Lagos-based fin-tech startup Flutterwave has partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

Flutterwave is a Nigerian-founded B2B payments service (primarily) for companies in Africa to pay other companies on the continent and abroad.

Alipay is Alibaba’s digital wallet and payments platform. In 2013, Alipay surpassed PayPal in payments volume and currently claims a global network of more than 1 billion active users, per Alibaba’s latest earnings report.

A large portion of Alipay’s network is in China, which makes the Flutterwave integration significant to capturing payments activity around the estimated $200 billion in China-Africa trade.

“This means that all our merchants can accept or install Alipay as a payment type to accept payments from its billion users,” Flutterwave CEO Olugbenga Agboola — aka GB — told TechCrunch.

“There’s a lot of trade between Africa and China and this integration makes it easier for African merchants to accept Chinese customer payments.”

A Flutterwave company release added, “We’ve managed to connect African countries…to each other so it was about time we connected Africa to the world. We started with the U.S. … but you can’t connect Africa to the world without China.”

An Alipay spokesperson confirmed with TechCrunch the Flutterwave collaboration. Flutterwave will earn revenue from the partnership by charging its standard 3.8% on international transactions. The company currently has more than 60,000 merchants on its platform, according to Agboola.

The Flutterwave-Alipay alliance developed out of Agboola’s acceptance in Alibaba’s Africa eFounders Fellowship.

“Because of that I was in China to do meetings with Jack Ma and the only ask I had from that trip is ‘I want to be the Africa payment infrastructure that plugs directly into Alipay,’ ” Agboola said.

The Alipay partnership follows one between Flutterwave and Visa earlier this year to launch a consumer payment product for Africa, called GetBarter.

Founded in 2016, Flutterwave allows clients to tap its APIs and work with Flutterwave developers to customize payments applications. Existing customers include Uber, Booking.com, and e-commerce unicorn Jumia.com. Flutterwave has processed 100 million transactions worth $2.6 billion since inception, according to company data.

In a recent Extra Crunch feature, TechCrunch tracked Flutterwave as one of several Africa-focused fintech companies that have established headquarters in San Francisco and operations in Africa to tap the best of both worlds in VC, developers, clients and digital finance.

Flutterwave’s Alipay collaboration also tracks a trend of increased presence of Chinese companies in African tech.

China’s engagement with African startups has been light compared to the country’s deal-making on infrastructure and commodities. That looks to be shifting.

Alibaba founder Jack Ma has made several trips to the continent and this March announced the $1 million Africa Netpreneur Prize for African startups and founders. Chinese company Transsion—a top-seller of smartphones in Africa under its Tecno brand—operates an assembly facility in Ethiopia and announced its IPO this year.

And this month Chinese owned Opera raised $50 million in venture spending to support its growing West African digital commercial network, which includes browser, payments and ride-hail services. 

Written by Jake Bright

Agriculture and agribusiness are projected to become a trillion-dollar industry in Africa by 2030. Dr. Martin Fregene, Director of Agriculture and Agro-Industry at the African Development Bank, outlines the opportunities this presents for Africa’s youth.

At 23 years old, Aboubacar Karim is CEO and founder of INVESTIV, an Ivorian startup established in 2017 specialized in precision agriculture.

INVESTIV uses drones to provide farmers with information on soil quality, plant health conditions, spraying crops with pesticides and fertiliser, and measurement and monitoring of crop development through an online platform.

The company has mapped and monitored over 8,000 hectares of land and created more than 20 jobs.

Bright young Africans like Karim are the reason why the African Development Bank is investing millions of dollars in Africa’s agriculture sector – with a focus on youth.

Karim won the Bank’s 2018 African Youth Agripreneur Forum and AgriPitch Competition – an annual event instilling a culture of innovation and nurturing technology-led agribusiness innovations to create jobs and improve livelihoods among youth.

In addition, the Bank is working with its member countries and other development partners through implementation of the Enable Youth Program, one of the Bank’s flagship initiatives addressing Africa’s youth employment challenges.

