With the ongoing talks in Paris on Climate Change and new energy crises happening as the region prepares for its summer, it becomes clear that clean energy is on top of the minds of stakeholders in the Southern African region.

Reliable and affordable energy remains as relevant as ever for many C&I companies in sub-Saharan Africa. Businesses and consumers face unreliable power supply, and the resulting economic costs of power outages can impact for as much as an estimated 5-7% of the gross domestic product (GDP) in countries like Tanzania, Zambia and South Africa.

Utility companies look for solutions by adding energy generation capacity through emergency measures such as expensive diesel generators and additional capacity. These new utility scale projects tend to be developed by Independent Power Producers that sell the generated energy through multi-year contracts, in the range of 20-25 years, to the utility companies.

The Procurement Program (REIPPP) in South Africa has been successful in deploying new capacity in a short term by developing wind, PV and CSP plants. Solar utility projects are becoming increasingly cost competitive with traditional forms of generation (mostly coal in the region). The LCOE for African solar PV utility projects in 2013 and 2014 ranged between USD 0.13 and USD 0.26 per kilowatt-hour. In a time when energy tariffs are on the rise throughout the entire region, the business case for solar energy is rapidly improving.

Furthermore, new energy troubles have recently arisen, like the ongoing drought causing new (energy) crises in Zambia and Zimbabwe and South Africa’s immediate loss of 220 MW of imported power from Mozambique due to technical failure at a converter.While the realization of coal, gas, hydro and nuclear plants faces increasing lengthy timescales; solar and wind offer solutions with short lead times as demonstrated in South Africa’s procurement program and the tenders that are underway in Zambia.

On the off-takers side there has also been increasing activity. Interest of C&I businesses in alternative energy solutions is growing, partly because of rising energy tariffs, generally in the line of 10-15% per year, and partly because of the power outages. Mining companies have taken the lead in the field of large embedded PV generation, often in a hybrid form with diesel generation or storage.

Gold Fields have started a tender for 40 MW of PV with storage, and others have followed suit. With growing incentives and the business case getting better and better from a technical perspective, the final step to unlock this potential is the financing of projects in the C&I market.

Solar solutions have proven themselves able to deliver reliable and steady energy supply for those that already invested in it. The CAPEX of solar energy projects has come down drastically with the decreasing prices of PV modules. But for companies that prioritise other expenditures over solar, new financial solutions are in high demand.

Market solutions like ESCOs, leasing and crowdfunding are finding some daylight and create new possibilities for financiers, solutions providers and off-takers in the region. To leverage the abundance of the sun and the opportunities that are out there in the C&I segment, new financial services and products are needed from local players.

Unlocking the potential of the sun can and will be the game changer in the region, backed by increasing interest and financial support from across the globe. This goes from the financing of separate projects, like Chinese support in building 300 MW of PV in Zimbabwe,to institutional funds ramping up renewable energy generation. The African Development Bank is increasing its yearly budget for renewable energy projects to $ 5 bn by 2020.

To capture the business opportunities that solar+storage offer for C&I  off-takers, there is a growing need for the financial parties to align with solution providers and end-users. When they get on the same page where the opportunities and risks lie within these solar projects, they can truly accelerate each other's business and the potential of PV can be tapped for businesses in the region.

Find out more about how to unlock emerging market funding at Making Solar Bankable: Emerging Markets, on February 18 and 19 in Amsterdam, the Netherlands. Register before December 17 for a €100 early-bird discount.