Efforts and initiatives have been carried out on trial to lighten the darkest part of Africa that left some 600 million people from the reach of electric power supply. This time, the United Nations Economic Commission for Africa (UNECA) has unveiled a new five-year initiative that seeks an initial investment of USD 10 billion to produce 10,000 megawatts of clean energy.
By 2030, Africa and the rest of the developing world is required to achieve most of the UN’s Sustainable Development Goals (SDGs) and SDG7 stand out to be Africa’s initiative by UNECA to spearhead achieving universal renewable energy in 10 years.
Under the auspicious of addressing the seventh Sustainable Development Goal (SDG7), which among others, streamlined on ensuring development and scaling of universal access to clean energy from renewable sources, UNECA has been championing this initiative for some time now. A few weeks ago in Addis Ababa while hosting the third annual Africa Business Forum under the theme: Investing in People, Planet and Prosperity, on the sideline of the 33rd Ordinary Summit of African Union. The Commission brought together a handful of heads of state and governments to encounter potential funding agencies and private businesses.
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Since Africa has committed itself to achieve universal access to clean energy by the end 0f 2030, while 570 million people unable to have any source and access to electric power, African countries are tested by providing an affordable universal access to energy in ten years.
In doing so, Vera Songwe (PhD), executive secretary of UNECA, has reiterated the initiative that seeks an investment coffers of USD 10 billion for 10,000 megawatts of clean energy requires a little bit of out of the way approach and perhaps, a more private sector oriented one.
“Increasing energy production in the country will allow us to mechanize our agriculture and, in the process, enhance productivity, boost food security, which is our main concern right now, and create jobs,” said President Mnangagwa, said. He added that African leaders ought to “walk the talk on agreed programs that seek to transform the continent”.
Prime Minister do Rosario referred Mozambique being open and ready to welcome investors partake into its energy sector.“Mozambique, like the rest of Africa, has vast natural resources that are waiting to be tapped. We have oil and gas company and would readily welcome investors willing to work with us for the betterment of our people,” he said.
For that call Scott Mather, Chief Investment Officer, U.S. Core Strategies with Pacific Investment Management Company (PIMCO)a company that manages US two trillion worth of properties for private investors globally, responded by saying his company is ready to work with African governments to ensure they tap into clean energy to power the continent’s inclusive development and address climate change at the same time.
Mather says Africa has presented a notable business opening for global investors. “A bold initiative is needed to address Africa’s energy challenges. We can work together to find concrete ways with the partners we represent to push Africa’s sustainable development vision,” Mathersaid, adding, equitable growth on the continent can be powered by clean, reliable and affordable energy.“We need governments and policy makers, especially at the national level, to create enabling policies for the capital to flow,” Mathersaid.
Less subsidies for more energy
The UNCEA chief made a bold statement to substantiate the need to review the subsidized tariffs and the prices that in most cases are below the cost of power generation and operation, posing inadequate dash into a cost recovery tariff. “We don’t have to subsidize energy and other utilities [anymore]as the most part of the subsidies are not necessarily benefiting those who couldn’t afford”, Songwe said arguing energy subsidies in many parts of Africa are ending up benefiting the affluent segments of the society.
It is claimed that Africa is subsidizing the supply of fossil fuel with a cost of USD a size of USD 11 to 26 billion annually and that as NogoziOkonjo-Iweala, former Finance Minister of Nigeria point out to be a five percent of Africa’s GDP.
The rationale behind such measures UNECA argues to have been attributed to the dramatically rising energy demand in Africa intermittently propelled by the population growth, swelling middle class group, industrialization, urbanization, trade, and climate change.
In the situation of Ethiopia, Songwe’s call appears to be responded two years ago where the government has revised utility tariffs and introduced a four year cycled annual price increments. A very small segment of the tariff still remains subsidized assuming there are those people who couldn’t afford a 50 to a 100 percent price rise.
More than that, both southern Africa leaders have emphasized the needs to bringing in private sector involvement in the run. According to President Mnangwa, Zimbabwe is experiencing one of the gloomier period of power deficit as consecutive rain failure has brought its hydroelectric dams go desiccated. Currently, Zimbabwe is facing a deficit of 1,100 megawatts of energy supply due to two successive rain failures, forcing the hydro dams operate below installed capacities.
Underlining these predicaments, so far, eight potential countries including Ethiopia, Senegal, Kenya, Togo, South Africa, and Morocco have been identified fulfilling requirements to stand the chance for the 10,000 megawatts clean energy.According to Yohannes G. Hailu, economic affairs officer with UNECA working in the energy, infrastructure and services section at the energy sector development and finance division.
Yohannes said that this pilot project will help Africa to alternate its power generating, transmitting and distributing options and to see how it could best address its power supply targets in the years to come.
