Insights

The African continent as a whole remains heavily dependent upon fossil fuels with the likes of South Africa and Nigeria remaining over 70% dependent on non-renewables. The potential for a green transition over the coming years remains pertinent, yet a long way off.

Investment opportunities will arise in two main areas in Zimbabwe in the next decade: renewable energy and petroleum. The government has provided incentives to the energy sector and awarded several IPP licenses to different companies, but very few of these projects have been executed. The delay in implementing these projects has been caused by a lack of funding in light of perceived currency risks.

In Zambia, renewable and new technologies will attract foreign direct investment and can be used to develop the economy following the negative effects of poor rainfall in the past few years and COVID-19. There has been recent growth in industrial activity which has increased the demand for energy.

Due to the need to diversify Uganda’s energy mix and fulfill the country’s climate change commitments, the government’s emphasis will be on renewable forms of energy such as wind, solar and biogas. Nevertheless, it is anticipated that large and mini-hydro will continue to be Uganda’s principal energy supply source in the medium to long-term.

Tunisia is in the process of launching its first generation renewable energy projects. As part of this process, the state plans to build renewable energy projects with a capacity of 500 MW. Annual investment for these projects is estimated at USD400 million, which will improve Tunisia's energy autonomy, reduce production costs and create jobs.

Tanzania like other developing countries in Africa is striving to adopt various ways of ensuring that energy supply is accessible as well as affordable. Talking into account the social, environmental, and economic benefits of off-grid renewable energy vis a vis costly grid infrastructure, renewable energy will undoubtedly remain a dependable energy source for Tanzania in the near future.

Although South Africa remains very reliant on fossil fuels, there has been an increased supply and use of renewable energy, particularly wind and solar. This is mainly a direct result of the 2019 Integrated Resource Plan (IRP) which sets out the South African government's diversification targets for the energy supply mix by 2030.

Senegal is implementing a gas to power program in the energy sector. Its purpose is to convert existing thermal power plants to dual-fuel and to build future thermal power plants using natural gas as a primary energy source. The exploitation of the GTA field will play an important role in promoting consumption of clean energy and will support the implementation of the gas to power program.

Rwanda is committed to the sustainable development of the energy sector by giving priority to renewable energy alternatives and new technologies. Solar power is expected to contribute a significant share of power generation as technology improves and battery storage prices fall.

Nigeria will undoubtedly adopt greener sources of energy in its mix. It is expected to be mainly in the form of solar. Nigeria could generate over 50% of required power by deploying solar PV panels on just 1% of Nigeria's land mass. However, there will also be further development of thermal power plants in view of the abundant gas reserves in-country.

Namibia has great potential for renewable energy, especially solar and wind. Under the National Energy Policy of 2017, the government resolves to guide integrated resource planning by prioritizing generation projects from renewable, non-polluting, indigenous, diverse, and decentralized resources, in a way that optimizes the long-term cost of electricity supply.

In 2009, the Kingdom of Morocco launched an ambitious energy strategy which essentially seeks to increase the country’s total power and share of renewables in the energy mix. The objective was to reach a 42% share of renewable energy of total power production capacity by 2020.

In today’s challenging context marked by the continued prevalence of COVID-19 that has shaken Mauritius’ economy and in the wake of the surge in prices of petroleum products, it is anticipated that renewable energy will play a pivotal role in the country’s development.

While thermal energy continues to play a role in Kenya’s energy mix, more than 70% of installed capacity comes from renewables. Over the last five years, there has been tremendous growth in renewable energy technologies, particularly wind, solar and geothermal.

Spurred by the power crises in the last decade, Ghana quickly ramped up production capacity and currently has excess capacity. But the added capacity came at a relatively high cost. The government's response has been to renegotiate some identified power-purchase agreements (PPAs) and encourage renewable sources of energy, notably solar.

In Ethiopia, the development of the renewable energy sector will play a fundamental role in realizing the government’s policy of achieving middle-income country status by 2025. In the process of realizing this goal, the sector will create job opportunities, transfer knowledge and add skills to local professionals.

Côte d'Ivoire has launched a set of legislative and regulatory texts aiming at governing the energy sector in recent years. However, these texts need to be updated to better align with the development of the sector.

In Burundi, the liberalization of energy services began in 2015 following a new law on the reorganization of the electricity sector in Burundi. It involves attracting investors to the sector and promoting the emergence of national power sources through the use of public-private partnerships (PPP).

Botswana’s power system has been characterized by unreliable power supply, lack of investment, poor maintenance and high service costs. To meet its peak power demand, Botswana imports power from the Southern Africa Power Pool – mainly from South Africa – and when imports are not available, resorts to the use of costly backup diesel power plants.

