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Overview

The development of Africa’s electrical power sector is a prerequisite for growth in other industries. A regular, consistent power supply will do much to attract foreign investment and entice international companies to establish operations in Africa. Unfortunately, a combination of droughts, wars and aging equipment has contributed to an irregular and sparse electricity supply in many African countries. Notable examples in recent years have been Nigeria and Kenya, where severe power shortages have had serious consequences for the local economies.

Africa’s power sector is dominated by South Africa in Southern Africa, Egypt and Morocco in North Africa and Nigeria in West Africa. 82 % of Africa’s power comes from the northern and southern regions alone, with three-quarters coming from five countries - Egypt, South Africa, Libya, Morocco and Algeria. Approximately 50 % of power in Africa is generated from coal based facilities, although this figure is projected to decrease to 36 % by 2020, with many of the new developments running on natural gas. Hydro electrical power is also a significant contributor, with the hydro potential of the Democratic Republic of Congo alone reported to be sufficient to provide three times as much power as Africa presently consumes. Africa’s electricity consumption is expected to grow at a rate of 3.4 % per year over the period between 1999 and 2020. Africa stands to benefit in the future from interconnection projects initiated and implemented by the New Partnership for Africa's Development (NEPAD), an initiative that sees investment in Africa's infrastructure as a high priority. All NEPAD power projects are aimed at boosting electrical power generation, distribution and transmission in Africa.

A look at the electrical power industry in Africa reveals a number of trends common to most African countries. Privatization and restructuring of government-owned power companies has been a feature of almost every country’s governmental policy over the last ten years. Power shortages and irregularities have forced many countries to look to neighbors to supplement their supply, with regional networks and power pools arising as a result. Power shortages have also brought a number of new projects to the fore, with large multinational power companies establishing a growing presence, particularly as natural gas discoveries have made combined-cycle plants competitive economically.

Finally, power supply in Africa brings with it issues unique to Africa and the developing world - black empowerment, electrification of rural and peri-urban areas, electricity theft and free electricity for the poor.

Regional Power Networks

Power sharing has become more prevalent in the African electrical power context in recent years. In line with developments in the regional economies, such as the formation of the Southern African Democratic Community (SADC) and the Economic Community of West African States (ECOWAS) , neighboring countries have seen benefit in the sharing of electricity. This has enabled countries like South Africa, who have surplus power, to run their stations at maximum output without the risk of an oversupply of power. Conversely, countries with limited or unreliable power generation capacity now have access to power, without the intensive capital investment required to construct new facilities. Countries can purchase power in bulk enabling them to redistribute it locally at a cheap price. Another advantage that power sharing brings is flexibility - demand peaks and troughs can be better managed with the larger pool of power.

Regional networks have occurred both on an informal basis, where neighbouring countries simply agree to share, and on a more formalized basis, such as with the Southern African Power Pool (SAPP), where a number of countries have been linked and purchase power at regulated prices. Countries linked through the SAPP network are: South Africa, Mozambique, Zimbabwe, Zambia, Namibia, Botswana, the Democratic Republic of Congo, Swaziland, Tanzania, Lesotho and Malawi. Kenya and Tanzania have recently been discussing a connection to the Zambian power grid, which would bring Kenya into the SAPP.

South Africa, Ghana and Zambia are the biggest net exporters of power on the continent.

Rural Electrification

Electrification levels in Africa are low, especially when compared with Europe and North America. South Africa and Egypt have the continent’s highest electrification levels at approximately 70 %, while the average for the SADC region is only 20 %. This picture is changing, however, as African governments are starting to realize the importance of electrification for the well-being of the local economy. A number of countries have committed themselves to electrification goals for the short to medium term.

Ghana, Senegal, Burkina Faso and Cote d’Ivoire in West Africa have all recently announced rural electrification programmes. Burkina Faso aims to have completed electrification of about one-seventh of the country’s 350 communities by 2010. Cote d’Ivoire estimates that new generation facilities will allow 200 villages to be electrified each year. Ghana’s National Electrification Scheme will bring electricity to all communities of 500 people or more by 2020. A similar plan in Senegal will bring power to 150 rural towns, meaning all villages of 3000 people or more will be electrified by 2004.

Approximately 18 % of Zambia’s population have access to electricity at present, while the government’s Rural Electrification Program aims to bring this figure to 50 % before 2004. Namibia hopes to improve social conditions by bringing electrification to 250 000 households by 2010. Zimbabwe has extensive plans to use solar power to provide lighting in rural homes and power for small and medium rural industries.

Rural electrification has raised a number of issues for power companies and the African governments they service. Many of the rural communities to be electrified are situated in such remote locations that to connect them to the national grid is costly and often impractical. Alternatives include wind power, solar power and small diesel or petrol generators. Developments in solar and wind power technology are making these forms of generation more and more attractive, particularly in the rural African context. South Africa, Egypt, Ghana and Uganda are some of the countries reviewing photovoltaic electricity systems for installation in rural areas. Kenya has the highest use of photovoltaic systems in the world, with nearly 20,000 units sold annually.

Governments in Africa are beginning to view provision of electricity as part of their responsibility alongside basic services such as sanitation and clean water. In South Africa, the government has introduced a policy of free electricity up to a certain number of units, designed to make electricity affordable for all.

The large number of electrification projects on the go makes Africa a continent of opportunity for companies in the business of distribution and transmission of electricity, suppliers of cable, experts in the field of solar and wind power and construction and engineering service providers.


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