File picture: Karen Sandison

Johannesburg - No discussion about Africa’s economic development is complete without focus on the failure of African governments to ensure access to energy, which is a critical enabler of the economic growth and development they need.

Sadly, progress to address this glaring impediment to economic advancement has been muted. This is notwithstanding lofty plans and ideas bandied about by leaders on the continent.

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Reality is that many resource-rich African countries prioritise exports ahead of economic development. Nigeria is one country that comes to mind. While it is blessed with plenty of crude oil, millions of Nigerians do not have access to electricity.

In a paper on the state of the power system in Nigeria, global law firm Latham & Watkins said Nigeria’s installed electricity capacity was 12 522 megawatts, while only 4 500MW of this capacity was available to power a population of 170 million.

Basic services

Access to affordable and reliable energy matters because it enables the provision of basic services, enhances competitiveness and facilitates economic development.

Recently, there has been a clear shift in perceived solutions to Africa’s “energy poverty”. While speakers at the World Economic Forum on Africa made repeated references to the impact of big power projects, such as the Grand Inga hydropower scheme in the Democratic Republic of Congo, there was an overwhelming view that small-scale, renewable energy projects would have an immediate impact. There is growing consensus that the inclusion of independent, private-sector power producers in national grids can rapidly step up power supply levels.

Financing bulky and capital-intensive energy projects has proven to be difficult especially given the gloomy economic outlook. The much anticipated Inga project, for instance, is expected to cost $80 billion (R1.2 trillion).

Adewale Tinubu, the chief executive of JSE-listed Nigerian energy group Oando, said this week: “There is limited capital available for large power generation projects, traditionally built by government.”

Tinubu said Africa had no choice but to move rapidly towards a smart mix of energy systems if it was to grow. He said conventional energy grids would not meet the growing demand for energy, hence the need for private-sector involvement, small-scale projects and renewable technology.

He said government involvement should be limited to creating enabling policies for private sector investment. He said Africa was potentially the largest power market in the world. “We are losing the opportunity to leapfrog out of poverty by failing to invest in energy,” he said.

Erastus Mwencha, the deputy chairman of the AU, said: “Africa does not have time for traditional power roll-outs. The continent cannot transform without power.”

He said, while the Inga Dam hydroelectric project could light up Africa and parts of Europe, it would take time to be completed.

Flare of hope

South Africa’s renewable energy independent power producer (IPP) programme is a flare of hope in the mobilisation of private capital for energy projects. The programme has seen more than 2 000MW of renewable energy connected to the national grid.

Jasandra Nyker, the chief executive of BioTherm Energy, said: “Since the advent of the programme in 2009, 2.3 gigawatts of renewable energy have been installed.“

BioTherm Energy has three operational wind and solar projects under the South African IPP procurement programme. Nyker said the implementation and roll-out of new technologies needed a sense of urgency. “It is not happening everywhere,” she said. BioTherm has been awarded preferred bidder status on four solar projects in Zambia, two solar projects in Burkina Faso, and is a finalist in the Ugandan GET FiT Solar facility.

“These might not be gigawatt-sized projects, but they are helping and adding value.”

Jacqueline Novogratz, the founder and chief executive of Acumen, a US non-profit global venture capital fund, said governments needed to “change the narrative” to make solar power systems an integral part of the energy mix.

BUSINESS REPORT