Page 5 - AfrElec Week 34

AfrElec COMMENTARY AfrElec
Japan’s strategy is also in uenced by the need to compete with China in terms of bee ng up its investment in Africa.
Beijing committed $60bn to Africa in 2018, and is now the biggest provider of foreign invest- ment to a range of countries from Angola to Kenya to Zambia. Chinese construction compa- nies will add 9 GW to African power capacity between 2014 and 2024, according to Interna- tional Energy Agency (IEA) data.
e Japanese private sector has, meanwhile, invested $25.6bn in Africa since 2016, according to the Japanese Foreign Ministry.
Mitsubishi is keen to leverage its own renew- ables experience. e company’s Power Solution Group currently owns and operates 6,100 MW of net renewables generating capacity worldwide.
It is already present in African o -grid via its NEoT O grid Africa joint venture with EDF, which provides nancing for developers of dis- tributed energy projects in o -grid areas. e BBOXX investment allows Mitsubishi to extend this footprint in Africa.
Mitsubishi has a major exposure to coal and gas generation through its turbines business. Investing in companies such as BBOXX will allow it to improve its credentials in ghting cli- mate change and supporting the transition to a low-carbon society.
Grid bypass
e investment will allow BBOXX to scale up its power supply model in developing economies worldwide, especially Asia.
e use of mini-grids and o -grid solar sys- tems relies on the current fall in the cost of gen- erating and storing electricity when compared to more traditional grid networks, which are o en non-existent in both rural and urban areas in Africa.
BBOXX claims that this technology will e ec- tively allow African consumers to bypass the need for large generation and grid systems, such as those existing in more developed economies
in Europe and North America.
“As battery costs drop . . . the future is ulti-
mately a much higher percentage of self-gener- ation and self-storage and Africa will be the rst continent to leapfrog into that reality,” Hamayun said.
The funding round also involved much smaller contributions from BBOXX’s current shareholders: ENGIE Rassembleurs d’Energies; Luxembourg impact investor Bamboo Capital Partners; Dutch impact investor DOEN Partic- ipaties and MacKinnon, Bennett & Company (MKB), a Montreal private equity rm.
is is not BBOXX’s rst international place- ment. In January it raised $31mn from Africa Infrastructure Investment Managers, while in 2018, France’s EDF bought a 50% stake in BBOXX’s operations in Togo.
Strategy
For Japan, investing in African renewables re ects the country’s move away from nuclear and towards more diversi ed interests in energy. It builds on existing Japanese activity in Africa, for example providing geothermal technology in Kenya. TICAD, meeting this week, aims to concentrate on realising sustainable economic growth, especially through private investment.
However, in the power sector the environ- mental record of the Japan’s private corporations and development nance institutions (DFIs) has been mixed, with the export of coal- red gen- erating technology to many emerging Southeast Asian markets coming under criticism from cli- mate change NGOs.
Manufacturers such as Mitsubishi have stressed their clean-coal technology, although their export drive has been propelled by the brake on fossil fuel development at home.
In Africa, Japan is likely to focus on renew- ables, sustainability and disruptive technology such as BBOXX’s pay-as-you-go solar technol- ogy in order to maintain and expand its green reputation.™
The use of mini- grids and off-grid solar systems relies on the current fall in the cost of generating and storing electricity
Week 34 28•August•2019 w w w . N E W S B A S E . c o m
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