Enable Youth empowers young men and women at each stage of the agribusiness value chain as agripreneurs. To date, the Bank has committed over $350m to Enable Youth investments in 12 countries on the continent.

The goal of the Bank’s Jobs for Youth in Africa Strategy is to create 25m jobs by 2025.

Of the various economic sectors that can engage youth, the agribusiness sector is best placed to provide significant employment and economic opportunities.

Despite rural urban migration, about 70% of youth in Africa still reside in rural areas and most work in the agriculture sector where they account for 65% of the workforce.

In addition, the agriculture and agribusiness sectors are projected to become a one trillion-dollar industry in sub-Saharan Africa by 2030.

According to the FAO, the food import bill for sub-Saharan Africa in 2017 was $47bn – a clear market opportunity. There is phenomenal growth in global and regional agri-food markets and agro-based industries in Africa – responding to this demand can provide jobs and income to youth.

Africa’s youth must be ready to take advantage of these fast-growing agricultural markets. The Bank is committed to empowering a new generation of young commercial farmers who will make African agriculture more productive, more efficient and more competitive.

Kenyan agripreneur Yvonne Otieno is part of this new generation. The CEO and co-founder of Miyonga Fresh Greens, which focuses on improving small holder fruit and vegetable farmer access to global markets, participated in a Bank-organised SME training in Korea that exposed her to new innovative technologies. Miyonga Fresh Greens started as a 1.5 acre family farm growing French beans and baby corn, and has since grown to 10 acres, exporting directly to Europe. It has expanded from two product lines to six product lines and from trading just in raw agricultural products like fresh vegetables and fruits to value addition products including dried fruits and fruit powder for export.

The company now works with a network of 5,000 small-holder farmers who have over 200 hectares of land and has created employment for 100 women and youth. It is currently in discussions with a distributor who has over 1,000 retail outlets across Europe as well as a strong online presence.

There are clear opportunities for drawing youth to the agriculture sector as agripreneurs. With the right entrepreneurship ecosystem, skills, technologies and improved access to finance, young African men and women will approach agriculture as a business and can become the proud owners of viable and profitable agribusiness enterprises.

The result of investing in youth will be more jobs created, increased food production for a growing population, less reliance on food imports and a healthier trade balance for African countries.

The Bank is committed to working with Africa’s private and public sector actors to enable Africa’s youth to lead and succeed in agricultural sectors not just across the continent, but also around the world.

The African Development Bank is hosting the third edition of the African Youth Agripreneur Forum and AgriPitch Competition from 24-28 June in Cape Town.

Source: African Business Magazine

Ethiopia will host the 2021 World Telecommunication Development Conference (WTDC), as approved by the International Telecommunication Union, ITU, at the request of the African nation.
The event takes place in 2021 and will be the first time an African country is hosting it.

The International Telecommunication Union Council meeting in Geneva (2019) approved the choice of Ethiopia unanimously according to Getahun Mekuria, Minister of Innovation and Technology, who was in Geneva.

WTDC happens every 4 years and since its establishment in 1994, it will see for the first time an African country as host in 2021.

Ethiopia has in the past few months been beneficiary to major international meetings increasing the diplomatic and hospitality profile of its capital Addis Ababa, which is seat of the African Union and other United Nations offices.

In May, Addis Ababa hosted the United Nations Education, Scientific and Cultural Organization, UNESCO’s World Press Freedom Day event which brought together major stakeholders over a three-day period.

Before May, the Prime Minister had announced that Ethiopia had been awarded hosting of the World Economic Forum, WEF, on Africa meeting for 2020. Abiy attended his first WEF meeting in Davos early this year.

Addis Ababa was earlier this month chosen to host the next gathering of world football governing body’s supreme legislative body, the FIFA Congress.

The announcement of the 70th FIFA Congress taking place in Addis Ababa was made at the end of the 69th Congress which took place in the French capital, Paris.

According to Chief of Staff of the AU Chairperson, Congress will take place at the Union’s headquarters in May 2020.

