Editorial

The figures are staggering. Six hundred million Africans have no access to electricity, making up 75% of the world’s 789 million people who live without electricity. The International Energy Agency (IEA) reported these figures in October 2020, warning that without considerable investment and workable policies, the continent will definitely not achieve the UN’s Sustainable Development goal (SDG) 7, which aims to ensure that everyone has access to affordable, reliable and sustainable energy by 2030.

Africa’s energy deficit (to use a euphemism), which is most apparent in sub-Saharan Africa, impacts on every area of people’s lives and is a serious impediment to the continent reaching its development goals, even the longer term Agenda 2063 set by the African Union itself.

Lack of access, affordability and reliability; all three briefly describe Africa’s difficulty in keeping the lights on. The reasons why are many and complex: policy uncertainty, unstable macroeconomic policies, weak legal systems, political instability, a lack of investment, corruption, climate change, and a lack of coherent power sector planning. Governments also insist on pursuing large, hugely expensive but unsustainable infrastructural vanity projects that pollute the environment and look increasingly obsolete in the face of advances made in more affordable and efficient renewable energy. Sub-Saharan Africa’s geography is a factor, too; national grids are often simply unable to offer access to remote rural areas.

The issues raised above are just some of the obstacles bedevilling efforts by African countries to provide power to their people. This issue of Africa in Fact seeks to highlight why, in the third decade of the 21st century, 600 million people on the continent are still without access to electricity and what can – and should – be done to remedy this deficit.

In the opening article, Ini Ekott points out that solving Africa’s energy problem requires proper funding and policy adjustment, and that off-grid renewable projects, like solar, are the future; they are cheaper and do not require expensive connections to the national grid. It is ironic, he notes, that despite having more solar resources than any other region in the world, Africa has only five gigawatts of solar photovoltaics – less than 1% of installed global capacity.

Nick Branson looks at the role of regional integration in overhauling Africa’s energy infrastructure. Regional cooperation, he says, has the potential to increase market size, making projects more likely to attract foreign investment, enable countries to share surpluses with neighbours, which would make supply more stable and help drive down costs for consumers. He also looks at the power pools already created, such as the Southern Africa Power Pool (SAPP) and the West African Power Pool (WAPP), and unpacks why failings of legal, regulatory and institutional frameworks have led to mixed results.

Interrogating why Africa’s energy sector has battled to enter into cost saving public-private partnerships (PPPs), Fisayo Alo and Eniayo Ibirogba say these have the potential to solve Africa’s profound infrastructure and service deficits. Efforts, however, have been limited due to an inability to guarantee investor funds, capacity gaps and few or no regulatory frameworks. PPPs must be protected from fraud and corruption, which are endemic in many African countries, they write.

Dianna Games sets out to explain why, 15 years after Nigeria began a privatisation process, it is still one of the most underpowered countries in the world. A flawed privatisation process, including decrepit infrastructural assets, unrealistically low tariffs and a culture of non-payment among citizens fed up with an erratic supply and unreliable billing, means Nigeria has some tough decisions to make towards a functional energy sector.

Unreliable supply is one reason Nigerians spend $14 billion a year on fuel and generators, writes Amindeh Blaise Atabong, quoting the African Development Bank. As he notes, a reliable electricity supply is key for the functioning of any modern economy. But costly back-up generators are virtually essential for running an enterprise in sub-Saharan Africa, making businesses uncompetitive and distorting the cost of doing business (a 2015 McKinsey report on the African energy sector noted that generator power was on average four times the price of grid power – and would still be two to three times expensive if grid power in some African countries reflected actual costs rather than benefiting from subsidies).

But there is a more immediate human cost to Africa’s energy deficit. Over reliance on generators and no access to electricity are health hazards.

As Barnabas Thondhlana writes, Africa’s rural poor are heavily reliant on biomass for cooking and heating, exposing them to high levels of pollutants. Fossil fuel-run generators are air and noise polluters, while the effects of indoor pollution, most often from charcoal and firewood, kills 600,000 sub-Saharans a year. There are other environmental consequences: firewood collection and the charcoal trade have led to devastating swathes of deforestation and environmental degradation.

In other articles, Ronak Gopaldas looks at the pros and cons of nuclear power for Africa, in the context of Russia’s aggressive wooing of African governments to commit to expensive nuclear deals. Egypt has already agreed to a $25 billion Russian loan to build its first nuclear plant. Water security expert Anthony Turton looks at tensions between Ethiopia and Egypt over the former’s filling of its Grand Renaissance Dam on the Blue Nile. However, contrary to outgoing US President Donald Trump’s recent suggestion that Egypt could “blow up” the dam, Turton proposes a benefit sharing network that shifts water, energy and food security from a national to a regional level.

