Ucilia Wang,Contributor
Ah Africa, the continent that evokes images of bright sunlight spilling over deserts, jungles and savannas. Turning that sun into electricity makes good sense, but lining up financing for solar power projects has always been a big challenge. The World Bank has stepped up its financial support for solar in Africa and announced this week loans for two large solar power projects. The bank on Thursday approved a $297 million loan for a solar power plant in Morocco, which will develop the projectwith help from the German-led Desertec Industrial Initiative. Desertec belongs to a consortium of European firms that aims to build solar and wind farms across North Africa and the Middle East and ship some of the power back to Europe.
The bank also announced the signing of a $250 million loan for two renewable energy projects in South Africa. The loan brings the total of the bank’s financing for the two projects to $510 million, which will be used by South Africa’s utility, Eskom, to build a 100-megawatt solar power plant and a 100-megawatt wind farm (the bank couldn’t provide a breakdown of the loans for the two projects).
The bank has financed solar power development in the past but usually at a smaller scale. From fiscal year 2007 through 2011, the bank issued $759 million for solar projects.
The bank, which offers financial help to developing countries, approved the loans just before the United Nations is scheduled to hold a climate change conference in Durban, South Africa, later this month. The bank has made it clear that it wants to highlight opportunities for renewable energy development in Africa during the meeting. It’s noted that only 31 percent of residents in the continent have access to electricity. TheInternationalEnergy Agency pegs the access rate at around 42 percent.
“If you care about poverty in today’s world, you have to care about climate change,” said Andrew Steer, World Bank’s special envoy for climate change, during a conference call on Thursday. “This is a decade when action is absolutely central, and yet it’s also a decade in which obviously the economic conditions are not conducive to breakthrough.”
Steer said policy and finance are the two big issues to discuss during the U.N. meeting. The current climate change treaty, the Kyoto Protocol, will expire at the end of next year, and it’s unclear whether it will have a successor. The Kyoto Protocol requires industrialized countries to reduce their greenhouse gas emissions. A big part of the ongoing international debate for a new treaty involves getting developing countries and the United States to commit to emission reduction goals. The United States refused to ratify the Kyoto Protocol because, according to then President George W. Bush, abiding by the treatywould hurt the economy.
Steer said a growing number of developing countries are seeking the World Bank’s help to fight climate change, and part of that fight involves creating cleaner sources of power. The bank said it has boosted its renewable energy loans and loan guarantees from $840 million in fiscal 2007 to nearly $3 billion in fiscal 2011, which ended in June this year. Renewable energy projects grew to account for 23 percent of its portfolio during that period.
The bank has attracted criticism for counting hydropower as renewable energy and financing projects in placeslike Ethiopia, Uganda and Sierra Leone, however. Environmentalists have long contended that hydropower plants aren’t eco-friendly sources of electricity – dam building leads to severe habitat losses for fish and other wildlife. Steer reiterated the bank’s support for hydropower and noted, “Africa has still only exploited less than 10 percent of its hydro, and it also has a huge potential in renewables that are increasingly competitive.”
While hydropower development is popular in Africa, solar project development is growing. The bank has mostly supported solar projects that use solar panels, but the two projects announced by the bank this week will use a type of technology commonly called concentrating solar thermal. This technology uses mirrors to concentrate and direct the sunlight to heat up water or oil to produce steam, which is then piped to run a turbine and generate electricity.
It’s the same type of technology that has attracted some of the biggestenvironmental opposition in the American Southwest, where several projects are under construction. Solar thermal power plants are typically large in size and require huge tracts of land if not water, which is used to condenses the steam for re-use.
Companies such as Abengoa Solar have been developing solar thermal power plants in Africa. Abengoa has built a 20-megawatt project in Algeria that sits next to a natural gas power plant. The steam from the solar field will run the turbine at the gas plant. Solar Millennium hasconstructed a concentrating solar thermal field to help fuel a natural gas power plant as well. And California-basedBrightSource Energy also is developing projects in North Africa.
