Page 498 - 2016 - Vol. 40

Programme in South Africa and the Azura-Edo Power West Africa
power plant in Nigeria. Concerning their existence and success,
Castellano et al’s survey has shown that the private renewable
energy projects in SSA operate mainly in wind, solar or hydro fields,
and they perform slightly better than their public counterparts in
terms of final cost percentage of original budget (12) .

III. Challenges faced by Private Investors in Renewable Energy

Sector in Africa
There are many types of costs that face private investments

in renewable energy sector in Africa and discourage private
actors from getting involved in these investments. The barriers
(problems) that result in these costs can be classified into three
main groups: financial, regulatory, and capacity barriers (13) .

High costs of renewable energy projects, limited access to
finance (external funding), and financial risks are three main
financial problems that face private investments in renewable
energy in Africa. To establish renewable energy projects,
huge costs for feasibility studies and tendering procedures are
incurred; sometimes they reach 4% of the total investment costs.
Also costs of importing inputs in landlocked African countries
are enormous. As a result, the average electricity generation cost
in SSA amounts to US$ 0.18 per kilowatt-hour; which is much
higher than that found in South Asia of US$ 0.04 per kilowatt-
hour, and in East Asia of US$ 0.07 (14)

With respect to access to finance, energy projects’ share
of domestic banking loans in a lot of African countries is very

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