Meanwhile, Ross Harvey’s article on Tanzania’s Stiegler’s Gorge hydropower project in Nyerere National Park, and Grace Wu and Ranjit Deshmukh’s assessment of Democratic Republic of Congo’s Inga 3 dam system, both reveal that the jury is out over the long-term feasibility of legacy megaprojects, given the global move towards cheaper, sustainable options.

All the articles in this issue of AIF emphasise the enormous effort and political will required to power up Africa, but it would be wrong to suggest no progress is being made. Wind and solar power projects across sub-Saharan Africa are proving a viable element of the energy mix, particularly in rural communities, as illustrated by on-the-ground reporting from contributors Munyaradzi Makoni and Blamé Ekoue. Meanwhile, writes Justus Wanzala from Kenya, real efforts are being made across Africa to develop and distribute carbon neutral, affordable alternatives to charcoal and firewood for domestic and commercial use.

Finally, Joe Walsh’s article suggests that instead of trying to get everyone onto national grids via projects like Inga with their inevitable financial, political and logistical problems, there’s room for decentralised, renewable energy mini and micro-grids where geographically and economically appropriate. It is in this context that it is worth highlighting a June 2020 quote in Ini Ekott’s article from Damilola Ogunbiyi, the UN Secretary-General’s special representative for Sustainable Energy for All, who said: “There has never been a better time to invest in clean, efficient renewable energy. Countries that recover better [from COVID-19] with sustainable energy will see the pay off in the form of resilient economies, new jobs and faster energy development. By making this investment, African countries can develop a competitive advantage.”

Susan Russell is editor of Africa in Fact. She has over 30 years’ experience in journalism.

A far from bright future 

More people in Africa live without electricity than anywhere else and there is little hope things will change soon

When it comes to access to energy, Africa’s figures are noticeably unimpressive. Nearly 75% of the world’s 789 million people who lack electricity live in Africa, according to an October 2020 International Energy Agency (IEA) report, and of the 2.6 billion people who lack access to clean cooking, 900 million are in Africa. While the rate of rural electrification in other parts of the world is above 70%, in sub-Saharan Africa it is just above 20%.

However, there has been progress. According to the IEA, the number of people on the continent without access to electricity, which stood at 610 million in 2013, fell to about 580 million in 2019. That gain, however, has been overshadowed by Africa’s ballooning population, and many remain without access to power. “In the past decades, access to electricity in Africa failed to level up with its booming population and this negates the drive for development milestones,” said Ubong Edet, director at Open Policy, a development-focused civic group in Abuja, Nigeria 

Attempts by most African nations to significantly increase their citizens’ access to electricity over the years largely failed, hampered by policy missteps, poor funding, corruption and sometimes instability. The result is a dysfunctional power sector that has been unable to support economic activities that can create jobs, and education and healthcare services. Only an estimated 28% of health facilities in sub-Saharan Africa have access to reliable electricity, according to Powering Healthcare, a United Nations initiative. 

The IEA says unless there is considerable improvement in investment and policies, Africa is certain to default on the global sustainable development goal of 2030 (SDG7), which seeks to ensure access to affordable, reliable, sustainable and modern energy for all. The current policy trajectories will see 530 million Africans still without electricity in the next decade, it says. 

A woman disconnects her electricity counter in a bid to save money inside the courtyard of a workers quarter in Dakar, Senegal. Photo: AFP/Georges Gobet

“Despite progress in several countries, current and planned efforts to provide access to modern energy services barely outpace population growth,” the agency says. 

It is an irony for a continent that is the most endowed with raw energy hydro, solar, oil, gas, coal and geothermal resources. Despite having more solar resources than any other region, Africa has only five gigawatts of solar photovoltaics – less than 1% of installed global capacity, says the IEA.

The bulk of the region’s energy deficiency is in sub-Saharan Africa, with Nigeria, Ethiopia, Democratic Republic of Congo (DRC), Uganda and Tanzania accounting for the largest number of people without electricity.  

Years of efforts by African governments have failed to produce sufficient energy the continent needs for several reasons. The first is the funding gap.

The IEA estimates that sub-Saharan Africa needs $35 billion a year to ensure electricity access for all by 2030, and only a few countries have been able to mobilise enough funds locally for their energy projects.

Ethiopia, for example, recently raised 8 billion birr out of an expected 12 billion birr (about $550 million) for its Grand Renaissance hydroelectric dam through domestic and diaspora bonds. 

Corruption is another factor. The anti-corruption group, Socio-Economic Rights and Accountability Project, said Nigeria has spent over $30 billion in the past two decades but has only managed to generate less than 7,000 megawatts of electricity, far less than required by its more than 200 million citizens. It said successive administrations had “squandered” huge amounts without a commensurate result. 

