Botswana-based energy development company, Shumba Energy, through its green energy unit, Shumba Renewables, received commitments of $950,000 from international investors to develop an $80 million, 100 MW solar project as part of the company’s plan to shift towards renewable energy.
With full funding expected by the second quarter of 2022, the solar project will be the largest in Botswana, and will be situated in the north-eastern region of the country. The equity commitments will be used to finalize technical studies and for the development of the processes leading to financial close.
With holding licenses for an estimated 4.6 billion tons of coal, the move comes as part of Shumba Energy’s commitment to transition away from fossil fuels.
“We believe that, as much as coal will play its role, in the long term, renewable energy is where we want to be,” stated Shumba Energy Managing Director, Mashale Phumaphi, adding that, “This is a really good time to fast track projects of this nature and for Botswana, it is particularly important because 99% of our generation is from fossil fuels.”
With 50% of global energy investment last year placed in solar PV, solar has become the most affordable form of energy, considerably cheaper than coal. Following the COP26 UN Climate Change Conference in early-November, Botswana has reaffirmed its commitment towards easing coal and fossil fuel use and focusing on renewables in the country’s integrated resource plan, which will see 81% renewables in its energy mix by 2040.
With commercial companies and investors transitioning away from coal, Shumba Energy has been unable to attract investors, and is now developing renewable projects to secure investment.