By John Kelly, Kigali, Rwanda
STAKEHOLDERS at the World Economy Forum on Africa, recently held in Kigali, Rwanda, have identified inadequate financing, policy inconsistency and bureaucratic bottlenecks as some of the major problems confronting power supply in Africa including Ghana.
Speaking on the sidelines of Africa’s power sector, which was a major discuss, Vice Chairman, General Electric (GE), John Rice, said there were some well-intentioned initiatives geared towards meeting the energy gaps, but challenges related to financing, bureaucracy, traditional risk analysis, and decision-making based on election cycles have led to delays.
Citing the case of United States-backed Power Africa initiative, which was launched in 2013 by President Barack Obama with a view to “double access to power in sub-Saharan Africa”, he said, “Power Africa, supported by a host of governments and private sector players, has an ambitious goal of adding 30,000MW of electricity.
“But, so far the number of megawatts added onto the grid directly related to the initiative is very little. Identifying poor electricity access as constraint to businesses and the country’s economy growth, President of the African Development Bank, AfDB, Akinwumi Adesina, has stated, noting that Africa “cannot industrialise” without improving power generation capacity.
Mr Adesina also said that over the next decade Africa must strive to attain ‘universal access to electricity’.
“We have got to be so impatient with moving Africa forward relentlessly. We have no choice. In 2025, there is absolutely no reason why Africa should not be totally lit up with the power it needs to industrialise, because we must not forget, no economy ever develops unless you have the base load power to drive industries and be competitive,” he stated.
On his part, Group Chief Executive Officer, Oando, Adewale Tinubu, reckons Africa is “potentially the largest power market in the world”, based on available resources and demand for electricity.”
“We are losing a wonderful opportunity to leapfrog out of poverty by not having a more sustainable or robust energy policy, and I think, without a doubt, the biggest challenge we have to economic growth is really our poor consumption of energy, and invariably our very expensive consumption of energy,” he added.
He continued: “We are never going to become an exporting continent until we lower our cost of energy and we take advantage of these different [energy] sources, as the development of more regional mega-projects in the continent is necessary for growth in the sector.”
Although there has been some momentum in developing power projects in recent years, sub-Saharan Africa still has a long way to go with hundreds of millions of people not having access to grid-connected electricity.
Private sector’s involvement He further noted that the private sector can play a significant role in power generation, but with a friendly business environment, citing example of Nigeria that has become reliant on private diesel generators, which are pricier to operate, compared to industrial power.
What was missing was having an enabling environment, which the government has finally realised and has privatised the power system, liberalised tariffs and in the process we are now seeing the private sector getting involved in building new power plants, and we are now attracting global capital. The difference is, power is now seen as a business opportunity for investors to make a return.
“People now have access to cheaper power than when the government was subsidising and [was] unable to meet that demand,” said Tinubu.
Developing projects However, Jasandra Nyker, Chief Executive Officer of BioTherm Energy, a Southern Africa-focused investor in energy projects, called for a greater sense of urgency in developing projects.
He said, “When I talk sense of urgency, I see projects needing to happen in the next two to three years. In my company, we moved from site identification, to providing power to the grid, it took us 36 months and we did that twice. So if a small company like mine can do that, I think more and more players out there can actually do it.”
On local content, he added that her company was able to complete projects swiftly by working with surrounding communities to avoid conflicts over land.
“The community understood what was being done, how it would be done, and when benefits would accrue to them.” she added.