Credits to Abdur Rahman Alfa Shaban

Jumia Technologies AG,  the leading pan-African e-commerce platform is experiencing a successful rise after it was listed on the New York Stock Exchange (NYSE), seeing the price of its American Depositary Receipts (ADRs, representing shares) more than double and then crash back.

The ADR price had climbed as high as $46.99 on 1 May, up by a massive 224% since its initial public offering (IPO) at $14.50 each, and up by 180% since they started trading two weeks earlier on 12 April at $18.95. The ADRs had started to slip back and when the report came out there were two days of heavy trading and the price crashed nearly 25% to $24.50 on 10 May before sliding back to $19.92 by 17 May.

Jumia countered by releasing its first quarter results early on 13 May, showing 58% growth in gross merchandise value (GMV), representing the total value of merchandise sold before deducting fees, and a 102% increase in revenue.

Sacha Poignonnec and Jeremy Hodara, co-CEOs of Jumia, said there was “year-on-year improvement of 356 basis points of operating loss as a percentage of GMV and further development of JumiaPay, highlighted by the investment by and partnership with Mastercard. We believe that Jumia is increasingly relevant for consumers and sellers in Africa.”

The listing raised $196m for the e-commerce firm, which issued 13.5m ADRs, representing shares accounting for 17.6% of the company. It is the first African start-up IPO on a major global exchange.

The company was launched at Africa Internet Group in 2012, backed by Germany’s Rocket Internet, an incubator and venture capital fund based in Berlin which still owns 20.6% of the shares.

In 2016 it was valued at $1bn – earning the title “tech unicorn” – in a funding round involving South Africa’s MTN, which owns 29.7% of the shares, investment bank Goldman Sachs, French insurer AXA and French telco Orange. Mastercard Europe snapped up $50m in Jumia ordinary shares before the New York IPO.

Jumia operates in 14 African countries, offering goods and services including online takeaway food, travel bookings, and classified advertisements.

In Nigeria it operates the JumiaPay payment platform and a delivery service of leased warehouses, trucks and motorcycles, and allows African traders to sell online with more than 81,000 active sellers (defined as a retailer who received an order on Jumia in the last 12 months). The prospectus said there were 4m active shoppers, up from 2.7m a year before.

Hodara and Poignonnec are French, both former employees of consultancy firm McKinsey, and the company is incorporated in Berlin. However it has corporate presence and pays taxes in Africa, has its headquarters in Lagos, and employs more than 5,000 people in Africa.

Juliet Anammah, the Nigerian CEO of the main country operation rang the NYSE ceremonial trading bell. Two Nigerian tech entrepreneurs, Tunde Kehinde, and Raphael Afaedor, were co-founders but both left in 2015 to create other companies.

A McKinsey report suggests African consumers will spend $2.1trn by 2025, and e-commerce could be 10% of that. Many tech firms take years to reach profitability and Jumia’s track record greatly encouraged New York buyers.

Visit the official website of Jumia Technologies AG: https://investor.jumia.com/CorporateProfile

The African Chamber of Commerce (AFCHAM) is an aspiring leading international business association whose aim is to promote a healthy environment in China. They encourage beneficial connections and enable a platform to help building opportunities between African and Chinese businesses.

AFCHAM also takes very seriously its role in assisting Chinese and African companies to expand their businesses across both continents by providing guidelines, updating with the last businesses and opportunities trends, but also with our strong team of consultants ready to provide you advice and walk with you through all the expansion of your business.

Since its creation, AFCHAM has been focusing on partnering and collaborating with institutions, organizations and individuals who have a deep understanding of African societies and cultures and that are committed to bring positives changes together with Africans. Recently on the 24th of May 2019, AFCHAM has celebrated the second edition of the Annual Gala Dinner for the Africa Day. The theme this year was “Empowering the Youths” to award all the companies, organizations and individuals that have contributed to the development of Africa.