UNECA, many countries in Africa continued generating the majority of their electric power from fossil fuels, including dirty coal. However,“a clean-energy revolution is rapidly gripping the continent with already close to 9,000 megawatts of non-hydro renewable power, mostly solar and wind, is online in 20 countries”, UNECA stated. Kenya, for example, derives three-quarters of its electricity for renewable energy, while 97 percent of Ethiopia’s electricity is from renewable sources.
The case for Ethiopia
Not long ago, the government of Ethiopia was struggling to supply everyday power needs of the country. The hydroelectric power pool that delivers 90 percent of the national energy grid highly fluctuates due to the level of water available in the hydro dams. To that effect,Ethiopia was hard hit from a power deficit that occurred last year.
The government was forced to reinstate power shading. Power outages resurfaced to hamper economic activities aswater shortage has desiccated hydro power major hydro dams since 2018. That conveyed a scarcity of 400 to 1,000 megawatts, forcing power cuts on households and industrial units. Sileshi Bekele (PhD), Minister of Water, Irrigation and Energy can be recalled here for declaring a shortage energy fluctuating between 400 and 1000 megawatts that even impaired power export destined to Sudan and Djibouti inevitably hit the country’s capability last year.
Gibe-III hydropower is one of the largest hydro plants having a major share of46 percent with a built capacity of 1,870 megawatts. However the plant was encountering a deficit of 426 megawatts. Gibe-III is prone to technical faults and deficits. In 2018 alone, a technical failure caused several days of outages as a result of Gibe-III faulty issues. This plant was experiencing technical faults before the water shortages exacerbated the deficit situations.
Despite having 20 hydro power generating plants, Ethiopia achieved to install a generation capacity of 4,300 megawatts, out of its perceived 1.4 million megawatts of electric power that could have been obtained from hydro, geothermal, wind and solar sources. The actual supply however, remains to be somewhere around 2,500 megawatts.
Alow level of water elevation that went down to a 16 meter height triggered the deficit at the Gibe-III plant last year. That got the power utility provider to its knees and forced it to power shading and rationing that lasted for almost two months leaving households and industries to receiving only for five to six hours of electricity per day in those 60 days. Though not immune for perpetuities, last year’s depressing shortage have withdrawn from reappearing. But for how long will the normal condition last for the year? Difficult to suggest a stanch reaction to that.
Necessity raddled and hungry for growing into a self-sufficient energy producer, Ethiopia is longing to diversify its energy sources. The likes of wind, thermal, solar, ethanol and other bases are utterly sought after to appropriate the growing gap between supply and demand for energy where some 60 percent out of the 110 million people remain darkness. Some wind and thermal projects have been gestated and brought out to generate clean energy. So far three different wind power plans have been installed fetching some 400 megawatt power to the national grid.
Furthermore, a public private partnership law has been introduced and currently two solar power generating projects have been awarded to a Saudi based quasi state company to develop a 250 megawatt plants that involve USD 300 million. All in all, Ethiopia has identified eight solar projects with generating capacities of some 1,000 megawatts of electricity requiring USD 1.2 billion, suitable for public private partnership venture.
While this year’s AU Summit was themed “Silencing the Guns”, well, Songwe, while concluding the forum argued that “one of the reasons we cannot silence the guns in Africa is because there are no jobs for the youth. There is no energy to power job creation. We can silence the guns if the right investments are made into our energy and ICT sectors, including strengthening our health systems in partnership with the private sector.”“If we cannot ensure Africa has the energy it needs then 2030 is really a distant dream. We need to do more, and we need to do it faster”. According to Songwe, ambitious climate action can bring a USD 26 trillion worth of improvement to the global economy between now and 2030. “If we [Africans] enter the new climate economy, we can create 20 million jobs for the continent. Right now, we need 13 million jobs every year,” Songwe said.
That said, African leaders and experts as bystanders suggest, need to be well versed and mindful of the conditions required in order to ease access to clean energy in the continent. The technologies required to facilitate the development renewable energy sources, for instance, solar panels, thermal engines, and wind turbines, hydraulic and electromechanical structures needed to construct hydroelectric power plants are some of the major technologies Africa remotely affords or struggles to capitalize on. However, many argue that technologies for renewable energy are getting cheaper.
In fact, African experts are pledging the technologies are becoming more affordable but require flexible policies and regulations that guarantee pricing and incentives systems for the private sector players interested venturing on renewable energies. Hence, the countries that are willing to partake in UNECA’s initiative have submitted their political wills. They have revised or have agreed to revise their power tariffs, reduce or do away with subsidies, and when the industry players want to have access for credits and funds, governments might be required to provide guarantees as well.
