Big players blind to real value of small-scale off-grid power

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More than 5 000 power and water professionals from different African utilities and institutions descended on Cape Town yesterday to engage on the challenges that face these two crucial sectors on the continent.

Although Africans are quick to dispel the notion that theirs is a dark continent, more than 600 million people are still without electricity in sub-Saharan Africa.

According to World Bank figures cited by Agnes Dasewicz, the director of USAid’s Private Capital Group for Africa, at the African Utility Week yesterday, businesses on the continent, on average, experience 56 days of power outages a year, translating to a loss of 20 percent of working days yearly.

These are not new discussions, they take place every year yet even a country like South Africa, considered to have a more stable grid than most, is able to avert general outages only at the expense of big businesses.

As Frans Vreeswijk, the secretary general and chief executive of the International Electrotechnical Commission put it, some countries have enough resources to power the entire continent but they do not have the money to make anything out of those resources, be it rivers for hydropower plants, gas or solar energy.

The planned integrated southern African electrical grid, which is being piloted by the region’s power pools, is a noteworthy start but something to take away from Vreeswijk’s remarks yesterday is that we do not need to build big centralised power systems. Isolated small-scale off-grid power generation is gaining momentum around the world. And such systems can be installed in months rather than years.

So why is South Africa sceptical of off-grid generation?

Ayanda Nakedi, the senior general manager of the renewables business unit at Eskom, spoke about off-grid power that had been rolled out to a few rural communities, but it was not reliable. Its performance showed that it was “electricity for poor people” and people protested against that. They wanted the same quality of power supply provided to people in the urban areas and rightfully deserved that.

If there is one thing the engagements at African Utility Week should try to provide a solution to, it is these small areas of concern because the bigger problems, bigger power stations and bigger and smarter grids will take years to sort out.

Leisure

The hotel, gaming and entertainment industry leaders looked a lot like players forming strategies on a chess board.

Announcements about who is buying and selling what came trickling down yesterday from Tsogo Sun, Sun International and Grand Parade Investments (GPI).

By the end of the day all three players had made healthy gains on the JSE, led by GPI, whose shares shot up just over 5 percent after it sold 70 percent of its GPI Slots business to Sun International.

GPI said the opportunity to sell a majority stake in a business with 5 000 limited payout machines to Sun International would give GPI Slots a bigger national and international platform. GPI will benefit through the remaining 30 percent stake that it will have in the business.

It will also give GPI an opportunity to diversify its capital by deploying the proceeds of the transaction into non-gaming assets.

In the other court, Tsogo Sun, which has been making huge investments in the hotel and casino industry, has set a goal to be key player in these sectors. Its strategic move to acquire 40 percent shares in two entities owned jointly by GPI and Sun International does not come as a surprise.

The company has recently invested R220 million in the refurbishment and relaunch of the Southern Sun Elangeni and Maharani hotels in Durban.

For Sun International, which had earlier planned to cut 1 700 jobs due to muted growth as a result of highly indebted consumers cutting back on domestic travel and gambling, the move is based on a pure strategy.

The group’s chief executive Graeme Stephens said the move was consistent with its long-term objectives of increasing interest in key strategic assets, streamlining the company’s structure and enabling black empowerment value creation.

Edited by Banele Ginindza. Contributions from Londiwe Buthelezi and Nompumelelo Magwaza.


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