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Africa’s lightbulb moment

Africa’s lightbulb moment
  • PublishedDecember 12, 2014

Africa desperately needs to improve access to electricity, and from fossil fuels to nuclear energy and solar power, the continent is faced with a number of options. Caroline Hellyer examines which might be viable and which might be dead ends.

Africa is home to 15% of the world’s population but consumes just 4% of the world’s energy output. According to the International Energy Agency, this leaves around 620 million Africans without access to electricity.

Furthermore, for those that do have access, power cuts are often a daily fact of life and a nuisance to be negotiated by the lucky few that have back-up supplies in the form of generators. In rural areas, generators are of course a luxury, and fuel often means long treks to find wood, charcoal or animal waste, which may be supplemented by expensive kerosene, candles and torches. Toxic fumes damage eyes and lungs, education is impeded, businesses lose millions of dollars, and states lose valuable tax revenues. Africa may be rising but it needs more than a creaking generator and a litre of diesel to fuel that rise.

Paying for infrastructure

The continent is rich in resources but weak in infrastructure, and poor energy systems in particular are responsible for a massive development bottleneck.

Grid supply has never been a strong point, and much of Africa’s power generation relies on ancient and poorly maintained equipment. A huge amount of investment is needed. Indeed, the World Bank estimates that Africa requires $93 billion annually to improve its infrastructure, of which almost half is needed to enhance power supplies. Finding this funding, however, may prove difficult.

Africa may be rising but it needs more than a creaking generator and a litre of diesel to fuel that rise.

“There are not many bankable infrastructure projects in sub-Saharan Africa,” says Rolake Akinkugbe, head of Energy and Natural Resources at FBN Capital in Lagos, Nigeria. “Can African banks meet that infrastructure requirement? I think not on their own.”

Akinkugbe suggests that Africa may need to raise external funds, but this process can be complex and many are wary of the lending terms imposed by international multilateral institutions. Their typical insistence on the deregulation of markets, for instance, can cause consumer energy prices to rise and remove labour protections.

US President Barack Obama’s flagship $7bn Power Africa initiative is one example of an energy-focused multilateral funding initiative intended to attract investment through financial support and loan guarantees. Alongside it is the recently enshrined US Electrify Africa Act, but while these programmes may be promising, Jason Hickel, lecturer in anthropology at the London School of Economics, emphasises the need to be cautious. With a reliance on public-private partnerships, he says, “it is essentially loading up the [African] state with massive amounts of debt which then gets syphoned through to private pockets.”

Pooling power

With investment interest growing, regional cooperation may be one way forward. After all, integrated energy projects along national borders can offer advantages through market pooling and shared generation capacities.

“Can African banks meet that infrastructure requirement? I think not on their own.”

The West African Power Pool, for example, aims to establish a common power grid and market for electricity across the Ecowas regional bloc. This kind of cooperation could bring with it significant benefits, though the challenges of harmonising regulatory frameworks and technical standards against the backdrop of various crises and internal political wrangling has meant that progress so far has been slow.

South Africa meanwhile has entered a partnership deal with the DRCongo to buy electricity from the proposed expansion of the Inga Dam in what could be the largest hydroelectric project in the world. Again though, it remains to be seen whether it will work out. Three international consortia are bidding for the contract to build the dam, but the cost is estimated to be around $12bn and most of the energy generated is intended for business use, with the remainder to be channelled to the Congolese capital Kinshasa.

Written By
Caroline Hellyer

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