South Africa and Morocco are leading a renewable energy boom in Africa while several North and East African countries have plans in the works to reduce chronic power shortages and lack of access with renewable energy, according to a report in RenewEconomy.

The energy team at global law firm Baker & McKenzie conducted a survey of 140 senior executives in the energy industry. More than 80 percent of respondents said Africa’s strong wind and solar resources were primary drivers for the continent’s renewables development.

Renewable energy can compete with conventional energy sources, particularly away from limited transmission networks or developed fuel transportation hubs and it’s cheaper than new coal-fired generators, according to the report.

Much of Africa relies on expensive diesel for electricity, the report says. It suggests solar photovoltaic has the most potential throughout Africa, while concentrated solar power, onshore wind and solar CPV could make significant contributions to the energy mix. Hydroelectric and biomass are viewed as the most obvious complements to solar photovoltaic in Sub-Saharan Africa, the report says.

South Africa plans to bring 6.9 gigawatts of renewables capacity online by 2020 and has already awarded 2.4 gigawatts of contracts. The first phase of 1.4 gigawatts represents $5.4 billion of contracts, according to the report.

“The average price for wind in the last bid was 89 rand cents per kilowatt-hour, which is cheaper than the equivalent cost of cleaner coal new build in South Africa,” said Christopher Clarke, director of Inspired Evolution Investment Management, in the RenewEconomy report.

Morocco plans to develop 850 megawatts of wind capacity in five projects as part of the second phase of its wind program, which targets 2 gigawatts of installed capacity by 2020, the report says. Morocco also has under construction the 500 megawatt Ouarzazate concentrated solar power project, which, the report says, will be the largest such plant in the world when completed.

Tunisia and Algeria announced plans to develop renewable energy resources and have begun to put in place enabling legislation.

Egypt plans to install 7,200 megawatts of wind power by 2020 and had projects with total installed capacity of about 550 megawatts in 2010, which is the largest installed capacity in Africa, the report says.

In East Africa, Kenya and Uganda have established a renewable energy feed-in tariff. There is significant interest in exploiting geothermal resources of the Rift Valley region in East Africa, the report says.

Zambia, the Democratic Republic of Congo, Uganda and Mozambique have built hydroelectric projects.

Financing is key for African renewables, the report says. Investors need strong relationships with local banks and international development finance institutions to access affordable capital.

South African banks have so far financed most of the country’s program to bring 6.9 gigawatts of renewables capacity online by 2020. Participation from international banks in African renewables has been limited so far, the report says, but 78 per cent of respondents to the Baker & McKenzie survey said they believe non-African banks will become more active in the next two years, according to RenewEconomy.

Asia may be a source of additional investment, having invested more than $6 billion in non-Asian renewable energy assets in 2012, the report says, with Africa an increasingly important target destination.

Survey respondents listed political risk as the greatest uncertainty for those considering investing in renewables in Africa, with 68 percent putting it at the top of their list of concerns, higher than regulatory risk (42 percent), exchange rate risk (37 percent), compliance risk (28 percent) and technology risk (18 percent), RenewEconomy said.

“It is an exciting time for renewables in Africa,” said Scott Brodsky, a lawyer and co-managing partner of Baker & McKenzie in Johannesburg, interviewed in the RenewEconomy report. “Renewable energy programs such as South Africa’s will bring much-needed power to keep the lights on and drive growth in an energy-intensive economy that needs power for key industries such as mining, smelting and pulp and paper.”