Only 39% of Africans currently have electricity access, far below other developing regions. Key challenges include inefficient supply, growing demand, limited capacity and lack of grid interconnectivity. The PIDA Priority Action Plan identifies 15 energy projects, including large hydropower plants and transmission lines,
This document discusses financing options for sustainable energy solutions in Africa. It notes Africa faces large energy deficits and high costs of power production. The annual financing gap for Africa's power sector is estimated at $23 billion. Public finance sources that could help close this gap include domestic taxation, official development assistance, emerging donors from countries like China, and innovative financing from carbon markets, aviation/maritime taxes, and financial transaction taxes. Private investment will also be important but returns are currently low, so public-private partnerships are encouraged.
Afghanistan power system development project final project under Massive Open...Atiqur Rahman Barbhuiya
Afghanistan is at the bottom 10% globally in electricity consumption per capita and only 28% of its population is connected to the grid. In June 2015 Afghanistan’s access to electricity rate is estimated at about 25% with about 1 million residential connections.
The demand for electricity is increasing steadily, and it is estimated that Afghanistan would require 3,000 MW of electricity to suffice its needs by 2020.
This project is conceived to solicit external aid from private and Donor agencies to meet the challenges described above and creating a framework for a sustainable, decentralised power supply using renewable energy sources. The project is preparedfor partial fulfillment of obtaining a certificate under Massive Open Online Course (MOOC) on Financing for Development (FFD): Unlocking Investment Opportunities
Electricity generation in South Africa is changing, but whether the electricity grid will be able to adapt to these changes is uncertain. This paper presents an alternative frame for the current electricity challenges by focusing on the electricity grid. Using the International Futures forecasting model, the African Futures Project has built three scenarios to 2050 to inform policymakers of the long-term implications of grid decisions. With coordinated planning, improved operational strategies and coherent policies, renewable energy can contribute significantly to the energy mix by 2050, help increase economic growth and benefit all South Africans. These interventions, however, will only be successful if there is a clear plan for the structure of the electricity sector.
This document discusses long-term energy scenarios for Africa's energy transition. It finds that Africa will need to double its power capacity by 2030 to meet growing demand, yet many scenarios conservatively estimate renewable energy growth. The document compares two scenarios: the IEA projects 26% of electricity from solar by 2050, while a 100% renewable scenario from LUT projects 58% from solar, as renewables are becoming cheaper than fossil fuels. Faster renewable growth is possible with innovative business models and finance.
The document discusses opportunities for SK Energy to enter the wind power market in China. It analyzes the market size and growth potential of China's wind industry. Government policies strongly support the development of renewable energy like wind power. The wind power market in China is large but development has been uneven across regions. There is potential for SK Energy to partner with players in the industry to take advantage of opportunities in both developed and developing wind power markets in China.
Sustainable Infrastructural Development in Africa: The Build Operate and Tran...AJHSSR Journal
This document summarizes the state of electricity infrastructure in Nigeria and advocates for adopting a Build-Operate-Transfer (BOT) public-private partnership model to address issues in the power sector. It finds that Nigeria's electricity generation, transmission, and distribution infrastructure is outdated, inadequate, and unable to meet the country's energy needs. Compared to other African nations, Nigeria has significantly lower electricity consumption and production. Adopting a BOT model, which has successfully developed infrastructure in other countries, could attract private investment to rehabilitate Nigeria's electricity system without placing additional fiscal burdens on the government. A comprehensive legal framework is needed to regulate public-private partnerships in infrastructure.
This document provides an overview of the power sector in Africa. It notes that while electricity generation has increased across the continent, distribution issues and disruptions limit access. Quality of supply is generally poor, with countries like South Africa, Botswana, and Egypt seeing deteriorations. Renewable energy, particularly hydro, wind, and geothermal, shows strong potential but has been underdeveloped. Significant investment is still needed to expand power access across Africa.
Only 39% of Africans currently have electricity access, far below other developing regions. Key challenges include inefficient supply, growing demand, limited capacity and lack of grid interconnectivity. The PIDA Priority Action Plan identifies 15 energy projects, including large hydropower plants and transmission lines,
This document discusses financing options for sustainable energy solutions in Africa. It notes Africa faces large energy deficits and high costs of power production. The annual financing gap for Africa's power sector is estimated at $23 billion. Public finance sources that could help close this gap include domestic taxation, official development assistance, emerging donors from countries like China, and innovative financing from carbon markets, aviation/maritime taxes, and financial transaction taxes. Private investment will also be important but returns are currently low, so public-private partnerships are encouraged.
Afghanistan power system development project final project under Massive Open...Atiqur Rahman Barbhuiya
Afghanistan is at the bottom 10% globally in electricity consumption per capita and only 28% of its population is connected to the grid. In June 2015 Afghanistan’s access to electricity rate is estimated at about 25% with about 1 million residential connections.
The demand for electricity is increasing steadily, and it is estimated that Afghanistan would require 3,000 MW of electricity to suffice its needs by 2020.
This project is conceived to solicit external aid from private and Donor agencies to meet the challenges described above and creating a framework for a sustainable, decentralised power supply using renewable energy sources. The project is preparedfor partial fulfillment of obtaining a certificate under Massive Open Online Course (MOOC) on Financing for Development (FFD): Unlocking Investment Opportunities
Electricity generation in South Africa is changing, but whether the electricity grid will be able to adapt to these changes is uncertain. This paper presents an alternative frame for the current electricity challenges by focusing on the electricity grid. Using the International Futures forecasting model, the African Futures Project has built three scenarios to 2050 to inform policymakers of the long-term implications of grid decisions. With coordinated planning, improved operational strategies and coherent policies, renewable energy can contribute significantly to the energy mix by 2050, help increase economic growth and benefit all South Africans. These interventions, however, will only be successful if there is a clear plan for the structure of the electricity sector.
This document discusses long-term energy scenarios for Africa's energy transition. It finds that Africa will need to double its power capacity by 2030 to meet growing demand, yet many scenarios conservatively estimate renewable energy growth. The document compares two scenarios: the IEA projects 26% of electricity from solar by 2050, while a 100% renewable scenario from LUT projects 58% from solar, as renewables are becoming cheaper than fossil fuels. Faster renewable growth is possible with innovative business models and finance.
The document discusses opportunities for SK Energy to enter the wind power market in China. It analyzes the market size and growth potential of China's wind industry. Government policies strongly support the development of renewable energy like wind power. The wind power market in China is large but development has been uneven across regions. There is potential for SK Energy to partner with players in the industry to take advantage of opportunities in both developed and developing wind power markets in China.
Sustainable Infrastructural Development in Africa: The Build Operate and Tran...AJHSSR Journal
This document summarizes the state of electricity infrastructure in Nigeria and advocates for adopting a Build-Operate-Transfer (BOT) public-private partnership model to address issues in the power sector. It finds that Nigeria's electricity generation, transmission, and distribution infrastructure is outdated, inadequate, and unable to meet the country's energy needs. Compared to other African nations, Nigeria has significantly lower electricity consumption and production. Adopting a BOT model, which has successfully developed infrastructure in other countries, could attract private investment to rehabilitate Nigeria's electricity system without placing additional fiscal burdens on the government. A comprehensive legal framework is needed to regulate public-private partnerships in infrastructure.
This document provides an overview of the power sector in Africa. It notes that while electricity generation has increased across the continent, distribution issues and disruptions limit access. Quality of supply is generally poor, with countries like South Africa, Botswana, and Egypt seeing deteriorations. Renewable energy, particularly hydro, wind, and geothermal, shows strong potential but has been underdeveloped. Significant investment is still needed to expand power access across Africa.
Arab Region Progress in Sustainable Energy Challenges and OpportunitiesRCREEE
The document summarizes the current status of sustainable energy in the Arab region and key challenges. Near-universal electricity access has been achieved in cities, but rural access remains around 80%. Energy consumption has more than doubled since 1990, with renewables playing a marginal role at 4% of energy. Barriers to expanding renewable energy and energy efficiency include high costs, lack of incentives, and insufficient policies. Universal access to electricity and clean cooking fuels has not been achieved. Water scarcity and dependence on fossil fuels are significant regional challenges. Promoting investments, technology, capacity building, and data are priorities to meet development and climate goals.
The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
This document discusses Pakistan's energy sector. It notes that Pakistan faces energy deficiencies despite having natural resources. The two main power suppliers are WAPDA and KE. Pakistan's total installed capacity is around 37,000 MW but demand is around 25,000 MW. The government is promoting renewable energy sources like solar and wind to meet its goal of 30% renewable energy by 2030. Current renewable capacity is only around 1,100 MW. The primary energy sources in Pakistan are gas, oil, hydro, and coal.
Liberia faces significant challenges in increasing access to electricity for its population. Currently, only 10% of the population has access and electricity is only provided in the capital city of Monrovia. To meet targets for increasing access, the report recommends that Liberia 1) develop policies and strategies to attract private investment in electricity generation, 2) establish effective regulatory bodies to oversee the energy sector, and 3) structure bankable power generation projects that multilateral development banks and private investors can finance. This will help Liberia develop sustainable and affordable electricity access across the country.
This document discusses Africa's energy outlook. It notes that while Africa has a large population and is growing rapidly, it accounts for a small percentage of global energy use due to poor electricity infrastructure hindering development. Africa has significant energy resources like oil, gas, coal, and renewables, but these have been underdeveloped and most past investment has been in exporting resources rather than developing them for domestic use. The document outlines scenarios where increased investment in power infrastructure and regional cooperation could help accelerate development and make the 21st century an "African century."
Vietnam, a hidden gem in power development & investingPhat Nguyen
1) Vietnam has experienced rapid growth in electricity demand but faces power shortages due to reliance on state-owned utilities for generation and distribution.
2) The government aims to diversify energy sources and increase private sector investment in power projects including IPPs, BOT, and joint ventures.
3) Opportunities exist for private companies to invest in hydropower, coal, gas, and renewable energy generation projects to help meet Vietnam's projected electricity demand and alleviate power shortages.
The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
The papers for publication in The International Journal of Engineering& Science are selected through rigorous peer reviews to ensure originality, timeliness, relevance, and readability.
Assessment of Energy Losses and Cost Implications in the Nigerian Distributio...Dr. Hachimenum Amadi
Energy shortages is the major challenge facing the industrial sector in Nigeria. This paper assessed the energy shortages due to technical losses in the Nigerian distribution network and the cost implications. The study was carried out based on network data collected over the period 2011-2015 from three electricity distribution companies (DisCos) drawn from the three major industrial cities of Nigeria. These data were simulated on the Electrical Transient Analysis program (ETAP) Version 12.6. The calculated energy losses for these cities for the said period are 108,959.87 MWH, 149,256 MWH and 72,743.08 MWH respectively. The corresponding revenue losses are N2,434,164,012, N3,538,754,758.8 and N1,699,751,530.1 respectively. The paper suggested remedial measures to reduce energy losses, mitigate losses arising from unannounced electricity cuts as well as achieve a more efficient and reliable electricity distribution network. The outcome of this research provides a data bank for policy makers and future researchers in the areas of electricity generation, transmission and distribution.
India has ambitious goals to increase power generation and reduce transmission losses by 2012. However, the country faces significant challenges in meeting these targets, including issues with project execution, fuel security, equipment capacity, and infrastructure constraints. To help address these problems, experts recommend improving project management, stakeholder communication, procurement planning, schedule integration, and developing skilled human resources.
Coupling Universal Energy Access with Financial Sustainability: the Case of L...Jacopo Pendezza
Modern energy access is an essential precondition for economic development. It is essential for poverty reduction, improvement of human health, women’s empowerment, education. With access to reliable and affordable energy services, local entrepreneurs and companies of any size can generate local jobs, income and, thereby, promote local development, in particular in rural and peri- urban areas. The major barriers toward improving rural electricity connectivity in Africa include: absence of national grid in large part of the country, high cost of delivering electricity to rural areas, high upfront investment costs; scattered settlements in the rural areas leading to long and costly distribution lines. Other challenges are harsh terrains and inaccessibility due to underdeveloped infrastructure leading to high cost of rural electrification projects; high operating costs of grids in rural areas due to low population density.
For these reasons, several experts suggest that the extension of the main grid is not the most economical viable solution to grant energy access to rural communities. In most of the case, and especially in Tanzania, the best option is the realization of renewable source powered mini-grid (both grid-connected and off-grid). This option, if carefully analyzed, allows to reach more and more rural clients and at the same time to increase the share of renewable energy production.
Experience, however, has shown that it is not enough to simply create a new mini-grid and hope for local economic activities to pick up just by themselves. Countless electrification projects have suffered from a low demand response from the commercial sector that ended up affecting plans and expectations. This usually determines two significant consequences: First, the hoped-for impact of electrification programmes on the development of local communities often struggles to materialize. Secondly, the electrification schemes suffer from a lack of new customers able to pay for their electricity connection and use the new availability of electricity for productive purposes. Such developments have undermined the entire economic viability, and thus sustainability, of many electrification programs in developing countries. This paper explores the concrete steps to be put in place in order to increase the financial sustainability of a mini-grid, in order to couple universal access to modern energy services with sound financial sustainability of the systems providing electricity. To show that, it will take in account a feasibility study that CEFA is doing the Luganga site, Tanzania.
Il World Energy Focus, nuovo mensile online della WEC's community, una e-publication gratuita per essere sempre aggiornato sugli sviluppi del settore energetico. Il World Energy Focus contiene news, interviste esclusive e uno spazio dedicato agli eventi promossi dai singoli Comitati Nazionali.
energy crisis introduction (Autosaved)Faizan Ahmed
- Pakistan has faced chronic electricity shortages since the mid-2000s due to a combination of factors. Demand grew significantly but investment in generation did not keep pace, and existing plants were not upgraded for efficiency. Tariffs were kept artificially low for political reasons, preventing full recovery of costs. This contributed to the problem of "circular debt" where fuel suppliers were not paid due to utility arrears. By 2011, the electricity deficit exceeded 7,000 MW at times and the circular debt had ballooned to over Rs. 500 billion, severely impacting the economy and social stability. Alternative energy sources will be needed to resolve the crisis.
The document discusses challenges facing electricity generation, transmission, and distribution in The Gambia and proposes possible solutions. It notes that The Gambia's electricity capacity is just over 100 megawatts but actual generation is only 50 megawatts, with excess demand of 50 megawatts. The system relies heavily on imported fuels and faces high transmission losses. The document proposes short, medium, and long-term solutions, including rehabilitating existing plants, investing in transmission and distribution to reduce losses, installing smart metering, building a new power plant, pursuing regional interconnections, and providing additional technical training. Timely investment in these solutions could help mitigate current challenges and achieve national energy goals.
Non-Profit/For-Profit Partnerships in SHPP: CEFA’s Experiences and Perspectiv...Jacopo Pendezza
Expanding renewable energy access for rural communities in Africa is a challenging task.
In most of the cases, government investments and donor funds have proved insufficient
to expand access to modern energy in rural areas in a sustainable manner. However, energy
production and distribution in rural areas in Tanzania is now a national priority and
a promising business opportunity, because national policy and legal framework provide
a good environment for investments and subsides from co-financing feasibility studies to
project realization. Still, there is a great need for mobilizing financial resources to expand
energy access for rural communities. A partnership between non-profit and for-profit
actors is here proposed in order to rapidly expand energy access and meet national
programmatic targets for electrification and energy production. Essentially, Non-Profit/
For-Profit Partnerships (NPFPP) occupy a fruitful “middle ground” between commercial
private sector projects, focused primarily on profit; and public/non-profit sector projects,
focused primarily on enhancing access. In a nutshell, effective NPFPP couple profit
with energy access. This article explores the concrete possibility of a NPFPP between
CEFA, an Italian NGO specialized in rural electrification, and a private partner for the
realization of a Small Hydro Power project in Ninga, Tanzania.
This document is a final project for a World Bank course (name as: Unlocking Investment and Finance in Emerging Markets and Developing Economies (EMDEs), it is a hypothetical finance and investment strategy in the electricity domain in Cameroon. the target audience is the learning communities of the above mention course.
Renewable Energy Presentation - Joanne Howarduktila
The document discusses opportunities and challenges in the US renewable energy market. It notes that renewables could provide 635 GW of new capacity by 2025, with wind, solar and geothermal growing significantly. The new administration plans to invest over $150 billion in clean technology and renewables by 2050. However, the financial crisis has reduced tax equity financing and transmission challenges remain. Each renewable technology faces issues around costs, manufacturing, deployment and incentives.
