Demand for reliable electricity supply in Africa forces spending

The demand for electricity in Africa is growing rapidly. At the same time, political and social stability is increasingly making the continent an attractive investment destination.
New analysis from Frost & Sullivan predicts that there will be healthy growth in electricity demand of between 4% and 6% between now and 2020.
“The demand for reliable electricity to develop and industrialise African economies is forcing governments and the private sector to spend on electrification,” notes Frost & Sullivan energy industry manager Cornelis van der Waal. “This, coupled with increased awareness of the benefits derived from electrification and increased finance, is driving this industry.”
He says ongoing power sector reform programmes across Africa have opened up the power industry to private participation. The reforms have created an environment conducive for power producers to compete in power generation and/or distribution. At the same time, equipment suppliers will increasingly have to compete on service delivery for large-scale projects and an understanding of where growth will take place will assist with business planning.

Cape Town-based Van der Waal says strong growth is anticipated in all areas of the power and energy sector in Africa.” This will be paralleled by general infrastructure development.”

Although expanded funding for projects is available to African utilities, the private sector will have to develop, operate and own more power projects on the continent. This is bringing a host of regulatory and service challenges, but the long-term outlook is bright.
“Corruption and political involvement in African power projects has cast a cloud of doubt about future project success,” cautions Van der Waal. “However, sheer demand will result in increased project success.”