During the event, the African Chamber of Commerce has particularly thanked Alibaba Global Initiatives for their commitment to the development of African societies and for their projects aimed for African youths and entrepreneurs. During AFCHAM Gala Dinner, Alibaba Global Initiative received “Youth Empowerment Award” who was delivered to Vice President Mr. Brian Wong.

Alibaba Global Initiative has launched in February the Alibaba Netpreneur Training program whose goal is to bring Africans entrepreneurs and business leaders together to explore digital innovations that have the power to positively transform their local economies. This program is a valuable opportunity for Africans entrepreneurs who will have a unique chance to learn from one of the best e-commerce leaders in the world.

Partnering with the AFCHAM, Alibaba gives the opportunity to Africans traders and entrepreneurs to access directly to Alibaba Platform and benefit from the digital market showcasing their products and selling them to the Chinese market even without living in China.

AFCHAM through Alibaba Global Initiative will provide African youths the chance to take part of e-commerce training programs and participate to Alibaba Fellowship program enriching their knowledge in fintech, logistics and e-commerce.

This partnership between AFCHAM and Alibaba Global Initiatives is only the beginning of a long and durable history.

Written by Maëla Bough – Edited by Khaoula Houssini

The African Chamber of Commerce today celebrates the World Environment Day with one of its partners that it is taking meaningful action towards the environment and wildlife protection: African Parks.

Being aware that the protection and improvement of the human environment is a major issue, which affects the well-being of peoples and economic development throughout the world, the United Nations have designed the 5th of June as World Environment Day. The celebration of this day is aimed to create awareness towards the environment protection and to bring the basis for an enlightened opinion and responsible conduct by individuals, enterprises, and communities in preserving and enhancing the environment.

The African Chamber of Commerce believes that the development of Africa can be successful only if it is inclusive for society and if it is sustainable towards the environment.

We were pleased to award during our Annual Gala Dinner for the Africa Day 2019, that took place on the 24th of May, African Parks for their impactful work for the protection of the wildlife and environment.

African Parks is a non-profit conservation organization that takes on direct responsibility for the rehabilitation and long-term management of protected areas in partnership with governments and local communities.

African Parks Annual Report ” Unlocking The Value Of Protected Areas” is available now. Click here to access it.

China and Kenya avocado deal.

The Chinese and the Kenyan government have signed recently a deal that will make the Chinese market absorb over 40 percent of Kenya’s avocado produce, thus being one of the largest importers of the fruit.

Kenyan farmers will now export their popular avocados to China following a trade deal signed when President Uhuru Kenyatta met his Chinese counterpart Xi Jinping in Beijing during a visit in April 2019. The signing of the agreement which makes Kenya the first African nation to export avocados to the Asian nation with a market of over 1.4 billion consumers comes after a long and comprehensive approval process that included Chinese experts visiting Kenyan farmers.

It is estimated that when the agreement is fully implemented, the Chinese market will absorb over 40 percent of Kenya’s avocado produce, making it one of the largest importers of the fruit. Other famous destinations of Kenyan avocado include Europe and the US. The signing of the protocol on sanitary and phytosanitary (an agreement relating to the health of plants, especially with respect to the rules of international trade) requirements for the export of frozen avocado was the last major hurdle for the Kenyan crop to be accepted in the highly regulated but lucrative Chinese market.

The meeting between Presidents Kenyatta and Xi Jinping and their delegations focused on promoting economic and trade exchange in 8 key initiatives identified during the Forum on China-Africa Cooperation (FOCAC) meeting held in Beijing last year. These initiatives include industrial promotion, trade facilitation, infrastructure connectivity, green development and people-to-people exchange. Others are capacity building, healthcare, and peace and security.

The African Chamber of Commerce on the 24^th of May 2019 has celebrated the second edition of the Annual Gala Dinner for the Africa Day. This year our theme was “Empowering the Youths” and our goal was to bring honor and recognition to organizations, companies and individuals that left a social and environmental impact in Africa and that have contributed in the recent years to the development of African societies.

