Soldera Markets #6 | Tony Tiyou, Renewables in Africa CEO, on African Renewable Ecosystems

Transcript of the episode's discussion between Oliver Bonallack, Tony Tiyou, and Stenver Jerkku [00:00:03] Hey everyone, today we're joined by Tony Tiu. [00:00:06] He is the founder and CEO of Renewables in Africa, [00:00:09] which is a media brand and also a consultancy focused on accelerating clean energy [00:00:14] in Africa. [00:00:14] Hope that's a good description, Tony. [00:00:17] Yeah, over to you to give a little bit of an introduction about yourself and your background. [00:00:21] And then hopefully we can do a deep dive into the African renewable market and [00:00:25] specifically the REC and IREC market in Africa as well. [00:00:29] Well, [00:00:29] the first thing I would say that maybe I want to hire you because you get the [00:00:32] introduction right. [00:00:35] No, that's absolutely perfect. [00:00:36] So yes, I'm Tony T. He was the founder of a company called Renewables in Africa. [00:00:41] And like Oliver rightly said, so we are a virtual media platform. [00:00:45] We're raising awareness about Renewables Energy in the country of Africa, but also beyond. [00:00:50] And also involving to sustainability where we very much present in carbon markets, [00:00:56] supporting clients. [00:00:58] to tap into this market and then helping them to issue and trade both the IREX, [00:01:03] the carbon credits, [00:01:04] but also supporting company to decarbonize. [00:01:07] So, and it's a pleasure for me to be talking to you guys today. [00:01:11] So, [00:01:12] yeah, [00:01:12] I guess my first question to you is what is the current status of the African rec [00:01:17] market and ecosystem in general? [00:01:19] How do you see it and how has it evolved over time? [00:01:22] I mean, that's an excellent question. [00:01:24] And that's probably one of the reasons why two, [00:01:27] three years ago, [00:01:27] we decided that we wanted to step into this market because we could see that it's a [00:01:32] growing market with everything that's happening around the world, [00:01:34] including the current climate, [00:01:36] where I know there's some uncertainties coming from. [00:01:38] and North American colleagues. [00:01:40] The market is still growing, [00:01:41] but we could see that the continent wasn't really tapping too much into that, [00:01:45] right? [00:01:45] So that's what we made because as a company looking to do awareness for renewable energy, [00:01:51] sustainability, [00:01:52] we wanted to raise awareness to that as well because we see that as an excellent [00:01:56] opportunity for [00:01:57] developers to uh tap into additional revenue stream and some sort of financing as [00:02:03] well and it's a relatively new market why because typically the clean energy market [00:02:08] in africa in terms of volume liquidity it's a lot smaller compared to other regions [00:02:13] but it's also a lot smaller because not a lot of people know about the opportunity [00:02:18] right because if you're talking about specifically the iraq so [00:02:22] I think I can really trace exchanges, you know, from about five years ago, 2020. [00:02:28] I'm sure there was some before, [00:02:30] but from 2020 up until now, [00:02:32] definitely there has been some progress. [00:02:35] And more specifically over the last two to three years. [00:02:38] So what I have seen is actually the volume is doubling in year on year. [00:02:43] So definitely see that there is a great interest there from people. [00:02:45] And people could see that because they could see that, [00:02:47] hey, [00:02:47] listen, [00:02:48] so not only I have built these assets that's generating renewable power, [00:02:53] but I don't even need to do anything else, [00:02:54] you know, [00:02:55] to be able to tap into the reg just by virtue of having these power generation. [00:02:59] So you can tap into the market, providing you can register your device. [00:03:03] And if you can work with some people like myself as a consultant that can make it happen, [00:03:08] that could help. [00:03:09] How much is the volumes already like year on year? [00:03:12] I think those are like really interesting numbers. [00:03:15] Very because I think compared to maybe Europe, it could be still very, very small. [00:03:19] But in 2024, [00:03:19] for example, [00:03:20] more or less, [00:03:22] I think we can talk about between three, [00:03:24] three and a half million IRECs that have been actually sold across the continent. [00:03:29] And the year before, it was half of that. [00:03:32] And the year before was half of that. [00:03:34] So that's why I say that approximately, right? [00:03:37] So that's why I say. [00:03:38] So over the last three years, [00:03:39] so we've gone for something like about 800K in terms of volume, [00:03:43] you know, [00:03:44] to 3.5. [00:03:45] That's IREX, right? [00:03:46] So I'm not talking about the actual term. [00:03:48] I'm talking about the number of IREX that have been sold. [00:03:50] So that's 800 gigawatts? [00:03:53] Yes, yes. [00:03:54] Yeah, 800 gigawatts. [00:03:55] You're correct, yeah. [00:03:56] 800 gigawatts. [00:03:57] Exactly. [00:03:58] And we've gone now to then... [00:04:00] Well, if it's double two years in a row, then