By Liana Cramer – Only 290 of the 915 million people that live in Africa have access to electricity. Further, 30 out of 48 countries of sub-Saharan Africa experience daily power outages. Despite its unreliability, electricity in Sub-Saharan is more expensive than in many other parts of the world, a result of systemic issues. Energy infrastructure is inadequate. Poor managementand maintenance of existing facilities has caused poor energy efficiency. Few improvements have been made in the sector due to the lack of engagement by the private sector and low capacity of the public sector. Additionally, Africa’s movement towards regional energy integration has been hindered by unsustainable tariffs, government interventionism, and losses in transmission and distribution, and poor technical, managerial and financial performance.
There are a number of energy projects currently being carried out throughout sub-Saharan Africa to improve the continent’s energy outlook. In June of 2013, U.S. President Barack Obama launched Power Africa, an innovative public-private sector partnership to drive economic growth in sub-Saharan Africa by increasing the number of people in the region with access to power. The U.S. government pledged US$7 billion and committed to working with African governments to remove barriers to investment and to promote proper governance and management of the power sector. To date, Power Africa has also leveraged more than $20 billion from the private sector to fund power projects.
Desertec, founded in 2009, was hailed as one of the most ambitious solar energy projects ever. Its mission: to meet two-thirds of the electricity needs of the Maghreb and the Middle East, and 15% of that of Europe, through renewable power generated in the Sahara Desert by 2050. But a lack of political support from European governments, and funding from European businesses, has left Desertec projects dead in the water for the moment.
Senegal’s Strategic Investment Fund, FONSIS, was created at the end of 2012 and endowed with US$1 billion, which will be invested alongside national and foreign investors in select assets, and in particular the energy sector. In Mauritania, the Banda Gas-to-Power Project aims to enable production of natural gas from the Banda gas field, to reduce cost and increase supply of electricity in the country, and to facilitate regional integration through export of power to Mali and Senegal. This project includes the development of the Banda gas field, and the construction of pipelines, a gas processing facility, two power plants, and transmission lines to the north of Mauritania and to Senegal in the South. This project was expected to be complete by the end of 2014 or the start of 2015, but has been held up.
In Ghana, a private company, Blue Energy, has invested US$400 million in constructing Africa’s largest solar power plant. This 155-megawatt power plant will also be the fourth largest solar project in the world and will increase Ghana’s current generating capacity by 6%. The project is expected to be complete by October 2016. The Senegal River Basin Development Authority (OMVS) was established by Mali Mauritania, and Senegal to develop the agricultural and hydropower potential of the Senegalese river basin. Funded by the Exim Bank of China, the OMVS expects to complete its third hydroelectric plant, the Gouina plant, in 2017.
Located in the Democratic Republic of the Congo (DRC), the Great Inga dam is the world’s largest proposed hydropower project. It has the potential to increase the electricity production capacity of Africa by one third. The initial funding for the project came from the World Bank and the African Development Bank. There is talk that investors from China and the U.S. may support the rest of this estimated US$80 billion project in collaboration. However, most of the energy produced by Inga-3 will be exported to South Africa, some will be allocated to the DRC’s mining industry, and only the remaining will be distributed to the electricity grid in Kinshasha. The Inga dam is controversial for this reason; the energy it generates may not actually reach people currently without access to power. Furthermore, there are concerns over potential human rights violations, its environmental impact, and the conflicts and governance challenges that the DRC faces.
In 2016, Kenya expects to complete its 300-megawatt Lake Turkana Wind Power Project, which it hopes will produce 20% of the country’s current electricity generating capacity. This US$694 million project is the largest private investment in Kenyan history. Once online, it is expected to generate $150 million a year in savings to Kenya and save money for families and businesses who now employ expensive diesel generators during black outs.
While the status of electricity projects across sub-Saharan Africa vary, these significant investments in the continent demonstrate an improving investment climate. Further, countries such as the Ivory Coast and Cape Verde have become models of energy success for African countries.
The Ivory Coast, the first sub-Saharan Africa nation to turn to the private sector to expand its electricity generation capacity, has become a primary supplier of energy to sub-Saharan Africa. It uses hydroelectric and thermal generating facilities to provide power to its people, and exports reserves of natural gas and excess generating capacity. The Ivory Coast is attractive to foreign investors in oil and gas given the country’s established track record of production, the amount of territory still unexplored, and the local market for gas.
Lacking any crude oil reserves, Cape Verde is a regional leader in renewable energy. About 27% of energy consumed in the country derives from renewable sources, and the government aims to increase this percentage to 50 by 2020. Cape Verde is the second country ever to graduate from “least developed” country status to “developing country” status by the United Nations. It is thus a rare success story for the continent.