Final project artifact rural electrification for malawiNyauthali
This document proposes ways for Malawi to achieve rural electrification in line with UN Sustainable Development Goal 7 of affordable and clean energy access by 2030. It provides background on Malawi's energy sector, noting that over 75% of the population lives rurally with limited electricity access. The document then outlines challenges to rural electrification in Malawi related to infrastructure, resources, geography and technologies. It proposes that the government of Malawi support rural electrification through legal/policy reforms, incentives for private providers, and developing bankable projects. Additional financing could come from national utilities, multilateral institutions, donors, NGOs, private sector social responsibility programs and philanthropists. Domestic resource mobilization and strong bilateral relations are also
Nigeria recently deregulated its power sector to pave way for private sector investors. The government owned corporation, Power Holding Company of Nigeria (PHCN) that was responsible for all electricity supply was unbundled, partly privatised and there are many ongoing reforms to reposition the power sector. However, the authorities must get the policies right and seek the support of international partners to attract private investments into the sector. Opportunities in the energy sector are highlighted for private sector participants to consider and take decisions. The citizens (consumers) must support government by agreeing with the new policies for a successful transformation. All hands must be on deck for success to be achieved.
This document discusses opportunities and constraints of scaling up electricity access in The Gambia. Currently, less than half (42%) of the Gambian population has access to electricity, with over 90% dependent on biomass for cooking and heating. Scaling up access is a top government priority to support development. The government has implemented policies and projects through the Least Cost Power Development Plan to increase access, yielding opportunities. However, scaling up also faces substantial constraints, including technical challenges, institutional and policy issues, and financial difficulties. To effectively increase supply, the document recommends encouraging private-public partnerships with local energy entities able to generate 50-100MW, and signing a performance contract between the national utility and government.
Presentation from Director Gauri Singh during the first IRENA meeting on the Africa Clean Energy Corridor.
http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=30&CatID=79&SubcatID=343
The document discusses the potential for an energy revolution in Africa through new technologies that could transform lives by providing universal access to electricity. It notes that access to electricity enables digital access and improves education, healthcare, enterprise and productivity. However, Africa currently has very low electricity usage per capita and high costs compared to other regions. The document advocates leveraging renewable energy sources like solar, wind and hydropower through public-private partnerships and government support of private sector investment to help drive an economic transformation. It highlights South Africa's success in increasing its share of renewable energy capacity through its renewable energy program.
Arab Region Progress in Sustainable Energy Challenges and OpportunitiesRCREEE
The document summarizes the current status of sustainable energy in the Arab region and key challenges. Near-universal electricity access has been achieved in cities, but rural access remains around 80%. Energy consumption has more than doubled since 1990, with renewables playing a marginal role at 4% of energy. Barriers to expanding renewable energy and energy efficiency include high costs, lack of incentives, and insufficient policies. Universal access to electricity and clean cooking fuels has not been achieved. Water scarcity and dependence on fossil fuels are significant regional challenges. Promoting investments, technology, capacity building, and data are priorities to meet development and climate goals.
The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
This document discusses Pakistan's energy sector. It notes that Pakistan faces energy deficiencies despite having natural resources. The two main power suppliers are WAPDA and KE. Pakistan's total installed capacity is around 37,000 MW but demand is around 25,000 MW. The government is promoting renewable energy sources like solar and wind to meet its goal of 30% renewable energy by 2030. Current renewable capacity is only around 1,100 MW. The primary energy sources in Pakistan are gas, oil, hydro, and coal.
Liberia faces significant challenges in increasing access to electricity for its population. Currently, only 10% of the population has access and electricity is only provided in the capital city of Monrovia. To meet targets for increasing access, the report recommends that Liberia 1) develop policies and strategies to attract private investment in electricity generation, 2) establish effective regulatory bodies to oversee the energy sector, and 3) structure bankable power generation projects that multilateral development banks and private investors can finance. This will help Liberia develop sustainable and affordable electricity access across the country.
This document discusses Africa's energy outlook. It notes that while Africa has a large population and is growing rapidly, it accounts for a small percentage of global energy use due to poor electricity infrastructure hindering development. Africa has significant energy resources like oil, gas, coal, and renewables, but these have been underdeveloped and most past investment has been in exporting resources rather than developing them for domestic use. The document outlines scenarios where increased investment in power infrastructure and regional cooperation could help accelerate development and make the 21st century an "African century."
Vietnam, a hidden gem in power development & investingPhat Nguyen
1) Vietnam has experienced rapid growth in electricity demand but faces power shortages due to reliance on state-owned utilities for generation and distribution.
2) The government aims to diversify energy sources and increase private sector investment in power projects including IPPs, BOT, and joint ventures.
3) Opportunities exist for private companies to invest in hydropower, coal, gas, and renewable energy generation projects to help meet Vietnam's projected electricity demand and alleviate power shortages.
The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
The papers for publication in The International Journal of Engineering& Science are selected through rigorous peer reviews to ensure originality, timeliness, relevance, and readability.
Assessment of Energy Losses and Cost Implications in the Nigerian Distributio...Dr. Hachimenum Amadi
Energy shortages is the major challenge facing the industrial sector in Nigeria. This paper assessed the energy shortages due to technical losses in the Nigerian distribution network and the cost implications. The study was carried out based on network data collected over the period 2011-2015 from three electricity distribution companies (DisCos) drawn from the three major industrial cities of Nigeria. These data were simulated on the Electrical Transient Analysis program (ETAP) Version 12.6. The calculated energy losses for these cities for the said period are 108,959.87 MWH, 149,256 MWH and 72,743.08 MWH respectively. The corresponding revenue losses are N2,434,164,012, N3,538,754,758.8 and N1,699,751,530.1 respectively. The paper suggested remedial measures to reduce energy losses, mitigate losses arising from unannounced electricity cuts as well as achieve a more efficient and reliable electricity distribution network. The outcome of this research provides a data bank for policy makers and future researchers in the areas of electricity generation, transmission and distribution.
India has ambitious goals to increase power generation and reduce transmission losses by 2012. However, the country faces significant challenges in meeting these targets, including issues with project execution, fuel security, equipment capacity, and infrastructure constraints. To help address these problems, experts recommend improving project management, stakeholder communication, procurement planning, schedule integration, and developing skilled human resources.
Coupling Universal Energy Access with Financial Sustainability: the Case of L...Jacopo Pendezza
Modern energy access is an essential precondition for economic development. It is essential for poverty reduction, improvement of human health, women’s empowerment, education. With access to reliable and affordable energy services, local entrepreneurs and companies of any size can generate local jobs, income and, thereby, promote local development, in particular in rural and peri- urban areas. The major barriers toward improving rural electricity connectivity in Africa include: absence of national grid in large part of the country, high cost of delivering electricity to rural areas, high upfront investment costs; scattered settlements in the rural areas leading to long and costly distribution lines. Other challenges are harsh terrains and inaccessibility due to underdeveloped infrastructure leading to high cost of rural electrification projects; high operating costs of grids in rural areas due to low population density.
For these reasons, several experts suggest that the extension of the main grid is not the most economical viable solution to grant energy access to rural communities. In most of the case, and especially in Tanzania, the best option is the realization of renewable source powered mini-grid (both grid-connected and off-grid). This option, if carefully analyzed, allows to reach more and more rural clients and at the same time to increase the share of renewable energy production.
Experience, however, has shown that it is not enough to simply create a new mini-grid and hope for local economic activities to pick up just by themselves. Countless electrification projects have suffered from a low demand response from the commercial sector that ended up affecting plans and expectations. This usually determines two significant consequences: First, the hoped-for impact of electrification programmes on the development of local communities often struggles to materialize. Secondly, the electrification schemes suffer from a lack of new customers able to pay for their electricity connection and use the new availability of electricity for productive purposes. Such developments have undermined the entire economic viability, and thus sustainability, of many electrification programs in developing countries. This paper explores the concrete steps to be put in place in order to increase the financial sustainability of a mini-grid, in order to couple universal access to modern energy services with sound financial sustainability of the systems providing electricity. To show that, it will take in account a feasibility study that CEFA is doing the Luganga site, Tanzania.
Il World Energy Focus, nuovo mensile online della WEC's community, una e-publication gratuita per essere sempre aggiornato sugli sviluppi del settore energetico. Il World Energy Focus contiene news, interviste esclusive e uno spazio dedicato agli eventi promossi dai singoli Comitati Nazionali.
energy crisis introduction (Autosaved)Faizan Ahmed
- Pakistan has faced chronic electricity shortages since the mid-2000s due to a combination of factors. Demand grew significantly but investment in generation did not keep pace, and existing plants were not upgraded for efficiency. Tariffs were kept artificially low for political reasons, preventing full recovery of costs. This contributed to the problem of "circular debt" where fuel suppliers were not paid due to utility arrears. By 2011, the electricity deficit exceeded 7,000 MW at times and the circular debt had ballooned to over Rs. 500 billion, severely impacting the economy and social stability. Alternative energy sources will be needed to resolve the crisis.
The document discusses challenges facing electricity generation, transmission, and distribution in The Gambia and proposes possible solutions. It notes that The Gambia's electricity capacity is just over 100 megawatts but actual generation is only 50 megawatts, with excess demand of 50 megawatts. The system relies heavily on imported fuels and faces high transmission losses. The document proposes short, medium, and long-term solutions, including rehabilitating existing plants, investing in transmission and distribution to reduce losses, installing smart metering, building a new power plant, pursuing regional interconnections, and providing additional technical training. Timely investment in these solutions could help mitigate current challenges and achieve national energy goals.
Non-Profit/For-Profit Partnerships in SHPP: CEFA’s Experiences and Perspectiv...Jacopo Pendezza
Expanding renewable energy access for rural communities in Africa is a challenging task.
In most of the cases, government investments and donor funds have proved insufficient
to expand access to modern energy in rural areas in a sustainable manner. However, energy
production and distribution in rural areas in Tanzania is now a national priority and
a promising business opportunity, because national policy and legal framework provide
a good environment for investments and subsides from co-financing feasibility studies to
project realization. Still, there is a great need for mobilizing financial resources to expand
energy access for rural communities. A partnership between non-profit and for-profit
actors is here proposed in order to rapidly expand energy access and meet national
programmatic targets for electrification and energy production. Essentially, Non-Profit/
For-Profit Partnerships (NPFPP) occupy a fruitful “middle ground” between commercial
private sector projects, focused primarily on profit; and public/non-profit sector projects,
focused primarily on enhancing access. In a nutshell, effective NPFPP couple profit
with energy access. This article explores the concrete possibility of a NPFPP between
CEFA, an Italian NGO specialized in rural electrification, and a private partner for the
realization of a Small Hydro Power project in Ninga, Tanzania.
This document is a final project for a World Bank course (name as: Unlocking Investment and Finance in Emerging Markets and Developing Economies (EMDEs), it is a hypothetical finance and investment strategy in the electricity domain in Cameroon. the target audience is the learning communities of the above mention course.
Renewable Energy Presentation - Joanne Howarduktila
The document discusses opportunities and challenges in the US renewable energy market. It notes that renewables could provide 635 GW of new capacity by 2025, with wind, solar and geothermal growing significantly. The new administration plans to invest over $150 billion in clean technology and renewables by 2050. However, the financial crisis has reduced tax equity financing and transmission challenges remain. Each renewable technology faces issues around costs, manufacturing, deployment and incentives.
Final project artifact rural electrification for malawiNyauthali
This document proposes ways for Malawi to achieve rural electrification in line with UN Sustainable Development Goal 7 of affordable and clean energy access by 2030. It provides background on Malawi's energy sector, noting that over 75% of the population lives rurally with limited electricity access. The document then outlines challenges to rural electrification in Malawi related to infrastructure, resources, geography and technologies. It proposes that the government of Malawi support rural electrification through legal/policy reforms, incentives for private providers, and developing bankable projects. Additional financing could come from national utilities, multilateral institutions, donors, NGOs, private sector social responsibility programs and philanthropists. Domestic resource mobilization and strong bilateral relations are also
Nigeria recently deregulated its power sector to pave way for private sector investors. The government owned corporation, Power Holding Company of Nigeria (PHCN) that was responsible for all electricity supply was unbundled, partly privatised and there are many ongoing reforms to reposition the power sector. However, the authorities must get the policies right and seek the support of international partners to attract private investments into the sector. Opportunities in the energy sector are highlighted for private sector participants to consider and take decisions. The citizens (consumers) must support government by agreeing with the new policies for a successful transformation. All hands must be on deck for success to be achieved.
This document discusses opportunities and constraints of scaling up electricity access in The Gambia. Currently, less than half (42%) of the Gambian population has access to electricity, with over 90% dependent on biomass for cooking and heating. Scaling up access is a top government priority to support development. The government has implemented policies and projects through the Least Cost Power Development Plan to increase access, yielding opportunities. However, scaling up also faces substantial constraints, including technical challenges, institutional and policy issues, and financial difficulties. To effectively increase supply, the document recommends encouraging private-public partnerships with local energy entities able to generate 50-100MW, and signing a performance contract between the national utility and government.
Presentation from Director Gauri Singh during the first IRENA meeting on the Africa Clean Energy Corridor.
http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=30&CatID=79&SubcatID=343
The document discusses the potential for an energy revolution in Africa through new technologies that could transform lives by providing universal access to electricity. It notes that access to electricity enables digital access and improves education, healthcare, enterprise and productivity. However, Africa currently has very low electricity usage per capita and high costs compared to other regions. The document advocates leveraging renewable energy sources like solar, wind and hydropower through public-private partnerships and government support of private sector investment to help drive an economic transformation. It highlights South Africa's success in increasing its share of renewable energy capacity through its renewable energy program.
H2 Worldwide Limited plans to develop 1GW of solar photovoltaic energy across northern Nigeria over 10 years. Their first stage involves developing 50MW PV solar power plants at an estimated cost of $225M, seeking funding from government grants, private investors, and financial institutions. H2's technical partner Titan Energy Systems has expertise in PV manufacturing and turnkey solar power plants. The strategic aims will contribute to economic, environmental, and social development in northern Nigeria by improving energy supply, enhancing energy security, reducing greenhouse gases, and creating jobs.
The document summarizes the potential for distributed solar energy in Ghana. It finds that while Ghana has a relatively high national electrification rate, unreliable electric power is a major impediment to economic growth. Distributed solar could help expedite service to off-grid communities and enhance reliability in areas that experience frequent outages. However, significant challenges remain in spurring distributed solar development, including Ghana's high electricity costs and the ongoing restructuring of its power sector.
This document summarizes a report by the International Energy Agency (IEA) and African Development Bank Group (AfDB) on financing clean energy in Africa. It finds that energy investment in Africa needs to double by 2030 to achieve universal energy access and meet climate goals. However, securing financing for clean energy projects in Africa is challenging due to high costs of capital, weak regulatory environments, and lack of project preparation. The report provides case studies and policy recommendations to help mobilize the $90 billion per year in private investment needed for Africa's clean energy transition by 2030.
Current (and best) practices in financing industry decarbonisation: Wale Shon...OECD Environment
"Challenges and best practices in financing to accelerate industry decarbonisation", OECD Series of Webinars on low carbon hydrogen and industry decarbonisation, 14 June 2023
IChemE Energy Centre report - Transitions in electricity systems towards 2030...Alexandra Howe
1. Climate change mitigation efforts in the analyzed countries are implemented only if they promote economic growth objectives.
2. Energy security concerns drive diversification of electricity sources, with many countries investing in natural gas infrastructure and promoting renewable energy.
3. A key driver of capacity expansion is addressing shortages in electricity supply to fuel economic growth, with countries investing in new generation capacity and transmission infrastructure.
Keynote address min at africa energy indaba feb 2019 1aujourlejour1
The key points from the document are:
1) South Africa faces challenges in ensuring energy security including unreliable electricity supply, aging infrastructure, and high energy costs.
2) The country is working to diversify its energy mix through renewable energy and natural gas while ensuring a just transition from coal.
3) Regional cooperation on energy infrastructure such as gas pipelines and hydropower projects from the DRC could boost energy access and economic development in Southern Africa.