roughly two terawatt hours. [00:04:04] Yeah. [00:04:04] 3000 gigatowers, if not terawatt hours. [00:04:09] Yeah, that's what we've seen. [00:04:10] And this is because more people getting away of this market, [00:04:15] more people participating and it's growing. [00:04:19] there's still a lot of room for progress, definitely. [00:04:22] Do you know what's the total renewable production capacity as well? [00:04:28] How much of that renewable production is residual? [00:04:31] How much is tracked with Direx, basically? [00:04:34] Okay, so I've not looked at that more specifically, but what I can tell you, for example... [00:04:39] in terms of solar market in africa we've done about in general right so there has [00:04:44] been i think four gigawatts of solar that has been produced across the uh the [00:04:50] content that's only for solar and for wind you can easily add another one or two [00:04:56] gigawatt uh that way there now obviously you can look at the corresponding energy [00:05:01] produced in [00:05:02] gigabyte hours that that would be and then you compare that as well with what is on [00:05:07] IREC so but because what you also need to know it's uh for IREC in in the continent [00:05:13] there's only 16 17 countries which signed up for IREC skin as you know it depends [00:05:19] on the country who signed up right so not all the continent is [00:05:22] represented. [00:05:23] That's what I'm saying. [00:05:24] There's clearly scope. [00:05:25] And every year, there are no countries that are joining the scheme. [00:05:29] So that's why you can also see a natural progression, a natural expansion of the year. [00:05:34] And the continent of Africa, we're talking about 54 countries. [00:05:37] So if you take into account some regions that are still disputed between countries. [00:05:42] So [00:05:44] 17 out of you know 54 as you could see there's definitely a lot of scope there so [00:05:49] that's why i'm confident that this market that will be growing absolutely it seems [00:05:53] to be doing great do you have like any indication on the because i was actually [00:05:57] looking around we in soldera we like you purchase proprietary price information and [00:06:04] volume information you know to kind of [00:06:06] get the idea how these markets and everything looks like. [00:06:10] And I was very surprised. [00:06:12] I didn't see any of the African continent prices at all. [00:06:16] To be honest, pricing is very difficult. [00:06:20] In fact, to get any information for African high rates is very difficult, to be honest. [00:06:26] You pretty much need to approach various companies or desk participants who are in [00:06:32] the market and have a one-on-one conversation with them to sort of pull things [00:06:37] together to get a little bit of a flavor how the market is looking like. [00:06:41] So you won't see a lot of that. [00:06:43] In terms of the pricing, same thing. [00:06:45] But what I can tell you, [00:06:47] roughly speaking, [00:06:47] like I said, [00:06:48] don't quote me for that, [00:06:49] but that's just average that I've seen. [00:06:51] So pricing, they will vary significantly. [00:06:54] between $1 and $5, correct. [00:06:57] And also it would depend on the region, the country. [00:07:01] That's right. [00:07:02] I think India currently, for example, has 0.5 roughly. [00:07:07] So that's double of India right now, basically. [00:07:10] Because you know as well, so those who wreck, as you know, so it's year on year, right? [00:07:14] So depending on the vintage. [00:07:17] So if you're not using it, you're kind of losing it. [00:07:19] And it's a typical commodity market, you know. [00:07:22] If there's a lot of supply, not a lot of demand, obviously pricing is dropping. [00:07:25] And I know particularly in India, [00:07:27] you have places like India, [00:07:29] Turkey, [00:07:29] Brazil, [00:07:30] they have a lot of supply. [00:07:31] Sometimes they struggle a little bit with the price. [00:07:34] So it's got to be a little bit adjusted, yeah. [00:07:36] In the continent, we don't have that just yet. [00:07:40] So we still have an issue with supply because I regularly get people reaching out [00:07:45] to me and say, [00:07:46] hey, [00:07:46] do you have this quantity for me, [00:07:48] this X amount of gigawatt hours that you can sell to us? [00:07:51] Because we see other issues in terms of supply. [00:07:54] I'm interested on national rec schemes also present because sometimes in Europe, [00:07:59] you have like, [00:08:00] they'll have like a local REC system that's separate from the sort of European system. [00:08:04] I imagine in Africa, [00:08:05] you might have something similar where you have an internal REC system within a [00:08:09] nation and also IREC as well. [00:08:11] Yeah, could you tell us a little bit about that? [00:08:13] You'd be surprised. [00:08:14] As I say, so the whole IRC system, carbon credit, is still relatively new. [00:08:20] So for most of the people in the country of Africa. [00:08:24] So you don't have many national IRC skin wrecks. [00:08:28] You do have some for sure, but not many. [00:08:30] I know places like South Africa, [00:08:32] yes, [00:08:33] they have it because obviously it's the most industrialized country on the continent. [00:08:37] They