The Fastest Growing Renewable Energy Market in the World?- Energy Minute for January 9, 2014
January 9, 2013 /3BL Media/ - South Africa may not be the country that comes first to mind when reviewing the global growth of renewable energy. However, recent data suggests that it’s on track to become one of the fastest growing renewable energy markets in the world. In 2012, renewable sources made up less than one percent of South Africa’s energy mix.
This percentage is now projected to grow to 12 percent by 2020. The reason? South Africa’s electricity demand is increasing at a rate of three percent a year. Based on this growth, more than 40,000 megawatts of new electricity generating capacity will be developed over the next 20 years. As part of the government’s initiative to diversify the country’s energy mix, 18,000 megawatts of new capacity to be brought online is mandated to come from renewable energy sources.
As renewable projects are typically 70 to 80 percent debt funded, this rapidly expanding renewable sector offers a large opportunity for investors. For example, Vantage Capital has launched a 2.2 billion Rand renewable energy debt fund, The Vantage GreenX Fund, underwritten by a number of South African pension funds. This fund has already identified seven solar and wind energy projects worth 1.1 billion Rand that it will invest in. The bottom line? There’s big business to be done in South Africa’s renewable energy industry, good for profits and good for the planet.
I’m John Howell for 3BL Media.
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