power Archives - Gong Kenya

Isabelle Alenus-Crosby

According to the World’s leading forecasters, the African economy is expected to grow by approximately 6% during 2013/14, while its total GDP is expected to reach USD 2.6 trillion by 2020. The Nigerian stock market alone returned 47.2 % in 2013.

This is great news, but where should one invest?

Let me quickly state the obvious; Rapid urbanisation on the continent means that priority needs to be given to infrastructure (mostly power and transportation). Africa has a growing population of young, globally minded people who increasingly use mobile phones and the internet. The banking industry is expanding with growing income levels, as is consumer demand, and a population explosion requires more schools and hospitals. The African continent is also said to be on its way to become the world’s low-cost manufacturing hub.

A CNBC news reporter recently stated that sub-Saharan Africa, which was once seen as a pure commodity play (or as a part of the world to avoid entirely) is now the place to get big returns on relatively small investments.

The key issue is of course the risk/reward balance. Investment-grade countries like South Africa, Botswana and Namibia might offer lower returns than countries with higher risk like Nigeria, Ghana, Tanzania and Kenya. The bottom-line is that Africa offers numerous opportunities and that they are as varied as the 54 countries of the African Union.

The overall buzz resounding around the globe however, is that the time is now!

Isabelle Alenus-Crosby

Africa’s wind and solar power potential have been much in the news since President Obama’s “Power Africa” speech on June 29^th in Cape Town. Investment into renewable energies has always been rather limited on the continent, but this is now changing rapidly. One example is the African Development Bank’s (AfDB) recent approval of a €115m loan to help fund the construction of the 300 MW Lake Turkana Wind Power Project in Kenya. The project is being developed by a conglomerate of investors, while the government of Spain has agreed to lend Kenya $178m in order to fund the construction of a transmission line which will connect the project to the country’s national grid. All electricity will be sold to the Kenya Power and Lighting Company under a 20-year power-purchase agreement.

Strong economies are highly dependent on good energy supplies and in order to achieve global competitiveness, Africa’s economic activity (and thus electricity use) must increase exponentially. It is no surprise therefore that in recent years the continent has seen an increasing number of young entrepreneurs keen to try out their much needed innovation. Many of these concentrate heavily on Solar Energy since Photovoltaic (PV) production costs have fallen dramatically worldwide. According to the U.N., the African renewable energy sector was valued at $750 million in 2004. By the time Obama was making his speech, it had reached more than $5 billion. The latest projection is that by 2020 the value of the African renewable energy sector will reach more than $55 billion (U.N.). While Africa’s wind resources are concentrated in just a few areas, the continent’s solar resources are spread across all of the continent and, for obvious reasons, rank among the world’s most successful.

There are of course many other forms of energy that could contribute in filling Africa’s massive power gap.

Think you have an alternative idea for ensuring energy access in developing countries? With 1.5 billion people currently lacking electricity, Statoil and the Economist Intelligence Unit have joined forces to create The Energy Realities Competition. Enter before December 23^rd for your chance to win: https://event.wavecastpro.com/energyrealities/ or follow #EnergyRealities

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