Dominique MINIERE, EDF Senior Vice President, Deputy Chief Operating Officer and SFEN President, opened the 4th edition of Atoms for the Future. He welcomed the 250 participants coming from 13 countries with the very good news of the UK project which will see two EPRs being built on the Hinkley Point site. He emphasized the global need for electricity, especially in developing countries, and therefore the high potential for further nuclear development.
The Energy Crisis of Nigeria An Overview and Implications for the FutureMichael Olafusi
The document provides an overview of Nigeria's energy crisis, which stems from structural problems across its energy system including hydropower, oil, natural gas, and its grid structure. The crisis is exacerbated by low governmental cooperation, public opposition to privatization efforts due to past negative experiences, and widespread use of unsafe fuelwood. To address this, Nigeria's 2003 energy policy aims to diversify energy sources and increase capacity from oil, natural gas, and renewables, while reducing dependence on fuelwood. However, progress has been limited due to social, political, and economic challenges.
Feasibility Report of Small Hydroelectric Power PlantSulaman Muhammad
The aim of this project is to make the feasibility report of small
hydroelectric power generating station in small village of district Malakand, KPK, Pakistan. Required data (available head, flow of water, density etc.) was collected during site visit, through which appropriate turbine and capacity of was plant was calculated.
This document discusses energy trends in sub-Saharan Africa. It notes that while the region accounts for 13% of the global population, it only accounts for 4% of global energy demand. Half of the region's energy demand is met by biomass. The region has significant oil, gas, coal, hydro, and solar resources that remain largely untapped. Two-thirds of energy investment since 2000 has been in developing resources for export rather than domestic use. The document outlines pathways for increasing energy access through a combination of grid extensions, mini-grids, and off-grid solutions utilizing the region's renewable resources. An upgraded power sector integrating regional cooperation could help realize an "African Century" with increased prosperity.
Detailed Analysis Of Power Plant Equipments (Power Sector)KAMALAKKANNAN G
This document provides a project report on the analysis of power sector equipments in India. It includes an acknowledgement, table of contents, executive summary and introduction. The executive summary highlights that the report provides an extensive study and analysis of India's power sector through Porter's five forces model and SWOT analysis. It shows that there has been continuous growth in power generation and consumption in India. The introduction provides background on the growth of the power sector globally and in India, current scenario and future scope. It indicates that demand for power is growing rapidly in India and there is a need to double generation capacity.
Crowdfunding for PV micro-grids in rural IndiaBoris Lopicich
Several policies have been implemented in the past decades, intending to solve the problem of low rates of energy access in rural India. One of the most popular solutions, although still in the early stages, is low-carbon electricity generation through off-grid solar Photo-Voltaic (PV) power plants. The lack of funding for these types of infrastructure projects, however, is a major obstacle to providing electricity to over 45 per cent of the rural population currently lacking it, and a “bottom-up” approximation from the private sector is necessary to overcome the current scenario.
However, the study of current and new funding mechanisms is not possible without taking a systemic approach that shows different levels and stages of the innovation process. The present report also pays attention to other dimensions of the current paradigm of energy efficiency investments, including aspects such as regulatory laws, and social and technological context, which have straight influence in the rates of rural electrification. The new configuration of actors in the electric market is also examined. Multiple new players have assumed a fundraising role and, properly regulated, could be drivers of the transition toward sustainable energy for all. Many have focused on solar appliances, small entrepreneurs and final consumers, while others put their efforts into micro-grid projects and partnerships with solar companies. The latter are the subject of this research.
Having this purpose in mind, the present report looks primarily to clarify whether and to what extent Crowdfunding Platforms (CFPs) can be an alternative to existing funding mechanisms for off-grid projects in rural India; aiming to analyse barriers that potential donors – especially from overseas – may face. Current methods employed by practitioners to circumvent these obstacles are examined, concluding that changes in regulatory laws would help to provide with more incentives to private donors and foreign lenders to be part of the Indian energy transition by investing in CFPs.
The document discusses the potential for solar and wind energy to power the future of the Philippines. It notes that a single wind turbine can power 600 homes and that solar power is the most abundant energy source on Earth. It outlines the Philippines' goals of reaching 3 GW of solar capacity by 2022 and challenges such as high upfront costs. However, incentives like tax breaks and priority grid access could help overcome challenges to the renewable transition.
Electricity Grids and Secure Energy Transitions: Enhancing the foundations of...OECD Environment
OECD-IEA: Unlocking transmission grid finance and investment for the clean energy transition in emerging markets and developing economies, 17 January 2024, Virtual meeting
The global power and utilities sector is undergoing significant transformation, which is challenging traditional business models, and paving way for new technologies. In all major developed economies, utility companies face a tough operating environment, and this is resulting in several new business models that are mainly based on technological advancements and customer services.
Electricity transmission grid, historically a regulated and traditionally run entity, is also moving in the same direction, and adopting several new technologies, such as Smart, energy storage, and high voltage capacity corridors. Evolution is mostly seen in developed regions with a mature power and utility sector, such as Germany, the UK and the US. However, developing economies too are looking to leapfrog to new models, and currently building plans for the future. The global smart grid market is considered as the grid of the future and is pegged at US$70 billion by 2023.
Paying the Price for Unreliable Power Supplies: In-House Generation of Electr...Dr Lendy Spires
This document summarizes a working paper that analyzes the prevalence of in-house electricity generation by private firms in Africa. The paper finds that own generation accounts for about 6% of installed capacity in Sub-Saharan Africa, but is much higher in some low-income and post-conflict countries, representing over 20% of capacity in countries like DRC and Nigeria. While unreliable public power supplies contribute to firms generating their own power, the likelihood of owning a generator also increases significantly with firm size. Even with reliable public power, the analysis predicts own generation would remain prevalent, suggesting factors like backup needs and export regulations also play a role. The costs of own generation are three times higher than grid electricity, but generators operate infrequ
INTERNATIONAL GRID INTEGRATION Efficiencies, Vulnerabilities, and Strategic I...Power System Operation
The new decade is poised to be one of fundamental
change in the global electricity sector,
with the widening cost advantages and spread
of renewable energy. One result of that trend is
that power networks and markets have entered a new
phase of international and regional integration. More renewables
benefit from larger, varied, and more flexible
grids, which has spurred transmission build-out and grid
modernization worldwide. Trading power across international
borders and facilitating more complex markets
both deliver increasing cost savings and efficiency gains,
especially with rising demand and growing shares of renewables
in the power mix. That is the case across many
(otherwise very different) developing Asian economies.
Evolving international electricity grids and markets also
have regional political implications in a world where critical
infrastructure informs trade and national security.
This report is intended to inform US policy responses to
the energy transition as it spurs new interdependencies
and reshapes geopolitical relationships.
As economic growth and power demand both increase
in developing Asia (including the Middle East), countries
are integrating cheaper renewables and shifting away
from dependence on fossil fuels. Meeting demand while
reducing costly emissions has encouraged new infrastructure
and policy changes to increase cross-border trade.
The changing political economy of electricity trade in the
Middle East, South Asia, and Southeast Asia reflects trends
that are likely to accelerate in this decade, and highlights
the institutional challenges of international grid integration.
China’s role is significant. Its program to supply grid infrastructure
that can support the energy transition, and a
particular vision of global interconnection, are products of
the country’s drive to engage its industrial capacity and
sell to the region; to build a soft-power case for Chinese
climate leadership; to expand regional political and economic
influence; and to raise its national profile in a quiet
rework of international energy governance. It is also a
bet on a particular view of future continental electricity
markets and architecture. The wider Belt and Road
Initiative (BRI) to develop regional infrastructure networks
Similar to Building Electricity Supplies in Africa (20)
Mckinsey company - Capturing the next wave of growth in alternative Investmentsasafeiran
Investment trends come and go, so it may be tempting to
think of the current rush to alternatives as a passing fad. On
the one hand, money has continued to pour into the
category—which McKinsey defines to include hedge funds,
funds of funds, private equity, real estate, commodities and
infrastructure—over the past three years, with global assets
hitting an all-time high of $7.2 trillion in 2013. And with their
premium fees, alternatives now account for almost 30
percent of total industry revenues, while comprising only 12
percent of industry assets. Yet returns for many alternatives
products have lagged the sharp gains of broader market
indices in recent years, leading skeptics to contend that
investor patience is wearing thin—and that the alternatives
boom is about to run out of steam.
How the balanced scorecard complements the McKinsey 7-S modelasafeiran
The diagram for the 7-S model looks like a spider-web, with
each of the ‘S’s’ connecting with all the other six. The BSC
strategy map illustrates cause-and-effect linkages across its
four perspectives. Both help managers align their organization
for effective strategy execution
Diagnosing and solving organizational problems means looking
not merely to structural reorganization for answers but to a
framework that includes structure and several related factors.
The Africa Progress Report (APR) is the annual flagship publication of the Africa
Progress Panel. The APR draws on the best research and analysis available on
Africa and compiles it in a refreshing and balanced manner. The Panel makes policy
recommendations for African political leaders and civil society who collectively have the
primary responsibility for spurring Africa’s progress. In light of the continent’s dynamic
links with the rest of the world, the APR also highlights critical steps that must be taken by
leaders in the international public and private sector.
Baseline Renewable Energy - Africa Databaseasafeiran
facilitate the widespread introduction of renewable energy projects in the region that are sustainable and contribute towards the availability of locally generated energy in COMESA
• Consumer expenditure in SSA
equaled nearly $600 billion in
2010, accounting for almost eight
percent of all emerging-market
spending, and is expected to reach
nearly $1 trillion by 2020.
• Consumer spending in South
Africa and Nigeria accounts for 51
percent of SSA's total expenditure.
• Poverty in SSA is decreasing
rapidly—from 40 percent in 1980 to
less than 30 percent in 2008—and is
expected to fall to 20 percent by 2020.
• By 2050, almost 60 percent of
people in SSA will live in cities,
compared with 40 percent in 2010.
This means 800 million more people
will live in urban environments.
• By 2012, over 50 percent of all
Africans—or more than 500 million
people—will own a mobile phone.
By 2014, this portion is expected to
increase to 56 percent (more than 600
million people), giving Africa one of
the world’s highest mobile usage rates.
The long-term growth outlook for Africa appears bright. With a large and growing, young and increasingly wealthy population, Africa has a demographic advantage that few other parts of the world will be able to match over the coming decades. The rise of non-traditional economic
sectors, such as the telecoms industry, and the growth of service industries supporting the expanding middle class, should help African economies to diversify and become less dependent on commodities, aiding their long-term development.
Cost and Financing of Education in Mozambiqueasafeiran
This document provides a summary of the cost and financing of education in Mozambique. It finds that while enrollment rates have increased steadily over the past decade, quality remains low due to challenges such as teacher shortages and inefficient allocation. Recurrent costs per student are relatively high compared to other countries but outcomes are still poor. There are also significant disparities in access and outcomes based on gender and geographic location. Overall, the education system is underperforming given the resources available, and reforms are needed to improve efficiency, equity and learning outcomes.
Doing Business in Nigeria - Creating Wealth from Opportunitiesasafeiran
The document discusses opportunities for business in Nigeria. It notes that Nigeria is one of the key markets behind Africa's economic growth story and its large population and economy make it an important market for investors. It outlines various emerging opportunities in sectors like agriculture, power, oil and gas, infrastructure, mining, and telecommunications that are being driven by government reforms and the growing consumer class. The parting message encourages taking advantage of the current window of opportunity in Nigeria's expanding economy.
Grain Fish Money Financing Africa’s Green and Blue Revolutions 2014asafeiran
The annual Africa Progress Report is the flagship publication of the Africa Progress
Panel. Published every year in May, the report draws on the best research and analysis
available on Africa and compiles it in a refreshing and provocative manner. Through
the report, and as part of its overall mission of promoting transformative change in
Africa, the Panel makes viable, policy recommendations for African policy makers who
have responsibility for Africa’s progress, and for international partners and civil society
organizations.
Inclusive Green Growth in Zambia - Scoping the Needs and Potentialsasafeiran
This document summarizes a workshop held in Zambia to discuss developing an inclusive green growth strategy. The workshop was hosted by Zambia's Ministry of Finance and Ministry of Lands, Natural Resource Management and Environmental Protection. Participants discussed defining principles for inclusive green growth in Zambia, priority policy options like waste-to-energy and sustainable agriculture, and next steps to create an operational strategy. These included establishing a focal point, developing the strategy over the next year with stakeholder input, and assessing policies and investments to include in the strategy to promote long-term green economic growth in Zambia.
Innovative Approaches along the Private Equity Value Chain in Sub-Sahara Africaasafeiran
This document discusses private equity in sub-Saharan Africa. It conducted interviews with 43 stakeholders in the African private equity ecosystem to understand challenges and innovative approaches. The key challenges identified are high costs of operating due to fragmented markets and lack of infrastructure/talent, difficulties with fundraising due to reliance on development finance institutions previously, and limited deal flow due to the nascent industry and lack of "investment ready" companies. However, private equity firms have found innovative solutions along the investment value chain, such as specializing in niches, accessing new sources of capital, creating platforms for regional growth, and developing local talent. Overall, while the industry is growing more competitive, opportunities remain for firms that can operate effectively on the ground in Africa
Private Equity Investment in Africa - In Support of Inclusive and Green Growt...asafeiran
!e African Development Bank Group uses Private Equity
Funds to invest in a diverse range of African enterprises,
supporting them in their expansion and giving them the capital and the expertise to grow, creating jobs and driving economic growth. !e funds to which the Bank has committed are invested in 294 individual companies across the continent.
Ernst & Young’s Africa Attractiveness Survey 2013asafeiran
This document summarizes Ernst & Young's 2013 Africa Attractiveness Survey. Some key points:
- While FDI projects in Africa declined in 2012, Africa's share of global FDI flows increased. FDI from emerging markets into Africa grew, while flows from developed markets like Europe declined.
- There has been a shift in FDI toward sub-Saharan Africa and away from North Africa due to political issues. Countries attracting more investment include Ghana, Nigeria, Kenya, Tanzania, Rwanda, Mozambique, Mauritius and South Africa.
- Perceptions of Africa among investors have improved slightly, but a gap remains. Investors see opportunities but cite challenges like infrastructure, skills
Banking in sub-Saharan Africa - Challenges and Opportunitiesasafeiran
This study was prepared for the EIB’s Roundtable Discussion on Banking in sub-Saharan Africa. It was
put together by the EIB’s Economics Department to support the Bank’s new initiatives in the region’s
banking sector and to contribute to a better understanding of the recent market developments in the
sector.
How China is influencing Africa's Developmentasafeiran
This document discusses China's increasing engagement with Africa over the past decade. It poses three questions about China's impact on Africa's development: 1) Will China help African industrialization? 2) Does China's model of concessional finance offer a new approach for Africa's extractive industries? 3) Will China's infrastructure investments help integrate Africa's economies? After decades of reduced involvement, China is now a major investor and partner in Africa as its companies look abroad and its policy banks provide loans for commodities and projects.
Global Risks 2014 - The World Economic Forumasafeiran
Objectives of the Global Risks 2014 Report:
The world faces risks that can be addressed only by
long-term thinking and collaboration among business,
governments and civil society. The Global Risks 2014
report aims to support this process by:
– exploring the nature of systemic risks
– mapping 31 global risks according to the level of
concern they arouse, their likelihood and potential
impact, as well as the strength of the
interconnections between them
– looking in-depth at the ways in which three
constellations of global risk – centred on youth,
cyberspace and geopolitics – could interplay and
have systemic impact
The roles and opportunities for the private sector in Africa’s agro food indu...asafeiran
The study commissioned by the United Nations
Development Programme’s (UNDP) African Facility
for Inclusive Markets (AFIM) seeks to identify the roles
and opportunities for the private sector in Africa’s
agro-food industry. It focuses on successful inclusive
market development models in Africa and highlights
the incentives required for the private sector to capture
business opportunities and deepen investment in
the agro-food sector. Furthermore the study explores
mechanisms through which the private sector can engage
smallholder farmers and turn them from subsistence
farmers into viable agri-enterprises.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
New Visa Rules for Tourists and Students in Thailand | Amit Kakkar Easy VisaAmit Kakkar
Discover essential details about Thailand's recent visa policy changes, tailored for tourists and students. Amit Kakkar Easy Visa provides a comprehensive overview of new requirements, application processes, and tips to ensure a smooth transition for all travelers.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Confirmation of Payee (CoP) is a vital security measure adopted by financial institutions and payment service providers. Its core purpose is to confirm that the recipient’s name matches the information provided by the sender during a banking transaction, ensuring that funds are transferred to the correct payment account.