There is also a policy challenge. Since jumping on the electrification trend in the post-independence days, poor management and a lack of political will have seen many African countries end up with unrealistic (or failed) mega energy projects. In contrast, Asia has, through the same period, had accelerated its electrification and achieved the most significant decline in the number of people without electricity worldwide between 2010 and 2018. 

Source: World Bank

Africa’s modest improvement has been in East Africa. Here, Kenya, Ethiopia and Tanzania account for more than half of those gaining access to electricity, according to the Brussels-based Alliance for Rural Electrification. In Kenya, the electricity access rate rose triple fold within five years to 75% in 2018 as the country complemented grid connections with solar and geothermal systems.  

Even with such progress, as of July 2020, only one country in Africa – Gabon – was “on track” to achieve SDG7, according to an analysis by the Sustainable Development Goals Center for Africa and the Sustainable Development Solutions Network. Twenty-two countries were “moderately increasing”, 28 were stagnating while three countries were “decreasing”. 

African countries appear better on track to attain the more drawn out African Union’s own goal that seeks to harness, by 2063, all “African energy resources to ensure modern, efficient, reliable, cost-effective, renewable and environmentally friendly energy to all African households, businesses, industries and institutions.” 

“Africa will have to raise its funding and actionable plans if it will ever meet up with the rest of the world developmentally in the coming years,” said Edet of Open Policy. 

Access to electricity in Africa is also hampered by affordability and reliability. The unit cost of electricity to consumers in many African countries is more than double the cost in developed nations such as the United States, according to a joint assessment by Agence française de développement and the World Bank.  

Also, even in instances where power is available, households spend hours without power. In 25 of the 29 countries in Africa examined by a World Bank report, fewer than one-third of firms had reliable access to electricity. Things worked relatively better in Liberia, Namibia, and South Sudan than in Nigeria, Kenya, Mali, and Tanzania, the report said. 

Solving Africa’s energy problem requires proper funding and policy adjustment. Experts say off-grid renewable projects, like solar, should be Africa’s energy future because they are less costly and do not require expensive connections to the national grid, especially since the majority of the population live in rural areas. 

A technician from an electricity distribution company stands on ladder and repairs a faulty line in Lagos. Photo: Pius Utomi/AFP

First, African countries will have to quadruple their rate of investment in their power sectors for the next two decades to bring reliable electricity to all Africans, the IEA said. The agency recommends an annual investment of around $120 billion yearly to bring electricity to all in Africa. 

“We’re talking about 2.5% of GDP that should go into the power sector,” Laura Cozzi, the IEA’s Chief Energy Modeller, said in November 2019. “India’s done it over the past 20 years. China has done it. So, it’s something that is doable.” 

Given the cost, the agency recommends using more mini-grids and says attention should be focused more on the huge potential that solar, wind, hydropower, and natural gas offer. 

Source: World Bank

Despite evidence that solar and wind could provide cheaper and more environmentally friendly options to expand electricity in Africa, a number of African nations are shifting to nuclear energy.

They cite the threat of drought to hydropower and argue that nuclear power can provide a reliable support for renewables such as solar and wind. 

In addition to South Africa, which has Africa’s only nuclear power plant, Ghana, Morocco, Egypt, Kenya, Nigeria, Niger, Tunisia, Algeria, Zambia, Uganda and Sudan have considered adopting nuclear energy, according to the International Atomic Energy Agency.  

Norbert Edomah, an energy expert and senior lecturer at the Pan-Atlantic University, Lagos, says countries should adopt options that work best for them and should consider “contextual energy geography”.  

“What works in East Africa may not work in West Africa,” he told Africa in Fact. Edomah advised policymakers to pay attention to “providing energy for productivity”. 

“The question to ask is, what do people use energy for? In what way can we provide energy to improve livelihoods? Things that focus on livelihoods and improve productivity is what we should focus on,” he said. 

There is an immediate constraint. The IEA fears the COVID-19 pandemic may reverse years of progress made in expanding access to electricity. It says that as governments attend to the immediate public health and economic crisis, utilities are bound to face serious financial strain. Also, increased poverty levels worldwide in 2020 may make basic electricity services unaffordable. 

But Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All (SEforALL) and co-chair of UN-Energy, said the pandemic also provided an opportunity that could be harnessed. 

In a statement to launch SEforAll’s Recover Better with Sustainable Energy Guide for African Countries in June 2020 Ogunbiyi said, “COVID-19 has changed the world as we know it. As countries rebuild economies impacted by the pandemic, they are faced with a unique, once in a generation opportunity to ‘recover better’ with sustainable energy.  

“There has never been a better time to invest in clean, efficient renewable energy. Countries that recover better with sustainable energy will see the pay off in the form of resilient economies, new jobs, and faster energy development. By making this investment, African countries can develop a competitive advantage.” 

