Powering Africa: There are bright spots on the continent

Imagine that you have to describe the African power sector with one word. Which one would you choose? What comes to mind? Deficit? Shortage? Undersupply? Synonyms that imply low or inadequate supply and high demand or under-utilization of available renewable resources?

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Describing the African power sector in one word is virtually impossible. There are 54 countries on the continent with a range of challenges, opportunities, and approaches that would shape outcomes in different ways. As a unit, however, the Africa Development Bank (2023) notes that Africa has a collective electricity access rate of just over 40%. For a continent of over 1.4 billion people (UN 2023), an electrification rate of less than 50% is, in one word, insufficient, some would say unacceptable. But zoom in, and you will find a more nuanced picture and spot trends across the different regions of the continent. For example, Northern Africa has one of the highest electrification rates on the continent as five of eight countries have an electrification rate of over 99% (IEA, 2019). Similarly, while many Sub-Saharan African countries are lagging behind, especially in West Africa which has one of the lowest electricity access rates in the world (World Bank, 2022), there are examples of countries deviating from the ‘norm,’ and making strides towards ramping up capacity to match supply with demand. What lessons can the rest of the continent learn from these ‘shining stars?’

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All is Not Bleak

On the one hand, these cases may seem few and far between. Much of the progress toward achieving electricity access targets between 2014 and 2019 was concentrated in just a few countries, particularly Kenya, Senegal, Rwanda, Ghana and Ethiopia (IEA, 2021). Interestingly, these are not the richest countries in terms of natural resources. According to the World Bank, only 8 Subsaharan African countries are on track to achieving the SDG 7 universal goal of full electrification by 2030; 3 of which are in West and Central Africa. For the rest of the continent, achieving this goal means connecting 90 million people to electricity annually for the next 7 years; and investing an estimated $ 100 billion every year, within the next 2 decades (AfDB, 2023). However, rising inflation rates and increasing public debts across the continent raise questions about the capacity of African countries to fund electrification projects, and consequently casts doubt on the prospect of meeting universal access targets. By this standard, the future looks bleak.

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On the other hand, the exceptions to the ‘norm’ demonstrate that there are countries, albeit relatively few, which have made some progress in spite of the same challenges faced by the rest of the continent. This may point to two things. First, there is hope after all. Second, these countries may have done some things right, which may indicate relevant factors, themes or steps for achieving targeted electrification rates in Africa.??

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Take Kenya for example. The country’s power sector has steadily grown, especially in the last decade, during which household electricity access more than doubled from 32% in 2013 to 75% in 2022 (ITA, 2022). Although the country has an installed capacity of 2,990 MW (ITA, 2021) which is still insufficient for a population of over 50 million people, the current capacity is a 40% improvement from 2014 (at 1,800 MW), and is expected to reach 5,000 MW by 2030. According to the Kenya Bureau of Statistics (2021), nearly 90% of the country’s energy mix consists of renewable energy, with geothermal power accounting for 41%, followed closely by hydro (30%), wind (16%) and solar (1%). There is an estimated untapped geothermal energy potential of about 10,000 MW (IMF, 2022), making Kenya the location of one of the largest geothermal power plants in the world, and the world’s eighth-largest geothermal producer (ITA, 2022). With increasing vulnerability of its hydropower sources due to rising frequency of climate change-induced droughts, Kenya is expected to lean more into its geothermal sources, and expand its capacity for harnessing solar and wind energy, especially as the country already has one of the largest solar projects in East Africa, and the largest wind power project on the continent. In power, as in other areas like education, Kenya is indeed an example to follow and emulate.

