Gas has a major role to play
Africa’s energy deficit
is a key reason for the
continent’s stunted
economic development.
According to the World Bank,
some 25 countries in sub-Saharan
Africa are facing a crisis, evidenced
by rolling blackouts. This is despite
the continent being well endowed
both with fossil fuels and renewable
resources.
The cost to the economy of
load-shedding is estimated to be
the equivalent to 2.1% of GDP on
average.
Bheki Mfeka, economic adviser
to the South African president, says
there are no easy solutions available
to the energy challenges.
“Over the past few years we have
spoken often about the reserves
that exist and the large discoveries
that are being made across the
continent. It is still not easy. To
address energy will require large
investments.”
The World Bank estimates that
since the mid-1990s, external
finance to Africa’s power sector has
averaged only around $600 million
per year of public assistance, plus a
similar volume of private finance.
To double current levels of energy
access by the year 2030 will require
sustained investment at much
higher levels.
“Our first step in addressing
energy therefore lies in creating
a welcoming environment for
investors,” said Mfeka. “Investment
does not go where it is wanted or
needed but where it is welcome. We
need to listen to what
investors require and
we need to ensure
we are creating those
environments that
will bring the necessary
investments.”
According to energy minister
Tina Joemat-Pettersson, the first
task at hand in dealing with energy
on the continet is to stabilise power
systems and enhance the reliability
of these systems while at the same
time decreasing the demand that
exists.
“In South Africa we all look at
load-shedding and we complain,
but foreigners are seeing the
business opportunities that exist.
Load-shedding has given rise to
innovative business solutions,” she
said.
She pointed
out that
governments
across the region
agreed that relying
on fossil fuels –
especially coal – could
not be sustained and it was
therefore important to support the
renewable energy sector.
“Gas is a definite game changer.
We need baseload power that
cannot necessarily be achieved
with renewables, but gas will play a
major role in addressing this need,”
she said. “We have to understand
that conventional solutions won’t
necessarily work for Africa and so we
are going to have to start embracing
those unconventional and alternative
solutions while attracting the
investments required.”
