| dc.description.abstract | It is now widely recognized that the availability of affordable and reliable energy services is key to unlocking the economic growth potential especially in the African sub-region. However, the energy sector remains one of the key challenging areas in Africa, largely lacking in necessary infrastructural investment. The sector is characterized by lack of access to modern energy services (especially in rural areas), poor infrastructure, lack of expertise, low purchasing power, limited investments, lack of local manufacturing capacity and over-dependence on the traditional biomass to meet basic energy needs.
In most parts of Africa, especially Sub-Saharan Africa (SSA), energy has been supplied in insufficient quantity, at a cost, form and quality that has limited its consumption by the majority of Africa’s population, making the continent the lowest per capita consumer averaging about 0.66 toe. Only 25% of SSA’s population has access to electricity and electrification is as low as 5% in some countries while per capita electricity consumption is below 50kWh in parts of the region (World Bank 2007).
The entire generation capacity of the 47 countries of SSA (excluding South Africa) is mere 28 GW (equal to that of Argentina). Capacity utilization and availability is poor, typically in the range of 30% - 40% of the installed capacities. Consequently, supplies are erratic and intermittent, with attendant frequent power cuts, load shedding and at-times outright grid collapses. An increasingly common response to the crisis has been short-term leases for emergency power generation by a handful of global operators. Though this capacity can be put in place within a few weeks, it is expensive. The costs of small-scale diesel units, for example, are typically about US$0.35/kWh. In eastern and western Africa, about one-third of installed capacity is diesel-based generators (IMF, 2008).
Over the past four decades, the gap between energy supply and demand in Africa has actually widened. Unless drastic interventions are made, recent trends indicate that this gap continues to grow, and the majority in Africa will continue to lack access to basic energy services and consequently will have limited chances of realizing any meaningful social and economic development. One form of intervention would be to promote renewable energy development.
The World Bank estimates that about USD 11 billion would be required annually for Africa to achieve 100% electrification by 2030. The IEA estimates that the African power sector infrastructure requires a cumulative investment of USD 485 billion to 2030. Most African countries have largely failed to attract investment in the power sector despite sectoral reforms which attempt to attract private investment. For example, total external capital flows to the power sector in SSA amount to no more than 0.1% of the region’s GDP (IMF, 2008). | en |
