Solar PV is, like many other renewables, a capital-intensive technology with high up-front costs. This makes solar PV projects particularly sensitive to the cost of capital and investor confidence in a country. Small differences in cost of capital can lead to large jumps in the levelised cost of electricity (LCOE).
So how can we ensure that risks are mitigated and investors confident they will see their money back when investing in solar PV in sub-Saharan Africa? How can we deal with currency, offtaker and technical risks in a way that allows projects to go forwards? And critically, how can we leverage development finance institution money to make projects across Africa viable? For a region predicted to be at 2billion people by 2050, it is critical that we bring down the cost of financing and scale up renewables in the African sun belt.
SolarPower Europe in collaboration with the African-EU Renewable Energy Cooperation Programme (RECP) organised on Thursday 1 June a half day workshop to address finance issues in off-grid and on-grid solar and conducted a masterclass so that developers and entrepreneurs were able to learn best practice.
The topics we were covering included how to ensure the modules you buy are bankable, what you need to assemble before you approach an investor, a summary of development finance institution funds and an example of how bitcoin is allowing new crowdinvesting models.