Educated in his native Benin and in Ghana, France, and the United States, Khaled Igué is Head of Public and Institutional Partnerships at OCP Africa, a subsidiary of Moroccan world phosphate leader OCP. He is also President of the Club 2030 Afrique think tank. As an active participant in, and observer of, African development, he believes that the continent needs an ambitious energy policy if it is to achieve economic take-off.
Could you describe the access to energy situation in Africa and more particularly in North Africa and the western part of the continent?
Across the continent, more than half the 54 African countries have an electrification rate of less than 20%. The rate is especially low in the Central African Republic (3%), Chad (4%), and the Democratic Republic of Congo (9%), but is 85% in South Africa. Geographically, North Africa has a 99% electrification rate but Sub-Saharan Africa has only 32% on average and 14% in rural areas. Only 42% of the population has access to electricity in Africa, compared to 75% in developed countries.
Access to electricity is a prerequisite for overcoming poverty in Africa.
Consumption is also unevenly distributed: North Africa and South Africa have 30% of the continent’s population, but together the two regions account for 80% of the continent’s total energy consumption (excluding biomass).
In addition, the electricity generated in Africa is very expensive: the kWh can cost an African household up to €4, compared to €0.15 for a European household. This explains why biomass, which is available free of charge, makes up 80% of the energy consumed in Sub-Saharan Africa (mainly firewood and charcoal). Although it causes pollution and is harmful to health, coal, mainly used in cooking and heating, represents about 60% of energy consumption in Sub-Saharan Africa.
Which types of energy production do you think should be given priority?
The use of firewood cannot be eliminated in the short term since it is often the only source of energy available to rural households. It is therefore urgent to massively distribute improved woodstoves – a simple and inexpensive measure that is rarely applied. To foster rural electrification, one solution would be distributed generation and off-grid and mini-grid solutions using technologies such as photovoltaic solar, micro-hydro and methanisation.
Companies should shift their focus from risks to opportunities.
But substantial difficulties – technical, policy and financing issues – remain to be overcome. At the other end of the spectrum, expanded distribution of electricity to poor populations and centralised electricity generating capacity remain very costly and their implementation is complicated.
The construction of large-scale hydro capacity, such as the Inga complex in the Democratic Republic of Congo, is one solution. The DRC has substantial potential, enough to cover virtually the entire current demand in Sub-Saharan Africa. The power generated by these plants would be less costly than most other sources of energy. But as things now stand, investments are lagging. The power supplied by the first two Inga complex dams is just 700 MW because two-thirds of the turbines are out of operation due to lack of maintenance.
Which countries are driving development?
Morocco is still the leading renewable energy country. On 3 December 2014, the Board of Directors of the African Development Bank (AfDB) approved two loans to cover Phase 2 of the solar power complex in Ouarzazate (the NOORo II and NOORo III power plants). The first, for €100 million, is covered by AfDB funds and the second, for US$119 million, was granted via the Clean Technology Fund (a funding window of the Climate Investment Funds – CIF) as implementing body.
This second phase of the solar complex project covers development of two new power plants with a combined capacity of about 350 MW and total annual production estimated at 1,100 GWh on average. The project is part of Morocco’s solar energy programme (the “NOOR Programme”), which is designed to develop at least 2000 MW of solar capacity by 2020.
The goal is to ensure a secure supply of energy for the population and the productive sectors. Morocco is dependent on imports to cover 95% of its primary energy needs. Between 2001 and 2012, the country’s electricity consumption rose 7.2% on average.
Primary energy demand is projected to triple and electricity demand to quadruple in Morocco between now and about 2030. Energy supply is therefore given priority in Morocco’s new 2010-2030 energy strategy, which focuses in particular on diversification of sources and use of renewables. The share of renewables in electricity generation is set to reach 42% by 2020.
What role do governments play in implementing these projects and what role should private sector initiative play?
More and more African governments are encouraging the private sector to become involved in helping to implement a comprehensive energy infrastructure development policy. This cooperation generally takes place within the framework of public-private partnerships (PPPs).
There is no generally agreed legal definition of the term “public-private partnership”. It is used to describe a wide variety of arrangements involving cooperation between the public and the private sectors. But it is important to distinguish between PPPs and privatisation. Under a PPP, the public sector retains responsibility for providing a public service, whereas privatisation effectively transfers responsibility to the private-sector partner.
Public-private partnerships are financially advantageous. They make it possible to raise private sector financing to make up for any shortfall in public or donor funding. But PPPs also offer other benefits. The partners share the long-term risks, fostering more rational use of the resources involved. Another benefit is the application of performance penalties if requirements are not met when the property is transferred at the end of the project period. This gives the private-sector partner an incentive to properly maintain and manage the property with which it is entrusted.
Are French and/or European countries particularly involved in the process?
A number of French companies such as VINCI Energies have been quick to grasp the importance of supporting African customers, based on a long-term African strategy. But there is considerable scope for further development, since French companies have the advantage of sharing a language with the countries of French-speaking Africa, which represent a market of nearly 300 million people. Companies should shift their focus from risks to opportunities. Contrary to what many companies think, the market is solvent since a lot of Africans are using costly and outdated energy solutions. Beyond the market, there is the issue of consumption philosophy. Companies need to adapt to different local consumption patterns. To give just one example, we have seen how prepaid meters and mobile money have revolutionised the system used to pay electricity bills.
How does electrification fit into a broader managed development policy in Africa?
The African equation is not easy to solve. With the exception of South Africa, the continent currently emits a very low level of greenhouse gases (less than 3.8% of total global emissions) yet at the same time it is highly vulnerable to climate change. To achieve economic take-off, Africa needs to introduce an ambitious energy policy. There can be no agricultural, industrial or technological development without energy. Access to electricity is a prerequisite for overcoming poverty in Africa and enabling the continent to improve its health and education infrastructure.
How can Africa avoid the massive consumption of fossil energy that has been a feature of industrialisation in China and India?
There are several initiatives that African countries can take to increase their clean energy portfolio while reducing poverty. One is to use prepaid meters to improve access to electricity. The meters, which encourage efficient use of electricity and facilitate payment collection, have already been introduced in a number of countries such as Benin. Other initiatives include providing government guarantees to banks that offer loans to companies wishing to invest in the production of clean, renewable energies; eliminating import duties and production levies on renewable energy; increasing the availability of funding for renewables, such as microcredit programmes to enable the poor to purchase solar panels and solar lanterns; and ensuring worldwide availability of green climate funding for clean energy projects that reduce fuel poverty in Africa.
18/04/2017
