain unchanged over the long term. We estimate the cost of the 1.1 GW installed capacity in Africa at USD 1.8 billion, out of which 60% was contributed by DFIs. We also document a reduction of ODA resources, an increasing participation of the private sector, either as sponsors or partners of PPPs, greater use of specialized funds and CDM funding, as well as an emerging south-south cooperation with few experienced African firms already seeking new markets on the continent. Interestingly, our results suggest that ODA resources were not used to pursue new markets or affect the choice of technology. The paper also finds that the public sector remains a key player in these projects, not necessarily as a financier but also as a local partner that ensures smooth implementation. Moreover, the paper discusses technical, environmental and financial considerations that African countries need to take into consideration when developing wind projects and concludes that wind energy has limited potential to address the issue of electricity access in Africa at its current state mainly given its output variability and Africa’s limited global carbon footprint. . JEL Codes: O13, O55, Q01, Q42