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Many power utilities in sub-Saharan Africa (SSA) have inadequate generation capacity, unreliable services, and high costs. They also face capital constraints that restrict them from making the investments necessary for capacity expansion. Capacity shortages have compelled power utilities to use leased emergency power-generating units, mainly oil-fired diesel generators, as a short-term solution. An economic analysis is carried out to compare the economic net present value (ENPV) of fuel savings, as well as the greenhouse gas (GHG) savings, from investing capital in a solar PV power-generation plant with those from investing the same amount of funds into a diesel power plant. The results show that ENPV is negative for the solar PV plant, whereas it has a large positive value for the diesel plant. In addition, the diesel plant would be almost three times as effective in reducing GHG emissions as the same value of investment in the solar PV plant. Even with solar investment costs falling, it will take 12 to 24 years of continuous decline before solar PV becomes cost-effective for SSA. The capital cost of solar PV would need to drop to US$1058.4 per kW to yield the same level of ENPV as the diesel plant.

This paper assesses the economic benefits of 57 World Bank Group-sponsored hydropower dam plant investments. Hydropower dams are among the main sources for producing electricity and the largest renewable source for power generation throughout the world. Hydropower dams are often a lower-cost option for power generation in Clean Energy Transition for addressing global climate change. Despite its conspicuous aspects, constructing hydropower dams has been controversial. Considering the World Bank’s long history as the largest hydropower development financier, this study investigates its performance in supporting hydropower dams. The outcomes of this study apply to the wider hydropower development community. Of the projects in this study, 70% experienced a cost overrun, and more than 80% of projects experienced time overruns, incurring potential additional costs as a result. Despite the high cost and time overruns, this hydropower portfolio of dams produced a present value of net economic benefits by 2016 of over half a trillion USD. Based on our findings, the evaluated hydropower portfolio helped avoid over a billion tonnes of CO2 for an estimated global environmental benefit valued at nearly USD 350 billion. The projects’ additional environmental benefits raise the real rate of return from 15.4% to 17.3%. The implication for hydropower developers is that the projects’ assessment should consider cost and time overrun and factor them into the project-planning contingency scenarios. There is a considerable benefit for developing countries to exploit their hydropower resources if they can be developed according to industry practices and international standards. The case for developing hydropower may be stronger when considering its climate benefits. The net economic benefits of hydropower can be even higher if there is a greater effort to manage cost and time overruns.

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Many public electric utilities in Africa are capital constrained. In this paper, an economic analysis is carried out to investigate the efficiency of investing in solar photovoltaic power plants, as an option for on-grid power generation. A comparison is made in terms of the economic net present value as well as greenhouse gases savings if the same amount were invested in a combined cycle thermal power generation. The results show that economic net present value is negative for solar photovoltaic plant, whereas it is a large positive value for the combined cycle plant. In addition, the combined cycle plant would be two times as effective in reducing greenhouse gases as the same value of investment in solar photovoltaic plant. Even with solar investment costs falling, it will take 9-18 years of continuous decline before solar generation technology will become costeffective for most of Africa.