Africa APPG- The energy challenge in Sub-Saharan Africa- Edward George
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Sub-Saharan Africa faces significant energy challenges, including low electrification rates with over 40% of the population lacking access to electricity. Existing power generation also falls well short of demand, with power shortfalls exceeding 25% of the region's needs. Nigeria in particular produces a similar amount of power to Greater London despite having a population over 20 times larger. Meeting the region's growing demand for electricity will require innovative solutions and regional cooperation on initiatives like the West Africa Power Pool to develop power infrastructure. Off-grid solar programs like M-KOPA have also helped connect over 100,000 homes to reliable energy without government subsidies by offering pay-as-you-go financing options.
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Africa APPG- The energy challenge in Sub-Saharan Africa- Edward George
- 1. The energy challenge in Sub-Saharan Africa Dr Edward George Head of Group Research, Ecobank 22 March 2016
- 2. 5.63% 5.37% 5.67% 5.62% 5.05% 7.45% 5.74%5.79% 6.82% 6.94% 7.01% 8.02% 4.31% 4.58% 3.61% 5.31%5.95% 6.63% 4.99% 2.47% 5.83% >75% 50% - 75% 25% - 50% <25% Share of Population without access to electricity Source: McKinsey Africa’s power network is inadequate 5.3% Country Average GDP growth between 2015 - 2020 Africa Average GDP growth between 2015 - 2020 • Africa’s electrification rates are low – over 40% of Africans do not have access to electricity. • Power shortfalls across the continent are in excess of 25% of the region’s electricity demand. • Nigeria produces as much power as Greater London – but for a population >20 times the size. • Nigeria’s off-grid generating capacity is over 20,000 MW, five times the national grid. • At current growth rates, Africa’s electricity demand (per capita) will nearly double from 514 kwh in 2015 to 989 kwh by 2040. 2 © Ecobank 2016 | The energy challenge in Sub-Saharan Africa | Dr Edward George | 22 March 2016
- 3. 3 The West Africa Power Pool (WAPP): work in progress © Ecobank 2016 | The energy challenge in Sub-Saharan Africa | Dr Edward George | 22 March 2016
- 4. 4 • Launched in October 2012, M-KOPA enables Africans to acquire solar power units through hire purchase. • Customers pay a deposit of KES3,000, and 365 daily payments of KES40. • After one year, they own the unit outright. • In its first two years M-KOPA brought power to over 100,000 homes in Kenya, Uganda and Tanzania. • This required no government or donor funding and was entirely financed by African households themselves. • Innovation and creative thinking is needed to ensure that remote communities gain access to reliable power supplies.M-KOPA III Solar Home System © Ecobank 2016 | The energy challenge in Sub-Saharan Africa | Dr Edward George | 22 March 2016
- 5. Thank you
- 6. Africa-Asia trade flows Ecobank’s pan-African footprint
Editor's Notes
- But there is a huge fly in the ointment to all this exuberance – the power network Put bluntly, the provision of power is woefully inadequate, and is holding back economic growth Nigeria produces the same amount of power as the Greater London area – but has a population at least 20 times the size It is common for households in Lagos to have three generators – a main one, a back-up, and a back-up for the back-up – so unreliable is the power network In some countries power shortages are the result of underinvestment and incompetence – Ghana is a case in point, where Accra residents have been getting an average of 2 days of power per week since the start of this year But shortages also reflect economic growth – notably in South Africa where demand has far outstripped efforts to expand capacity, which his already high for Africa This is the single greatest opportunity for investors in Africa – as the pent up demand is almost limitless And it’s not as if SSA doesn’t have sufficient oil, gas or coal reserves to feed power stations Major investments are on the drawing board – and in fact, Ecobank’s advisory team has been working on a project for Vitol to identify power opportunities in West Africa The Vice-President, Namadi Sambo, Thursday disclosed that Nigeria’s power generation level would increase to a capacity of 20,000 megawatts even though the country currently generates about 5,500 megawatts. He spoke at the inauguration of the Niger Delta Power Holding Company/NIPP 330/132/33 KV Transmission Substation at Apir in Makurdi, the Benue State capital. He said: “The Niger Delta Power Holding Company, NDPHC, has effectively pursued its mandate of implementing robust power projects across the country under the National Integrated Power Power Project (NIPP). “Under the first phased of its project mandate, the company has completed several thermal generating plants in the country. “Today we are proud that the NDPHC has 265 out of a total of 296 distribution injection substations located nationwide and several other power projects across the country. Installed capacity 10.4 MW, but only produces 5.5 MW. Demand is what? Add is issue of poor gas distribution, poor investment in pipelines, pricing mismatch, means supplies are inadequate, Dangote switch to coal The West African Gas Pipeline was supposed to ship 120mmscfd but ranged between 20mmscfd and 80mmscfd since 2012 Across all 3 countries, collection of payments from both residential, govt. ministries, depts & agencies (MDA) is problematic Over 50% of Nigeria's power demand is thus off-grid...that is a huge market estimated at over 20,000MW
