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African Business 2020 edition

  • Text
  • Agenda
  • Business
  • Invest
  • Union
  • Industry
  • Sustainable
  • Development
  • Regions
  • Trends
  • Sectors
  • Afcfta
  • Trade
  • Investment
  • Africa
  • Global
  • Continent
  • Projects
  • Economic
  • Infrastructure
  • Countries
A unique guide to business and investment in Africa. Global Africa Network is proud to launch this inaugural edition of African Business 2020 at a time of energetic planning for a prosperous future for the continent. The African Union’s Agenda 2063 is much more than a document about a hoped-for future, it contains concrete goals and deliverables. The Programme for Infrastructure Development in Africa (PIDA) and the development finance institution, the African Development Bank (AfDB) are already rolling out valuable projects that are changing the reality on the ground in vital areas of the African economy. Perhaps the most significant event of recent times is the signing by African leaders of the African Continental Free Trade Area agreement (AfCFTA) which will bring together all 55 member states of the African Union and cover a market of more than 1.2-billion people. African Business 2020 has articles on all of these recent trends, plus overviews of the key economic sectors and regional and country profiles. In 2019 Ethiopian Prime Minister Abiy Ahmed received the Nobel Peace Prize for peace-making efforts in his region. The economic dividends of peace are beginning to be felt. In 2020 South African President Cyril Ramaphosa assumed the mantle of AU Chairperson. He brings to the role considerable experience in conflict management, constitution-writing and seeking consensus. Global Africa Network is a proudly African company which has been producing region-specific business and investment guides since 2004, including South African Business and Nigerian Business, in addition to its online investment promotion platform www.globalafricanetwork.com

OVERVIEW Energy

OVERVIEW Energy Africa’s development depends on a power revolution. At a World Economic Forum on Africa, former United Nations Under-Secretary-General Kandeh Kolleh Yumkella, said, “Without access to affordable, reliable, sustainable energy, Africa cannot really take advantage of the Fourth Industrial Revolution.” The Sierra Leonean was also the chief executive officer of the Sustainable Energy for All Initiative, which aims for faster action towards the Sustainable Development Goal which calls for universal access to sustainable energy by 2030. Yumkella urged African leaders to do in energy what was successfully done in the mobile telephony sector – deregulate, privatise and incentivise. Africa had installed capacity of 96GW in 2015 and 600-million of its citizens do not have access to electricity. Sub-Saharan Africa’s Sector Insight Commodity traders are looking for opportunities in power. electrification rate is 32% (African Development Bank, AfDB). Although all infrastructure sectors need funding, the energy sector is where Africa has the most catching up to do. In response to AFRICAN BUSINESS 2020 46

OVERVIEW this imperative, the AfDB will invest -billion in the energy sector in the period 2016-2021. Diversification is an important goal for countries in the power sector, both to improve security of supply and to reduce the carbon footprint. Many nations are dependent on hydropower and that cannot always be relied upon. Finding the right mix is key. While South Africa has not excluded the possibility of building new nuclear power stations, no new allocations have been made in the most recent Integrated Resource Plan. Two nuclear reactors in Cape Town supply 6% of South Africa’s current grid capacity. Kenya has decided that the first of four new nuclear power plants should begin construction in 2024 and Nigeria has also included nuclear in its plans. Oil-exporting Nigeria has a Transmission Rehabilitation and Expansion Programme which aims to address the fact that its citizens spent about -billion every year on generators. South Africa’s enormously successful Renewable Energy Power Producer Procurement Programme (REIPPPP) encouraged foreign investors and local companies to bid for projects and started delivering power in record time. Between November 2011 and July 2016, commitments to the value of -billion had been received to invest in solar, wind or hydro projects. Egypt plans to source 20% of its electricity from renewables by 2022 and 42% by 2035 in terms of its 2035 Integrated Sustainable Energy Strategy. The plan outlines a system with 2% hydropower, 14% wind and 25% solar, most of which will be delivered by the private sector. Special Economic Zones are a favoured means of the delivery of infrastructure: having a concentration of industry in one place allows for economies of scale. A new business park in Ghana is to be powered solely by renewable energy. Siemens will produce a microgrid at Takoradi. Gas is proving popular as a source for power plants. Italian company Ansaldo Energia has more than 16 000MW in various parts of Africa and offices in six countries. Two peaking-power plants have been developed in South Africa and projects are underway in the Republic of Congo and Tunisia. A gas-fired power plant built by the Temane Energy Consortium will provide 400MW to Electricidade de Moçambique at Temane. The TEC, comprising Globeleq and eleQtra, has delivered gas-fired power projects in Cameroon, Ghana, Ivory Coast and Tanzania. Regional cooperation is vital for functioning power grids. The various regional economic communities such as ECOWAS and SADC are key. A transmission line between the Democratic Republic of Congo (DRC) and Zambia is one of the projects being pursued by the Southern African Power Pool. Renewable energy In at least six African countries, hydropower is responsible for 90% of electricity production. Ethiopia is Africa’s biggest producer, at 3 822MW. The controversial Grand Ethiopian Renaissance Dam project will add a further 6 450MW, making it the largest single project on the continent, but there are serious disputes about who has what rights on the Nile River. Other countries almost wholly dependent on hydropower are the DRC, Namibia, Sudan, Togo and Zambia. Projects are underway in Angola, Ivory Coast and Sudan. The much-delayed Grand Inga project could be a game-changer if it ever comes to fruition. Inga3, a portion of the bigger plan to dam part of the Congo River, is estimated to cost .9-billion and will greatly assist mines in the Copper Belt. The greater project could produce as much as 50 000MW. The Global Wind Energy Council estimates that wind could supply 18GW to the SADC grid by 2030. That amounts to a third of the existing power pool in the region. The fact that such estimates are published is evidence of the ambitions of the promoters of renewable energy. A giant wind project at Lake Turkana in Kenya will supply 310MW from 365 turbines on 40 000ha. Africa has a plentiful supply of every kind of resource that could conceivably produce power. Japanese company Toshiba believes there is potential for geothermal power generation. It has established a plant in Kenya and signed agreements with Ethiopia, 47 AFRICAN BUSINESS 2020

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