 In this edition of the Gala Dinner, AFCHAM provided space to African artists that had the chance to present their artwork and handcrafts through an authentic and aesthetic African Art Bazar.

The AFCHAM Gala Dinner was host in the prestigious Fairmont Peace Hotel and it has seen the participation of Government officials of The People’s Republic of China,
diplomats from embassies and consuls, distinguished personalities,
leaders and senior company executives,
fellow representatives from local and foreign Chambers of Commerce, valued AFCHAM members, partners and sponsors and media representatives.

The opening of the Gala Dinner started with the authentic African dance performance of the group Kubtana who brought their energetic vibes to the stage, dancing and chanting with their drums.

Afterwards our honorable Afcham Chairperson D. Nkwetato Tamonkia delivered an official opening speech welcoming our distinguished guests to the gala and reminding the importance of the celebration of the Africa Day with remarks from the history with the foundation of The Organization for African unity (OAU) on May 25^th 1963. In his opening speech, our chairperson has furtherly highlighted the growing friendship and collaboration between China and Africa in all sectors and the value of youth empowerment for the development of African societies. 

Gratitude and appreciations were addressed from the AFCHAM chairperson to all the honorable guests that joined the Gala Dinner with special thanks to African Parks, The Bendo Community, The Alibaba Group and Tecno for their tremendous support to AFCHAM and African communities. The opening speech ended with a symbolic toast by the chairperson wishing all the guests presents a happy evening and an exciting experience of Africa.

The opening speech of our chairperson, was followed by the outstanding presentation of African Parks delivered by Mrs. Vega Hall-Martin Embree highlighting their valuable work for the rehabilitation and long-term management of protected areas in Africa saving the wildlife and protecting natural parks.

During the Gastronomic Dinner that was served at 7,30 pm (UTC+08:00) with the aromatic and fruity South African wines the Villiera and the Creation, an Awards Recognition Ceremony took place. Afcham CSR manager Ms. Khaoula Houssini awarded African Park represented by Mrs. Vega Hall-Martin Embree with Winner of Wildlife Protection Award.

The Award for Special Individual was given by our Afcham Business Development Manager Mr. Sam Onanda to Ms. Huiling Zhao, a Chinese vlogger that promote the exchange between China and Africa through her vlogs, showcasing African people and nature.

Then Afcham Business Director Mr. Jilles Djon was called to the stage to award Mr. Higher Zhao, Global Vice President of Tecno as Winner of Social Development Award.

Last but not least, our chairperson D. Nkwetato Tamonkia awarded Alibaba Global Initiatives represented by the Vice President Mr. Brian Wong for the Youth Empowerment Award Winner.

The Awards Recognition Ceremony was followed by the vibrant dance performance of the group African Vibration that brought to the stage their local dances and chants entertaining the guests with their enthusiastic voices and beats.

During the rest of the Gastronomic Dinner and till the end of the Gala, Tarwa N’Ayur Afro with Sarah and Ismail performed on the stage bringing an enchanting Desert Fusion with an authentic touch of Morocco to the guests.

Last, this memorable Gala Dinner was concluded with greetings and a networking session between the guests.

One of Africa’s biggest non-profit entrepreneurship outfit, the Tony O. Elumelu Foundation, TEF, has released details for its annual summit slated for later this year.

TEF’s gathering which is in its fifth year is set to take place between 26 – 27 July in the federal capital Nigeria Abuja. The two-day event will take place at the iconic Transcorp Hilton Hotel, Abuja.

Over 5,000 African entrepreneurs across different sectors will join the conference. The Forum is the culmination of the annual Tony Elumelu Foundation Entrepreneurship Programme, which this year mentored, trained and seeded over 3,000 young Africans, selected from over [216,000] applicants.

The event provides a unique opportunity for young women and men, from all 54 African countries, to meet, learn and network with the broader African and global entrepreneurship ecosystem.

“It is also a critical opportunity for political leaders and policy makers to meet, face to face, a new generation of African business leaders, who are transforming Africa’s economic trajectory,” the statement said.