Ini Ekott is the Assistant Managing Editor (News) at Premium Times, an online newspaper based in Abuja, Nigeria. Prior to this, he reported for Next, an investigative newspaper in Lagos. He has written for IPS Africa and other publications and is a former Wole Soyinka investigative journalist of the year. goes here

 

Shaky ground for PPPs in Africa’s energy sector 

Africa’s involvement in PPPs has been limited by an inability to guarantee investor funds, and gaps in capacity

Africa is home to about 1.3 billion people. It is the second-largest and second most populous continent in the world. The abundance of resources notwithstanding, the continent remains under-developed and very little of these resources have translated into sustained economic growth for the majority of people. Africa is food-insecure in spite of having vast areas of arable land, many lack access to safe water, health, education and energy. Energy is central to poverty reduction efforts and the sustainable development of Africa.

According to the International Finance Corporation (IFC), energy is a broad sector that holds two important yet very different industries: the oil and gas sector, and the power sector. Access to energy is essential to close development gaps in emerging markets. It underpins the investments, innovations, and industries that drive inclusive growth, create jobs and markets. It strengthens economies, enhances basic human needs, such as food and shelter, and improves education and public health.

Africa’s development is directly dependent on her ability to meet her energy needs. The African Development Bank (AfDB) has estimated that Africa needs at least $170 billion a year by 2025 to finance her infrastructure needs, with a financing gap of $68 to $108 billion a year.

The United Nations Economic Commission for Africa (UNECA), in its 2011 Africa Infrastructure Country Diagnostic (AICD), said that over a 10-year period, as much as $48 billion in new investment is needed annually in Africa to make up the spending shortfalls in all infrastructure sectors. But $29 billion, or 61% of that total, is needed in the energy sector. With at least 600 million Africans living without access to electricity, billions of dollars are needed for energy related projects.

The solar energy power plant in Zaktubi, near Ouagadougou, taken on its inauguration day on November 29, 2017. Photo: Ludovic Marin/AFP

Sustainable Thermal Energy Partnerships (STEPs), a project sponsored by the United Kingdom’s Department for International Development, revealed that Africa’s energy capacity and infrastructure have developed at a far slower pace than economic growth. It found that the rate of electrification access in Africa is less than half of other developing regions such as South Asia and Latin America.

The lack of investment in energy in Africa is evident in Nigeria. With a population nearing 200 million, the country only has an installed electricity capacity of some 8,500 MW, providing a per capita 150 KW annually. This is far less than countries with considerably smaller GDPs, such as Cameroon (256), Cote d’Ivoire (212) and Gabon (907). Across Africa, Private-Public Partnerships (PPPs) are increasingly seen as an essential mechanism to finance infrastructure facilities hitherto provided by the public sector.

The African Journal of Management (AJM) has described PPPs as cooperative arrangements between governments and multinational corporations that are created to finance, construct and manage infrastructure projects. Constraints on public sector resources, growing pressure on government budgets, and concerns about the efficiency of services provided by the state have led to many governments stepping up their efforts to encourage partnerships with the private sector. To radically improve infrastructure networks and enhance service delivery, governments are looking to PPPs.

Much of the success of a PPP derives from the strengths of both the private and the public sector to provide an efficient and cost-effective public service and ramp up implementation and/or coverage.

The drivers of PPP growth on the continent include increased efficiency in project delivery and operation; reinforcing competition; access to advanced technology; and reducing government budgetary constraints by accessing private capital. 

Across the region, government is latching on to PPPs. Between the years 1990 and 2008, approximately 360 infrastructure projects were implemented using private participation in sub-Saharan Africa, with a combined value estimated at around $70 billion. Recently, in March 2020, the International Finance Corporation (IFC) committed $750,000 to Comasel de St Louis, Senegal, a wholly-owned subsidiary of Morocco’s electricity utility, the Office National de l’Electricité, for a project that will use a mix of grid connections and individual solar kits to bring power to 20,000 rural households in 300 Senegalese villages. There is also the Gurara Hydro Power Project (30 MW) concession in Kaduna, Nigeria, a 25-year Operate and Maintain PPP project by North South Power Company Limited, which began on 12 May 2020.

The Sere wind farm, in South Africa’s Western Cape, consists of 46 turbines, each standing 115m above the ground and producing 2,3 MW of electricity. It is managed by Eskom, the South African government parasatal charged with electricity supply, and was built by Siemens. Photo: Rodger Bosch/AFP

In Cameroon, the Kribi gas-fired power plant project is part of a medium-term strategic development programme for the supply of electricity to the country, which is designed to meet growing electricity demands. Comprising a 216 MW gas-fired power plant and a 100 km long 225 kV transmission line, the $400 million project is co-owned by the private AES Corporation (56%) and the Republic of Cameroon (44%).

