Infrastructure investment vital to address region's energy needs

If southern Africa is serious about

addressing its energy needs

it will have to invest heavily in

infrastructure in the next few years

while at the same time creating

environments where business

wants to invest.

Aldworth Mbalati, executive

chairman of Delta Natural Gas,

said gas was a natural choice in

sub-Saharan Africa to address the

power needs.

“Gas currently is cheap, it is

clean, and we’ve got a clean agenda

all around the world. At the same

time, it is fast to deploy,” he said

at a recent meeting on gas in Cape

Town.

Several southern African

countries are looking at gas as

a viable option, with Mozambique

and its massive finds leading the

way. Botswana also has major

coal reserves that could be a viable

option as is the case with South

Africa. Gas can be found in deep

forms of coal.

Mbalati said there was no

denying however the major

investments that would be

required to set up the necessary

gas infrastructure. In this regard

he advised governments to produce

environments attractive for

investors.

He told delegates the biggest role

of any government was to ensure the

right legislation was in place and

that the investment environment

was friendly and not risky.

“Another important aspect that

must be taken into account is the

scale of what needs to be done. The

South African target of some 3126

MW is slightly marginal in my

opinion if one takes into account

the investment infrastructure that

is required,” he explained. “There

must be sufficient output to justify

the level of investment that is

required.”

He said private investors needed

a reasonable project size to justify

their investment and on top of that

there needed to be a return on that

investment.