have something national. [00:08:40] And Egypt as well, [00:08:42] which is the other buoyant markets in the continent, [00:08:44] they have a lot more established markets, [00:08:46] right? [00:08:47] However, [00:08:47] I would say compared to those international schemes like IREX, [00:08:52] so the national scheme here sometimes lack some level of standardization and also [00:08:59] international recognition. [00:09:01] And that can sometimes limit the attractiveness. [00:09:04] So that's why you would see in those countries, [00:09:07] so producers would prefer IREC for the broader market access and standardized [00:09:13] verification processes. [00:09:14] You mentioned a very interesting term. [00:09:16] You said IREC carbon credit. [00:09:18] I noticed that this was referred like that by an Indian colleague as well that I discussed with. [00:09:25] In my head, they're like completely separate things, right? [00:09:28] One, you need to... [00:09:29] basically do with the IREC registry what is it ICX I guess in India and I don't [00:09:35] know if in Africa it's a similar organization and then carbon credits are you know [00:09:39] done by Verra for example or some other NGO now there's new ones popping up so do [00:09:46] you guys sort of bundle them together or handle them separately or are carbon [00:09:51] credits even relevant that [00:09:53] Let's be honest, they're kind of getting destroyed out there. [00:09:56] Yeah. [00:09:58] No, they do. [00:09:59] They do. [00:09:59] They do also for a very practical reason. [00:10:02] The fact that, unless I'm wrong, but carbon credit is still... [00:10:07] global as opposed to localized like Rex Ruby. [00:10:11] And remember, I mentioned only 17 countries tap into IREX at the moment. [00:10:15] So that means in many countries where you have great projects, [00:10:19] but unfortunately they can't do that, [00:10:21] which for me is a shame. [00:10:23] The other option for them is to tap into carbon credit. [00:10:25] And also the other challenge there, [00:10:27] which is not a challenge, [00:10:28] it's the way they're structured, [00:10:31] as you know. [00:10:31] So carbon credit, because [00:10:33] you have a lot more criteria that come into play. [00:10:36] So you can sometimes achieve better pricing compared to IREC, [00:10:39] even if obviously the process to acquire carbon credit is slightly a lot more [00:10:43] longer than that. [00:10:45] So that to say that for us, we definitely will treat them separately. [00:10:52] And we make those developers or asset owners know that you have to choose which one [00:10:58] you want to go for each of the assets. [00:11:02] Obviously, you can mix and match. [00:11:04] Say that, okay, part of my portfolio, I want to open that to IREX. [00:11:08] The other one, I'm going to open that to carbon credit. [00:11:10] You're free to decide. [00:11:12] But obviously, you got to choose, as you know. [00:11:14] So it's all about... [00:11:15] avoiding double accounting for the CO2. [00:11:18] So you got to choose. [00:11:20] So which one you want to go for? [00:11:21] We educate them on that, but also advise them on how they could choose it. [00:11:29] And then they make their own decisions. [00:11:31] I was talking with one reducer in Global South, [00:11:35] and he's told me that for the future, [00:11:37] he registered direct. [00:11:39] And for the past five years, he registered carbon credits. [00:11:44] But then I asked him, all right, have you been able to sell those carbon credits? [00:11:48] And he was like, [00:11:50] It's tough. [00:11:53] But IREX seem to be a lot more in demand and a lot more trusted basically out there [00:11:59] for good reason. [00:12:00] It's a very simple instrument. [00:12:02] Yeah, it's a very simple instrument. [00:12:03] It's fast, lots of money in the pockets. [00:12:07] Obviously, providing you have a buyer and a seller relatively quickly. [00:12:12] But you mentioned something that I want to sort of jump on, and you're absolutely right. [00:12:15] The challenge for many of those guys as well, [00:12:17] it's not just to have the... [00:12:19] Because the title, [00:12:20] the instrument, [00:12:21] the title is a financial title, [00:12:23] but it's worth nothing if you can't sell it. [00:12:26] So having access to buyers is critical. [00:12:30] So that's why, obviously, I commend people like yourself, the platform that you build. [00:12:34] For us as well, [00:12:34] we've created a platform called AfroCab Lite, [00:12:37] where we purely and simply trading those assets. [00:12:41] So we actually launched in that as well. [00:12:42] So clearly, there's a potential for scope there if you are willing to explore that. [00:12:48] But it's something that we recognize. [00:12:50] So... [00:12:51] You need to have access to international buyers. [00:12:54] And most of the time, [00:12:54] those guys, [00:12:55] the people that own those assets, [00:12:58] they're sometimes small producer or small asset owner. [00:13:00] They don't have access to the huge market, right? [00:13:04] So that's why helping them get it done, that's fine. [00:13:07] Because it costs money to get carbon credits. [00:13:11] And it costs some money to have the IRAs, obviously. [00:13:14] So if you're not able to