Meanwhile, in Mozambique, UK company Aggreko and its local joint-venture partner Shanduka Group, has opened and delivered power from its 107.5 MW interim gas-fired power plant at Gigawatt Park in Ressano Garcia. The project is a Power Purchase Agreement (PPA) that Aggreko signed with Electricidade de Moçambique (EDM), the Mozambique power utility, and the country’s South African counterpart, Eskom.

Kenya’s Thika power plant project consists of the development, design, construction and operation of a Greenfield 87 MW heavy Fuel Oil (HFO) diesel power plant on a 20-year Build-Own-Operate (BOO) basis about 35 km from Nairobi. Thika Power is a subsidiary of Melec PowerGen Inc., an affiliate of the Matelec group of companies from Lebanon.

Theoretically, PPPs have the potential to solve Africa’s profound infrastructure and service deficits. In comparison to other continents, Africa’s involvement in PPPs has been limited, largely due to an inability to guarantee investors’ funds, and gaps in capacity.

It is also imperative that a clear institutional framework be put in place. This framework will be a critical factor in the success of PPPs and would help with defining roles for regulation, preparation, assessment, supervision, monitoring and evaluation. States must strengthen the institutions of governance. One way to achieve this is by passing laws that guide the actions of state institutions. This would make it harder for government agencies that are critical to the success of PPPs to be weakened by political interference.

Nigeria’s Minister of Works, Babatunde Fashola, alluded to this at the Lafarge Africa Concrete Ideas virtual meeting held on 13 October, 2020 that legislation like this was of paramount importance in effectively implementing PPPs, citing the example of Nigeria’s Infrastructure Concession Regulatory Commission (ICRC),  which was established in 2008 by an act of parliament to regulate the federal government’s PPP endeavours. This aims at addressing Nigeria’s physical infrastructure deficit, which hampers economic development. PPPs investments must be protected from fraud and corruption, which are endemic in many African countries.

On what should Africa focus? Against this background, and as many governments look to seal PPPs that guarantee win-win situations, policymakers and government deal makers must appreciate the need to have watertight deals, at least to save governments from any financial loss and embarrassment. The PPPs adopted by states may differ, depending on focus as well as political and economic goals. Emphasis needs to be on fiscal benefits, the efficiency gains of the private sector, and the development of local financial markets.

There should be concerted efforts to address identified challenges, including unstable macroeconomic policies, weak legal systems, absence of a clear policy framework, lack of (transparent, consistent, and fair) regulations, absence of coherent power sector planning, little or no cost-reflective tariffs, political risks, and poor operational practices. Governments must pursue bankable projects that are capable of attracting private sector investors. They cannot be a regulator and an actor within the energy sector at the same time. Governments should allow market forces to drive prices and service delivery, and only ensure that the right regulatory environment for effective and quality service delivery is guaranteed.  

 

The struggle to keep pace

Africa’s collective electricity supply is bedevilled by weak legal frameworks and regional rivalry

An estimated 580 million Africans lack access to electricity, three quarters of the global total. The International Energy Agency (IEA) expects this number to rise as the COVID-19 pandemic stalls efforts to keep up with rising demand. 

Before coronavirus struck, the continent had been making slow progress towards Sustainable Development Goal 7 – Ensuring access to affordable, reliable, sustainable and modern energy for all – but it now stands little chance of meeting this target by 2030.

Despite extensive petroleum reserves, high solar irradiation levels and vast hydropower potential, Africa receives only 4% of global energy supply investment, according to the IEA. This is largely a result of foreign investors’ fears that short-term political considerations will trump long-term policy goals, rendering energy master plans obsolete. Investors’ primary concerns include abrupt changes to the policy environment, unsustainably low electricity tariffs dependent on unaffordable state subsidies, and the poor governance and creditworthiness of state-owned utility companies. A whopping 95% of African energy utilities fail to recover their costs, according to the Energy for Growth Hub, scaring off potential investors. 

Regional cooperation on energy promises potential solutions in three key areas. First, cross-border partnerships increase market size, making projects more likely to attract foreign investment. Second, regional connections enable countries with surplus electricity to share it with neighbours experiencing shortfalls thereby making power supplies more reliable. Third, a regional market can help drive down the costs for consumers if utility companies are mandated to purchase the cheapest available power. All three trends help to promote a shift in the energy mix by maximising the potential of new renewable sources at the expense of older and inefficient thermal generators.  

