South Africa, Kenya and Ethiopia are set to benefit from increased investment in clean energy in Africa as over 1.8 gigawatts of renewable energy , excluding large hydro projects, get commissioned in 2014, Bloomberg New Energy Finance (BNEF) said in a report.

The BNEF report said clean energy investment in sub-Saharan Africa is likely to rise by more than 30 percent to $7.7 bn in 2016 from $5.9 billion currently. In the 2006-11 period, investment was far lower, averaging some $US1 billion per year.

South Africa, Kenya and Ethiopia are considered the leaders in renewable energy in Africa  and together they have longer term plans to builder nearly 6 gigawatts of solar PV, wind and geothermal installations, RTCC reported.

Of the 6 gigawatts South Africa is likely to install 3.9 gigawatts, mostly from wind energy; Kenya will install 1.4 gigawatts, mainly from geothermal and wind; and Ethiopia will install nearly 570 megawatts, largely wind with some geothermal.

Access to viable financing models will determine how fast the region manages to develop its clean energy potential, Derek Campbell, a Cape Town-based analyst for BNEF said. Renewable projects require high levels of upfront capital.

“The joker in the pack for the Sub-Saharan region is likely to be rooftop and other small-scale PV, which has the potential to enjoy explosive growth in Africa’s towns and cities and also in rural areas not connected to the grid,” Campbell said.

Sub-Saharan Africa is emerging as one of the most exciting new markets for renewable energy technologies such as onshore wind, small-scale and utility-scale solar and geothermal power.

This is however not a new phenomena.

South Africa has been an active market for a few years and there have been occasional large investments in geothermal in the Rift Valley countries. What is different now is the breadth of activity, with wind, solar and geothermal exciting interest in many different countries, and the potential for further growth,” senior BNEF analyst Victoria Cuming said.

In prior years many investors avoided the region due to fears of corruption and lack of transparency, which made attracting finance for projects in Africa has been difficult.

BNEF report says this is starting to change.

The European Investment Bank (EIB) recently loaned solar developers Abengoa nearly US$100 million for a solar plant in South Africa. Other major investments include the 310MW Lake Turkana Wind Power scheme in Kenya, which has been backed with a US$650 million loan from the African Development Bank and Standard Bank of South Africa.

The UN’s Green Climate Fund, which is expected to start work early in 2015, is likely to offer one financing path for African countries eager to boost their renewable capacity.

The World Bank has also pledged US$5 billion in support of energy projects in Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania, with a goal of exploiting hydropower resources.

Africa currently uses only 8 percent of its hydro potential, compared to 85 percent in Europe, which according to the World Bank leaves around 600 million people in Africa with no access to electricity.