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Ethiopia, Kenya’s neighbor, is another bright spot on the continent, where much progress has been made. Over 90% of the country’s electricity generation is from renewable sources, especially hydropower, which makes up most of its 5.3 GW energy generation capacity. This has contributed to raising access from 28% in 2016 to 44% in 2022, with a plan to boost electrification efforts. According to a report by Energy and Utilities (2022), the Grand Ethiopian Renaissance Dam (GERD), a project which has been underway since 2011, is expected to be a game changer, substantially contributing to raising the country’s output to 17.1 GW by 2030. In fact, while Ethiopia currently exports electricity to neighboring countries like Djibouti and Sudan (ITA, 2022), the Minister of Finance, Ahmed Shede, noted that the GERD would further expand export capacity to others, as the potential of the dam makes up half of the 10 GW expected to be generated from several power projects over the next 10 years (Economic Commission for Africa Forum (ECA) 2022). There are important ongoing discussions between Ethiopia and regional countries, like Sudan and Egypt, who depend heavily on water resources from the Nile River, to ensure this massive project is implemented in a sustainable way.

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Some of you may be familiar with the Inga dam project in the Democratic Republic of Congo. I’ve been hearing big pronouncements about that potential game changer for the last 30 years, without much progress on the ground. Many Africans find comfort and pride in seeing such a massive infrastructure project as the Grand Renaissance Dam, on the scale of what the Chinese build in their own country, become reality in Ethiopia. Well done.

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Like Ethiopia, Namibia is intensifying efforts towards keeping pace with rising demand. As the country’s power purchasing agreement with South Africa’s ESKOM nears its 2025 expiry date, amidst a strained South African power sector, Namibia has increasingly embraced independent power producer (IPP) agreements to diversify its energy mix and boost long-term self-sufficiency. Consequently, NamPower, the national utility company implemented courageous reforms, allowing for more private sector participation to increase energy generation; notable of which is the recently concluded deal with Hyphen Hydrogen Energy, to harness Namibia’s green hydrogen potential. According to ITA (2022), this deal is expected to attract over $6 billion in foreign direct investment (FDI), as the country harnesses a vast potential ‘to produce about 2.5 million metric tons of green ammonia annually,’ positioning it as a world leader in green hydrogen and related products.

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Powering Africa: What Will it Take?

These examples do not preclude the persistence of challenges. Kenya’s rural areas remain relatively underserved at an access rate of about 65% compared to 100% for urban areas. The case is similar in Ethiopia, where only 27% of its rural population has access to electricity compared to 96% in urban areas. And in Namibia, the country’s generation facilities currently rarely produce enough to meet peak demand of over 600MW (ITA, 2022), expected to reach 930 MW by 2025.

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Beyond these challenges, two relevant factors cut across these examples,?and may point to relevant catalysts for boosting electrification efforts on the continent. One is political will, as embodied in policies and targets designed to boost electrification efforts. Kenya has a national electrification strategy that aims to boost access rates to an acceptable level by 2022 (World Bank 2018)) and Ethiopia has a 10-year power project plan. These plans are backed by clear and credible implementation schedules, as well as dedicated national resources. They are not just plans for political slogans, often copy-pasted from other countries where development organizations intervene.?Unfortunately, many countries have not even established clear objectives. In fact, about 40% of countries in Subsaharan Africa lack official electricity access targets (IEA, 2021). Lack of targets and relevant policies may constrain efforts to prioritize power as a national concern, which then becomes a spillover problem for more virtuous neighboring countries. This is especially relevant for strengthening cross-border transmission projects. Another important factor is the importance of partnerships and IPP frameworks that provide access to funding options and expertise, to harness relevant energy sources for a robust energy mix.

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Tidiani Jeff Tall is CEO of Lidera Green Power, a renewable energy independent power producer (IPP) based in Madagascar. He previously held transformational leadership roles at KONE (elevators & escalators), and Lafarge (building materials), after starting his career in debt capital markets at Morgan Stanley, and strategy consulting at Roland Berger. Jeff is a graduate of Ecole Polytechnique Paris and Institut Fran?ais du Pétrole (IFP School), as well as a participant in the first session of the Emerging Leaders Program at Harvard Kennedy School.