How Global South countries are catalysing renewable energy manufacturing


For Global South countries, accelerating the pace of renewable energy adoption is an opportunity to meet growing energy demand, build local industries around energy transition solutions, reduce import dependency and create jobs.  

The inaugural webinar of the Africa Renewable Energy Manufacturing Initiative (Africa REMI) South-South Virtual Policy Dialogue Series convened experts from ASEAN, India, Nigeria, South Africa, Kenya and Brazil to share experiences in industrial policy design and implementation to scale renewable energy manufacturing. This article summarizes key takeaways from the webinar.  

Effective industrial policies require a holistic, multi-faceted approach  

Experts emphasized the need for visibility over national and regional demand for renewable energy products to strengthen the investment case for local manufacturing. Governments can unlock domestic demand through deployment targets and policies. Local content requirements are a tool, specifically where public financing is involved, although these must be time-bound and enforced for effectiveness.

“The success of Brazil’s wind manufacturing industry is a result of a strong public procurement, local financing and national content policy that gave a clear, long-term market signal to global manufacturers to produce turbines and other components locally. Today, Brazil has a competitive wind industry,” highlighted Elbia Gannoum, CEO, ABEEólica, Brazil. Regional demand can be unlocked by investing in physical infrastructure, such as grids and through instruments such as special economic zones and trade agreements. The Southeast Asia Renewable Energy Manufacturing Initiative study discussed opportunities for supply chain development in the ASEAN region.

“In the ASEAN region, there is significant experience at the national level, including Indonesia, Malaysia, Thailand and Vietnam, on building domestic renewable energy supply chains. There is a tremendous opportunity to leverage the ASEAN Plan of Action for Energy Cooperation framework to build a consensus on renewable energy manufacturing, enabling each country to leverage its unique resources and the region to develop resilient supply chains for energy transition technologies,” highlighted Monika Merdekawati, Research Analyst, ASEAN Centre for Energy.  

Demand alone is not enough

In a highly competitive environment vis-à-vis imports, building local manufacturing will require a host of supply-side incentives and support.

Subrahmanyam Pulipaka, CEO of the National Solar Energy Federation of India, reflected on India’s case: “Until 2019, India was one of the largest importers of solar modules about 90%. To achieve true energy independence, it was imperative to strengthen domestic supply chains.”

India’s Production Linked Incentive Scheme, launched in 2021, aims to build an end-to-end value chain, from mining to polysilicon, wafers, cells and modules. By the end of 2024, India is expected to have 75 GW of module, 30 GW of cell and 10 GW of polysilicon wafer manufacturing capacity – dramatically reducing import dependency.  

A path to increase manufacturing capacity and reduce manufacture import dependencies in India


GW of module manufacturing capacity, by 2024


GW of cell manufacturing capacity, by 2024


GW of polysilicon wafer manufacturing capacity, by 2024

In the electric mobility sector, favourable fiscal incentives for knocked-down kits are driving the expansion of local assembly in many countries, including Ethiopia, Ghana, Kenya and Rwanda. In South Africa, as part of the Renewable Energy Master Plan (SAREP), tax incentives for both greenfield and brownfield manufacturing in renewable energy value chains is being pursued, with public demand serving as an anchor.  

In Africa, while local manufacturing of solar PV, batteries and electric vehicles is limited to a great extent to assembly, the focus of industrial policy should be on deepening supply chains. Kenya’s recently launched draft e-mobility policy positions local manufacturing as a key objective with a local content requirement phased over time.

“There is a big focus on electric vehicle assembly in Kenya because that supply chain is already there, but the real win is beginning to create incentives for local component manufacturing of electric power train, battery packs, electric motors, power electronics,” highlighted Jit Bhattacharya, CEO of BasiGo, which established the first local electric bus assembly line in Kenya.  

Designing and implementing an enabling industry policy framework

An industrial policy framework must embody a whole-of-a-systems approach, offering a long-term roadmap for the renewable energy sector based on extensive consultations and data. It should consider what is economically and technically feasible, and where comparative advantages lie in a rapidly evolving sector.

Pulipaka added, “In a competitive environment, the domestic industry must innovate to build a value proposition. The Indian government is ensuring incentives are directed at high efficiency modules manufacturing capacity rather than outdated technology. Industry consultation is crucial to calibrate policy design.”

The South African Renewable Energy Master Plan serves as an example of a long-term industrial policy framework for the sector. Reflecting on the design and implementation process, Gaylor Montmasson-Clair, Senior Economist, Trade & Industrial Policy Strategies and Facilitator, SAREP added, “Co-creation and co-ownership is crucial involving government, industry and labour. To drive implementation, it is critical to have a dedicated, independent, well-resourced and empowered body.”  

Experts also emphasized the need for early-stage support to industry as firm capabilities build up, and the local ecosystem involving demand, supply chains, testing, research and development and skills develops. Governments can also take proactive steps to reduce input costs, including access to reliable and affordable electricity supply and concessional financing.

Proactively building a green manufacturing workforce

While the renewables manufacturing sector is still in nascent stages in many countries, the skills gap can quickly become a constraint. Technical and vocational training institutes must integrate curricula related to manufacturing roles that complement theory with practical training for new students as well as upskilling existing workforce. There is a significant opportunity to facilitate collaboration across the Global South training institutions on curriculum design and delivery.  

Jit Bhattacharya noted, “In the case of e-mobility, whether buses or bikes, where the gap exists is with skills relevant to electric powertrain which is much more in the realm of computer/electronics manufacturing than mechanical engineering. We absolutely need to build human capacity on both manufacturing lines and in the operations serving the vehicle fleets that are out in the market.” Skills gaps are not limited to technical skills alone – new generation enterprises require continuing upskilling across areas, including operations, business development, marketing and financing.  

Strengthening South-South cooperation

Across many African countries, it was noted that it is still cheaper to import finished goods from abroad, than to trade within the continent. Existing programmes, such as the Africa Continental Free Trade Agreement and regional economic communities, are necessary to better integrate markets and maximize economies of scale.

Drawing on India’s experience, Pulipaka noted, “The Production Linked Incentive scheme demonstrated that economies of scale makes local industry more competitive. For example, any polysilicon manufacturing less than 10 GW is not viable and by ensuring sufficient scale at each segment of the value chain, you also ensure that your final product (module) is competitive.”  

South-South cooperation can also be leveraged to bridge other gaps in the manufacturing ecosystem, including policy design, investments, technology access and skills building.

Zira John Quaghe, Country Manager – Nigeria, African Climate Foundation noted, “Better knowledge exchange is crucial. Learnings from countries that are further along in their renewable energy value chain development and just transition journey should be shared with other Global South countries, alongside efforts to address issues of trade reforms.“ Based on the experiences shared, it was evident that policies profoundly shape markets irrespective of geography. Thus, it is imperative to be intentional about deploying multiple levers of industrial policy design, and implementing them simultaneously to support renewable energy manufacturing and scaling it up across Africa.  

The recording of the webinar can be accessed here. The next webinar in the series will take place in May 2024. Please sign up here to the Africa REMI mailing list for updates.  

Africa REMI is supported by partners, including Bloomberg Philanthropies, ClimateWorks Foundation, African Climate Foundation and CREIA.

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