Page 501 - 2016 - Vol. 40

IV. Benefits for Private Investors in Renewable Energy Sector in

Africa
The risk-return profile of a renewable energy project,

considered by private investors, is the key determinant of whether
to undertake it or not. Concerning the (financial) return of any
energy investment, it depends on two main factors: the financial
profitability of the technology applied, and its competitiveness
with other technologies .(27)

Generally, at the start of the energy project, electricity
generation from renewable sources is more expensive than
from conventional sources. However, over the project life-
cycle, costs for renewable energy generation tend to steadily
decrease. Renewable energy is also relatively quick and
cheap to deploy on a small scale compared with fossil fuels.
Besides, certain renewable energy technologies have become
competitive with conventional forms of power generation
in some African regions(28). For example, solar photovoltaic
generation is expected to be fully competitive with coal-fired
generation in South Africa .(29) Also, in windy locations, wind-
based generation delivers electricity at a lower cost than coal-
based generation .(30)

According to a survey conducted by Baker & McKenzie
in 2013 (31) , private investors pointed that one of the major
investment drivers for establishing renewable energy projects
in Africa is their attractive (financial) returns. Another five
investment drivers listed in this survey are as follows :(32)

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