Scaling Solar update: Senegal, Madagascar, Ethiopia and Zambia tenders

Jamie Fergusson, principal investments manager at the IFC, which is a member of the World Bank and provides financing for projects in developing countries, told Abu Dhabi’s WFES event last week that current investment in African solar PV is not delivering on its potential. For this reason, the IFC’s Scaling Solar program aims at creating viable markets for solar power in a number of Africa’s countries, he added.

Through its “one stop shop” scheme, the IFC aids privately funded grid-connected solar PV projects to undertake an initial legal, regulatory and technical analysis; prepares the tender process and helps bidders to qualify for participating in the tenders; while also helps investors to achieve financial close for their projects. Eventually, solar projects participating in the Scaling Solar scheme “should be operational within two years and at competitive tariffs,” says the IFC.

What is even better, Fergusson told the WFES, is that while single countries alone might be weak to sustain a solar PV market, the Scaling Solar program when implemented across multiple countries can create a regional market capable of sustaining growth.

Tenders update

Following the program’s success in Zambia, Fergusson said there are a number of new tenders that will materialise soon.

In Senegal specifically, there is a tender under preparation concerning three projects totalling 100 MW. The Request for Qualifications (RFQ), which is the preliminary selection process for the tender, is completed, said Fergusson, and the request for proposals (RFP) will be issued in the coming weeks.

In Madagascar too, a 40 MW tender is under preparation with the pre-bid due diligence underway.

The Ethiopian PV market is one that attracts a lot of attention from potential investors, the IFC manager told the WFES, and therefore the IFC is working towards tenders that would eventually reach 500 MW of capacity.

Currently, the IFC is preparing the first round of tenders concerning 200 MW to 250 MW of PV projects and the pre-bid due diligence is underway.

Regarding Zambia, Fergusson said that a second round of tender, larger than the first one, will follow, however he didn’t specify when.

The first round of PV tender in Zambia led to a record low tariff of US$0.602 per KWh. This non-indexed tariff is equivalent to an average in current US dollars over contract life of $0.47 per KWh, Fergusson explained. Furthermore, he added that the first tender was prepared and implemented in a 9-months long process only.

Bankable projects

Speaking at a WFES panel debate that followed his presentation, Fergusson said that equity and debt are important for making an African project bankable. However, he added, they are not the sole factors leading to bankable projects. Other factors also include whether the project is in the right place, if there is a reliable grid connection, whether all the generated power will be absorbed and consumed and other.

The IFC considers all these factors, Fergusson told the conference, and is looking to speed up solar projects that replace old diesel ones.