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Johannesburg - Private investment and technological advances are key to boosting power generation in Africa where an estimated 600 million people lack access to electricity, a US envoy said.
“There is not enough money in any government to solve this problem,” Amos Hochstein, Special Envoy and Coordinator for International Energy Affairs at the US State Department, said at the African Utility Week conference in Cape Town on Wednesday.
“This is not a government problem. The role of the government is to restructure and reform and create an enabling environment for the private sector to come in and operate.”
South Africa, Nigeria and Ghana are among countries facing energy deficits, leading to regular blackouts that stifle economic growth. The International Energy Association estimated in a report last year that the world’s poorest continent would need an additional $450bn in investment by 2040 to halve outages and provide universal access in urban areas.
About 95 energy projects worth more than $50m were under construction in Africa last year, according to a report released in March by accounting firm Deloitte LLP.
While more people on the continent are gaining access to electricity, progress isn’t fast enough, said Norman Ndaba, power and utilities sector leader at accounting firm EY.
“Africa still produces less than 5% of global electricity and that’s not tenable,” he said in a May 11 interview at the conference.
“The demand is there, the supply is there, but there is no market. We can’t afford power on the current basis using the current technology. I’m hoping that in the next 10 years there will be a technology breakthrough” that will dramatically drive down costs, he said.
READ: SA sees drop in electricity production
‘Revolutionary time’
New batteries, such as those being offered by Tesla Motors, that can be used to store power generated by solar panels or wind turbines and can increase access to off-grid sources, may prove part of the solution.
“We are in a revolutionary time in energy around the world,” Hochstein said. “We have made more progress in energy in the last 10 years that we have in the previous 100 years combined.”
The US government is seeking to bolster electricity generation in sub-Saharan Africa by more than 30 000 MW through an $8bn initiative known as Power Africa that has drawn in more than 100 partner companies.
Projects to generate more than 4 100 MW have reached financial close since the programme was first announced by President Barack Obama in 2013.
While six countries - Kenya, Ghana, Nigeria, Liberia, Ethiopia and Tanzania - were initially targeted, it’s is now being expanded, said Andrew Herscowitz, Power Africa’s co-ordinator.
“We have had teams fanning out all over the continent,” he told the conference this week.
“We bring a lot of money to the table but Power Africa is not about having the US government build out infrastructure. It’s about getting the private sector to build out the infrastructure that’s needed.”
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