Confirmation of Payee was built to tackle the increasing numbers of APP Fraud and in the landscape of UK banking, the spectre of APP fraud looms large. In 2022, over £1.2 billion was stolen by fraudsters through authorised and unauthorised fraud, equivalent to more than £2,300 every minute. This statistic emphasises the urgent need for robust security measures like CoP. While over £1.2 billion was stolen through fraud in 2022, there was an eight per cent reduction compared to 2021 which highlights the positive outcomes obtained from the implementation of Confirmation of Payee. The number of fraud cases across the UK also decreased by four per cent to nearly three million cases during the same period; latest statistics from UK Finance.
In essence, Confirmation of Payee plays a pivotal role in digital banking, guaranteeing the flawless execution of banking transactions. It stands as a guardian against fraud and misallocation, demonstrating the commitment of financial institutions to safeguard their clients’ assets. The next time you engage in a banking transaction, remember the invaluable role of CoP in ensuring the security of your financial interests.
For more details, you can visit https://technoxander.com.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
Learn in-depth about Dogecoin's trajectory and stay informed with 36crypto's essential and up-to-date information about the crypto space.
Our presentation delves into Dogecoin's potential future, exploring whether it's destined to skyrocket to the moon or face a downward spiral. In addition, it highlights invaluable insights. Don't miss out on this opportunity to enhance your crypto understanding!
https://36crypto.com/the-future-of-dogecoin-how-high-can-this-cryptocurrency-reach/
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
South Dakota State University degree offer diploma Transcriptynfqplhm
办理美国SDSU毕业证书制作南达科他州立大学假文凭定制Q微168899991做SDSU留信网教留服认证海牙认证改SDSU成绩单GPA做SDSU假学位证假文凭高仿毕业证GRE代考如何申请南达科他州立大学South Dakota State University degree offer diploma Transcript
South Dakota State University degree offer diploma Transcript
Building Electricity Supplies in Africa
1. 1WWW.NEWCLIMATEECONOMY.NET
Page
Building Electricity Supplies in Africa for Growth and
Universal Access
Andrew Scott
Working Paper
Executive Summary
Although Africa has enormous energy resources, more than
half of the continent’s population do not have any access to
electricity and generation is often unable to meet the demand
of those who do. Growth and poverty reduction will be
constrained if this deficit continues. The purpose of this paper
is to outline the nature of the opportunities and challenges
for expanding the supply of electricity to meet development
objectives, taking into account recent reductions in the costs
of renewable energy.
Access to electricity
Under business as usual scenarios, over 600 million Africans
would still lack access to electricity two decades from now.
The example of Morocco and a number of other countries
indicate that in Africa, faster rates of electrification are
possible. The global goal of universal access to electricity by
2030 would add about 3% to the expected total demand and
could be delivered with a small increase in the capacity that is
already expected to be built. For about 60% of the population,
mini-grids and stand-alone systems would be the best means
to provide access.
Addressing the lack of access to electricity in sub-Saharan
Africa needs to recognise opportunity in the significant
amounts already spent by households on lighting and
communications. If households spent this amount, around
US$50 a year, on electric lighting, they could purchase more
electricity than the average African household currently
connected to the grid.
Even where there is a supply of electricity, many people may
not connect to the service because they cannot afford to. In
most African countries there is a connection charge for new
consumers. These are high by international standards, ranging
from US$2 to US$400, and can make access to electricity
unaffordable for households, even if the monthly tariff can
1. INTRODUCTION 4
2. ACHIEVING UNIVERSAL ACCESS TO
ELECTRICITY 5
Supplying electricity for universal access 7
Making electricity affordable 9
3. ELECTRICITY FOR GROWTH AND
PRODUCTION 13
Expanding generation capacity 14
Comparing costs 17
Exploiting renewable energy potential 21
The reliability of electricity 21
The performance of utilities 22
4. CONCLUSIONS AND
RECOMMENDATIONS 23
Access 23
Growth 24
CONTENTS Page
2. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET2
About this working paper
This paper was prepared as an input to the 2015 Africa Progress Report Power, People, Planet: Seizing Africa’s energy and climate
opportunities produced by the Africa Progress Panel led by Mr. Kofi Annan which can be found at: www.africaprogresspanel.org.
The Africa Progress Report (APR) is the annual flagship publication of the Africa Progress Panel. The APR draws on the best
research and analysis available on Africa and compiles it in a refreshing and balanced manner. The Panel makes policy
recommendations for African political leaders and civil society who collectively have the primary responsibility for spurring
Africa’s progress. In light of the continent’s dynamic links with the rest of the world, the APR also highlights critical steps that
must be taken by leaders in the international public and private sector.
This material has been partly funded by UK aid from the UK government. However the views expressed do not necessarily
reflect the UK government’s official policies.
Citation
Scott, A., 2015. Building electricity supplies in Africa for growth and universal access. Background paper for Power, People,
Planet: Seizing Africa’s energy and climate opportunities. New Climate Economy, London and Washington, D.C. Available at:
http://newclimateeconomy.report/misc/working-papers.
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivative Works 3.0
License. To view a copy of the license, visit https://creativecommons.org/licenses/by/3.0/us.
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3. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 3
be afforded. Connection charges could be made affordable by enabling consumers to spread the cost over time, rather than
incurring it as an up-front cost. For tariffs for electricity supplied through the grid, the tariff structure can be used to cross-
subsidise low-income consumers. For off-grid supplies, credit and financing schemes would enable access.
Electricity for growth
Economic growth is closely associated with the production and consumption of electricity, though the relationship is complex.
The impact of growth on the demand for electricity will be felt through expanded industrial and service sectors, and higher
incomes. Under business as usual assumptions, the International Energy Agency (IEA) expects the total demand for electricity
in Africa to increase at an average rate of 4% a year to 2040, and the demand from the industrial sector to more than double.
Generation capacity in Africa needs to expand rapidly to meet this expected growth in electricity demand.
The bulk of Africa’s electricity will continue to be delivered to industrial and commercial consumers connected to the grid. By
one estimate, industrial and commercial consumers will account for 68% of the demand in 2030. The supply of electricity to the
grid is expected to be predominantly from large-scale generating units. Substantial investment in transmission and distribution
will also be necessary.
The current level of investment in sub-Saharan electricity systems (about US$8 billion a year) is inadequate to overcome the
existing shortcomings of the region’s electricity systems, to expand coverage and to meet the growth in demand. The region
has under-invested for a number of years. The total additional investment required to meet expected demand, estimated to
be US$46 billion a year by the IEA, is beyond the capacity of Africa’s public finance. Policy frameworks that attract inward
investment will be necessary.
In 2012, 82% of Africa’s electricity was generated from fossil fuels. By 2040, another 81 gigawatts (GW) of thermal capacity
will have been built in sub-Saharan Africa, under business as usual assumptions. However, for both grid and off-grid electricity,
the levelised cost of electricity (LCOE) from most renewable options is now at the same level or lower than the cost of fossil
fuel options. This change in relative costs, combined with the expected future reduction in the cost of renewables, suggests the
need to review plans for expanding fossil fuel generation.
The quality of Africa’s electricity supply is poor. On average there is a power outage about every four days in sub-Saharan
countries, and in some countries outages are a daily occurrence. The economic impact of unreliable electricity is felt through
lost or reduced output, lower productivity, and the higher cost of electricity for consumers. These losses have been estimated
to reduce Gross Domestic Product (GDP) by around 2%. At the firm level, unreliable electricity has been found to have a
significant negative impact on productivity. Improving the reliability of electricity supplies, by expanding generation capacity
and investing in transmission and distribution, would contribute to economic growth.
The vertically-integrated state-owned utilities have become an excessive burden on limited government budgets in some
countries, amounting to 1.4% of GDP in 2010 in sub-Saharan Africa. Their weak financial performance affects their ability to
maintain the electricity infrastructure, reinforcing inefficiencies in the system, and is a barrier to investment in the expansion of
electricity supply.
Structural reform of the electricity sector, combined with privatisation, has been part of the conventional approach to
addressing the inefficiencies of state-owned utilities, often with a presumption that private sector companies will be inherently
more efficient. The lessons from the past two decades suggest that power sector reform needs to be adapted to the local
context and implemented over a long period of time. In the hybrid electricity systems that have evolved, comprising vertically-
integrated utilities supplemented by private power producers, effective regulation of the electricity market is a critical question.
Recommendations
The two challenges of expanding electricity generation and distribution for economic growth, and extending electricity supplies
to those who do not yet have access, are inter-related but require different policies and interventions.
To achieve universal access to electricity, governments should:
• Raise the level of their ambition for electrification, especially in countries where universal access is currently envisaged
only for the next generation.
4. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET4
• Target all electricity consumer subsidies more directly at the poorest households.
• Promote credit schemes for low-income households to enable access to off-grid supplies and remove the barrier of
connection charges for access to the grid.
• Include off-grid electricity (mini-grids and stand-alone systems) as an essential component of power sector plans.
• Support the design and implementation of mini-grids.
To address the challenge of expanding electricity to enable growth, governments should:
• Reform electricity utility companies to make them more efficient and financially sustainable.
• Ensure that tariff setting in the power sector is transparent, based on actual costs and able to cover operating costs and
contribute to future investment.
• Review national power plans to ensure they take advantage of recent dramatic reductions in renewable energy costs.
• Build African institutional and technical capabilities to develop and disseminate renewable energy technologies.
• Improve the reliability of electricity supplies by ensuring adequate generation capacity (or imports) and improving
maintenance of electricity infrastructure.
1. Introduction
The African continent has enormous energy resources, far beyond its own needs. Yet Africa has an electricity deficit. More
than half of the continent’s population do not have any access to electricity, and generation is often unable to meet the
demand of those who do. Per capita consumption of electricity is lower in Africa than in all other major regions of the world.1
South of the Sahara, it has stayed at about the same level for two decades, according to World Bank statistics.2
The rise of
Africa heralded by recent growth rates will be constrained if this deficit continues and the demand from growing population
and economies is not met.
The purpose of this paper is to outline the nature of the opportunities and challenges for expanding the supply of electricity for
economic growth and poverty reduction in Africa.3
The focus is on sub-Saharan Africa, where the electricity deficit is greatest.
The paper draws from recent literature and identifies developments that will influence future investment in electricity systems,
as well as the key areas of action for policy-makers and planners.
The need to increase electricity supply in order to match the current and growing demand is one of Africa’s major energy
challenges. Another is the need to enable over 620 million Africans to gain access to electricity for the first time. The number
of high profile initiatives to increase investment in the provision of electricity in Africa, including the New Partnership for
Africa’s Development’s (NEPAD) Africa Power Vision, which pursues the energy priorities of the Programme for Infrastructure
Development in Africa (PIDA), and the International Renewable Energy Agency’s (IRENA) Clean Energy Corridor, which aims to
exploit the continent’s renewable energy potential, demonstrates that these challenges are recognised by African governments.
The UN Secretary-General’s Sustainable Energy for All (SE4All) initiative, launched in 2011, is building support for an
approach to energy policy and planning that addresses energy access and climate change together. SE4All’s targets are the
universal provision of access to modern energy services by 2030, a doubling of the rate of improvement in energy efficiency
and a doubling of the share of renewables in the global energy mix, also by 2030. The Conference of Energy Ministers of
Africa endorsed these objectives in 2012,4
and they are incorporated in the Sustainable Development Goals agreed in
September 2015.
Energy policy has conventionally focussed on how to meet expected demand in a timely way and at least cost. Electricity
consumption in Africa has increased by around 5% a year over the past decade, and electricity demand is expected to double
between 2012 and 2030.5
To meet the growth in demand, and satisfy current unmet demand, installed generation capacity
needs to double by 2030 and increase by almost another one and a half times by 2040.6
This calls for much higher levels of
investment than have been experienced recently.
5. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 5
For electricity, energy policy implementation in Africa has often resulted in investment in thermal electricity generation,7
and in a transmission and distribution (T&D) grid. Large-scale hydropower has also been developed (supplying 15% of the
electricity generated in 2012),8
but with a very long lead time, it can be unresponsive to rapidly growing demand. The relative
costs of generating electricity from different energy sources are changing, however, as renewable energy technologies mature.
Solar photovoltaic (PV) electricity generation is now a lower cost option than fossil fuels in many places,9
while decentralised
generation and distribution alternatives are becoming technically and economically more feasible. These developments
challenge the conventional wisdom of energy planners and existing power sector plans. This paper suggests that plans for
expanding generation capacity should be reviewed to take advantage of these changes.
The paper first discusses the extension of access to electricity in sub-Saharan Africa, outlining the scale of the challenge and
measures that would enable the goal of universal access to be achieved. The third section considers the expansion of electricity
production and distribution to enable economic growth, and meet expected demand. Summary recommendations for measures
to address both challenges are presented in the final section.
2. Achieving universal access to electricity
Since 2000, 145 million people in sub-Saharan Africa have gained access to electricity.10
This equates to an increase in the
access rate from 23% to 32%.11
A few countries are achieving faster rates of improvement in access to electricity than others.
Five African countries (Cameroon, Côte d’Ivoire, Ghana, Morocco and Senegal) increased access by more than one percentage
point a year over the period 1990 to 2010 (see Figure 1), compared with a global average of 1.2 percentage points a year.12
The
example of Morocco and other fast movers indicates that substantially faster rates of electrification are possible.
Figure 1
Change in electrification rates, selected countries and regional averages, 1990-2010
Source: SE4All database.
0
10
20
30
40
50
60
70
80
90
100
1990 2000 2010
%populationwithaccesstoelectricity
%
North Africa
South Africa
Morocco
Cote d’lvoire
Senegal
Sub-Saharan
Africa average
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There is a marked difference between electrification rates in North Africa and sub-Saharan Africa. North African countries had
a 99% average electrification rate in 2012. The island states of Cape Verde, Reunion, Mauritius and the Seychelles had also
reached close to universal access. In sub-Saharan Africa, the average electrification rate was a third of this (32%), ranging from
85% in South Africa to under 10% in six countries (Chad, Central African Republic, DR Congo, Liberia, Malawi and South Sudan).13
Electrification rates in sub-Saharan Africa also differ greatly between urban and rural areas. On average, 59% of the urban
population has access to electricity, while 16% of the rural population do.
Across sub-Saharan Africa, however, the increase in access to electricity has typically not managed to keep up with population
growth. The number of people without access has increased by around 200 million, since 2000.14
More than half of Africa’s
population – more than 620 million people – did not have access to electricity in 2012.15
Boxes 1 and 2 describe the different
approaches to electrification in Ghana and Senegal.
The millions of Africans who lack access to electricity are disadvantaged in a number of ways. The absence of electricity limits
the opportunities open for people to improve their productivity and earn higher incomes. It limits their education, denying them
opportunities to read during hours of darkness and constraining the quality of educational facilities and services. In sub-Saharan
Africa only 35% of primary schools have access to electricity.16
Lack of electricity prevents people from accessing good-quality
health services, with an estimated 30% of health facilities having no electricity.17
Electric lighting would also improve people’s health,
by eliminating the household air pollution and burns from accidents that are associated with kerosene lighting.18
Without electricity,
opportunities to obtain information, knowledge and entertainment from the radio or television are more limited, and the absence of
street lighting reduces people’s sense of personal security. Lack of electricity also disadvantages people by requiring them to spend
a higher proportion of their income on less-efficient lighting and communications than can be provided by electricity.19
Outside the residential sector, lack of access to electricity can limit the productivity and opportunities for micro-, small- and
medium-scale enterprises (MSMEs). Electrification, however, does not necessarily lead to enterprise growth, increased
productivity, and higher returns.20
Electrification and the number of MSMEs are correlated, suggesting that the creation of new,
often informal, home-based micro-enterprises follows electrification. However, electrification has been found to have a variety
of effects on established micro-enterprises, including a small but significant effect on sales,21
and no systematic effect.22
Ghana has one of the fastest rates of rural electrification in sub-Saharan Africa. The proportion of the rural population with
access to electricity increased from 6% in 1990 to 52% in 2012. This progress has been driven by the National Electrification
Scheme (NES), which began in 1989 with the aim of extending access to electricity to all communities of 500 people or more, by
2020. A major component of the NES is the Self-Help Electrification Programme (SHEP). By 2009, the SHEP had connected
2,837 communities.
