African Review February 2017
Only 7 of 48 sub-Saharan countries have electrification rates above 50 percent, with the remainder averaging just 20 percent notes EY, Power Transaction and Trends, Q 2m 2015. For example, in Kenya, although 73 percent of the population live within one kilometre of a transformer, only 18 percent are connected to the grid reports, Kenya’s Electrification Authority, October 2016. Even those with access suffer high prices for an insufficient and unreliable supply, reports management consulting company McKinsey, Powering Africa 2015. Currently, the region’s total generating capacity is around 80 GW the same as the UK’s.
Across Africa, there are ongoing plans to develop new gas power stations to reduce the gap between supply and demand for electricity. For example, South Africa and Nigeria each plan at least four gas power plants. Ghana and Kenya are also planning gas powered stations says Greg Stonesfield International Corporate Finance Partner at King & Wood Mallesons LLP.
Appreciation of the rate of population increase now and in the foreseeable future is the main driving force spurring governments to confront their country’s energy deficit. In the past year, Africa’s population increased by 30 million. By 2050 Africa’s total population will have doubled to 2.4 billion, according to the UN.
PwC’s Africa Power and Utilities Sector Survey forecasts that installed capacity will rise to around 380 GW by 2040 but this is insufficient to meet demand and would leave around 530 million rural dwellers without power.
Even with determined efforts, closing Africa’s energy gap is a huge challenge, for as recent research by McKinsey shows, it takes an average of 25 years to get from 20 per cent electrification rates to 90 percent .