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IPPs in Africa are Growing in Size and Scale Thanks to their Ability to Attract a Diverse Array of Financing

Over time, independent power projects (IPPs) have emerged as Africa’s fastest growing energy sector structures, spreading in popularity across borders and meeting with a surfeit of investment as private sector backers gain comfort with the continent’s liberalising power markets. Though up to now the IPP model has focused on a clutch of major markets – the likes of South Africa and Kenya – these privately financed, owned and operated projects are starting to capture new territory. The figures show a picture of steady growth. According to the International Renewable Energy Agency (IRENA), since 2000, 340 IPPs have been operating, under construction or reached financial close in 36 countries in Africa, representing 30 GW of installed capacity (of which about half are renewables based) and an impressive $61bn of total investment. IPPs are starting to scale up, with the pace of growth in renewables in particular pushing the envelope. According to IRENA, investments are now larger and dominated by renewable energy.