Power lines leaving the Eskom Duvha power station, some 15 km east of Witbank, South Africa.  Photo: Marco Longari/AFP

Africa’s regional economic communities have already taken steps to integrate through power pools, which enable national utility companies to plan and operate their collective electricity supply and transmission in the most reliable and economic manner given their load requirements. These power pools have the potential to promote investment in new hydropower capacity, reducing power system operating costs by $2.7 billion each year, and carbon dioxide emissions by 70 million tonnes per annum, according to estimates by the World Bank.  

The Southern African Development Community (SADC) was the first regional economic community to connect national electricity grids and form a common market for electricity, establishing the Southern Africa Power Pool (SAPP) in 1995. Rising power demand in South Africa and at energy-intensive mining projects elsewhere in the region helped to attract foreign investment. This led to the creation of the Copperbelt Energy Corporation, a private Zambian electricity generation, transmission, distribution and supply company, in 1997, and Motraco, a joint venture between Mozambique, South Africa and Swaziland to upgrade cross-border transmission lines in 1998.  

This early progress spurred the signing of bilateral contracts between the member countries, followed by the development of a Short-Term Electricity Market in 2001 and a Day-Ahead Market in 2009. By 2010, 7.5% of power generated in the region was being traded across the SAPP, according to the Infrastructure Consortium for Africa. However, this early progress in trading was not accompanied by comparable attention to the institutional environment. SADC failed to establish an independent regulator to oversee compliance with technical codes, regulate prices and promote competition. The weak legal framework and the absence of an autonomous dispute-resolution body undermined the pool’s prospects, according to a report commissioned by the World Bank.   

Regional rivalry also undermined SAPP’s prospects, with SADC energy ministers unable to agree on a list of priority projects, thus missing opportunities to secure new investment in power production during the 2000s.

Uneven development left members overly reliant on Eskom, the utility company in regional hegemon South Africa, which had both the most installed capacity and was the top buyer of surplus electricity. A wave of power cuts in South Africa forced other members of the pool to implement load-shedding from 2008 onwards. Rather than address this challenge President Jacob Zuma mismanaged Eskom, leaving the utility company overstaffed and broke, undermining its ability to honour contracts through SAPP.  

The Economic Community for West African States (ECOWAS) was more pragmatic than SADC when it established the West African Power Pool (WAPP) in 1999. Recognising the chronic energy shortages which plagued the region’s economic engine, Nigeria, WAPP adopted a more pragmatic, two-tier approach. Where reliable connections existed, steps were taken to forge a common market for electricity. Bilateral power purchase agreements enabled Côte d’Ivoire to export surplus energy to neighbouring Ghana, which was grappling with power cuts, and onwards to Benin and Togo, which as small countries had struggled to secure investment in their grids. By 2010, 6.9% of power generated in the region was being traded across this bloc, according to the Infrastructure Consortium for Africa.  

Where reliable connections were lacking, the focus was on linking the hinterland to more developed coastal nations. Thus inland Burkina Faso gained access to power from Ghana and Côte d’Ivoire, while Niger was hooked up to Nigeria. But a number of smaller economies remain left behind, with laggards Guinea, Liberia, Mali and Sierra Leone still busy aligning their systems in the hope of accessing cheaper energy supplies from elsewhere in the WAPP. Other countries have forged their own path. Senegal initially cooperated with Mali and Mauritania to share hydropower from the Manantali dam, but President Macky Sall has since focused on upgrading his country’s installed capacity and grid, eyeing abundant offshore gas reserves. This threatens to leave Senegal’s smaller neighbours Guinea-Bissau and Gambia in the dark.   

While the WAPP’s approach risks exacerbating regional inequality, it has at least developed a more robust framework, including a stronger and more autonomous secretariat capable of promoting priority projects and finalising decisions rather than waiting for national governments to act, according to a report commissioned by the World Bank. ECOWAS also took the critical step of establishing a Regional Electricity Regulatory Authority (ERERA), which became operational in 2011, addressing the lacuna identified in the SAPP.  

The thermal power station of Ivory Coast’s electricity production company Ciprel, a subdivision of French industrial group Eranove.  Photo: Sia Kambou/AFP

In the middle of the continent, the Economic Community of Central African States (ECCAS) has failed to emulate ECOWAS’ dynamism through the Central Africa Power Pool (CAPP), which it founded in 2003. 

Hugely ambitious plans to build new transmission lines required to unlock the vast hydropower potential of the River Congo have yet to move beyond the drawing board, with neither donors nor the private sector willing to tackle myriad political, regulatory, macroeconomic and security risks.  