The purpose of the SHEP is to connect villages and towns within 20km of the grid. They must apply to be included in the
programme, and to be eligible the community itself has to provide materials and finance for the low voltage distribution network,
as well as evidence that at least one-third of households are wired and ready to be supplied with electricity. The government
provides conductors, pole-top arrangements and transformers, and covers the other installation costs. The Ministry of Energy is
responsible for vetting and selecting the communities to be included in each phase of the programme.
In 2010, only 64.2% of households in electrified communities were connected. Access to electricity in communities connected
by SHEP has been facilitated by the use of lifeline tariffs and the cross-subsidisation of poorer consumers by more affluent and
high-usage electricity consumers. Measures to ensure monthly electricity charges are affordable to the poorest will be necessary
to realise the government’s current goal of achieving universal access to electricity by 2020. The performance of utilities and the
shortage of electricity in the country will also be a challenge.
Box 1
How rapid rural electrification was achieved in Ghana
Source: Abavana, 2012; Ghana, 2012; https://energypedia.info
7. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 7
The existing conditions in areas undergoing electrification help determine the kind and scale of impacts that electricity can be
expected to bring,23
and the full potential economic impact of electricity can be exploited only if essential preconditions are met,
such as firms’ endowment of adequate capital, access to markets and transport infrastructure. Decisions by MSMEs to connect
to an electricity supply when it does become available reflect their assessment of the expected returns, and are influenced by the
costs involved.24
SUPPLYING ELECTRICITY FOR UNIVERSAL ACCESS
Under business as usual scenarios, a significant proportion of the sub-Saharan population would still lack access to electricity
two decades from now.25
The global goal of universal access to electricity, endorsed by African energy ministers,26
implies
the expansion of electricity generation and distribution to meet this additional demand, as well as the growth in demand from
existing consumers, industry and services.27
The additional electricity consumption in 2030 that would result from universal
access to electricity in sub-Saharan Africa is estimated to be approximately 35 terawatt hours (TWh) (see Box 2). This is
equivalent to an additional 3% on total demand, and 12% on residential demand.
Box 2
Achieving rural electrification in Senegal through concessions
The electrification rate in Senegal more than doubled between 1990 and 2010. By 2012, 90% of urban households had access
to electricity, and in rural areas 28% of households were electrified, compared with just 2.2% in 1990. The approach of the
Senegalese Rural Electrification Agency (Agence Sénégalaise d’Électrification Rurale; ASER) in contributing to this progress, with
support from the World Bank, has attracted the attention of other countries.
Before 1998, rural electrification was managed through a number of agreements between the government and the national utility,
SENELEC (Société National d’Electricité du Sénegal). In 2001, ASER was established and given the responsibility to promote rural
electrification. This has been pursued through several channels. The principal one focusses on the allocation and operation of 25-
year rural electrification concessions. ASER also supports locally initiated rural electrification projects and multi-sector projects
to support business productivity and social service delivery.
The country has been divided into 18 different rural electrification concession areas, to be awarded to private operators by
ASER through a competitive bidding process. Each concession area is to have its own electrification plan, covering 5,000-10,000
potential electricity consumers. The concessionaires are contractually required to connect a given number of households,
including a number living more than 20km from the grid.
The maximum tariffs for defined levels of service in each concession are set by the independent regulator, the Commission de
Regulation du Secteur de l’Electricité (CSRE). Tariffs can vary between different concessions but not within concession areas. In
addition, consumers pay a monthly charge that allows their up-front connection and wiring costs to be repaid over time.
ASER’s concessions approach provides a way to ensure private investment in rural electrification. Concessionaires are required
to provide at least 20% of the investment. Up to 80% of the investment cost can be provided as a subsidy by the government,
through the World Bank support, but disbursements are tied to performance milestones and the number of connections made.
The first six concessions secured a total of US$52 million of private finance, amounting to 49% of the total investment and more
than double the minimum 20%.
While the financing model, entailing private sector investment and an element of output-based aid, has been successful, the
concessions’ progress in expanding the number of connections has been slower than anticipated. Increases in rural electrification
in Senegal before 2012 cannot be attributed to them. Nevertheless, ASER’s objective was to increase the national electrification
rate to 30% by 2015 and 60% by 2022, and the 2015 target has been surpassed. On current projections, the target for 2022 may
be narrowly missed.
Sources: de Gouvello and Kumar (2007); Mawhood and Gross (2014); https://energypedia.info.
8. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET8
The additional generation capacity that will be required to enable universal access to electricity depends on how the electricity
will be supplied and the energy sources that will be used. Mini-grid and stand-alone systems would together supply an estimated
57% of the additional demand from ensuring universal access and 43% would be supplied from the grid.28
On the basis of IEA and Joint Research Council estimates of the proportions of off-grid electricity that would be supplied from
different energy sources (Figure 2), the off-grid generation capacity required would be approximately 7.2 gigawatts (GW)
(details in Table 1). About 87% of this capacity is in renewable energy generation capacity.29
The total additional capacity in 2030
for universal access is estimated to be 11 GW, which is equivalent to 4% of IEA’s expected total sub-Saharan capacity. In other
words, the ambition of universal access to electricity could be delivered by 2030 with a small increase in capacity above what is
already expected to be built, bringing electricity to almost one third of the population of sub-Saharan Africa.
Box 3
Estimating the demand for grid and off-grid electricity
The IEA’s assumptions (IEA, 2014) indicate that approximately 48% of the total population who currently lack electricity in sub-
Saharan Africa, would be best served by grid extension and just over half by mini-grids (34% of the population without access) and
stand-alone systems (18%). By 2030, when 45% of the sub-Saharan population will be living in urban areas, compared to 35% now
(UN Population Division) and 635 million people will still lack access to electricity (under current policies), the proportion of the
population best served by mini-grids and off-grid systems will be slightly higher, 37% and 20%, respectively.
Another estimate of the relative contributions of grid extension and off-grid systems in providing universal access in Africa has been
provided by the Joint Research Council (JRC). Using a combination of spatial mapping and social and economic data, this research
found that 39% of the total population would be best served by grid extension (Szabó et al., 2011), about three-quarters of the IEA’s
estimate and a difference of about 60 million people. There is considerable variation between countries and the balance between
grid extension and off-grid systems will be subject to local geographical, economic and policy conditions.
The JRC did not distinguish between mini-grid and stand-alone systems for the population best served by off-grid options, but did
look at technical options and found that 34% (of the total population without electricity) would be best served by solar PV, 12% by
mini-hydro and 15% by diesel generators (Szabó et al., 2011).
The additional demand for electricity to be met through off-grid systems can be estimated using assumptions about the basic
level of electricity consumption of newly-connected households. Although average electricity consumption in the sub-Saharan
residential sector is 317 kilowatt hours (kWh) per capita a year (IEA, 2014), or 1585 kWh per household per year, consumption
by most households gaining electricity for the first time is likely to be much lower than this. Unfortunately, data on the actual
consumption of electricity by newly-connected households is unavailable. The IEA assumes a minimum rural consumption level of
250 kWh per household per year, enough for a couple of light bulbs, phone charging and a fan (IEA, 2014). This is comparable to
Tiers 2 and 3 of the SE4All Global Tracking Framework (2013), which entail electricity consumption of 100 kWh and 365 kWh a
year, respectively. Sanchez (2010) considered a higher level, 600 kWh per household per year, to be the minimum acceptable level
of consumption. Using the IEA’s minimum consumption figures, the total estimated additional consumption of electricity from
universal access is shown in the table below.
MWH 2010 2012 2030
Grid extension urban 11465354 13740334 6213750
Grid extension rural 7160941 5875160 8592938
Mini-grids 10860760 8910659 13032622
Off-grid 5848102 4798047 7017566
Total without access 35335157 33324200 34856875
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MAKING ELECTRICITY AFFORDABLE
The challenge of addressing the access to electricity deficit in sub-Saharan Africa is not just a question of providing a supply,
from the grid or through off-grid systems. Even where there is a supply of electricity many people may not connect to the service
because they cannot afford to. After electrification in rural areas, many households do not immediately connect to the supply
and take-up rates are often lower than anticipated. In urban areas, Eberhard et al. (2011) found that 93% of the population lived
close to an electricity supply from the grid, while 75% had a connection. More than half of this difference was attributed to a gap
in demand. In other words, when electricity supplies are extended to new areas, a lack of effective demand can result in some
households remaining without a connection.
Figure 2
Sources of electricity for off-grid systems (% MWh by source)
Source: SIEA, 2014; Szabo et al., 2011.
Wind 6.7%
IEA JRC
Biomass 2.7%
Oil 32.9%
Oil 24.6%
Solar PV 40.2% Solar PV 55.7%
Hydro 17.5%
Hydro 19.7%
Table 1
Generation capacity required to meet off-grid demand from universal access
GWh Capacity factor GW
Oil 6627 0.8 0.945575
Solar PV 8120 0.2 4.634889
Hydro 3449 0.5 0.787359
Wind 1323 0.2 0.755315
Bioenergy 531 0.5 0.121308
Total 20050 7.244446
Source: Author’s own estimates.
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To understand how to address the demand gap, it is important to understand what households use electricity for and how they
meet these needs without electricity. The Poor People’s Energy Outlook 2010 (Practical Action, 2010) identifies six services that
energy provides to households – lighting, cooking and water heating, space heating, cooling, communications, and earning a
living. Electricity could be used to provide all of these services. In practice, the evidence indicates that most households with an
electricity supply in Africa use it primarily for lighting and communications (including radio and television).
Households without an electricity supply do not go without lighting or modern communications. Indeed, they often spend a
significant proportion of their limited incomes on these services. Kerosene is currently the most common source of energy for
lighting across sub-Saharan Africa, used by more than two-thirds of households. Market surveys conducted in 2008 for Lighting
Africa, in five countries, found that the great majority of households use a paraffin (kerosene) lamp of some kind for lighting,
except in Zambia (see Table 2). Household surveys in Kenya and Uganda have also found that kerosene was the main source of
lighting for, respectively, 76% and 85% of households.30
The proportion of households using kerosene for lighting in urban areas
is lower than in rural areas, however.
Other sources of lighting, for households without an electricity supply, include candles and dry cell batteries (for torches or
lamps).31
The very poorest households do not use any lighting device, but rely on firelight or moonlight during the hours of
darkness. Incidence of the use of electricity as the main source of lighting corresponds with the level of electrification.
The cost of purchasing and running different lighting devices varies, as does the quality of light provided. Lighting Africa’s market
surveys provide information about how much different lighting devices cost to run. The monthly cost of running a kerosene lamp
ranged from about US$3.20 to over US$8.00, depending on national kerosene prices, while the monthly cost of candles ranged
from less than one dollar to US$4.65 (Table 3).
Estimates of total annual household expenditure on lighting vary, in part because of survey methodology, but all show that
households spend a substantial amount on a service they regard as a necessity. A survey of households in selected Millennium
Villages found an average annual expenditure of US$48.27 on lighting and electricity. More than half of this was on kerosene
(55.3%), 39% was on batteries and 0.3% on candles.32
Lighting Africa’s market surveys estimated the average annualised costs
of purchasing and running lighting devices at US$57 per household per year, while en.lighten’s estimates across 45 sub-Saharan
countries suggest average annual expenditure of US$102 on kerosene, candles and batteries.33
Addressing the lack of access to electricity in sub-Saharan Africa needs to recognise the significant amounts already spent by
households on lighting and communications. This expenditure presents an opportunity to increase access and pay for extended
electricity services. If households spend around US$50 a year on electric lighting, an amount many are already spending on
lighting, at an average price of US$0.10 per kWh,34
this would purchase 500 kWh a year. This is more than current African
Table 2
Types of lighting devices used by households (%)
Devices Ethiopia Ghana Kenya Tanzania Zambia
Paraffin lamp with no cover 69 5 30 30 8
Paraffin lamp with cover 14 72 67 60 6
Firelight /moonlight 11 7 5
Torch 10 12 10 8 3
Light bulb in socket or lamp 8 6 10 6
Candles 18 5 19 79
Lantern (battery or solar) 4
Source: Lighting Africa.
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average residential consumption. Households in the lowest income quintiles that have access to electricity tend to consume less
than this. At a price of US$0.40 per kWh, around the cost of generating off-grid electricity, US$50 would purchase 125 kWh a
year which would still be enough to meet the need for lighting and communications in low-income rural households.
Poorer households tend to spend a larger proportion of their income on energy than richer households. Analysis of household
survey data from 30 African countries found that the poorest quintile spent 15% of their total expenditure on energy,
compared with 9% by the richest.35
Household survey data from Uganda showed that the poorest quintile there spent 16% of
their total expenditure on energy, and the richest quintile 5.7%.36
These proportions also vary between rural and urban areas,
as shown in Figure 3.
Table 3
Monthly cost of running lighting devices
Ethiopia US$ Ghana US$ Kenya US$ Tanzania US$ Zambia US$
Paraffin lamp with glass cover 3.30 3.20 8.06 5.10 3.54
Paraffin lamp with no cover 0.90 2.40 2.80 2.40 4.65
Bottle gas lamp 0.80 n/a n/a 0.85 n/a
Candles 0.30 1.44 0.77 1.50 4.74
Torch batteries 0.90 2.31 1.38 2.30 2.34
Battery powered lantern n/a 7.80 n/a 5.00 10.21
Source: Lighting Africa.
Figure 3
Proportion of household expenditure on energy by rural and urban income quintiles in Kenya
and Uganda 2005/06
Source: Bacon et al. 2010.
0
2
4
6
8
10
12
14
16
18
Q1R Q1U Q2R Q2U Q3R Q3U Q4R Q4U Q5R Q5U Q1R Q1U Q2R Q2U Q3R Q3U Q4R Q4U Q5R Q5U
Electricity
Kerosene
Other
Kenya Uganda
12. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET12
These figures do not distinguish between energy for lighting and energy for other uses, including cooking, which is the largest
single use of energy by nearly all households. However, the proportions in Figure 3 for electricity and kerosene can be regarded
as a good indication of the share of expenditure on lighting by different income quintiles.
Similarly, the use of electricity varies with income group. In Uganda, for example, where electrification rates are low, 0.2%
of households in the lowest income quintile used electricity in 2005/06, compared with 15% in the highest quintile.37
The
international goal of universal access to electricity calls for the eradication of these differences and the supply of electricity to all
households, across all income quintiles and in both urban and rural areas.
To ensure universal and equitable access, and to maximise the benefit from electrification, low-income households may still need
support to use electricity for essential services, such as lighting. For electricity supplied through the grid, the tariff structure is
commonly used to cross-subsidise low-income consumers.
An analysis of tariffs in the mid-2000s found that about two-thirds of the residential tariff structures in sub-Saharan Africa were
increasing block tariffs (IBTs), which have a different unit price for each of a number of defined blocks of consumption. One-third
of tariffs had the same unit price irrespective of the level of consumption.38
Half of the tariff systems also had a fixed monthly
charge, US$1 to US$3 in most cases. IBTs lend themselves to cross-subsidisation by setting the tariff for the first, or ‘lifeline’,
block at a lower level. In most cases this block was 50 kWh per month, but the lifeline tariff varied from US$0.009 (Nigeria) to
US$0.266 per kWh (Mali). In sub-Saharan Africa, most countries recover costs through higher unit prices for high consumption
level blocks, but in a small number of countries the tariff structures would not be able to recover operating costs.39
Some countries also set a social tariff, providing a bigger subsidy for households that meet certain eligibility criteria. South
Africa, for example, introduced Free Basic Electricity in 2004, aiming to provide 50 kWh a month free to low-income households
connected to the grid.40
The initiative has been implemented unevenly, and a review in 2012 found that a quarter of those
eligible did not receive free basic electricity.41
Nevertheless, many households are able to afford tariffs which recover costs, and it is clear that monthly tariffs need not be
a barrier to access to grid electricity. At the same time, tariff structures can be designed to allow cross-subsidisation for the
lowest-income households.
