Since the mid-1990s, external finance to Africa’s power sector has averaged only around $600m per year of public assistance, plus a similar volume of private finance, according to the World Bank. Africa’s critical need for development requires rapid and effective solutions. With the proven economic setbacks of poor access to power, the crisis should be approach by exploring “All Options”.
With a quarter of the earth projected to be Africans by 2050, population size is expected to reach 2.4 billion people in that same year. If the current power demand and supply gap was matched today, in many African countries, the imminent population growth is bound to disrupt that balance in about a decade. Investment and policy efforts should therefore take a long term view, in order to meet – not just today’s needs – but tomorrow’s demand. This scenario is also a broad indication of the size of the market and the huge levels of power investments required.
Mini-Grids and Off-Grid (MG & OG) power solutions are a strategic fit for Africa. There are huge investment opportunities too in this area. Sadly, the economic case for MG & OG is neglected, the size of the opportunity is underreported, the investment considerations are mildly understood and the expected government support policy is conspicuously absent. Enterprise concerns such as large mines, large agricultural farmlands and manufacturing centers – Africa’s typical productivity pulse – have power demand patterns that are huge and unique. When they are tied back to grid-electricity, they take disproportionate potions of already insufficient power or become stifled themselves if not prioritized.
Organizations with MG & OG capacity could target specific energy markets in Africa and utilize diverse models to tap into opportunities that are largely unexplored. Ambitious grid electricity projects have continued to come short of expectations; which is a loud call for concerned countries to leverage MG & OG solutions.
In Nigeria for example, 16 years attempts at bogus, ambitious and fossil-dominated grid-electrification has not answered many critical question for that country’s power sector.