The rhetoric about electrifying Africa is finally being actioned into tangible and achievable goals. In West Africa, where some 180 million people do not have access to electricity, an abundance of natural resources is driving a somewhat large portfolio of renewable energy projects.
The clean energy wave rippling across West Africa is underscored by reinvigorated interest from the African Development Bank, or AfDB, and the Africa Progress Panel, or APP, in ensuring the continent addresses its energy crisis, for crisis it is.
Take Nigeria for example. A recent survey by NOIPolls revealed that 61 percent of small and medium-sized enterprises in the country spend Nigerian Naira500-1000 (US1.4-2.8 cents) daily on fuel, with as much as 85 percent of micro and small businesses reliant on generators for power. Ghana, in 2015, experienced 159 days without power. Ghanaians call it Dumsor, translating into “off and on,” which typifies the persistent, irregular and unpredictable power outages experienced.
On the other hand, Cote d’Ivoire, a power supplier to neighboring Ghana (which is indebted to Cote d’Ivoire for some US$60 million worth of electricity), long ago saw the value of allowing private firms to operate in the sector. This resulted in it not only being able to meet its own growing energy needs, but in giving it optimism to being able to double its 2013 installed capacity by 2020, and even outsource a bigger portion of its generation.
Lighting Up Africa
Such foresight addresses some of the issues raised by organizations like APP, which has over the past three years been promoting the lighting up of Africa. The publication of its Lights, Power, Action: Electrifying Africa report this year provides feedback on its Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities, which was issued in 2015.
The latter report was motivated by the need to find the links between energy, climate and development in Africa. It highlighted the opportunities that African leaders could employ in making a transition to a low-carbon, renewable energy future, and was hailed across the continent for its recommendations and its blueprint advice.
However, it was felt that more in-depth policy-relevant information and insights are needed in order to not just build on the political momentum the first report motivated, but also to enhance initiatives that are in the pipeline, as well as in support of the AfDB’s New Deal on Energy for Africa. This is a described as a “transformative partnership to light up and power Africa” by the bank.
The New Deal on Energy for Africa comprises five interrelated and mutually reinforcing principles:
• Aspirations to solve energy challenges on the continent.
• Establishment of a Transformative Partnership on Energy for Africa.
• The how-to in terms of raising local and international capital for the sector.
• Support that must be provided to governments in terms of policy and regulation, and governance.
• Increasing AfDB investments in climate financing and energy.
It is reports like this and APP’s that are kick-starting energy projects in the continent. But, what are the ultimate goals of such organizations? Kofi Annan, APP chairman, and former Secretary-General of the United Nations, said Africa needs to meet a double energy imperative to increase the scale and pace of electrification, and it is only through meeting Africa’s energy needs that economic growth will be realized to its full potential. “It’s a huge task but its also an exceptional opportunity,” he said.
Call to Arms
Entrepreneurs and investors are being called upon to get Africa’s power grids back on track, provide off-grid solutions, and introduce mini-grids. Simple to say, but much harder to achieve, and unless legal, financial and technical frameworks are in place, the 620 million Africans who are impacted by a lack of electricity will continue to experience challenges despite project initiation.
The call to governments by both APP and AfDB for an acute focus on energy is not an appeal, it is an imperative particularly for cross-border power trade.
“Africa is rich in energy resources, but they are not all evenly distributed,” Annan said. “To unlock Africa’s energy potential for all Africans, governments must cooperate to ensure regional power trade thrives.”
With some 52 percent of the West African population having no access to electricity, the launch earlier this year of the West Africa Clean Energy Corridor, or WACEC, is going to be a catalyst in preparing to meet a collective nations’ goal for 2030 of getting “clean” power to 88 percent of the population. At the African Utility Week Conference in May, experts and panelists agreed that hydro offered the best potential, followed by solar, wind and biomass. Hydro is, however, a very expensive option, explaining why there is a preference for wind and solar farms, especially when addressing “the need is now” scenario.
