Renewable energy businesses flourish in Africa, despite Trump’s policy

Mazino Dickson


Despite U.S president Donald Trump’s high tariffs, renewable energy businesses are booming on the African continent.

Dr. Thomas Hillig, managing director at THEnergy, says that Donald Trump’s foreign policy is “resulting in a renewables-peak for industrial offtakers in Africa”.

In recent months, oil prices have been unstable and analysts at THEnergy say that to some extent this has been related to Donald Trump’s foreign policy – mainly in respect to Iran.

Oil – and consequently ­global diesel – market prices have become very volatile with a tendency to increase long-term.

This volatility is putting solar power on the centre stage in Africa.

Many remote sites are powered by diesel or heavy-fuel oil, including mines, factories and even large metropolitan regions.

“For industrial off-takers and utilities, recent diesel price developments are critical as fuel represents one of their main operational costs. Price increases have direct adverse effects on their business. Even higher volatility represents a major concern by affecting plannability,” says Hillig.

“Solar power does not display a high level of volatility. Today’s investments determine the electricity costs over the next 20-25 years. Industrial consumers often do not have to invest their own capital. It is sufficient to sign power purchase agreements with third party investors that finance the solar power plants and sell electricity.

Dr. Hillig’s position seems to have gained global traction.

Solar Plaza, a Dutch-based solar energy, has described Africa as the next solar hub.

“Africa is quickly becoming one of the most significant regions in the global expansion of the solar PV industry,” it says.

“The high levels of solar irradiation, extreme (and growing) energy demand – with 600 million Africans not yet served by up-to-date electricity solutions – and an increasing amount of renewable energy related commitments by governments in the region are just some of the factors that are sparking growing interest from local businesses and international stakeholders alike.”

Indeed, the International Energy Agency (IEA), sub-Saharan Africa will require more than $30 billion in investment to achieve universal electricity by 2030.

No doubt more government investment in this energy sub-sector would serve to increase foreign capital flow to the continent.