Competition and China's Changing Role

Battery storage in Africa is one of the most misunderstood opportunities in global energy. Only 8% of the continent’s hydro power has been tapped. In Malawi, just 14% of the population is connected to the grid. Africa needs to add an estimated 100 GW of capacity in the next decade and the fastest way is with renewables and storage. Michael Cupit develops BESS projects in Malawi and Kenya, and he’s spent years working inside the gap between how these markets look from the outside and how they actually operate on the ground.

In this episode of Transmission, Ed Porter sits down with Michael to break down the real risk picture in Sub-Saharan Africa: why mid-to-high-teen IRRs are the reality, how 20-year capacity payment contracts compare to merchant BESS in Europe, and what it actually takes to get a project from bare earth to operational - a journey that took eight years in Malawi.

They cover:

• The two biggest misconceptions about doing business in Africa
• How South Africa, Malawi, and Kenya's grids differ and where batteries fit in each
• The role of DFIs, MIGA guarantees, and multilateral risk wrappers in making projects bankable
• China's declining role in African infrastructure and what's replacing it
• The O&M challenge: building operational capability from scratch in frontier markets
• Why winning the argument for renewables means making the commercial case - not just the climate one

Want to track battery storage capacity and market trends across Africa and beyond? Ko, Modo Energy's AI analyst, is built for exactly these questions. Free sign up: https://modoenergy.com/sign-up?utm_source=podcast_apps&utm_medium=podcast&utm_id=michael_cupit

Subscribe on YouTube: https://www.youtube.com/@modoenergy

────────────────────────────

⏱ CHAPTERS

0:00 Introduction

1:08 The two biggest misconceptions about Africa

4:30 IRRs, risk and contracted vs merchant returns

8:00 Why Africa is skipping the fossil fuel grid model

9:40 South Africa: load shedding, rooftop solar and grid constraints

13:00 Battery use cases: the transmission line problem

17:00 Malawi's grid: run-of-river hydro and the diesel spread

19:00 Kenya: geothermal, 10 GW buildout and hyperscaler demand

22:30 Rare earth mining and the electrification push in Malawi

26:30 Financing: DFIs, MIGA, project finance and currency risk

31:45 How long does it really take? The 8-year development journey

33:10 China's role in African infrastructure - myth vs reality

33:45 Engineering talent, local capacity and the O&M challenge

36:55 What success looks like in 5 years

────────────────────────────

You can watch or listen to new episodes every Tuesday.

Transmission is a Modo Energy production. Your host is Ed Porter - Director EMEA & APAC at Modo Energy.