Tariffs are not the only cost incurred when gaining an electricity connection. In most countries there is also a connection charge
for new consumers, and investment is required for wiring and fittings within the home. Connection charges vary across sub-
Saharan countries, both in the amount of the charge and its rationale. In some cases, it is intended to cover administrative
costs, in others it is meant to cover the full cost of extending the grid to a particular house. Connection charges in Africa are
high by international standards, ranging from US$2 to US$400, and averaging US$168 (across 15 countries with information
available).42
In five countries they exceed, by a good margin, average monthly incomes. High connection charges can, therefore,
make access to electricity unaffordable for households, even if the monthly tariff can be afforded.
There are two ways to make connection charges more affordable. The first is to reduce the costs, by adopting less expensive
technical specifications.43
This would also be a way to reduce the costs of internal wiring incurred by new consumers.
Connection charges could also be made affordable by spreading the cost over time, rather than incurring it as an up-front
cost before the supply is connected. This would allow any savings in energy expenditure from the substitution of electricity
for kerosene and batteries, to be used to cover the cost of the initial connection. In Senegal, monthly bills include a charge
that allows their up-front connection and wiring costs to be repaid over time,44
and a number of credit schemes have been
introduced, such as in Cote d’Ivoire, Kenya and Botswana, to enable payment of connection charges to be spread out over
time.45
These credit schemes have been linked to the electricity provider or government, rather than provided by commercial
financial institutions.
For off-grid electricity consumers, there is less scope within tariff structures to subsidise access for low-income households.
Mini-grids can use technical means, such as load limiters, to ensure a household’s consumption does not go above a
predetermined maximum, and charge differential tariffs for different levels of consumption. Costs can also be reduced by the
use of appropriate technical standards. For stand-alone systems, a variety of credit and payment systems has evolved, often
initiated by the supplier of the equipment (see Box 4.) Prepayment and mobile payment technologies make revenue collection
less costly and more efficient.
13. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 13
3. Electricity for growth and production
Economic growth is closely associated with the production and consumption of electricity, though the relationship is complex
and context-specific. Some studies have found no causal relationship between growth and electricity (or energy consumption),
while others have concluded that electricity is a factor that determines growth, or vice versa, or the causal relationship is in
both directions.46
This variation in the findings from statistical analysis is partly due to differences in methodology and the data used (e.g.
different countries and time periods). The evidence from sub-Saharan Africa suggests that electricity is a factor that does
contribute to economic growth.47
In different countries the causal relationship has been found to be in both directions and in
one direction.48
There is also evidence that electricity infrastructure is a significant factor explaining differences in industrial
development between countries.49
Whether as a causal factor or enabler of growth, it is clear that electricity consumption is
linked to economic growth. Figure 4 shows how the annual rates of growth in GDP and electricity consumption in sub-Saharan
Africa have followed a similar pattern.
The impact of economic growth on the demand for electricity will be felt through higher incomes, allowing higher levels of
consumption in the residential sector, and through expanded industrial and service sectors. Industry consumes the largest
share of electricity, accounting for half of all electricity consumed in sub-Saharan Africa in 2012 (IEA database). This was largely
for mining and mineral processing, and concentrated in South Africa, Nigeria, Ghana and Mozambique.50
Under business as usual assumptions, the IEA expects the total demand for electricity in Africa to increase at an average rate of
4% a year, until at least 2040 (Table 4).51
The demand for electricity from the industrial sector will more than double between
2012 and 2040, according to IEA estimates. A substantial part of this additional demand is from the mining sector, whose demand
is expected to be 142-155% higher in 2020 than in 2012, and will consume 30% of sub-Saharan Africa’s electricity by 2020.52
Box 4
Access through pay-as-you-go solar electricity: the example of Azuri Technologies
Although the cost of solar technologies has fallen in recent years, solar lighting remains out of reach for many low-income families.
At US$70, the typical price of a lighting device is too high to be affordable without credit, but this is often not available for their
purchase. The suppliers of lighting devices are therefore innovating payment methods that allow resource-poor households to pay
the purchase cost over a period of time. One of the most successful is Azuri Technologies.
Azuri produces solar home systems that incorporate a pay-as-you-go controller. This is activated by a code which is obtained by
purchasing a scratch card and is then sent by SMS to Azuri. Azuri sells its solar home systems to dealers who install the system,
provide after-sales support and sell the scratch cards, which can be physical cards or scratch card numbers bought using a mobile
payment system.
Customers pay an initial fee of about US$10 for the installation of the lighting system in their home, comprising a 2.5 Watt-peak
(Wp) PV module, battery, two light-emitting diode (LED) light bulbs, and a USB socket for phone charging. They pay about US$1.50
for a weekly scratch card, which is about half of the typical US$3 a week spent on kerosene for lighting. After 18 months, users can
pay a fee of about US$5 to have the system permanently unlocked or they can upgrade to a larger system.
Following a pilot in 2011, Azuri began commercial sales in Kenya the following year and by March 2013, 2,400 systems had been
installed. By 2015, the system is available in 11 African countries.
An impact study in 2014 found that the main use of the lighting provided by the solar home systems was studying, and that mobile
phone charging was the second most important use of the systems. Most users also reported working more, and saving time on
travelling to purchase kerosene or charge their phone.
Source: Ashden; Azuri (http://www.azuri-technologies.com)
14. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET14
EXPANDING GENERATION CAPACITY
The total installed generation capacity in Africa was 165 GW in 2012. The five countries of North Africa accounted for around
40% of this. Sub-Saharan Africa’s share, totalling 97 GW, was dominated by Nigeria (18 GW) and South Africa (46 GW).53
The
installed capacity in around half of sub-Saharan countries is less than 500 megawatts (MW).
Generation capacity in Africa needs to expand rapidly to meet expected growth in the demand for electricity from existing
consumers, from additional consumers gaining access and from growth in the industrial and services sectors. The IEA estimates
that installed generation capacity will more than double from 165 GW in 2012 to 384 GW by 2030, and increase by almost
another one and half times to 558 GW by 2040 (under the business as usual or New Policies Scenario).54
As shown in Figure 5,
this will require a much faster expansion in capacity in sub-Saharan Africa than was achieved over the past two decades.
Figure 4
Pattern of annual growth rates in GDP and electricity consumption, sub-Saharan Africa, 1990-2012
Source: World Development Indicators.
0
2
4
6
8
10
-2
GPD Growth
Growth in electricity
production
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Table 4
Electricity demand by main sectors 2010-2040 (TWh)
2010 2020 2030 2040
Residential 91 163 283 463
Industrial and commercial 331 516 760 1107
Total 423 679 1043 1570
Source: Castellano et al., 2015.
15. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 15
The broad options to expand the supply of electricity, and access, are (a) to extend the national grid, (b) build mini-grids, and (c)
promote decentralised stand-alone systems. Within each of these categories a variety of techniques can be used to generate and
distribute electricity. The IEA’s projection assumes that all urban areas would be best (i.e. most economically) supplied through
grid extension.55
According to the IEA, grid extension would also be the best option for 30% of rural areas; mini-grids would be
best for 45.5% of rural areas and off-grid (stand-alone) systems56
best for 24.5%.57
Though more individual consumers might be best served by off-grid supplies, their relatively low consumption means that the
bulk of Africa’s electricity will continue to be delivered to industrial and commercial consumers connected to the grid. By one
estimate, industrial and commercial consumers will account for 68% of the demand in 2030, and about 7% of this is expected to
be through off-grid generation.58
The supply of electricity to the grid to meet this demand is expected to be predominantly from large-scale generating units,
such as fossil fuel plants, nuclear power plants and hydropower plants, which have significant economies of scale but require an
efficient T&D network to serve consumers. Indeed, according to the IEA, investment in T&D will need to be nine-times higher
than it is today, and proportionally greater than investment in generation capacity.59
Distributed electricity generation, such as rooftop solar PV and localised wind farms feeding into the distribution network, could
also help increase the supply of electricity to the grid. The potential for distributed small-scale generation is not well understood,
however, and it rarely features in power sector plans. Only 9 countries in Africa have a feed-in tariff policy to encourage it.60
Small generation units may not provide all the economies of scale in electricity production, but they have the advantages that
they require smaller amounts of capital investment and they contribute to the resilience of the electricity distribution system in
the face of technical breakdowns and extreme weather events.
Mini-grids comprise a generator of electricity and a low-voltage distribution network (grid), usually serving a single community,
village or small town. The source of electricity may be a diesel generator, a solar PV system, a micro-hydro scheme or a
combination (hybrid) of these or other sources. Mini-grids are not connected to the national grid, though may be seen as a
precursor or step towards this. Mini-grids may be community owned (e.g. by local authorities or cooperatives), operated by
a utility company, operated by a commercial business, or some combination of these (e.g. community owned but privately
operated).61
More detail about the variety mini-grid models found in Tanzania is presented in Box 5.
Figure 5
Installed generation capacity estimates 1990-2040
Sources: 1990-2010, SE4All database; 2012-2040, IEA (2014).
0
100
200
300
400
500
600
1990 1995 2000 2005 2010 2012 2020 2025 2030 2035 2040
North Africa
Sub-Saharan Africa
16. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET16
Stand-alone systems include a source of electricity (e.g. diesel generator, pico-hydro or solar home systems) and distribution
or wiring within a single property (home or firm). The system operator is the consumer of the electricity generated. Although
stand-alone systems do not require conventional electricity infrastructure, their diffusion and operation requires an effective
market for energy devices and services. For the operations of industrial and commercial consumers, stand-alone systems may be
essential in locations not connected to the grid, or as a back-up in case of grid failure.
Box 5
There is a variety of possible models for mini-grid development: examples from Tanzania
Mini-grid development in Tanzania demonstrates the diversity of possible models for mini-grid design and operation as
well as their potential for enabling access to electricity in rural areas. Over 30 mini-grids are operating in the country and
electricity from mini-grids may be the best option in 1,600 other locations, according to the Rural Electrification Investment
Prospectus. Renewable energy mini-grids are a cost-effective electrification option for an estimated 20% of the population,
over 9 million people.
TANESCO, the state-owned utility, operates 21 diesel and gas-fuelled mini-grids, with capacities ranging from 400 kW to 12
MW. The initial investment came from public funds and donors. The generators for these mini-grids are expensive to operate
(the costs in 2012 were US$0.40-0.45 per kWh), but TANESCO is required to charge households the same tariff as consumers
with grid connections. This means that TANESCO loses around 30 cents per kWh consumed by customers on its isolated
mini-grids.
Private sector mini-grids in Tanzania are operated by commercial organisations, co-operatives and non-governmental
organisations. The mini-grid scheme operated by the Urambo Electric Consumers Co-operative Society was established in
1993. This mini-grid has two diesel generators (193 kW capacity), serving about 240 customers. The tariff in 2002 reflected
actual costs, but was more than 15 times higher than the TANESCO tariff. This has resulted in a limited connection rate.
Rift Valley Energy, a commercial company, set up the 4 MW Mwenga hydro plant with a mini-grid to provide electricity to
rural areas. At the same time, it is able to sell the bulk of the produced power to TANESCO via connection to the main grid.
The scheme established a utility company for the local customers, Mufindi tea and coffee factories, 14 villages and
some industries.
The Njombe Catholic Church Mission operates small hydro plants (about 150kW each) in three villages. Ownership and
responsibilities are shared between the Mission, the local community and donors, but the Mission manages operations.
Metered and flat rate tariffs are used, and in 2013 the tariffs were lower than the TANESCO tariff.
The non-governmental organization, TaTEDO has installed mini-grids in 16 rural communities. The generators use either
liquid biofuels or mineral diesel, and can provide mechanical power as well as electricity. The average net revenue, after all
operating costs, for these mini-grids may amount to Tshs 25.6 million (Tanzanian shillings) (about US$13,000) per month.
At the end of 2014, the Sustainable Energy Fund for Africa approved a grant of US$420,000 to Jumeme Rural Power Supply
Ltd., for the preparation of plans to develop a portfolio of solar hybrid mini-grids. The Jumeme project aims to expand rural
electrification to 16 villages, in the first phase, serving 11,000 households, 2,600 businesses, 42 public offices, 32 schools, and
12 health centres.
The Renewable Energy Agency has over 90 projects in the pipeline and the country has one of the most advanced policy and
regulatory frameworks for small power projects supplying both the main grid and off grid mini grids in Africa.
Source: IED (; World Bank; http://www.afdb.org/en/news-and-events/article/sefa-to-support-solar-hybrid-mini-grids-in-rural-growth-centres-
in-tanzania-13897/
17. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 17
When planning to meet the expected rapid growth in electricity demand, planners and policy-makers should assess all of the
technical options before arriving at an appropriate balance between options that best serve their country’s or region’s needs.
Sub-Saharan Africa currently invests about US$8 billion a year in electricity generation and T&D, equivalent to 0.5% of
GDP.62
This level of investment is inadequate to overcome the existing shortcomings of the region’s electricity systems, to
expand coverage and to meet the growth in demand. Indeed, the region has under-invested for a number of years. Analysis
for the Africa Infrastructure Country Diagnostic (AICD) suggested that between 2005 and 2015, the annual investment
requirement was more than three times higher than this, at US$27 billion a year.63
Of this, 15% was just to rehabilitate
existing infrastructure and maintain capacity. Looking ahead, the IEA’s business as usual scenario (the New Policies
Scenario) requires annual investment to average US$46 billion a year between 2014 and 2040, roughly half for generation
and half for T&D.64
This is more than five times higher than current levels, but the IEA suggests that policy and project
preparation barriers may be more of a hurdle than the availability of finance.65
The IEA estimates that the capital cost of increasing the electrification rate in sub-Saharan Africa, from 32% in 2012 to 70%
in 2040, will be US$205billion.66
This is equivalent to about US$7.5 billion a year, and less than 20% of the total investment
in the power sector expected over the same period. SE4All estimates that US$17 billion a year will be required to provide
universal access to electricity in sub-Saharan Africa.67
Capital invested in the electricity sector can be from several sources.
The financial state of the utilities means that self-financing from revenue is quite limited. The two main sources, therefore,
are public finance and external financing, the latter including foreign direct (equity) investment, commercial bank lending,
and multilateral and bilateral development assistance.
The total additional investment required is beyond the capacity of sub-Saharan public finance, and even small grid-
connected generation plants are likely to be beyond the scope of domestic equity investors. Though development finance
institutions will continue to be important, it will be necessary to attract more international commercial lenders and foreign
equity to invest in sub-Saharan electricity systems. This will depend on the costs and returns of investing in electricity
generation and T&D and on the perceived risks for investors.68
The main risks are in the regulatory and policy frameworks
of countries in the region, and risks related to economic or political instability. Governments in the region are in a position to
reduce these risks and create conditions that are attractive to investors.
COMPARING COSTS
The levelised cost of energy (LCOE) is used to compare the costs of different options for supplying electricity. The LCOE
takes account of costs, capital and operating, over the life of the infrastructure. The cost profiles of fossil fuel technologies
and renewable energy technologies are quite different, the former having low capital and high recurring costs, while the
latter has high initial capital costs and low operating costs. The LCOE allows comparison on the same basis.
The lifetime of some electricity infrastructure can be three or four decades, so estimation of the LCOE calls for assumptions
about future prices. Some energy prices may change significantly. The price of oil, for example, was on the increase until
mid-2014, but has since fallen dramatically and there are varied views about whether and when it will return to previous
levels. The capital costs of renewable energy technologies, except hydro, have been declining rapidly in recent years and are
expected to reduce further. Energy prices also vary between countries, often influenced by the regulatory environment, and
the capital costs vary according to the specific conditions of their location. Nevertheless it is useful to compare the costs of
generating electricity from different sources, using the most recent figures available.
Figure 6 summarises the latest (2014) worldwide LCOE estimates compiled by IRENA.69
A range of costs is shown for each
technology, reflecting differences due to location and other factors. Figure 6 shows that, globally, except for off-shore wind
and concentrated solar power (CSP), the LCOE of renewable options is at the same level or lower than the cost of fossil
fuel options.
18. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET18
Given the influence of location on these cost estimates it is also useful to consider LCOE estimates specifically for Africa.
Estimates for 2010 and 2030, compiled by IRENA, are summarised in Figure 7, and present a similar picture to international
costs. These estimates also suggest rising fossil fuel costs and falling renewables costs. Estimates from the IEA, in Figure 8,
include some of the less efficient fossil fuel technologies (sub-critical coal and gas turbines), which are lower than renewable
LCOEs, but which do not take pollution and emission costs into account.
