Project description

Title: Project Development Programme East Africa
Commissioned by: German Federal Ministry of Economics and Technology (BMWi)
Country: Ethiopia, Kenya, Rwanda, Tanzania, Uganda
Overall term: 2008 to 2011

Context

East Africa is a future market for renewable energies. Impressive economic growth in Ethiopia, Kenya, Rwanda, Tanzania and Uganda is prompting a sharp increase in the demand for energy. However, everyday life in the region is hampered by acute supply shortages. Networks and power plants are outdated and inefficient, and in many rural areas, people have no access at all to electricity. Demand for alternative and innovative supply options is growing. There is enormous natural potential for photovoltaics, wind, water and bio-energy, and solar and geothermal energy. Almost all countries in the region have launched programmes to promote renewable energies, and competitive bidding within current development programmes also offers attractive business opportunities.

The East African countries are extremely interested in German state-of-the-art technology, yet the German private sector’s involvement in the region has so far been limited. An unattractive business environment and a lack of clarity about market conditions, promotion opportunities and contract law, as well as inadequate technical and economic capacity locally, have impeded market access. This is where the Project Development Programme (PDP) East Africa comes in. GIZ is implementing the programme on behalf of the German Federal Ministry of Economics and Technology (BMWi) as part of the Ministry’s Renewable Energies Export Initiative.

Objective

Investment by German businesses in renewable energies in East Africa has risen, and the region is being accessed as a long-term target market. With knowledge and technology transfer, local private sector structures have developed and with them, the sustainable development of the region.

Approach

PDP East Africa tailors its activities to ongoing development cooperation, ensuring a link with trade promotion. It focuses on the private sector as the driver of investment in a sustainable energy supply.

Interested businesses can tap into information and advice on potential markets and promotion opportunities in the individual countries. PDP East Africa assists with contacts both on the ground and in Germany tailored to the requirements of specific technologies and business sectors. The programme provides ongoing support to the companies concerned, contributing to the long-term development of East Africa’s energy markets. Knowledge transfer and technology transfer are key elements of the programme, helping to develop local private sector structures and boost sustainable development in the region. Thus the programme benefits everyone involved: East Africa’s private sector, local communities and German businesses. PDP East Africa targets manufacturers and suppliers, investors, project developers, service providers and operators.

The comprehensive services offered within the programme are helping both German businesses and East Africa business partners and decision-makers. The programme provides sector-specific market analyses and organises consultations in Germany and business trips to East Africa as well as arranging for purchasers and delegations from East African business partners and decision-makers to come to Germany. The programme identifies and disseminates business opportunities, while local staff and business partners acquire skills and policy bodies receive advice on sustainable investment in the region.

Results achieved so far

Initiatives to survey the market and ease market entry have enabled German and local businesses alike to form a more accurate impression of the conditions on the ground. German businesses have been helped to make local contacts while on PDP business trips to Uganda, Kenya and Tanzania. This has laid the foundations for German-African business partnerships, which are central to future technological cooperation.

Viable business relationships need skilled, local partner companies and a supportive policy environment. PDP East Africa makes it easier for businesses to enter and establish themselves in local markets. It provides advice on improving policy and economic conditions and strengthens the technical and business skills of local partner companies in the region. One area where it has been possible to build successfully on existing development cooperation contacts, and where progress has been particularly rapid, is the use of photovoltaics for rural electrification and of biogas to generate electricity for the grid. Investment conditions have improved markedly.

German companies have been presented with specific business opportunities both in the private sector and through donor-funded competitive bidding, making it easier for them to gain access to the market. They have also been encouraged to take a sustainable approach to their involvement in the region. These activities have boosted the profile of Germany’s Renewables – Made in Germany campaign locally and attracted keen interest from both industry experts and politicians.

Further information

• Renewable Energies Export Initiative
  http://www.exportinitiative.de (not available in English)
• Renewables – Made in Germany
  Information on companies and products in Germany’s renewable energy sector
  http://www.renewables-made-in-germany.com