Jansénio Delgado, renewable energy expert at the Centre for Renewable Energy and Energy Efficiency, for the Economic Community of West African States, or ECOWAS, called on utilities and electrical companies in the region to adapt to renewable energy as a next phase of power generation. He also addressed cost factors: “The time is coming that renewables will really be a competitive source of energy.”
Driving Energy Developments
Senegal is one of the nations that is driving WACEC development, given its abundance of natural resources, so it is not surprising that government has a plan to produce at least 30 percent of its energy from renewables.
Another corridor in the region, the West Africa Power Transmission Corridor, a 2,000-kilometer coastal line connecting to an existing Ghana-Nigeria line, will have capacity of 1 gigawatt. However, it will take some four years in implementation with only three of the 13 related projects active.
In an anticipated second phase, an additional 2,500-kilometer inland route will take the total capacity up to 2 gigawatts. Regional nations involved in the project are Guinea, Guinea Bissau, Gambia, Sierra Leone, Liberia, Cote d’Ivoire and Ghana, but the project also impacts Niger, Togo, Benin and obviously, Nigeria. With just Guinea’s hydropower and Ghana’s thermal potential, all ECOWAS countries will benefit.
The ports and logistics suppliers in the region are undoubtedly an asset in support of renewable energy projects. Transporting equipment components for energy projects can be complicated and requires some understanding of the fragility and size of components, in the case of wind-powered projects, of turbines, generators, nacelles and blades. Given that regional projects involve a number of countries, transportation requires strict coordination from suppliers, through the value chain of project managers, freight forwarders and the local authorities.
This poses a problem. In the case of West Africa, the expertise needed to transport energy farm components is lacking, so sourcing such businesses with experience is somewhat of a challenge. However, freight forwarders, shippers and port authorities are showing a willingness to acquire those skills. What the local agents have in their favor is exactly that: they are local, so have a comprehensive understanding of the infrastructure and protocols that would be involved.
Doing business in Africa is known to be a challenge given a lack of quality infrastructure, particularly those that impact on related logistics services. Overall though, as nations develop, so too do the skills and professionalism of organizations that serve the international communities that are doing business in the region.
Two Ghanaian companies are a case in point. Where they are not already involved in the energy mix of projects, they are preparing to be. While both Climate Shipping & Trading and BluChip Logistics agree that financial resources are a challenge, there is optimism that the energy projects in the region will realize an increase and interest in the services they provide.
Climate Shipping & Trading is already involved with one energy project through its client, Ghana Gas Co. The Atuabo Gas Processing Plant, which is part of the Western Corridor Gas Infrastructure Development Project, comprises the construction of a 111-kilometer transmission pipeline, which addresses the energy deficiency by contributing some 500 megawatts to the energy mix.
Ras Afful Davis, president of Climate Shipping & Trading, confirmed the company will also be involved in the proposed Diesel Oil and LPG Storage Tank Farm facility that is to be established at Komenda in the Central Region of Ghana. “We have, over the past 16 years, established our business as one of the leading sea and air freight import/export professionals in the maritime, mining and energy sectors for the region,” Davis said. “Our breakbulk transport capacity is up to a million tons of specialized equipment, which positions us favorably both locally and internationally. And with our existing and new crop of highly qualified employees, we believe we are well able to meet customers’ discerning needs and expectations.”
Eunice Osei, COO of BluChip Logistics Ltd., was also optimistic for the future. “Energy drives our lives, as individuals and businesses, and for our nation,” she told Breakbulk. “Being able to secure some of the renewable energy projects in the region will be a real boost to our freight forwarding capabilities, and will also speed up delivery of services through the technologies we will be able to access.”
The services that BluChip is promoting to the energy sector include customs clearance, transport of equipment, and storage for all tonnages of breakbulk.
“We will do whatever is required to handle whatever tonnages are needed,” Osei said. “Where we don’t have skills, we will acquire those. It is also important to remain as an employer of local talent, with the ability to increase employment opportunities through our productivity and revenue increases.”
Kerry Dimmer is an award-winning freelance journalist, focused on African business affairs.
Photo credit: Shutterstock
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