Speakers at the forum

Keynote speakers at the highly anticipated Forum include His Excellency Paul Kagame, President of Rwanda, and His Excellency Macky Sall, President of Senegal, who will join Tony O. Elumelu, CON, TEF Founder and Chairman of Heirs Holdings and the United Bank for Africa (UBA) in an intimate open house discussion.

The Presidential Convening is a highlight of the Forum, allowing the African entrepreneurs in attendance to closely engage with political leaders, to give first hand testimony of the important role government can play in catalysing growth and encouraging business ambition.

The forum is also expected to as usual bring together leading policymakers, business leaders, development agencies and the entire entrepreneurship ecosystem including alumni of the Foundation’s Entrepreneurship Programme.

What seeded entrepreneurs are to expect

The Forum agenda includes masterclasses and panel discussions with leading speakers and sector experts, from Africa and globally, who will engage attendees in specialised training sessions to share insights, deepen their knowledge and refine their skills.

The Forum will also feature a pitching event, where select entrepreneurs will deliver exciting presentations on the goods and services they provide to a distinguished judging panel.

Last year, a significant highlight was the launch of TEFConnect, the digital networking platform for African entrepreneurs, which provides a unique digital hub for the African entrepreneurship, facilitating networking, mentorship and most importantly business beyond borders.

What drives the TEF

The Tony Elumelu Foundation’s determination to bring change in scale, across Africa and its relentless focus on entrepreneurship is rooted in the inclusive philosophy of Africapitalism, created by its founder.

The idea recognizes economically empowering Africa’s youth — the continent’s future wealth creators — and thereby creating sustainable economic and social wealth, as one of the most pressing issues of the 21st century.

In 2015, the Foundation committed $100 million to empower 10,000 entrepreneurs from across the continent, over 10 years. Now in the 5th year, the Foundation has funded, mentored and provided business management training to over 7,500 start-ups and small businesses, from all 54 countries in Africa.

TEF CEO speaks

“The TEF Entrepreneurship Forum will not just convene the most important stakeholders in the African entrepreneurship ecosystem, it provides an opportunity for everyone to make a commitment to advance entrepreneurship and scale the impact of our entrepreneurs if we are to accelerate the development of the continent,” TEF CEO, Ifeyinwa Ugochukwu said.

She added: “We are constantly inspired by the stories we receive from our entrepreneurs who are creating jobs, employing people and impacting their local communities and ultimately, the continent.

“We believe that these entrepreneurs are our future. Invest in them now and reap the Africa of our dreams tomorrow. This is what we are committed to.”

The government of Senegal, led by President Macky Sall, has made increased renewable energy generation one of the key pillars of its power generation strategy, with hopes of achieving universal access to electricity by 2025.

As part of its Plan for an Emerging Senegal (PES), the government expects increased generation capacity to help position Senegal as a middle-income nation by 2035.

A target of 15% renewable energy in Senegal’s energy generation mix looks set to be accomplished ahead of the 2025 schedule, as colossal utility-sized wind and solar power plants are due to be added to the national grid within the next two years.

The country has traditionally relied on imported liquid fuels for its oil and diesel-fired plants, but recent discoveries in oil and gas reserves could make Senegal an oil exporter in the coming years.

A further objective of 25% of renewable energy in the mix by 2030 looks achievable, according to Massaer Cisse, Senegal general manager of renewable power generation company Lekela Power.

“It’s an aggressive target and with that target come challenges, notably that grid integration and transmission will have to keep up with supply.

“It’s vital that all stakeholders are involved in work to upgrade the grid, but things are moving in the right direction,” says Cisse.

These are dramatic developments for a nation formerly hampered by the low supply and high cost of electricity, which stunted economic growth at the beginning of the decade.

Between 2010 and 2018, access to electricity increased from 54% to 68% according to the World Bank, and generation capacity rose from a 2012 low of 573 MW, to a current 864 MW capacity, subsequently providing cheaper tariffs for consumers. 