Accurate estimation of the costs of pollution from the generation of electricity in sub-Saharan Africa is difficult. The main cost
is on human health. Fossil fuel power generation contributes to atmospheric air pollution,70
which causes 176,000 deaths a
year, imposes costs on Africa’s stretched health services, and reduces people’s productivity through ill health.71
Factoring in environmental costs, by putting a price on carbon, would make LCOE estimates favour renewable electricity
options even more. The price of carbon in international carbon markets is currently low, does not fully reflect the costs of
pollution, and therefore may be unsuitable for LCOE estimates. South Africa is introducing a carbon tax in 2016, levied at
about US$10 per tonne CO2
e, but with an effective rate of US$1 to US$4 per tonne.72
At this rate, fossil fuel electricity
generating 1-2 tonnes CO2
per MWh,73
depending on the technology, could add US$1-US$8 per MWh to the LCOE.
Figure 6
LCOE ranges by generation technology 2014 and 2025
Sources: IRENA, 2015, Figure 10.1.
0.3
0.4
0.2
0.1
0.0
Range of today’s fossil fuel electricity costs
Windonshore
Windoffshore
SolarPV-Grid
CSPPTC(nostorage)
CSPPTC(6hstorage)
CSPPTC(6-15hstorage)
Biomass-Stoker/BFB/CFB
Biomass-Gasification
Biomass-AD
Biomass-Co-firing
Biomass-non-OECD
Hydropower
Geothermal
2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025 2014 2025
2014 US$/kWh
19. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 19
Figure 8
The IEA’s LCOE estimates for Africa
Source: IEA, 2014
50 100 150 200 US$ per MWh
Solar PV (large)
Gas GT (US$12/MBtu)
Gas CCGT (US$12/MBtu)
Onshore wind
Large hydro
Gas GT (US$4/MBtu)
Coal subcritical
Figure 7
LCOE of electricity generation in 2030 (US$/MWh)
Source: IRENA, 2013a, 2103b, 2015.
Heavy fuel oil
Open cycle gas turbine (imported gas)
Concentrated Solar Power with gas co-firing
Bulk Wind (20% capacity factor)
Supercritical coal
Combined cycle gas turbine (domestic gas)
Combined cycle gas turbine (imported gas)
Concentrated Solar Power with storage
Supercritical Domestic Coal
Biomass
Solar photovoltaic (utility)
Bulk Wind (30% capacity factor)
Hydro
Concentrated Solar Power (no storage)
Small Hydro
0 50 100 150 200 250 300 350 400
2010
2030
20. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET20
Off-grid electricity generation tends to have a higher cost than large-scale generation for the grid. Table 5 below shows the off-
grid LCOE estimates from two sources, IRENA’s planning tools for West Africa and Southern Africa74
and Innovation Energie
Développement’s (IED) mini-grid estimates.75
The table shows that off-grid generation from diesel or petrol is relatively more
expensive than renewable alternatives.
In 2012, 82% of Africa’s electricity was generated by the combustion of fossil fuels. By 2040, this proportion is expected to
have reduced to 62% (under business as usual), although the quantity of electricity generated from fossil fuels will more than
double.76
Another 81 GW of thermal capacity will have been built in sub-Saharan Africa to supply this. The cost comparisons for
electricity from different sources and the expected future reduction in the cost of renewables (shown in Figure 7), suggest the
need to review plans for expanding gas- and coal-based generation in some countries. Forecasters may also need to review their
assumptions for business as usual scenarios.
As well as potential savings in costs, renewable energy could benefit sub-Saharan countries in other ways. The development
of renewable energy could create jobs for Africans, through manufacturing, installation and maintenance services, and in
businesses that use the electricity generated. For every MW of renewable electricity installed, 27 jobs could be created.77
One
study has estimated that in South Africa, more jobs could be created through the development of renewable energy than an
energy system based on fossil fuels.78
Investment in renewable electricity generation would also reduce the impacts of volatility in the prices of fossil fuels. The
international market price of oil can change rapidly and unpredictably. In 1979, 1986 and 1990, for instance, there were
price rises.79
Between mid-2014 and January 2015, the price fell from US$115 per barrel to US$50 per barrel, and there is
uncertainty about the future price. This volatility delays investment, reduces consumption and slows growth.80
With 78% of
sub-Saharan Africa’s electricity currently dependent on fossil fuels, price volatility can have a direct impact on the financial
performance of the power sector. The costs of renewable energy, however, are falling and have low volatility. The diversification
of energy sources for electricity in sub-Saharan Africa would reduce the impact of oil price changes on the sector.
Table 5
Levelised costs of alternative off-grid technologies in Africa
IRENA US$/MWh IED US$/MWh
Diesel 100 kW 320 300-600
Diesel/gasoline 1 kW 604
Small hydro 102 100-300
Solar PV without storage 152
Solar PV with 1 hour storage 250
Solar PV with 2 hour storage 163
Biomass gasifier 100-300
Biomass 74-127
Wind hybrid 200-400
Solar hybrid 400-600
Sources: IRENA, IED (2013)
21. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 21
EXPLOITING RENEWABLE ENERGY POTENTIAL
Although renewable energy sources can provide least-cost options for the supply of electricity in Africa, their distribution across
the continent is varied. Hydropower, for instance, is the least-cost source of electricity but there is only enough hydropower
potential to meet the expected total demand for electricity in 2040 in Central and Eastern Africa, largely in the Congo and Nile
river basins (see Figure 9). Overall, however, Africa’s renewable energy resources are more than adequate to supply the future
demand for electricity. Indeed, the demand expected in 2040 (under business as usual scenarios) could be met by about 12% of
the technical potential of the continent’s renewable energy resources.
Solar energy has the greatest potential across the continent. The technical potential for solar PV has been estimated to total
6,567 TWh a year, almost three times the expected total demand in 2040.81
In addition, the total potential for CSP is an
estimated 4,719 TWh a year, mainly in the arid and semi-arid areas of the north, east and south of Africa.
Wind energy, which has been used for many years to pump water in many rural areas, has been little exploited so far for electricity
generation. The continent’s total technical potential has been estimated at 3,800 TWh a year. Though it is concentrated in the
coastal zones of northern, eastern and southern Africa, it is one of the most reliable wind energy resources in the world.
The geothermal energy resource is concentrated in eastern Africa and, with a total potential between 10 GW and 15 GW, is
likely to make a significant contribution to electricity supply in the region. It is competitive with thermal generation and unlike
other renewables, its supply is not variable. Kenya regards geothermal as the preferred choice for investment in generation
capacity, and is aiming to increase this from 250 MW to 5 GW by 2030.82
Figure 9 shows that the renewable energy potential in some parts of Africa, eastern and central Africa in particular, far exceeds
foreseeable demand. This offers the prospect in some countries (e.g. DRC and Ethiopia) of investing to export electricity to
neighbours or even further afield. Cross-border trading of electricity has been taking place in Africa since the 1950s, under
bilateral arrangements,83
and the potential advantages for managing demand by creating regional or continent-wide markets for
electricity have long been recognised. The Southern African Power Pool was formed in 1995. The proposal for a ‘Clean Energy
Corridor’ through eastern and southern Africa is intended to exploit the continent’s renewable energy potential for the benefit
of the widest number of countries.84
The formation of regional power pools has been a slow process, building on inefficient and
financially constrained national utilities, in countries where there may not be enough power for domestic consumption.
THE RELIABILITY OF ELECTRICITY
The quality of Africa’s electricity supply is poor. On average there is a power outage about every four days in sub-Saharan
countries, and in some countries outages are a daily occurrence. Only four African countries are above the world average for
Figure 9
Renewable energy potential and expected demand in 2040 (TWh)
Source: IEA, 2014
0
500
1000
1500
2000
2500
Central Africa Eastern Africa Northern Africa Southern Africa Western Africa
Hydro
Concentrated solar power
Photvoltaics
Wind
2040
22. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET22
the quality of their electricity supply in the World Economic Forum’s competitiveness index, and five African countries 85
appear
among the ten lowest-scoring countries.86
The reliability of electricity supplies is affected by two main factors: whether the available generation capacity is enough to meet the
demand, particularly peak demand, and the quality of the T&D infrastructure (largely determined by its age and maintenance). When
the reserve margin (i.e. the difference between peak demand and capacity) falls below 15%, electricity systems may be forced to
practice load shedding, temporarily cutting the supply to some consumers. In some African countries the reserve margin is in deficit
(i.e. capacity is lower than peak demand), including ten of the twelve countries in the Southern Africa Power Pool.87
Technical faults in the T&D network, as a result of poor maintenance, installation and design, are another cause of outages. The
quality of the T&D system is usually measured by the losses incurred once electricity has been dispatched to the grid, and in
the most efficient system, losses of around 6% can be expected.88
In sub-Saharan Africa average losses, at 18%, are more than
double the world average.89
A World Bank study for the period 1999-2006 found average losses in the region to be 27.5%, with
significant variation in losses between countries, ranging from 14.5% in Angola to 68% in Swaziland.90
According to one estimate,
these losses usually represent more than 0.5% of GDP.91
When losses are high, a significant proportion can be due to non-technical factors, such as a failure to collect revenues and the
theft of electricity. Reliable estimates of these non-technical losses are available for only a few countries. In South Africa, up to
40% of the losses in Eskom’s network have been found to be due to theft, mostly by businesses.92
The cost of electricity theft in
South Africa has been estimated as US$450 million a year.93
In Uganda, where overall access is less than 10%, electricity theft
costs an estimated 60 billion shillings a year (US$20 million).
The economic impact of unreliable electricity is felt through lost or reduced output, lower productivity, and the higher cost of
electricity for consumers. Outages cause African firms to lose 4.9% of annual sales, on average, and much more in some countries.94
For the wider economy, these losses have been estimated to reduce GDP by around 2%.95
At the firm level, unreliable electricity has
been found to have a significant negative impact on productivity,96
though not always for small and medium-scale manufacturing
enterprises.97
The impact of unreliability in electricity supplies depends on geography, the economy’s structure, and the overall
business environment, but lower productivity appears to be associated with more frequent and longer outages.98
Electricity losses add roughly US$35 per MWh to the cost of electricity for consumers in sub-Saharan Africa.99
Costs are increased
again when firms, and households, use back-up diesel generators during grid outages. Close to half of all firms (45.8%) in sub-
Saharan Africa own or use a back-up generator, with the greatest incidence in Nigeria (85.7% of firms).100
The cost of electricity from
small generators is about four times higher than from the grid, and in 2012 an estimated US$5billion was spent on fuel for back-up
generators.101
Generator ownership is affected by firm characteristics (including size, sector, and firm structure), and the probability
of ownership is higher amongst large firms. Small-scale and micro-enterprises tend not to have generators.102
Generators provide
12.6% of the electricity consumed by firms.103
These generators account for a significant proportion of total installed generation
capacity, averaging 6% across sub-Saharan Africa, according to Foster and Steinbuks (2008). Self-generation is more expensive than
electricity from the grid, but when used for a small proportion of total operating hours, does not affect the average cost of power.104
THE PERFORMANCE OF UTILITIES
In most African countries the basis for the development of the electricity system has been a vertically-integrated state-owned
utility, responsible for generation and T&D. The natural monopoly that characterises the supply of electricity and its perception
as a public service, notwithstanding low electrification rates, have resulted in the inefficient management of many electricity
utilities, over long periods of time. Setting tariffs at below cost, failure to collect revenues, overstaffing and poor maintenance
of infrastructure are all symptoms of this inefficiency.105
The result has been that utilities have become an excessive burden on
limited government budgets, amounting in sub-Saharan Africa to 1.4% of GDP in 2010.106
In some countries, the losses incurred
by the electricity utility amount to more than this – 2.8% of GDP in Senegal.
The weak financial performance of utility companies affects their ability to maintain the electricity infrastructure, reinforcing
inefficiencies in the system, and it prevents or constrains investment in the expansion of electricity supply.107
Their poor financial
performance also inhibits private investors who would depend on the utility for their market.
Structural reform of the electricity sector, combined with privatisation, has been part of the conventional approach to addressing
the inefficiencies of state-owned utilities, often with a presumption that private sector companies will be inherently more
efficient. In Africa the complete unbundling of vertically-integrated utilities into separate private generation, transmission and
23. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 23
distribution companies, has been the exception rather than the rule. A review of 49 sub-Saharan countries in 2006 found
that a vertically-integrated state-owned monopoly continued to operate in most countries (35). Only 8 countries had opened
generation to independent power producers (IPPs).108
More recently, in the 22 countries of eastern and southern Africa, 17
have systems dominated by a vertically-integrated utility, and in 10 of these it is state-owned (see Table 6).109
The lessons from
the past two decades suggest that power sector reform needs to be adapted to the local context and implemented over a long
period of time. In the hybrid electricity systems that have evolved, comprising vertically-integrated utilities supplemented by
private power producers, effective regulation of the electricity market is a critical question.110
4. Conclusions and recommendations
It seems clear that the forecast rapid growth in the demand for electricity in sub-Saharan Africa will be driven by industrial
expansion and the higher incomes of Africans who already have access to electricity. The consumption of those gaining access
to electricity will add only a small proportion to overall demand. The two challenges of expanding electricity generation and
distribution for economic growth, and extending electricity supplies to those who do not yet have access, are inter-related but
require different policies and interventions.
Removing sub-Saharan Africa’s electricity deficit is a critical challenge for governments in the region. Electricity producers and
suppliers of equipment for distributed generation in the private sector, as well as commercial financial institutions, have a critical
role in building Africa’s electricity systems. The public sector will also continue to have a major operational role in most countries.
A necessary condition to address the deficit will also be governments’ creation of appropriate policy and institutional frameworks.
This section outlines key policy measures to address the challenges of electricity access and electricity to enable economic growth.
ACCESS
The goal of universal access to electricity by 2030 has been accepted in principle by African leaders, though current plans in
many countries fall short of this. Rapid progress on electrification has been achieved in some African countries over the past 15
years, and in other regions of the world rapid progress has also been made where governments make access a policy priority.111
Governments should raise the level of their ambition for electrification, especially in countries where universal access
is currently envisaged only for the next generation, as an essential element of strategies for equitable development and for
achieving the Sustainable Development Goals in Africa.
Table 6
Structure of power sector in countries of Eastern and Southern Africa
Vertically integrated state-owned utility Vertically integrated Unbundled
Angola Burundi Ethiopia
Botswana Cong DR Kenya
Lesotho Djibouti Sudan
Malawi Egypt Uganda
Mozambique Libya
Namibia Rwanda
South Africa Tanzania
Swaziland
Zambia
Zimbabwe
Source: Castellano et al., 2015.
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Making electricity affordable for the poorest households will be necessary to achieve universal access. For grid electricity, the
tariff structure offers a means to subsidise them, and subsidies for connection charges will be necessary. Governments should
target all electricity consumer subsidies more directly at the poorest households. As African countries gain middle-income
status and start to introduce wider social protection measures, lessons from South Africa’s Free Basic Electricity policy should be
considered as a way to link electricity access and social protection.
For off-grid supplies and grid connection charges, credit schemes for low-income households could be expanded. These
need to be managed efficiently, but not necessarily by organisations within the power sector. Subsidies for off-grid supplies (e.g.
solar home systems) and grid connections should be targeted at the poorest households (e.g. through eligibility criteria, voucher
schemes or cash transfers).
The extension of electricity services to all rural areas, where the great majority of people without access to electricity live, is
constrained by the limited demand of each consumer, the high marginal cost of connections and high operating costs (maintenance
and revenue collection). For these reasons, off-grid generation and distribution offers a more cost-effective option than grid extension
in most rural areas. Governments should include off-grid electricity (mini-grids and stand-alone systems) as an essential
component of power sector plans. Public support for the development of mini-grids and stand-alone systems should focus on the
development of markets for these services and the goods to deliver them, rather than investment directly in infrastructure.
Mini-grids are a solution to a collective action market failure, where it is not in the interests of an individual household or firm
to invest in supplying to other consumers, but a system that supplies multiple consumers would have economies of scale and be
more cost-effective. Public support for the design and implementation of mini-grids will be required if the number of new
mini-grids is to be scaled up significantly.
