Politicians, business moguls face crucial decisions

Major hydro and solar power schemes are mooted for Africa, but will there be finance to fund them?

In November this year, many well-known politicians with foreign aid budgets and global moguls with sizeable investment portfolios will be flying over the continent en route to Durban to appear at the 17th United Nations Framework Convention on Climate Change (COP 17).

They will probably fly in overnight from the east, the north and the west, in warm comfort, snoozing with their bellies filled with first- or business-class food and a few nightcaps, probably not aware of what is going on thousands of feet below them.

Many will probably not even care about the one billion African people (as of 2009) living in 54 countries (as of 2011) where, on average, only one in 20 Africans have access to electricity.

That means they will be flying over close to 950 million people with no electricity, sleeping thousands of feet below in what can truly still be called “Darkest Africa”.

By the time these politicians and moguls have landed, most Africans will be plodding on again, eking out an existence with only wood for warmth and cooking, plus candles and perhaps torch batteries for light after the next typical African sunset.

All this on more than 30 million square kilometres of land, including the famine-stricken Horn of Africa and coastal islands surrounded by the Mediterranean Sea and the Atlantic and Indian oceans meeting close to Antarctica in the south.

Because only those who live in the cities, towns and villages over which the planes will be flying will, or could, if they can afford it, have access to electricity, coal, diesel, generators, paraffin, bottled gas and battery power.

The sad, if not ugly, thing is that most of the African population does not even know it is walking over or sitting,or sleeping on enough fossil and renewable energy resources that could generate enough power – not only for Africans, but also for the Middle East and parts of Europe, for many decades to come.

The colonial powers – England, Germany, Belgium, France, Portugal and Italy – have always known about it and have built small and massive dams and hydropower stations, to further their own interests during their rule. Most of these were not maintained or were left to rot after they granted African nations their independence.

Did these colonial powers switch off the lights, or are the African leaders who took charge to blame?

One thing for sure is that the question of political stability in African countries will certainly be raised by politicians and moguls alike when African countries will request, either en bloc or individually, for funds to restore or expand existing power plants and for building new ones.

Power outages from plants that still work, but did not overflow, have been the order of the day throughout the continent. Anyone studying existing power outages and backlogs will soon realise that some of the proposals expected will rely on power-sharing agreements (of the electrical kind) between two or among more countries.

Ethiopia, billed the “Water Tower of Africa”, surrounded by countries eying its huge hydropower potential, is one example. It is seeking billions of dollars for hydro projects.

The solar DESERTEC project spreading over North Africa is another.

Both have potential, but just one bad apple (country) in the pack and the request will likely be turned down by the moguls.

Only politicians with an eye on the power balance (as in ‘struggle’) between the West and the East will give such projects any consideration; and with China switching on lights all over the continent, African countries could stand a chance of receiving an American or European ‘goodwill’ gesture.

From a business point of view, investment in African hydropower projects may well be attractive, if a report by independent United States business information provider, visiongain, is to believed.

The report, “The Hydropower Market 2011–2021”, presented by Global Information Inc., indicates that the global hydropower market this year is worth US$56.51 billion.

visiongain’s forecast is defined in terms of spending on new hydropower projects, in addition to spending on upgrades and expansions.

The report states that hydropower is a key component of the energy industry, currently contributing around one-sixth of all global electricity; but it is likely to play an even more important role in the future of global energy supply as the inevitable shift to renewable energy occurs.

The downside to hydropower is that if it does not rain – as it has not in many parts of Africa, including central Africa – dams do not overflow and therefore do not generate power.

That is probably why Frost & Sullivan energy research analyst Ross Bruton recently said that investment in renewable power in Africa, which totalled a mere $3.6bn by 2010, “is expected to grow to $57.72bn by 2020, with the key growth sectors to be wind power, solar power, geothermal power and foreign direct investment (FDI) into energy and power infrastructure.”

He did not expound on which type of projects on which the FDI would be spent.

According to Frost & Sullivan, the development of Africa’s renewable energy sector will lead to greater diversification of the continent’s energy mix, decreased dependency on any one feedstock, and greater security of supply.

New technologies

New investments in the continent’s electricity infrastructure are likely to incorporate new, “smart” technologies and standards, which will see the development of information and communication technology taking place alongside the process of electrification.

“Smart electricity development in Africa will be driven through grid incorporation of renewable power, and technological leapfrogging through investments into greenfield transmission and distribution infrastructure projects,” Bruton said.

“Smart grids are, however, only expected to play a significant role in key high-growth African economies.”

Over the next 10 years, Frost & Sullivan predicts that African renewable energy initiatives will be dominated by wind power projects such as the Ashegoda Wind Farm in Ethiopia and Tanzania’s Singida Wind Farm.

Solar power will show good growth, “although this will most likely be through South Africa’s Upington solar project and renewed interest in DESERTEC in North Africa,” added Bruton.

The big question in Durban is which way the politicians will jump.

The visiongain report states that the world is currently facing two potentially contradictory developments: that of increasing global energy supply to meet a growing demand for energy; as well as that of tackling global warming by lowering their emissions of carbon dioxide.

“This situation creates an opportunity for hydropower, which is a low-carbon energy source capable of supplying substantial quantities of power throughout the world, including Africa,” notes the report.

Politicians can make a commitment to the Climate Change Fund or, along with the moguls, make private deals in a bar. Chances are they may make no commitment or decisions at all, jump on a plane and go home – overnight, and blindfolded to the problems below.

Cry the beloved continent...

Udo Rypstra