Senegal has experienced yearly GDP growth above 6% since 2015, and optimism about further growth among the young and rapidly expanding 16.6m population is palpable.

The power market continues to benefit from a partially liberalised structure, allowing private companies to build and operate power plants, while transmission and distribution remains controlled by state-owned utility Senelec. 

West Africa’s largest windfarm

Lekela – a 60:40 joint venture between emerging market investor Actis and a consortium led by Mainstream Renewable Power – has initiated construction on the Taiba N’Diaye windfarm, 80km northeast of Dakar.

Once complete in 2020, it will be the largest windfarm in West Africa, adding 158.7 MW to the grid and providing more than 450,000 MW hours of energy per year for 2m people.

Lekela deploys its fund in Africa, with a portfolio of three established windfarms in South Africa, and development of additional plants in Ghana and Egypt.

Chris Ford, Lekela’s COO, says that the business can add value to a nation benefiting from a stable government, and political leadership committed to a vision of how it wants the market to develop.

The company also profits from advancements in technology that will enable it to install 46 Danish-made Vestas turbines that will each be able to produce 3.45 MW of energy.

Wind turbines are getting bigger, more powerful and increasing in generating capacity, enabling greater returns. 

“The technology is getting cheaper over time, particularly as turbines get bigger the physical and technical limits the turbines push out increase.

“The direction of travel for renewables is positive and I think it continues to surprise people just how competitive it can be. As rates go down, and with the comparative volatility of oil prices, renewables become mainstream,” says Ford.

The Lekela project is also expected to contribute up to $20m to the local community and provide 400 jobs during construction, while continued employment opportunities will be provided for a maintenance team during operation of the plant for at least 25 years. 

Spurred on by the successful construction of smaller scale solar plants, Senegal launched a tender process in 2018 to build two further plants with a combined installed capacity of 60 MW, which will almost double existing capacity.

Developed in partnership with the International Finance Corporation  and part of a wider initiative called Scaling Solar, 14 bids were tabled.

The French alliance of Engie, the utility, and Meridiam, the infrastructure investor, won at auction.

Engie is currently building the plants in Kahone, near Kaolack, and Kaël in the Diourbel region, and they will represent one of the fastest buildouts of renewable power in Africa.

The contract was awarded with prices approximately 60% lower than the solar contracts previously agreed in Senegal.

Smart move

“In Senegal, they did something very smart, which other countries should learn from,” says Philippe Miquel, Engie Africa regional director.

“They built six solar plants without tender slightly above market rates to get the ball rolling, and in doing so they managed to bring four or five solar plants on budget, on time, and build an industry first”.

With companies confident they can quickly build a solar PV plant and take it to market, and sure they will be paid by Senelec, the market looks ripe for growth, with foreign capital set to follow.

Despite encouraging growth and a national utility aware of the need to increase transmission and distribution networks, there is a requirement for more nimble players in the market.

While there’s an 88% connection rate to the grid in urban areas, that number falls to 40% in rural areas, according to Power Africa, the US development programme. 

Faced with the choice of expanding the grid network deep into rural areas at cost or choosing not to, Miquel believes it would be best for Senelec to chose the latter. 

“As you reach out to people far away from the network it is costing per connection an enormous amount of money that’s not worth the investment, because the people, particularly in rural areas, consume very little,” he says.

Which is where the importance of mini-grids and companies like Oolu Solar – who sell solar home systems and in-home chargers – will play a key role if the country is to reach its target of universal electrification by 2025.

The long-term prospects for solar generation will face a brighter future if battery storage technologies can be developed and implemented in the country.

Senelec has expressed interest in piloting this solution, but owing to the high cost and unproven revenue streams of the technology it is yet to take off.

Despite these challenges, multinationals continue to show increasing interest in the renewable market in Senegal.

“There’s a clear vision and master plan so that’s really reassuring for a developer like ours, so Senegal is a market we want to continue investing in,” says Miquel.

Written by WIlliam McBain

Source: AfricanBusiness Magazine