Switching on the Lights in Africa
Fly across Africa at night and you will notice one thing, the continent is mostly dark. There’s plenty of light at the top (Cairo) and at the bottom (Johannesburg) but in-between it’s pretty dark.
Electrical costs in Africa range from 10 – 60 U.S. cents per kWh. So how does this affect economic growth and infrastructure development? We work with producers who focus on developing extrusion facilities that process raw materials into food and feed; a critical part of solving food security issues in the region. Many entrepreneurs planning extrusion projects in Africa simply don’t know what electricity costs will be until the utility company has finished installing the connection. This unknown makes it very difficult for a business man to determine financial feasibility of production facilities.
I recently flew into Kampala, Uganda at 3am, to my surprise, there was more light coming from some glasshouses than from Entebbe airport. I was visiting a customer who experienced a five month delay in starting operations in his extrusion plant because of the erratic supply of electricity. Lightning has twice destroyed his transformer because the utility company places transformers on telegraph poles without proper grounding.
Is anything going to change? Well, yes.
Currently, there are electricity generating projects underway to increase power generation by 50% in 2020. South Africa, which already generates two-thirds of Sub-Saharan Africa’s electricity, is adding 15,000 MW with coal-fired power stations. In addition, the country will add at least 64 renewable energy plants, such as wind farms, solar farms and sugar-cane-powered stations. Ethiopia is building Africa’s largest hydroelectric and geothermal plants. Kenya is building a giant geothermal plant as well as licensing private wind farms.
The International Energy Agency estimates that 600 million people in Sub-Saharan Africa lack electricity. The region needs to invest $300 billion to provide everyone with access to electricity by 2030.
The United States recently launched an $8 billion Power Africa initiative aimed at encouraging private investors to provide Ethiopia, Ghan, Kenya, Liberia, Nigeria and Tanzania with power. Power Africa plans to add enough electricity to connect 60 million new homes and businesses or about 300 million people.
The Africa power problem is not only about money. There is also a skills shortage, primarily qualified electricians. I was recently visited Ethiopia when the power went out. We drove out and found a team of 7 workers from the utility company fiddling with a transformer perched on telegraph poles.
Millions of African families, businesses and Insta-Pro customers are suffering from inadequate regulatory framework that puts obstacles in the path of private energy projects. It can take months to bring electricity to a new processing plant. Even in South Africa, the waiting list is so long that companies abandon expansion plans or move to another location with adequate power supply.
Businesses are tired of waiting for the lights to come on. Insta-Pro extruder operators in Africa dread the power outages that stop production in a second, wasting valuable production time and profitability.