GROWTH
Efficient institutions in the power sector will be essential to ensure that electricity contributes fully to growth and poverty
reduction. Whether under public or private ownership, separate institutions for generation, T&D, and regulation, would allow
focussed attention on each essential element of the electricity supply chain. Governments should reform electricity utility
companies to make them more efficient and financially sustainable. This should include providing a framework to ensure that
regulators have a strong mandate and an independent authority to implement and enforce the rules governing the sector.
The cost of generating a unit of electricity in sub-Saharan Africa is often not covered by the unit price charged to consumers. The
level of tariffs is sometimes not enough to cover even recurrent operating and maintenance costs. Governments and regulators
should ensure that tariff setting in the power sector is transparent, based on actual costs and able to cover operating costs
and contribute to future investment.
For large-scale power projects the time between the initial feasibility study and commissioning is often several years. During this
period costs can change (and often over-run), resulting in lock-in to infrastructure that may no longer be cost-effective. Some
projects may be identified and included in plans for years before financing is in place and construction begins. Energy sector
planners should review national power plans to ensure they take advantage of recent dramatic reductions in renewable
energy costs. Given the global imperative of decarbonising electricity, feasibility analysis should factor in realistic carbon costs.
Support from donors will be required by some countries to review and revise their power plans.
Governments, individually and collectively, should build African institutional and technical capabilities to develop and
disseminate renewable energy technologies. The new renewable energy technologies, such as solar PV, wind power and
geothermal energy, have huge potential in sub-Saharan Africa. Large-scale investments are already taking place, and in the
off-grid section of the electricity market the number of companies is growing. Many of these initiatives depend on imported
technologies and expertise, and the participation of foreign companies. African countries are potentially missing out on the wider
economic benefits of greater domestic value-added in the development of renewable electricity.
The demand for electricity from the grid is affected by the reliability of the supply. Households and firms can be deterred from
connecting because the benefit is outweighed by the cost of connecting and the risk of being dependent on an unreliable,
unpredictable service. Low-income households and small enterprises cannot afford back-up generators. The reliability of
electricity supplies should be improved by ensuring adequate generation capacity (or imports) and improving maintenance
of the infrastructure, benefitting existing consumers and encouraging more people to invest in a connection.
25. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 25
ASER Agence Sénégalaise d’Électrification Rurale
CO2
Carbon dioxide
DRC Democratic Republic of Congo
GDP Gross domestic product
GW Gigawatt (1,000 megawatts)
GWh Gigawatt hour
IBT Increasing block tariff
IEA International Energy Agency
IPP Independent power producer
IRENA International Renewable Energy Agency
JRC Joint Research Council
kWh Kilowatt hour
LCOE Levelised cost of electricity/energy
LED Light-emitting diode
MSME Micro-, small- and medium-scale enterprise
MW Megawatt (1,000 kilowatts)
MWh Megawatt hour
NEPAD New Partnership for African Development
ODI Overseas Development Institute
PIDA Programme for Infrastructure Development in Africa
PV Photovoltaic
SE4All Sustainable Energy for All
SHEP Self-Help Electrification Scheme
T&D Transmission and distribution
TANESCO Tanzania Electric Supply Company
TaTEDO Tanzania Traditional Energy Development Organisation
TWh Terawatt hour (1,000 gigawatts)
ACRONYMS
26. WWW.NEWCLIMATEECONOMY.NET26 Building Electricity Supplies in Africa for Growth and Universal Access
ENDNOTES
1 Sub-Saharan Africa has the lowest per capita consumption of any major region in the world. Average per capita electricity
consumption in 2012 was below 100 kWh in 16 countries, according to IEA Africa Energy Outlook 2014, Paris: International
Energy Agency, 2014. Available at: http://www.worldenergyoutlook.org/publications/weo-2014/
2 World Development Indicators, Electric power consumption (kWh per capita): 537 kWh in 1990, 535 kWh in 2011.
Available at: http://data.worldbank.org/data-catalog/world-development-indicators
3 Electricity is one form of energy necessary for growth and poverty reduction. It provided 9.4% of the energy consumed in
Africa in 2012, according to IEA statistics (http://www.iea.org/statistics/). Biomass energy for cooking, which accounted for over
half of all energy consumed in 2012, is addressed in another background paper for the 2015 Africa Progress Panel report.
4 Available at: http://www.eu-africa-infrastructure-tf.net/attachments/CEMA/resolution-on-sustainable-energy-for-all-
initiative.pdf
5 IEA, 2014.) Africa Energy Outlook 2014.
6 IEA, 2014. Africa Energy Outlook 2014; Castellano, A., Kendall, A., Nikomarov, M. and Swemmer, T. Brighter Africa: The growth
potential of the sub-Saharan electricity sector, London: McKinsey & Company, 2015. Available at: http://www.icafrica.org/en/
knowledge-publications/article/brighter-africa-the-growth-potential-of-the-sub-saharan-electricity-sector-276/
7 In 2012, 82% of Africa’s electricity came from the burning of coal, oil and natural gas (IEA, 2014).
8 IEA, 2014.) Africa Energy Outlook 2014.
9 IRENA. Renewable Power Generation Costs in 2014, Abu Dhabi: IRENA, 2015. Available at: http://www.irena.org/menu/
index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID=494
10 IEA, 2014.) Africa Energy Outlook 2014.
11 The access rate for the whole continent was 43%. SE4All, Global Tracking Framework, Washington: Sustainable Energy for
All, 2013. Available at: http://www.worldbank.org/en/topic/energy/publication/Global-Tracking-Framework-Report
12 SE4All, 2013. Global Tracking Framework.
13 IEA, 2014. Africa Energy Outlook 2014.
14 IEA, 2014. Africa Energy Outlook 2014, p.30, 40.
15 i.e. the proportion of the population who have access. There is no standard definition of ‘access to electricity.’ In some
cases ‘access’ is used to mean that electricity is available at a particular location, irrespective of how many people actually
use it. Increasingly, ‘access’ is interpreted as having an electricity supply in the home. It remains a binary measure, however
– either there is a supply or there is not – with no indication of how reliable the supply is, how many hours in the day it is
available, nor how much electricity is consumed, and what for.
16 Practical Action, Poor People’s Energy Outlook 2013, Rugby: Practical Action, 2013. Available at: http://practicalaction.org/
ppeo2013
17 Practical Action, 2013. Poor People’s Energy Outlook 2013.
18 Lam, L., Smith, K., Gauthier, A. and Bates, M Kerosene: A review of household uses and their hazards in low- and middle-
income countries, J Toxicol Environ Health B Crit Review, 15(6), 396-432, 2012. Available at: http://www.ncbi.nlm.nih.gov/
pubmed/22934567
19 The actual savings will vary from country to country. The Country Lighting Assessments undertaken for en.lighten,
for 45 African countries, suggest that around US$100 a year per household could be saved by a switch to solar PV and
LED lighting.
20 Attigah, B. and Mayer-Tasch, L. Productive use of Energy (PRODUSE): The Impact of Electricity Access on Economic
Development: A literature review, Eschborn: GIZ, 2013. Available at: http://www.produse.org/?lang=eng&page=5
27. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET 27
21 World Bank The Welfare Impact of Rural Electrification: A Reassessment of the Costs and Benefits, An IEG Impact Evaluation,
Washington, D.C.: The World Bank, 2008. Available at: https://openknowledge.worldbank.org/handle/10986/6519
22 Grimm, M., Hartwig, R. and Lay, J. How Much Does Utility Access Matter for the Performance of Micro and Small Enterprises?
Washington, D.C.: The World Bank, 2012. Available at: http://www-wds.worldbank.org/external/default/WDSContentServer/
WDSP/IB/2013/05/24/000333037_20130524141223/Rendered/PDF/779350WP0P11510BLIC00PublicServices.pdf
23 Pueyo, A. The Evidence of Benefits for Poor People of Increased Renewable Electricity Capacity: Literature Review, Brighton:
Institute of Development Studies, 2013. Available at: http://www.ids.ac.uk/publication/the-evidence-of-benefits-for-poor-
people-of-increased-renewable-electricity-capacity-literature-review
24 Neelsen, S. and Peters, J. Productive use of Energy (PRODUSE): Micro-enterprise Electricity Usage in Two Export-Oriented
Fishing Communities at Lake Victoria, Uganda, Eschborn: GIZ, 2013. Available at: http://www.produse.org/index.
php?lang=eng&page=5/; Scott, A., Darko, E., Lemma, A. and Rud, J-P. How does electricity insecurity affect businesses in low
and middle income countries? London: ODI, 2014. Available at:http://www.odi.org/publications/9184-electricity-energy-
security-sme-economic-growth
25 IEA, 2104. Africa Energy Outlook 2014; Castellano et al. 2015. Brighter Africa: The growth potential of the sub-Saharan
electricity sector.
26 Available at: http://www.eu-africa-infrastructure-tf.net/attachments/CEMA/resolution-on-sustainable-energy-for-all-
initiative.pdf
27 The Sustainable Energy for All initiative and the proposed Sustainable Development Goals have a target of universal access
by 2030. Currently, many African governments are not planning to achieve this electrification target.
28 This estimate is based on the assumptions in Box 1.
29 The capacity factor for diesel generators is higher than for renewable energies, making the installed capacity proportion
lower than the proportion of electricity generated.
30 Bacon, R., Bhattacharya, S. and Kojima, M. Expenditure of Low-Income Households on Energy: Evidence from Africa and Asia,
Washington, D.C.: The World Bank, 2010. Available at: https://openknowledge.worldbank.org/handle/10986/18284
31 Estimates for 45 countries, for the en.lighten initiative, give average household consumption of candles at 22 per month,
and of batteries 0.44 per month (http://www.enlighten-initiative.org).
32 Adkins, E., Oppelstrup, K. and Modi, V. Rural household energy consumption in the millennium villages in Sub-Saharan
Africa, Energy for Sustainable Development, vol. 16, 249-259, 2012. Available at: http://www.sciencedirect.com/science/article/
pii/S0973082612000221
33 UNEP, Modelling Methodology for Energy and Financial Savings Potential from Switching to Solar LED lanterns, UNEP/GEF
en.lighten Initiative, 2013. Available at: http://map.enlighten-initiative.org/docs/Off-Grid%20Country%20Lighting%20
Assessment%20Model%20Methodology%20for%20web%20Feb%2013-%2003-06.pdf
34 Tariffs for low consuming households vary from one US cent per kWh to US$0.42 per kWh (Cape Verde).
35 Banerjee et al. Access, Affordability and Alternatives: Modern Infrastructure Services in Africa, Washington, D.C.: The World
Bank, 2008. Available at: http://documents.worldbank.org/curated/en/2008/02/16281440/africa-access-affordability-
alternatives-modern-infrastructure-services-africa
36 Bacon et al., 2010. Expenditure of Low-Income Households on Energy: Evidence from Africa and Asia.
37 Bacon et al., 2010. Expenditure of Low-Income Households on Energy: Evidence from Africa and Asia.
38 Briceño-Garmendia, C. and Shkaratan, M. Power Tariffs: Caught between Cost Recovery and Affordability, Policy Research
Working Paper 5904, Washington, D.C.: The World Bank, 2011. Available at: http://documents.worldbank.org/curated/
en/2011/12/15536521/power-tariffs-caught-between-cost-recovery-affordability
39 Briceño-Garmendia and Shkaratan, 2011. Power Tariffs: Caught between Cost Recovery and Affordability.
28. Building Electricity Supplies in Africa for Growth and Universal Access WWW.NEWCLIMATEECONOMY.NET28
40 For households not connected to the grid, a subsidy of up to 80% of the monthly service fee would be provided for non-
grid systems.
41 Oxfam, ‘You Can’t Eat Electricity’, Oxfam Discussion Paper, Oxford: Oxfam, 2013. Available at: https://www.oxfam.org/en/
research/you-cant-eat-electricity
42 Golumbeanu, R. and Barnes, D. Connection charges and electricity access in Sub-Saharan Africa. Policy Research
Working Paper 6511. Washington, DC: World Bank, 2013. Available at: http://documents.worldbank.org/curated/
en/2013/06/17933875/connection-charges-electricity-access-sub-saharan-africa
43 Golumbeanu and Barnes, 2013. Connection charges and electricity access in Sub-Saharan Africa.
44 de Gouvello, C. and Kumar, G. OBA in Senegal : Designing Technology-Neutral Concessions for Rural Electrification. Washington,
DC: The World Bank, 2007. Available at: https://openknowledge.worldbank.org/handle/10986/11034
45 Golumbeanu and Barnes, 2013. Connection charges and electricity access in Sub-Saharan Africa.
46 Pueyo, 2013, The Evidence of Benefits for Poor People of Increased Renewable Electricity Capacity: Literature Review; Economic
Consulting Associates, Correlation and causation between energy development and economic growth, Evidence on Demand, London:
Department for International Development, 2014. Available at: http://dx.doi.org/10.12774/eod_hd.january2014.eca
47 See for example: Wolde-Rufael, Y., Electricity consumption and economic growth: a time series experience for 17 African
countries, Energy Policy 34, 2006; Wolde-Rufael, Y. Energy Consumption and Economic Growth: The African experience
Revisited, Energy Economics 31, 2009; Menyah, K. and Wolde-Rufael, Y. Energy consumption, pollutant emissions and
economic growth in South Africa, Energy Economics 32, 2010; Odhiambo, N. Energy consumption, prices and economic growth
in three SSA countries: A comparative study, Energy Policy 38, 2010; Adebola, S. Electricity Consumption and Economic
Growth: Trivariate investigation in Botwsana with Capital Formation, International Journal of Energy Economic and Policy,
Vol. 1, No. 2, 2011; Adom, P. Electricity Consumption-Economic Growth Nexus: The Ghanian Case, International Journal of
Energy Economic and Policy, Vol. 1, No. 1, 2011; Eggoh, J., Bangake, C. and Rault, C. Energy consumption and economic growth
revisited in African Countries, CESifo Working Paper, Energy and Climate Economics, No. 3590, 2011; Fowowe, B. Energy
consumption and real GDP: Panel co-integration and causality tests for sub-Saharan African countries, Journal of Energy in
Southern Africa, Vol. 23 No. 1, 2012; Ziramba, E. Hydroelectricity Consumption and Economic Growth Nexus: Time Series
Experience of three African Countries, European Scientific Journal, Vol. 9 No. 1, 2013; Dogan, E. Energy Consumption and
Economic Growth: Evidence from Low-Income Countries in Sub-Saharan Africa, International Journal of Energy Economics and
Policy, Vol. 4, No. 2, 2014; and Dlamini, J. Balcilar, M. Gupta, R. and Inglesi-Lotz, R. Revisiting the Causality between Electricity
Consumption and Economic Growth in South Africa: A Bootstrap Rolling-Window Approach, University of Pretoria, 2013.
48 Kirubi, C. and Jacobson, A. and Kammen, D. M. and Mills, A. Community-Based Electric Micro-Grids Can Contribute
to Rural Development: Evidence from Kenya. World Development, 73, pp. 1208–1221, 2009. Available at: http://www.
sciencedirect.com/science/article/pii/S0305750X08003288
49 Isaksson, A. Energy Infrastructure and Industrial Development, Research and Statistics Branch Programme Coordination and
Field Operations Division UNIDO, Working Paper 12/2009, 2009. Available at:http://www.unido.org//fileadmin/user_media/
Publications/Research_and_statistics/Branch_publications/Research_and_Policy/Files/Working_Papers/2009/WP%20
12%20Energy%20Infrastructure%20and%20Industrial%20Development.pdf
50 Banerjee, S., Romo, Z., McMahon, G., Toledano, P., Robinson, P. and Arroyo, I. The Power of the Mine: A Transformative
Opportunity for Sub-Saharan Africa. Directions in Development. Washington, DC: World Bank, 2015. Available at: https://
openknowledge.worldbank.org/handle/10986/21402
51 Castellano et al. Brighter Africa: The growth potential of the sub-Saharan electricity sector (2015) estimate a 4.5% annual
growth in demand, using a different model and assumptions.
52 Banerjee et al., 2015. The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa.
53 IEA, 2014. Africa Energy Outlook 2014.
54 IEA, 2014. Africa Energy Outlook 2014.
55 IEA.) World Energy Outlook 2011. Paris: International Energy Agency, 2011. Available at: http://www.worldenergyoutlook.
org/publications/weo-2011/