The African Development Bank (AfDB) president, Akinwumi Adesina, describes energy as “the lifeblood of any society and the passport to economic transformation”. As such, energy is at the top of the bank’s “High 5” priorities – 1) light up and power Africa, 2) feed Africa, 3) industrialise Africa, 4) integrate Africa, and 5) improve the quality of life for Africans.
Access to electricity is important for improving everything from education and agricultural productivity to employment. Even though Africa is endowed with inexhaustible raw energy potential, over 640 million people do not have access to electricity. Electrification of Africa will also help its people get rid of indoor pollution associated with kerosene lamps, which is a leading cause of respiratory diseases. Some 600,000 people in sub-Saharan Africa die every year from indoor pollution.
According to the AfDB, the rural electrification rate in sub-Saharan Africa is the lowest in the world, at less than 20%. The electrification of rural areas face challenges such as the high costs of capital, low revenue collection rates, and insufficient generation capacity (infrastructure), amongst others. For example, Tanzania’s national electricity coverage is estimated at just over 20%, with the transmission grid covering a minor part of the country and leaving out most of the territory. Access is even lower for the rural population at 7%; thus nearly 30 million Tanzanians lack a connection to the electricity grid. The vastness of the country, coupled with low population densities, makes grid extension too expensive. This is typical of most African countries.
In addition to the lack of energy infrastructure, Africa also has an inefficient generation, transmission and distribution system, which leads to increasing costs. For example, the average efficiency of the fleet of gas-fired power plants was 38% in 2012. Had the average efficiency been equal to that of gas-fired power plants in India (46%),…