Africa’s energy poverty: a complex yet simple equation
A recurring theme at the World Economic Forum on Africa was just how much fixing the region’s infrastructure bottleneck would add a tailwind to the continent’s already-above global average growth.
Panel discussants, interactive sessions and interviews yielded the same message — fix the infrastructure, especially electricity, and poverty in the region will be history. Nigeria, Africa’s biggest economy, barely scrapes together 4?000MW — an eighth of the capacity of rival South Africa — which is itself struggling to meet demand.
A major conference in Addis Ababa is expected to yield innovative ways of financing Africa’s growth, with the big focus being on channeling trillions into infrastructure. The outgoing president of the African Development Bank Donald Kaberuka told MGAfrica.com that refocusing the bank towards infrastructure, including energy, was a cornerstone of his legacy.
Africa’s energy challenge is framed by a population of 600 million people without power, which is expected to balloon to one billion people soon, with rapid urbanisation taking place.
This places a huge strain on the continent’s ability to grow economies, lift millions of people out of poverty and provide opportunities and education for its predominantly young population.
The energy conundrum is a vastly complex equation that calls for co-operation and at times compromise between public and private sector partners, which does not even begin to touch on the technical complexities of powering the continent.
“More than 60% of Africa — more than two Americas or half of China — is with without access to any form of energy. With the rate of population growth and urbanisation, that figure is likely to go above one billion, of which half will be in cities by 2030,” said Jasandra Nyker, chief executive of Biotherm Energy, in a panel discussion at the World Economic Forum on Africa in Cape Town.
“We have heard many times before about the African Renaissance, but to ensure that we create a game-changing environment we all need access to electricity. To alleviate our energy poverty, we need access to energy in a much shorter time-frame.”
Biotherm develops wind and solar energy projects in a number of countries on the continent and is one of the players participating in South Africa’s independent power producer (IPP) programme. Renewable projects usually come online far quicker than fossil fuel, nuclear and gas-powered projects.
At a second panel discussion focusing on the challenges of powering Africa, the tensions between the public and private sector came to the fore.
Policy certainty required
Panel moderator and deputy chairman of M&G Media Limited, Trevor Ncube, commented on a seeming lack of urgency on the continent to address the power deficit.
Namibia’s finance minister Calle Schlettwein responded from the audience that this was not the case; rather, it is a process delayed by the need to ensure an equitable deal is struck with independent power producers.
“Financiers insisted on a guarantee of price, they insisted on no taxes at all and on a policy freeze, and that was the basic framework. That was too greedy, if I may say so. We must have a toning down of the ambition from the side of the financiers,” he said.
Panel member Linda Mabhena-Olagunju, managing director of DLO Energy Resources, an IPP, said policy certainty was needed to give investors the confidence that later changes would not adversely affect the revenue model.
“People want to come into Namibia and play on the rest of the continent, but if there is not a stable environment for investors there is no need, we wouldn’t come in,” she said.
What is clear from the two panel sessions on Africa’s energy environment is that the question is far less about the type of technology needed, but about ensuring that policy certainty is achieved and that a regulatory environment is in place to attract the private sector.
Bigger questions such as regional integration and regional grids barely merit mention; the multiple challenges around power generation pale in comparison with the bigger issue of a distribution network.
Simply having a network that wind or solar projects can feed into is in itself a major obstacle. In most cases it just don’t exist.
This presents opportunities for those who are motivated enough. For example, Michael Nganga’s social enterprise GiveWatts has developed a solar LED lamp that provides communities in the remotest regions with sustainable, affordable light.
“The big question we want to answer is what does Africa need most: we need more engineers, we need more doctors, we need more teachers,” he said. “We cannot rule out the fact that someone who needs a light now can’t wait until the grid gets to them. We need to push to make it happen.”
This simple solution to a very significant problem highlights the levels of innovation taking place, but equally the desperation of communities who are being left in the dark while policymakers and political leaders dither on this issue.
The frustration felt by ordinary people on the continent was most poignantly stated by a pained comment from an Angolan audience member: “The point is that we have to resolve this problem. We are tired of hearing about all the plan and the projects and nothing is actually working.”
There is little doubt that the challenge is not one of appropriate technology, the availability of solutions, nor even a lack of capital. Investors, independent power producers and providers of all manner of engineering equipment and skills are at the ready. The question is: are Africa governments? And if not, why not?
Disclosure: M&G Media Limited is the holding company of the Mail & Guardian and MGAfrica.com