Greater hope lies in the Eastern Africa Power Pool (EAPP), which was formed by seven Common Market for Eastern and Southern Africa (COMESA) members in February 2005. Although the World Bank dismissed regional energy trade as “negligible” less than a decade ago, investment in new dams and transmission lines promises to make Ethiopia and Kenya major electricity exporters. While Kenya has mastered geothermal power from the Rift Valley, Ethiopia is doubling its installed generation capacity courtesy of the 6,000 MW Grand Ethiopian Renaissance Dam (GERD), which is expected to become fully operational in 2023. Such vast potential convinced the World Bank and African Development Bank to fund a new 2,000 MW transmission line between the two countries, which was completed last year. The GERD promises to lower electricity costs, transform the energy mix and make power supplies more reliable across EAPP.  

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COMESA has also moved to establish common legal, regulatory and institutional frameworks. In 2012, the EAPP established an independent regulatory board to supervise the pool, ensure compliance with electricity codes and technical standards, and regulate the use and price of transmission lines. The regulator also plays a role in enforcing standards and resolving disputes, helping to encourage private investment, thus promoting competition in the pool progressively. For now, the focus is the Day-Ahead Market, but the EAPP aims to move to a centralised trading regime in the next five years, according to the Infrastructure Consortium for Africa.   

[However, Francois Pienaar, Business Development Manager at ESB International and a former consultant to utilities in Ghana, Liberia and Tanzania, worries that “billions spent on interconnections will be wasted” without greater attention to regional integration. Too many African governments focus on short-term objectives, such as subsidising electricity to key electoral constituencies to retain their political support, rather than considering how to address the contingent financial liabilities of national utility companies. Moreover, the energy sector has to vie for attention with competing industries, including the transport sector, beloved by politicians seeking visible projects. 

The outlook is also complicated by COVID-19. “A crisis can often predispose policymakers to undertake more politically risky energy sector reforms”, as Alan David Lee and Zainab Usman note in their World Bank paper, Taking stock of the political economy of power sector reforms in developing countries. Yet Dr Usman told Africa in Fact that “the coronavirus pandemic has dramatically increased fiscal pressures in ways that could make African governments subordinate electrification projects to more urgent priorities.” The strengthening of Africa’s power pools therefore looks to be among the many casualties of the current public health emergency, increasing the number of Africans deprived of access to electricity. 

Nick Branson, Director of Gondwana Risk, advises foreign investors on key African markets and helps African governments to fine-tune their policy objectives. Nick has extensive experience of conducting research across the continent and producing actionable analysis for a range of different audiences. Nick undertook doctoral studies at SOAS, University of London, and previously worked at the think tank Africa Research Institute.

 

Between a rock and a hard place

The Sahel: Africa’s Great Green Wall

The African Union’s ambitious plans to revitalise the Sahel region face daunting challenges, including financial fallout from the COVID-19 pandemic

Acacia trees planted in Senegal’s Louga region, as part of the Great Green Wall Photo: Seyllou Diallo / AFP

It is a project that doesn’t lack ambition. The African Union’s Great Green Wall Initiative (GGWI) aims to create a new living world wonder, an 8,000 km tree line across the 21 countries in the Sahel region of Africa. A project this size needs the funding to match and so far, more than $8 billion has been pledged. But conflicts, capacity, direction and ensuring capital remain huge challenges standing in the way of the GGWI. This has led the initiative to refocus away from merely planting trees to developing climate-resilient communities that will be protected from droughts, famine, conflict and migration, restoring degraded land to provide food, jobs and other products that people can use to make a living.

“Planting trees just to restore the land is not the right methodology and this is why we’re looking at income generation as a key aspect,” said Camilla Nordheim-Larsen, programme coordinator at the United Nations Convention to Combat Desertification (UNCCD). “The communities need to have a reason to take care of these trees, whether it’s to use or sell products coming from  the trees or an agro-forestry project, or being able to sell carbon credits, for example,” she says, explaining the GGWI’s new direction.

The project’s aims, however, are vast in terms of land restoration, carbon offsetting, beneficiaries, and the number of trees planted by the end of this decade, with progress on many targets stalled and hovering around the 15 to 18% mark. Completion within the decade is ambitious, but Nordheim-Larsen remains confident the initiative can achieve its  goals  on time, which under the UN’s Sustainable Development Goals (SDGs) is 2030.

Nordheim-Larsen’s optimism is based on her belief that a significant increase in investment, from a variety of different sources, both public and private, could make a drastic difference to the funding gap and help to upscale projects. However, Elvis Tangem, coordinator for the GGWI at the African Union Commission, is less optimistic about that date, which he sees as a UN rather than African Union (AU) target.

“Most of the programmes of the UN are based on the SDGs [for 2030], but for the African Union we have Agenda 2063,” Tangem says. “As far as achieving it by 2030, it’s very, very unlikely. We did an extrapolation and we looked at the possibility of attaining that objective by 2030, but we had to be restoring almost 2.5 million hectares of land a year, which is not possible… with the financial and resources situation [as it is] we cannot say it can be achieved in the next 10 years. When you look at Agenda 2063 it’s more realistic, as we’re talking about restoring less than one million hectares of land a year.”