trade and recoup that, you may lose serious amount of money there. [00:13:19] So, yeah. [00:13:19] So that's why it's important to take that into consideration. [00:13:22] I agree. [00:13:23] I'm interested in the different issuers in the different countries, [00:13:27] because you rightly pointed out that not every country in Africa has an issuer for IREX. [00:13:33] It seems to me like it's kind of dominated between two being the IREX central issuer, [00:13:39] which is the GCC. [00:13:40] But also I keep seeing energy peace partners popping up. [00:13:44] I don't know if you've encountered them. [00:13:45] And I think that kind of speaks a little bit to the angle of IREX being a tool for [00:13:50] community development as well. [00:13:52] And I wondered if that had an impact on pricing, [00:13:55] especially when international buyers might be looking to kind of do more good with [00:13:59] their purchases as opposed to simply just offsetting their carbon. [00:14:03] Yeah, I think there's two pieces in your question, but let me handle it properly. [00:14:08] So you're right. [00:14:09] The issuers, they're not many. [00:14:12] The two that you mentioned, GCC, everybody knows GCC for sure. [00:14:16] And in fact, [00:14:16] GCC will stand for the issuer in many countries because what happens sometimes is [00:14:22] they have designated an organization to be able to issue that. [00:14:26] I'll give an example. [00:14:27] For example, in Kenya, it's called EPRA, right? [00:14:30] but epra is not yet ready although they have accepted yeah but they're not ready [00:14:35] yet to be able to issue that so gcc still handle handle it so and you will see many [00:14:40] kind of situation like that in africa so the couple of like i say for places like [00:14:45] egypt south africa okay you find some other people or maybe those gather you mentor [00:14:50] you can find them but they're not many they're actually limited [00:14:53] So does it have an impact on pricing the limited amount of issuer? [00:14:57] To be honest, I've not done specific studies on that. [00:14:59] So I'll be a little bit presumptuous from my side to say yes or no. [00:15:03] I would like to think that there could be some correlation. [00:15:06] But one thing that definitely will have some impact on the pricing is what you see its impact. [00:15:12] that could have embedded. [00:15:13] Because obviously, [00:15:14] if you're doing a project that is an impact, [00:15:16] a whole community, [00:15:17] so that may be a lot more valuable than something that is just sparring one business, [00:15:24] even if that's already good on its own. [00:15:26] But yeah, those are what you call additionalities, right? [00:15:29] But it has even more impact in the GRX. [00:15:32] I'm sure you heard about GRX, right? [00:15:33] We say distributed renewable energy, [00:15:36] which is where they're taking that a little bit more into consideration. [00:15:40] And this for me, and that scheme for me is particularly interesting. [00:15:44] So because in Africa, [00:15:46] compared to the rest of the world, [00:15:50] there are not that many huge projects, [00:15:54] huge power plants. [00:15:55] I'll give you an example. [00:15:57] You're just going to find a handful of projects that are 100 megawatts across Africa. [00:16:03] What we call big projects, it's anything between 10 megawatts to 50. [00:16:07] Those are big projects. [00:16:10] Whereas in Europe, in America, those are very small. [00:16:14] But what you have, you have a lot of small projects sometimes distributed, right? [00:16:19] And that's why these guys were frustrated as well because they couldn't tap too much into IRA. [00:16:25] Not that IRA will prevent them from signing up, [00:16:29] but it's because you know that if they don't generate... [00:16:32] enough volume buyers won't be interested so that's why guys ideas for example [00:16:37] finding a way to bundle them bring them together and create maybe a new category is [00:16:42] helping them to tap into the market and that's for me clearly as well as especially [00:16:46] for the continent of africa that's a way as well for me to dynamize the market and [00:16:51] maybe open up to uh some new players find a way to aggregate those more players so [00:16:56] that they can also take part of it but there's some initiative in that sense [00:16:59] I mean, this is exactly what happened with us as well in Europe, right? [00:17:03] We basically got into this market because we noticed that in Europe, [00:17:08] 30% of the producers were residual, [00:17:10] which means they were not selling. [00:17:12] It's simply money they leave on the floor, right? [00:17:14] They're not picking it up like [00:17:16] Like there's literally, [00:17:17] you know, [00:17:17] they every day it's kind of like they walk on the street and every day there's a [00:17:22] hundred dollar euro there and they're not like bending down to pick it up. [00:17:25] Then we were like thinking, [00:17:26] OK, [00:17:26] but what if somebody else would pick it up for them and give it to them? [00:17:30] That's what we're doing, right? [00:17:33] We basically use the technology to handle all the paperwork and compliance. [00:17:37] Then we aggregate them all together. [00:17:39] Then we