Addressing the Africa Power Deficit; 53% of Africans Without Access to Regular Electricity

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Without adequate power supplies there can be no industrialization, and without industrialization the development of Africa will continue to lag behind other continents. Africa accounts for 16% of the global population but also 53% of the same without access to regular electricity.

Some grounds for confidence, however, emerged from a discussion we attended yesterday at the annual meetings of the African Development Bank (AfDB) in Lusaka. President Uhuru Kenyatta of Kenya and President Paul Kagame of Rwanda were joined by the AfDB’s president and former Nigerian agriculture minister, Akinwunmi Adesina.

Kenyatta outlined the success of the country’s geothermal power plant at Olkaria, the ninth largest in the world. It supplies up to 45% of the national energy requirement. Further, it has acted as a catalyst for private investment, which now provides 30% of the requirement.

In addition to the geothermal contribution, hydro, wind and solar supply 30%, 8% and 6% of the nation’s current needs respectively. A prominent example is the wind power project at Lake Turkana, which aims to provide 18% of the country’s installed electricity generating capacity.

Kenyatta explained the geothermal success in terms of the government’s energy reforms since 1997. It commercialized KenGen, the 70% state-owned electricity company which is well known to frontier investors in local currency bond issues. The government also funded the geothermal exploration, overhauled the regulatory structure, and put in place transparent tariffs and power purchase agreements.

Kagame reported that the proportion of Rwandans with access to the grid had risen from 7% to 24%, and that the figure for offgrid power had increased from 5% towards 20%. Again, a momentum of policy reform attracts investors. A European company is investing in Rwanda to generate power from peat with clean technology.

Adesina stressed the role for renewables. He estimated that the gap across the continent could be plugged by the launch of 300 enterprises like M-Kopa. This is a Kenyan company which provides solar panels for offgrid consumers. It charges a deposit of about US$35 equivalent and a daily fee payable by mobile.

While Kenya and Rwanda are good examples, the reality is that the African power deficit is probably growing. US and many other donor programmes are supportive but African governments have to come more to the table. Adesina said that 10% of their total tax revenues of US$500m would plug the gap. The challenge is that they all have competing claims for funding.

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