The GGWI is led by the AU, with the World Bank, UN, European Union and Global Environmental Facility (GEF) as its main funders. Another revenue stream UNCCD is trying to tap is private funders and it supports projects that make the GGWI self-funding by producing products that can be sold on international markets such as oil from the moringa tree, baobab and superfoods type of products, and shea butter. Tangem claims there are as many as 27 products and commodities that could be sold on international markets in the GGWI to benefit communities, in addition to eco-tourism.

Although exploitation of such commodities and eco-tourism, along with addressing climate change, are all issues that may seem to be more of a focus of the western or developed world rather than the countries of the Sahel, Nordheim-Larsen is keen to emphasise the initiative is not being donor-led but was started in the region; the project ultimately builds on the vision of late Burkina Faso President Tomas Sankara.

A 3D movie about the Great Green Wall at the Chad stand at the COP21 UN conference on climate change in Paris, 2015 Photo: Eric Feferberg / AFP

“It started with African leaders and was adopted by African leaders in 2007 [after the idea was conceived in 2005] with no push from donors. We’ve come much later to try and support the initiative,” she says. Now, though, the main concern facing the GGWI is funding and searching for different revenue streams, the most significant of which would be carbon offsetting. “The potential carbon sequestration that this project could generate would have global benefits,” adds Nordheim-Larsen.

“There’s been interest from many companies in terms of offsetting projects in the region. At the moment there’s not a lot, but there’s some with the potential to be upscaled, both agroforestry and in the renewable energy sector.” Those companies include carbon polluting giants such as BP and Shell, who are believed to be very interested in offsetting through the GGWI, which could offset up to 500 gigatonnes of carbon emitted into the atmosphere, says Tangem. But private financial interest is not limited to the globe’s big polluters.

“During UN Secretary-General Antonio Guterres’ climate change summit in September [2019], we had serious engagement with companies like Timberland, who were ready to invest a good chunk of their corporate social responsibility funds in the Great Green Wall,” he adds. The recent coronavirus pandemic, though, has already begun to have an impact on this funding of the GGWI, as Tangem explains: “We successfully raised €1 million for the locust issue in the Horn of Africa, but because of Covid that money was diverted into supporting these countries to buy facemasks and sanitisers.”

This has not been a one-off issue as following last September’s UN Climate Summit in New York, the Great Green Wall has made engagements with both the public and private sector in the pursuit of additional funding that Tangem claims were successful. “We had many other pledges from private-sector partners, big and small, but many of them have withdrawn because they need to take care of their workers and help their investors during this Covid time when everything is shut down. But we are very confident that between 12 and 15 months down the line we will come back and have the support because these engagements are there,” he says.

Besides the ongoing coronavirus pandemic, the GGWI has faced several other problems, as can be expected with a project of this size, the most serious of which is security. Extremists, traffickers and terrorist organisations are all operating in various countries of the Sahel where the GGWI has been working, forcing them to retreat. “Burkina Faso, for instance, was one of our best and most successful practices, but we had to abandon about 60% [of our work] because of the security issues. We abandoned most of the areas that were being intervened in Mali, such as Timbuktu.

These are key areas but we had to abandon [them] because of security issues. In Nigeria, Niger, Cameroon and Chad as well,” says Tangem. These are all issues that simply weren’t there, certainly on this scale, in 2005 when the programme started. In addition, Somalia forms a large part  of the initiative’s strategy, but the GGWI is unable to operate there because of extremist organisation Al-Shabaab. Not only are these groups having a disastrous impact on the ground on the GGWI’s ability to carry out its programmes, but they have also discouraged funders, says Tangem, although he also points out that countries that are more secure have demonstrated more long-lasting results.

Ethiopia, for instance, has managed to restore 15 million hectares of degraded land. One other challenge facing the GGWI is a need to upscale domestic investment and unlock further finances from the Least Developed Countries Fund (LDFC), as it cannot rely solely on development aid, something about which both Tangem and Nordheim-Larsen agree. But, as Tangem points out, he accepts there is a domestic shortfall in funding, while many of the fund’s beneficiary countries are dealing with more pressing short-term issues than land restoration. The security issues detailed are the most pressing of these, though as Covid-19 continues to eat into the budgets of GGWI’s biggest funders, such as the World Bank and EU, it may well, at least in the short-term, fall to second behind financing.

Workers water the Widu tree nursery in Senegal’s Louga region, 2011 Photo: Seyllou Diallo / AFP

 

Joe Walsh is a freelance journalist based in Johannesburg. He primarily writes about the environment, energy and the green economy, as well as politics and society for British publications including Environmental Finance, the New Statesman and The New European.

 

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