sell. [00:17:40] Then we handle all the invoicing, the payments. [00:17:42] Everything is done for them. [00:17:44] They don't need to do absolutely anything themselves. [00:17:47] It's 99% automated. [00:17:49] Well, after we've done the sign up, it's 100%. [00:17:51] And that's it, right? [00:17:54] Suddenly all these people have market access that previously just couldn't be bothered to do it. [00:17:59] I'm very interested in looking into, can we repeat the same thing in Africa as well? [00:18:04] Excellent. [00:18:04] I think you're definitely going to find an open ear with me. [00:18:08] From what I've seen, what you guys doing looks quite interesting. [00:18:11] So you mentioned that there's only a few projects in Africa. [00:18:14] I think you said that there were a handful that have over 100 megawatts. [00:18:18] Does that reflect a broader problem in the international ambition when it comes to [00:18:24] funding big projects in Africa? [00:18:25] In a sense, if I have to rephrase it, why are they only... [00:18:28] Fuel Project 100 megawatt, yeah? [00:18:30] That's why you want to... Okay, yeah, very simple answer. [00:18:33] So it's that you also need to know that the grid... [00:18:39] In Africa, it's a lot smaller. [00:18:41] Obviously, [00:18:42] you heard about the fact that there's still a lot of countries that don't have full electrification. [00:18:46] In fact, only few countries have full electrification, we could say. [00:18:50] So the majority of countries, that's not the case. [00:18:53] So the grid is a lot smaller. [00:18:55] So when I'm talking about that, what does that mean? [00:18:57] It means that when you bring a 100 megawatt project, you still have to connect that to the grid. [00:19:02] And that's the problem. [00:19:03] If you go, [00:19:04] for example, [00:19:04] to a country that, [00:19:05] I don't know, [00:19:06] Chad, [00:19:07] Central Africa, [00:19:08] where you have the whole grid, [00:19:10] which is what? [00:19:11] Something like not even one gigawatt or sort of 800 megawatts. [00:19:15] So when you come and plug in 100 megawatts, [00:19:18] you can imagine already in terms of integration, [00:19:21] all the challenges that you're going to see. [00:19:24] So that's why you will see sometimes project that could be, [00:19:28] yeah, [00:19:28] 100 megawatts, [00:19:29] 200 megawatts that they want to develop, [00:19:30] but they do that in phases because [00:19:33] They can't be able to, they can't integrate. [00:19:35] I'll give you also another example. [00:19:36] You have a, [00:19:38] which is the biggest, [00:19:38] see the biggest wind projects in Africa, [00:19:41] which is Lake 2, [00:19:42] Canada, [00:19:42] that's in Kenya. [00:19:43] That's 310 megawatts. [00:19:45] It took them about three years to connect that to the grid. [00:19:50] Because it's quite significant, right? [00:19:52] So, yeah. [00:19:53] So that's the technical challenge. [00:19:55] Seems to be a common challenge everywhere right now, like in renewables. [00:19:59] The grid is just not there. [00:20:01] Yeah, you got to upgrade the grid for sure to absorb it. [00:20:06] And obviously, [00:20:08] I must admit, [00:20:09] greed in many of our countries, [00:20:11] they're not that effective, [00:20:13] you know, [00:20:13] so they're losing a lot of, [00:20:14] there's a lot of losses there happening, [00:20:16] all kind of issues that you can think about. [00:20:18] Financing as well, [00:20:19] you mentioned absolutely it's a problem to make sure that you, [00:20:22] because as you know, [00:20:24] so renewable is great, [00:20:26] but it's also fair to recognize that it's capital intensive, [00:20:28] at least initially. [00:20:30] And you need to find that money and that money. [00:20:31] And in the continent of Africa, we don't have a lot of capital markets, right? [00:20:35] So South Africa has it. [00:20:38] Egypt to Morocco has it. [00:20:40] But most of the time, those money come from GFI, which is European finance institutions, right? [00:20:44] So whereas in Europe, in America, that's private market. [00:20:47] You don't need to go and bother the state, the government to come and they can do that. [00:20:52] This guy can handle it without any problem. [00:20:54] For us, we don't have enough big guys that can do that. [00:20:56] Most of the money comes from abroad and a big part of it comes from GFI. [00:21:00] And why do big private guys don't come to Africa? [00:21:03] Because a lot of them still see that as a very risky place, you know, for the wrong reason. [00:21:07] Because if they look at that property, [00:21:09] they will see that it's actually the amount of default that you see in Africa. [00:21:13] You'll be surprised to know that it's as small as the U.S. [00:21:16] But people just don't know that. [00:21:17] But the perception will actually twist the picture. [00:21:20] So basically, that's this technical aspect, financial aspect, and also regulatory. [00:21:25] Because to get as well a large project like that, [00:21:29] you need to have as well the government that sort of create the regulatory [00:21:33] framework for you. [00:21:34] And a lot of the government were reluctant until very recently. [00:21:37] Why were they reluctant? [00:21:38] Because, obviously, they're greasing themselves with oil and gas project, isn't it, right? [00:21:44] So you don't want to change it. [00:21:45] So, yeah, all that politics that gets into place. [00:21:48] And, yeah, that comes into the mix. [00:21:51] And the last part is just capacity building. [00:21:54] So you also needed to have a local labor force that's able to do it. [00:21:58] Again, like I said, not many countries can do that. [00:22:00] South Africa can do it. [00:22:01] Egypt can do it. [00:22:02] Kenya could do it. [00:22:03] Yeah, [00:22:04] but if you go, [00:22:05] for example, [00:22:06] in a project, [00:22:07] I don't know, [00:22:07] Burkina Faso, [00:22:08] I promise you most of the guys that you have to bring that come from abroad because [00:22:11] you don't have a local supply chain who can actually handle it. [00:22:14] So there are different kind of challenges like that. [00:22:16] You mentioned that the default rate is lower than the US. [00:22:20] That's crazy. [00:22:21] Can you expand on that one? [00:22:24] Definitely. [00:22:24] So those are data that you can go and check, even from World Bank, you will see. [00:22:28] Okay, when you look at that, it can be surprising. [00:22:31] But if you look closely, not that much. [00:22:33] Because for a project to actually get to financial close in Africa, [00:22:38] you know, [00:22:39] it takes such a long time. [00:22:40] You have so many people looking at that from every angle. [00:22:43] And those are actually... [00:22:46] people that come from the international markets. [00:22:48] So they apply. [00:22:49] But this level of standard is pretty high. [00:22:52] That's what I'm saying. [00:22:53] So that means for that project, 100 megawatts, that's $100 million, right? [00:22:57] So I just make it simple, right? [00:22:58] So I know it's cheaper these days, but let's say $100 million. [00:23:02] So for $100 million to happen, you can be sure that whoever has signed up that check [00:23:08] has gone through all the checks possible to make sure that, [00:23:11] and also put in place all the type of guarantees. [00:23:14] Because we know already the off-takers in Africa, [00:23:17] so a lot of them, [00:23:18] like I say, [00:23:19] struggle financially. [00:23:20] So you need a certain number of guarantees for the deal to go through. [00:23:24] So that's what I'm saying. [00:23:25] That is actually very solid. [00:23:27] That's what I say. [00:23:28] When I'm talking about GFI, [00:23:29] I'm talking about guys like in France, [00:23:32] Propaco or KW, [00:23:36] these kind of guys. [00:23:37] BII, just in the UK here. [00:23:39] I know they changed the name there. [00:23:40] I forgot the whole name that they had. [00:23:43] I'm just going to say these are guys, IFC, those are very solid guys. [00:23:47] That's what I'm saying. [00:23:48] For a project to cross financial close and to move into construction, you can be sure that. [00:23:55] And usually even the EPC, those are international standards. [00:23:59] you know, the top guys that will go and build those things. [00:24:02] So you could be sure that people handling that. [00:24:06] So there's a lot of guarantees at every place. [00:24:09] That's why I say most of the big infrastructure project is very low, the default rate. [00:24:13] What I hear is also that Africa probably hasn't reached a point where solar is [00:24:18] cannibalizing itself, [00:24:19] right? [00:24:21] in europe like a lot of investments have been pulled back from renewables because [00:24:26] the marginal benefit starts getting so small it's just not worth it anymore but in [00:24:32] africa is that the case or or it's like completely the opposite and you can make a [00:24:37] lot of money there but no i think definitely you can make a lot you can you can you [00:24:41] can you can make another money because [00:24:44] Just for you to have, let's say, getting rid of the currency fluctuation. [00:24:50] So the volatility of pricing due to oil and gas. [00:24:55] And also availability. [00:24:57] Because a lot of the local economies in Africa are actually hurt by the fact that [00:25:04] they don't have access to power. [00:25:06] If you imagine, for example, you're running your factory. [00:25:09] Yeah. [00:25:10] And maybe 10 and 20% of the time you're having downtime, [00:25:13] not because your equipment not working, [00:25:15] just because you don't have power. [00:25:18] So that means you have an order. [00:25:21] You can't actually deliver that order, [00:25:23] not because there isn't any, [00:25:25] you don't have the labor force. [00:25:26] No, just like we didn't have power. [00:25:28] Or maybe because... So the demand is bigger than the supply even right now. [00:25:32] Absolutely. [00:25:32] Absolutely. [00:25:33] And also, every serious business company in Africa needs to have always a lot of genset. [00:25:41] Just a generator running with them. [00:25:43] Because they can't afford, obviously, to go there all the time. [00:25:47] But look at the amount of money that they have. [00:25:49] So if they find a way to replace that by solar over time, [00:25:55] that's actually not only, [00:25:56] obviously, [00:25:56] they're getting stable power. [00:25:59] Most of the time now it's cheaper price, or at least on par most of the time. [00:26:03] And