Italian utility Enel is well on track to build 5,000 megawatts worth of renewables capacity in Africa despite political unrest in North Africa and the lack of electric power connections between countries, its chief executive said on Thursday.
Early 2015, Enel laid out plans to invest in African renewables and power grids, with a target of 5,000 megawatts (MW) capacity in solar and wind.
Two years later, Enel – which operates 66,500 MW of capacity mainly in southern Europe – has nearly 1,000 MW of solar and wind under construction in South Africa and 200-300 MW in operation, while an Enel-led consortium is starting to build 850 MW of wind capacity in Morocco after winning a tender in early 2016.
“About 2,000 of those 5,000 megawatts are already in execution. We are working on the other 3,000,” Enel chief executive Francesco Starace told Reuters on the sidelines of the New York Times Energy for Tomorrow conference in Paris.
Starace said Enel is now exploring a 300 MW geothermal project in Ethiopia and a 50 MW one in Kenya, and in June won a tender for a 34 MW solar project in Zambia.
Starace said the big challenge in the electrification of Africa is political instability in parts of North Africa, notably Egypt, Libya and Algeria, which have huge potential but lack the conditions for power investment.
He said the southern part of Africa was seeing good renewable energy investment flows, while countries in East Africa – notably Ethiopia, Kenya, Uganda, Zambia and Mozambique – were creating the right framework for power investment by establishing cross-border power interconnections.
He said the lack of interconnections, which effectively makes each country an island in terms of electric power, was holding back investment in West Africa.
He said Nigeria was too difficult an environment for Enel to invest in and said that with the exception of Senegal and Ghana many West African countries were too small and isolated to attract significant investment.
“If they would agree to what the eastern countries have agreed to, create some kind of interconnected system, they would become much more interesting,” he said.
He said he could not comment on whether Enel would want to invest in grids in West Africa.
“First they would have to agree they want it, get consensus between governments,” he said.
He said Latin America too had relatively little connectivity between countries, but attracts more investment because of its higher level of development.
Enel is a major power grid operator in several countries in Latin America, where it has installed capacity of about 17,000 MW and serves more than 14 million clients.