How can we harness business to close the energy gap in Africa?

Power is routinely cited by large and small businesses as the most significant barrier to their success, adding huge costs to them and their customers. Poor infrastructure slows foreign direct investment and limits countries in their attempts to diversify their economies away from primary commodity export.
 
Unreliable or inaccessible power has a cost that goes beyond GDP figures and business growth, impacting on healthcare and education outcomes, which in turn have long-term implications for the future prosperity of individuals and societies.

The International Energy Agency estimates that more than 620 million people in sub-Saharan Africa live without electricity.  While 950 million people will gain access to electricity in Africa between 2014 and 2040, demographic expansion will mean that 75 per cent of the population will still be without power.

A step-change in investment into electricity generation, distribution and efficiency is needed over the next quarter-century to unlock the potential of Africa’s demographic boom.  This was the focus of a report published recently by Business Fights Poverty and the Initiative for Global Development (Click here to find out more and to download the report here)

Join our panel to discuss the following questions:

1. What is the real, day-to-day impact of Africa’s energy gap?  What are some practical examples of the impacts on the ground?

 

2. What are the opportunities for business to be part of the solution to closing the energy gap?

 

3. What building blocks need to be put in place by governments and other development partners to harness the potential contribution that business can make to closing this gap, and by doing so helping unlock the Continent’s potential?

 

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There are so many ways that the energy gap impacts life - and business - in Africa, that it's almost the wrong question to ask.  The better focus is on what development advancements could be made by increasing access to reliable, cost-effective power to Africans - or more a propos to this forum.  How will closing the energy gap reduce poverty...?

That sounds intriguing, Robert.  Where can we and others find out more?

Robert Laporte said:

Hello all, i am Robert Laporte, founder and CEO of Neutopia ecoSOLUTIONS inc, the world's first Social Impact Sustainable Community company. We have eliminated most obstacles to affordable energy for Africa and have created a most unique business model that has attracted unlimited investment for global change. We are now simply seeking project locations. Our system can identify business cases within 10 minutes for any GPS Coordinate on the planet. I look forward to collaboration via Business Fights Poverty as our page will be up in the near future and forums such as this will stimulate ideas and immediate action plans.

All our facilities have on-site generation capacity where there is a likelihood of power interruption, so we have not had any production impacts. There are of course costs associated with the capital outlay of buying on-site generators and operational expenditure to run them when there are power cuts.
 
Zahid Torres-Rahman said:

Interesting article, David.  Can you share any examples from your business?

David Grant said:

This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."

South Africa is also currently plagued by load shedding due to insufficient generation capability.

Thank you for sharing that example, Conall.

Conall O'Caoimh said:

Many of the factories we work with in East Africa are regularly out of power. That leaves them slower on meeting orders. As a result their overseas competition win the orders. Also, they cope with the lack of power by having a chunk of their capital tied up in generators that produce very expensive power. All making them less competitive.

One of the challenges I see for African countries in closing their energy gap is the momentum that needs to be maintained in terms of political drive and investment to keep the physical infrastructure being built continuously both in transmission and generation capacity. One response that is usually suggested is to complement that big centralised effort with decentralised energy projects e.g. solar but that also shows other challenges such as maintenance costs, scale, etc...what's your take on that?

First time user, and just cannot seem to figure out how to follow and participate in the discussion. Looks like every time a person says something u need to click on their reply and be redirected to their site. Is there not a single pane where we can follow and enjoy all conversations?

The broader economic impacts are stark though. A recent stat from the South African Department of Public Enterprises is that “Load shedding ... costs the economy anywhere between 20 billion rand to 80 billion rand (approximately 1.6 - 6.6 billion US$) per month”.



Zahid Torres-Rahman said:

Interesting article, David.  Can you share any examples from your business?

David Grant said:

This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."

South Africa is also currently plagued by load shedding due to insufficient generation capability.

David - that highlights one key issue - that smaller companies, who may not be able to afford on-site generation capacity, or for whom it represents a higher proportion of their costs, are potentially far more impact by the energy gap.

David Grant said:

All our facilities have on-site generation capacity where there is a likelihood of power interruption, so we have not had any production impacts. There are of course costs associated with the capital outlay of buying on-site generators and operational expenditure to run them when there are power cuts.
 
Zahid Torres-Rahman said:

Interesting article, David.  Can you share any examples from your business?

David Grant said:

This is a timely discussion! This is a newspaper excerpt from today - "Zambia has started rationing power supply to mines, an industry source said on Tuesday, as Africa’s second-biggest copper producer struggles to meet electricity demand."

South Africa is also currently plagued by load shedding due to insufficient generation capability.

Ok - let's move onto the second question:

Question 2: What are the opportunities for business to be part of the solution to closing the energy gap?



Zahid Torres-Rahman said:

Thanks for sharing that example, Rodger.  How do farmers overcome that - if they do, that is.  Or does it simply mean they lose their harvest all together?

Rodger Chali said:

Eastern Zambia cotton unable to be harvested due to lack of sufficient power to run the ginnery machinery.

They harvest by hand, but the project which would normally take two weeks to finish, might take 6 weeks and hence affect other projects. In short its question of watch and see. helpless scenario. 

Last Fri at a Virgin Unite event in London Claire Reid founder of Reel Gardening, SA, said that because she faced so many power outages (in J'berg) she had taken some of her production processes back to manual labour.

http://www.reelgardening.co.za


I agree here - another example from Mozambique draws on this, Speaking to women in Northern Mozambique who had gained access to electricity through our Energy & Environment Partnership programme, the biggest impact they had seen through increased access to energy was actually better access to communication. They saw a distinct difference between those that had electricity - and as a result made use of radios, tv, mobile phones - and those that didn't, in both their outlook and new ideas they brought in.


Christopher Camponovo said:

There are so many ways that the energy gap impacts life - and business - in Africa, that it's almost the wrong question to ask.  The better focus is on what development advancements could be made by increasing access to reliable, cost-effective power to Africans - or more a propos to this forum.  How will closing the energy gap reduce poverty...?

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