they can boost their productivity. [00:26:05] No, definitely solar in Africa, it definitely works. [00:26:09] That's not a problem. [00:26:10] It definitely works. [00:26:11] This reminds me of the Pakistani revolution, right? [00:26:15] Where without any government subsidies... [00:26:18] Pakistani now has solar as the biggest energy mix because it's the cheapest form of power. [00:26:25] There's a lot of sun and you can actually, [00:26:29] with very small amount of money, [00:26:30] start investing in solar panels already. [00:26:33] and people have built them all over Pakistan to their roofs, [00:26:37] and it's grown to be extremely popular and a massive success story, [00:26:43] actually. [00:26:43] It's brought power to most of the country, thanks to the solar revolution there. [00:26:48] And key point is zero government subsidies. [00:26:51] It's all naturally just pure free market moves. [00:26:54] It's a beautiful story. [00:26:56] I think it's really government around the world really let solar... [00:27:00] run its course. [00:27:01] I'm confident that the market would grow otherwise if it wasn't the case. [00:27:07] Trump would have killed the solar industry in the US the first time. [00:27:10] Obviously, he slowed that down, but he didn't kill it because the business case is there. [00:27:15] I know he's going to slow that down again this time around, [00:27:18] but he can't kill it because, [00:27:19] like I said, [00:27:20] the business case is there. [00:27:21] People will see the resources there. [00:27:22] You're absorbing that. [00:27:24] The costs are way low now, so it's a no-brainer. [00:27:27] Like I said, the environmental benefits... [00:27:30] why very important it's not even the primary decision factor and you know it's [00:27:36] economic the decision factor for most of the people just bringing it back to africa [00:27:41] we put out a post earlier this year essentially praising the growth of solar in in [00:27:46] nigeria after fuel subsidies were removed i think we were a little bit kind of deaf [00:27:51] to the the social impacts of what happened when the fuel subsidy was removed so [00:27:55] Is there a delicate balance to be struck between meeting the needs of a population [00:27:59] and just, [00:27:59] you know, [00:28:00] going all in on solar and removing subsidies for fuel? [00:28:03] Yes, I think this, I believe, always has to be a gradual process, right? [00:28:07] Because if you remove all of a sudden oil subsidies and you're also kidding a [00:28:15] certain part of the industry that relies on that, [00:28:17] and that can have very, [00:28:19] very, [00:28:19] very serious impact. [00:28:20] Remember, Africa is still a very young continent. [00:28:25] I'm talking about the age. [00:28:26] So the average, the median age is about, what, 19, 20. [00:28:30] So that means actually, [00:28:31] so all those business, [00:28:33] so people working there, [00:28:34] and obviously have about four to five children per family. [00:28:39] You can imagine the number of people that obviously that are impacted by this kind [00:28:44] of decision because it has an impact on the various families. [00:28:46] So it has to be a gradual process. [00:28:49] But ultimately, that's also the way to go if you don't want to skew the market. [00:28:54] Isn't it right? [00:28:55] First of all, I believe there should be a level of subsidy for everybody. [00:28:59] I know people complain about the fact that renewable solar gets in subsidy, [00:29:04] but I forget to say that it's actually the same for the last half century or whatever. [00:29:10] It's trillions that is going there. [00:29:13] So I believe that things should be balanced. [00:29:15] So ultimately, [00:29:16] obviously, [00:29:16] you want to make sure that it's properly balanced and create a playing field. [00:29:21] And when we have that, I know solar is going to definitely progressively make sense. [00:29:26] And in the content, [00:29:27] like I said, [00:29:28] yes, [00:29:28] I think I believe that solar really create a new kind of industry, [00:29:33] giving a lot of opportunities to people on the ground. [00:29:36] And you were talking about Nigeria. [00:29:38] Nigeria is speaking of big time. [00:29:41] I can tell you that [00:29:43] I don't have the exact figure, [00:29:45] but I believe from what I've heard from very good sources, [00:29:50] one of them, [00:29:50] I can't mention them, [00:29:51] but they're one of our clients. [00:29:52] I can't mention them. [00:29:53] It's one of the top solar manufacturers. [00:29:56] And they told me beyond closed door that Nigeria has achieved more than one gigawatt. [00:30:03] So that was last year. [00:30:05] And they started from a very low base. [00:30:08] And like I say, if Africa has done four gigawatt last year and Nigeria alone one gigawatt, [00:30:15] I know it's the biggest country in terms of the population, [00:30:19] but you could definitely see, [00:30:20] and you can imagine the number of people that would have been impacted by that. [00:30:27] But the funny thing is, [00:30:28] as we're talking about that, [00:30:29] I always like to remind people that no matter how much we talk about solar in Africa, [00:30:34] for me, [00:30:34] we haven't started yet. [00:30:36] We