- Earlier this month the CBA, Safaricom and MultiChoice announced an initiative to allow Kenyans to acquire set-top-boxes using M-Shwari. The GOtv decoder loan allows Kenyans to pay for the set-top boxes in three monthly installments. M-KOPA Solar is the global leader of pay-as-you-go energy for off-grid customers. Headquartered in Nairobi, Kenya and with operations throughout Kenya, Uganda and Tanzania, we have enabled over 100,000 East Africans to switch from high-cost kerosene to affordable, renewable solar power (in less than 2 years!) M-KOPA is the global leader for “pay-as-you-go” energy services for off-grid customers. Following 2 years of piloting and development, M-KOPA began commercial sales in Kenya in October 2012. M-KOPA expanded to Uganda in 2013 and commences operations in Tanzania in late 2014. As of September 2014, we are actively providing affordable solar power to over 100,000 households and adding 2,500 more every week. Our team includes over 400 staff and we sell our product through more than 1000 retail agents and shops. NICK HUGHES is the Chairman and founder’s representative to the board of M-KOPA LLC. Nick is a founder of M-KOPA and was previously Managing Director of Signal Point Partners, the advisory and venture firm that started M-KOPA. Until 2009, Nick was Head of Global Payments at Vodafone Group, where he started M-PESA in 2004. Prior to joining Vodafone in 2001 Nick headed BP’s climate change program. Nick has a PhD in Applied Science, an MBA from London Business School, and was the recipient of an Economist Innovation Award in 2010. Customers buy the solar home system on an affordable M-KOPA payment plan, with an initial deposit followed by daily payments for up to one year. After completing payments, customers own the product outright. 40 /= Per day + 2,999 /= deposit M-KOPA III Solar Home System 2 LED lights with switches and multiple brightness settings 1 LED portable solar torch light Phone charging USB with 5 standard connections Portable solar radio 8W high quality solar panel 2 year warranty Payment term: one year M-KOPA Solar Powers Up 100,000th Home in East Africa Entebbe, September 18th 2014 M-KOPA Solar is today announcing that is has powered up 100,000 homes in Kenya and Uganda within two years of its commercial launch. The 100,000th system has today been installed by Charles Lwanga, in his home in Masuliita, Uganda. M-KOPA Solar makes high quality solar systems available to low-income customers on a risk-free basis. Customers can take home a system for a deposit of just US $35 and then continue to make 365 daily payments of 45 cents – less than the average daily spend on kerosene. All payments are made conveniently via mobile money. The US$35 deposit is fully refundable at any time during the payment period, and products come standard with a 2-year warranty. After 365 daily payments are made, the device is unlocked with no further payments required. We estimate that customers like Charles will save $750 over four years using an M-KOPA solar system. This means that our 100,000 customers will make combined savings of $75 million, which they can invest in children’s education, improving their farms, growing their businesses, and bettering their lives. SEPTEMBER 2, 2014 M-KOPA UPDATE M-KOPA Solar and Safaricom Launch M-KOPA III First Safaricom-branded energy device The third generation affordable lighting solution 60% more charging capacity and upgradable for more lighting A lot more light for less – with cheaper pricing at KES 40 per day Nairobi, September 2nd 2014 The M-KOPA III is the company’s third-generation pay as-you-go solar home solution. It comes with two LED solar lights and one solar rechargeable LED torch, and a larger 8W panel that gives 60% more charging capacity. Customers will also get a solar rechargeable radio, mobile phone charger and a larger battery. The M-KOPA III is upgradeable to include two additional solar lights – sold separately. Following the removal of VAT on solar-powered devices, M-KOPA Solar has also announced a price reduction on the new units. Customers will now only pay an initial deposit of KES 2,999 followed by 365 daily payments of KES 40 (down from KES 50). BBOXX takes to another level Offers all accessories, can provide up to massive units But how pay for it?
- Thank you
- Before I start, I’d like to take couple of minutes to tell you about Ecobank We are a bank with long-standing African roots, but are relatively new players in East Africa Many clients who deal with Ecobank in East Africa do not realize that we are a pan-African bank Our headquarters is in Lome, Togo, and there are 34 subsidiaries spread across Middle Africa, all operating as one single bank The area we focus on is what we call: Middle Africa If you subtract North Africa, which is its own geographical, cultural and economic region, and the Rand Zone to the South Everything else, the cheese in the sandwich, is Middle Africa This is where the opportunity of Africa lies – in the world’s fastest growing and developing economies, and its most unbanked and unserved clients Ecobank is divided into five operating clusters – Anglophone and Francophone West Africa, Central Africa, SADC In essence, Ecobank was created to further regional integration, which means intra-regional trade To succeed in this region you need local knowledge, and a presence on the ground Ecobank is in Middle Africa to stay, and if you need a local partner, chances are we already bank them, and know them well I heard the research team of 9 analysts based across the region If you would like to receive our reports, please give me your business card at the end: there’s no charge And if you are interested in expanding your operations in Africa – or just dipping your toe in the market – come and see me afterwards