Africa requires Sh5.6tr to end energy woes
Business
By
Nicholas Waitathu
| May 04, 2015
Africa requires investments to the tune of Sh5.6 trillion ($60 billion) in the next 25 years to end its perennial energy deficit, according to a new report. The report published by the African Development Bank (AfDB) last week says the continent has to mobilise huge investments to finance various projects if it is to overcome the current energy deficit by 2040.
Titled ‘2014 Development Effectiveness Review on Energy’ the report notes that nearly 60 per cent of Africans have no access to reliable energy. More than 620 million people live without the benefits of electricity connection.
AfDB Vice President in charge of Infrastructure, Private Sector and Regional Integration Solomon Asamoah said in rural areas in sub-Saharan Africa, electrification rates can be as low as 10 per cent. “Over 30 African countries now face regular power shortages while access to electricity in the sub-Saharan region stands at between 15 per cent and 40 per cent,” he said.
The report said the bank has spent huge resources since early 1990s to connect Africans and committed Sh1.2 trillion ($13 billion) over the past two decades to build up the energy sector in Africa. “Most of the funding went towards building national generation capacity and distribution networks, with an emphasis on rural electrification to promote inclusive growth,” Asamoah.
“As this amount is far beyond the capacity of any single institution, we are working to leverage other sources of finance and establish strategic partnerships with other development partners. We are also helping our member States to develop public?private partnerships for power infrastructure and to access sources of climate change finance.”
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He noted that since 2011, the AfDB has helped secure Sh53 billion ($566 million) in funding from the global Climate Investment Funds to finance energy projects in Kenya, Mozambique, Morocco, South Africa and Niger. “Further, since 1998, we have approved more than Sh93 billion ($1 billion) in private sector energy projects that are designed to leverage additional private sector funding,” stated Asamoah.
Global partners
During the report’s launch at the bank’s headquarters in Abidjan, Côte d’Ivoire, Asamoah said new strategies will be fast-tracked, including working closely with member States and global partners to enable people to realise reliable, affordable and sustainable power.
AfDB Quality Assurance, Results and Energy Director Simon Mizrahi said Africa faces severe challenges in providing its citizens with energy access. He noted the continent’s untapped clean energy potential is one of its most important development resources. “Only five per cent of Africa’s vast hydropower resources are currently being tapped. In some cases, as much as 40 per cent of power generated is lost in transmission and distribution,” said Mizrahi.
The report noted that since 2009, the bank has been financing over 1,900 megawatts of new generation capacity and over 15,000kms of transmission lines. It has also provided 567,000 people with electricity connections and over 14 million people with improved access to electricity.
Mizrahi said power generation capacity is expected to grow at six per cent, but will fall well short of the demand, making power outages more common. He said clean energy solutions involve high initial capital costs, but are cost?effective over the longer term. “Innovative, small?scale and off?grid clean energy technologies will play a key role in bringing power to remote areas,” said Mizrahi.
“This Development Effectiveness Review shows that with over half of the world’s renewable energy sources, Africa has potential to leapfrog older technologies and become a global leader on clean energy.”
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