even haven't started yet. [00:30:38] You'll be surprised to hear me say that, but if you bring that in the grand scheme of things, [00:30:43] You know, the whole solar production in Africa, it's barely 2% of the global capacity. [00:30:52] With a country that holds more than 60% of the resource. [00:30:56] So that's what I'm saying. [00:30:57] We haven't even started. [00:30:59] What we see is minuscule. [00:31:01] When you have places like Germany, it's like 15 gigawatts. [00:31:04] So that's to give you an idea. [00:31:06] Yeah. [00:31:09] The smart thing would be to start manufacturing those panels straight in Africa, right? [00:31:14] You have a lot of countries, [00:31:15] a lot of, [00:31:16] more and more people now are asking for that because, [00:31:19] which is the general conversation in terms of raw material, [00:31:22] right? [00:31:22] Because as we talked about energy transition. [00:31:24] I wasn't joking, by the way. [00:31:25] No, no. [00:31:27] Yeah. [00:31:27] I'm just pushing in your direction to say that a lot of, [00:31:32] Government in Africa are actually requesting that. [00:31:35] But it's actually a broader conversation in terms of raw materials, [00:31:38] especially critical materials, [00:31:39] because the world can achieve what you call a just transition without key materials [00:31:46] that most of them have found in Africa as well. [00:31:50] Like, for example, lithium, cobalt, and all of that. [00:31:53] And many governments now, they are tired of just being... [00:31:57] seen as, let's say, a market and a dumping ground. [00:32:00] They want people now, okay, no problem. [00:32:02] You can trade, [00:32:03] you can get access to our resource, [00:32:05] but we want you as well to build infrastructure in here so that you can contribute [00:32:09] to training people locally. [00:32:11] So there's definitely a big push. [00:32:13] of getting a lot more manufacturing for the solar supply chain. [00:32:17] And another thing that boosted that was also COVID because with COVID, [00:32:21] in fact, [00:32:21] the rest of the world saw that with the full production being concentrated in China. [00:32:27] So look what happened, obviously, when China is gripped. [00:32:30] It's gripping the rest of the world. [00:32:32] That's why, for example, you know that... [00:32:34] There is this manifesto for manufacturing to come back to Europe and other places as well. [00:32:39] So, yeah. [00:32:40] And that's also a sound that we're also hearing in Africa. [00:32:44] Yeah. [00:32:45] So obviously it's going to take time, but yeah, people are pushing towards it. [00:32:48] Yes. [00:32:49] A lot of people in Africa now think in terms of region as opposed to just countries. [00:32:55] Because if you go, [00:32:56] for example, [00:32:56] to Africa, [00:32:57] I'm sure you heard about West Africa, [00:32:58] East Africa or Central Africa, [00:33:00] Southern Africa. [00:33:01] They realized that in the logic of this world, [00:33:04] you want to be talking in terms of, [00:33:06] obviously, [00:33:07] regions, [00:33:07] you know, [00:33:08] block. [00:33:09] Because if it's just one single country, you know, globalization, you're dead. [00:33:12] There's nothing that you can do. [00:33:15] And also in Africa, [00:33:16] I don't know if you heard about the AFCFTA, [00:33:19] which is the single markets, [00:33:22] sort of to replicate a little bit what the EU has done, [00:33:24] but obviously it's still a very early stage in Africa that it's been designed. [00:33:28] And you could see as well a lot of countries now in Africa now putting their [00:33:31] borders to other countries, [00:33:33] so obviously banishing countries. [00:33:36] visa rules. [00:33:37] And part of it is actually being fueled by this spirit of Pan-Africanism where [00:33:44] people say, [00:33:45] hey, [00:33:45] I think it's time for us to [00:33:47] Because I don't know if you know, but the inter-trade between Africans, it's a bit small. [00:33:53] It's very, [00:33:54] very low compared to... [00:33:55] Africa trade more with the rest of the world and with what it's doing in Africa. [00:34:02] I think it's less than 18% of the trade actually between Africans, [00:34:06] which is far lower than any other continent. [00:34:10] So definitely there is this movement where people say, [00:34:13] let's start working more together, [00:34:16] come together and maybe see, [00:34:17] pull our resources together. [00:34:19] And if we do that, [00:34:20] we are stronger, [00:34:21] you know, [00:34:22] compared to the rest of the world, [00:34:24] speaking from one voice. [00:34:25] So I believe, [00:34:26] Oliver, [00:34:27] to respond to your question, [00:34:28] I think, [00:34:29] yeah, [00:34:30] I think it's a movement and a spirit. [00:34:33] that is coming back and it will get things to move, to shape. [00:34:38] That sounds like a beautiful message to end this one. [00:34:41] Be stronger together and be stronger together. [00:34:46] Yeah, awesome. [00:34:47] Thank you so much, Tony. [00:34:48] Yeah, we really appreciate you sharing your insights. [00:34:51] Thank you very much for giving me the chance. [00:34:52] So I know we talked about many other things, but it was a beautiful conversation. [00:34:57] I appreciate that.