The Angolan Government has created investment incentive models to be adopted in the renewable energy sector. Through the Atlas and National Strategy for New Renewable Energies plan, a framework to encourage investment in renewable energy was proposed that focuses on attracting private initiatives to the sector.

In Algeria, despite the enactment of Law No. 04-09 of August 14, 2004, on the promotion of renewable energies in the framework of sustainable development, no concrete governmental decision to promote renewable energies has been taken since.

In terms of the ease-of-doing-business environment, the 2019 Doing Business Report rates Uganda at 127 out of 190 countries, while the 2018 Global Competitiveness Index rates Uganda at 117 of 140 countries.

Various vehicles exist under Burundian law. In fact, a Burundian company is established by an agreement involving two or more shareholders who agree to share part of their property and their know how to perform one or more specified activities in order to share the profits or take advantage of the economy that may result.

In the World Bank’s ease of doing business (2020) Ghana scored 60.0 on a scale of 100 as compared to the regional average (Sub-Saharan) of 51.8.

The global business segment of the Mauritius International Financial Centre provides convenience, fiscal efficiency and risk mitigation for companies engaged in international operations.

Nigeria has a rich variety of business vehicles in Nigeria, ranging from business organisations formed by only a single individual to business organisations collectively owned by several people. These different structures are moulded to suit multiple business peculiarities, giving investors a wide latitude of business models.

The World Bank annual ratings rank Rwanda 2nd economy in Africa and 38th economy globally. Rwanda is well known and highly acknowledged worldwide for its ease of doing business environment. It is, for example, one of the countries with the fastest company incorporation time in the world, with a striking timeline of only six hours.

With “Zimbabwe is Open for Business” as the new mantra, a concerted effort has been made to improve Zimbabwe’s Ease of Doing Business index ranking which is currently 138 out of 190. This has been done through streamlining the regulatory and compliance framework for investments coming into Zimbabwe.

In recent years, doing business in Angola has improved considerably, as important reforms have been implemented.

Mozambique has been investing in reforms to improve the regulatory environment for the setting-up and registration of companies, including licensing, property registration and matters related to the startups in the country.

Côte d’Ivoire is a country in full economic growth. This is beneficial because it attracts many investors. There are a variety of investment vehicles in Côte d’Ivoire but the most common are the creation of companies and the acquisition of equity participation in the capital.

The following make it easy to do business in Zambia – there is a short and effective process of registering a business, affordable rates for post registration requirements and certain company applications can be completed online.

According to the World Bank Group Doing Business 2020 report, which assesses regulatory environments for business worldwide, South Africa was ranked 84th out of 190 countries globally for ease of doing business.

Kenya is a vibrant regional business hub for international businesses looking to penetrate the emerging markets in East and Central Africa. In recent years, many foreign companies have set up in Kenya owing to the conducive business environment catalysed by regulatory reforms, adequate infrastructure and abundant skilled human resource.

The laws that regulate formation of business entities in Ethiopia are the Ethiopian Commercial Code of 1960, Ethiopian Civil Code of 1960, Investment Proclamation of 2020, Investment Regulation of 2020, Public Enterprises Proclamation of 1992, Cooperative Societies Proclamation of 2003, Commercial Registration and Business Licensing Proclamation of No. 980/2016, and the Commercial Registration and Business Licensing Regulation of 2016 (as amended).

Tanzania has been ranked 144th in ease of doing business records as per the latest World Bank annual ratings. Tanzania has deteriorated to 144 from 137 as ranked in 2017. In the ranking Tanzania has performed well in starting business, getting electricity, getting credit, enforcing contracts, paying taxes, registering property and obtaining construction permits, all being scores that were above 50%. The challenging issues addressed, among others, were cross-border trade, protecting minority investors and resolving insolvency matters.

Namibia enjoys one of the most stable, peaceful political environments in Africa. Namibia’s core business sectors are mining and energy, agriculture, fishing and tourism.

Over recent years, Kingdom of Morocco has created a legal and regulatory framework that is very attractive for foreign investors. In addition to its political stable environment, a recent series of tax treaties with numerous countries and reforms in almost all of its sectors of activities, in conjunction with its creation of successful industrial acceleration zones (previously named free trade zones) such as Tanger Free Trade Zone and Casablanca Finance City, have allowed it to decidedly become a gateway for Africa.

Our guide to the issues likely to impact businesses and the key measures taken by African governments in response to COVID-19.

DLA Piper Africa is pleased to announce that nine lawyers from across the continent have been recognised as Women Leaders by legal directory IFLR1000. The IFLR1000 Women Leaders rankings recognise the most prominent female lawyers working in the areas of financial and corporate transactions and contract, licensing and regulatory project work, within their jurisdictions