News / Africa

    Greater Investment in Electricity Could Spark African Economic Growth, say Analysts

    Specialists say continent has underutilized water and wind resources

    Multimedia

    Audio

    Part 5 of a 5 Series: Investment in Africa

    Economic growth in many sub-Saharan countries has been stunted by an energy crisis that many say will continue without more government and private investment.

    Many economists agree that increasing the region’s energy supply is essential for economic growth and poverty reduction.  Improved investments would also help African governments meet the U.N.’s Millennium Development Goals, which encourage drastic reductions in poverty and illness by 2015.

    Studies show that investing in energy resources and increasing electricity has a significant impact on women and children.  Without it, they often spend hours gathering wood for cooking, which affects their ability to attend school or engage in income-generating activities.

    According to statistics, 70 percent of all African governments do not have enough access to electricity, although they spend $40 billion annually on fossil fuel-based energy products.

    Need in numbers

    Robert Adam Mosbacher, Jr., is the former head of the Overseas Private Investment Corporation (OPIC), a U.S. government agency working to promote development by working with the private sector.  He was also the president and CEO of his own company in Houston.

    Mosbacher says, “Clearly Africa…needs more electricity, and there are Western companies that would be interested in helping develop more electrical capacity….”   He cites as one example the Democratic Republic of Congo, where millions go without electricity even though the country has millions of square kilometers of water for hydropower.

    Sub-Saharan Africa could also benefit from investment in wind energy, but the statistics from the World Wind Energy Report show that 95 percent of that investment is currently concentrated in Egypt, Morocco and Tunisia.


    Barriers

    Development in the energy sector could be daunting.  Observers say such investments are capital-intensive and involve high start-up costs.  But many economic analysts say it’s not the cost that turns away potential investors, but the volatile political climate of many African countries.

    Mosbacher says for investment dollars to flow, “a few essential elements must exist.…”

    He says that for every power project, which often costs hundreds of millions of dollars, “there has to be a legal framework that gives you comfort that…you will get your money back plus some return on your investment.”

    “It is true,” he says, “that investors often shy away from countries considered high risk,” although he says it’s these very countries that need investment the most.

    Current projects

    The CEO of Africa Finance Corporation, Andrew Ali, says some of the largest projects invested in Africa today are in the energy sector.

    Three are in East Africa.  They include a hydropower scheme at Bujagali, Uganda.  The 250 megawatt hydropower plant on the Nile is expected to supply electricity to millions of Ugandans in rural and urban areas, including the site of daily power failures, the capital, Kampala.

    The second is a new geothermal plant under construction a few hours away from Kenya’s capital Nairobi. The plant is being built by the Kenya Electricity Generating Company (KenGen). Money for the projects has been raised mainly from local sources with help from the government.

    Another is the African Rift Geothermal Project (ARGeo Project) is funded by a Global Environmental Facility contribution of US$ 17.75 million. The program seeks provide the region with more geothermal development – and investments.

    Dr. Crowther Pepela, the former chair of the Kenya power and lighting company, says that there is lots of room for expansion in the energy sector, especially power and distribution.  He says “the world bank and other consortium of investors are helping in availing funds.”


    Energy investment in Africa is not limited to hydro electricity and geothermal projects.

    In Rwanda, organizations like The Solar Electric Light Fund (SELF), a not-for-profit organization, is implementing sustainable energy solutions to enhance the health and education sector.  The group’s director, Robert Freling,  says he is encouraged by the number of African governments that are promoting public and private investment in solar energy. He says a recent project in Benin shows that investing in the power of sunlight can provide long-term solutions to hunger in underdeveloped nations.


    Making investments in big energy projects is becoming easier. Alex Twinomugisha, an analyst based in East Africa says that’s because banks are more willing to lend.  He attributes their change of attitude to the potential for success, and since, as he puts it, “they are probably making a killing arranging deals for the local financial market.”

    You May Like

    Vietnam Mulls Tough Measures for ‘Misbehaving’ Chinese Tourists

    Move comes after footage surfaced online of Chinese travelers harassing a banana hawker in Da Nang

    Pakistan Social Media Star's Honor Killing Fuels Debate

    Qandeel Baloch's murder puts spotlight on deadly tradition and other mistreatment of women

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Wall Already Runs Along Parts of US-Mexico Borderi
    X
    July 22, 2016 12:30 AM
    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.
    Video

    Video Number of Syrian Refugees Arriving in US Jumps

    The United States is committed to resettling 85,000 refugees from around the world by October. Of that number, 10,000 will come from Syria and already some 4,000 Syrian refugees have arrived in the United States, many of them settling in the state of Illinois. As VOA’s Kane Farabaugh reports from Chicago, their arrival is not the end of a difficult journey to find peace and stability.
    Video

    Video Rio’s Trams Await Olympic Tourists

    Over the past century, many cities around the world replaced electric trams, prone to breakdowns and backups, with faster and more spacious buses. But for some reason restored antique trams are a huge tourist attraction. So it’s no wonder the authorities in Rio de Janeiro are busy restoring their city’s old tram line ahead of the Summer Olympic Games. VOA’ George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora