“Power Africa” promotes American private sector investments in African electricity by garnering over $9 billion in initial commitments to fund the development of over 8,000 megawatts of new electricity in sub-Saharan Africa.
Lack of access to affordable and reliable electricity prevents Africa’s economy from growing and stifles poverty alleviation. In sub-Saharan Africa, 589 million people – 68% of the population – do not have access to electricity, and roughly 30 African countries face endemic power shortages. According to the International Energy Agency, sub-Saharan Africa will require more than $300 billion of investments to achieve universal electricity access by 2030. African business leaders note that the lack of affordable and reliable power is one of the most significant constraints to growth. The absence of electricity constrains economic growth in sub-Saharan Africa by an estimated 2 – 5% each year. This in turn also stifles American companies’ efforts to do business with the over 1 billion strong African population.
“Power Africa” hinges on the passage of the “Electrify Africa Act of 2013,” introduced by the House Committee on Foreign Affairs last month. If passed, the Electrify Africa Act will strengthen the American government’s ability to promote and facilitate the development of energy resources in Africa.
China also sees Africa’s enormous potential to do business. Currently, China is the largest investor in African energy. China is directing nearly $2 billion to African energy projects. In India, affordable solar equipment from China is dominating the energy market.
Power generation from hydro, wind, solar and other renewable sources worldwide will exceed that from gas and be twice that from nuclear by 2016, the International Energy Agency stated in its second annual Medium-Term Renewable Energy Market Report. The Environmental Protection Agency defines “renewable energy” as resources that rely on fuel sources that restore themselves over short periods of time and do not diminish. Such fuel sources include the sun, wind, moving water, organic plant and waste material (eligible biomass), and the earth’s heat (geothermal).
The potential for renewable energy investment in Africa holds much promise for clean-energy companies, most of whom call the Silicon Valley home. One such company is Bridgelux, based in Livermore, California. It is a leading developer and manufacturer in the lighting industry. It produces low-cost, high performing, energy-efficient LED lights that last for years and are used in a variety of applications like street lights and commercial-retail lighting. Bridgelux recently formed a partnership with CG Global. With CG’s 30% market share in India’s street lighting, streetlights supplied by CG will soon provide a clean and green lighting solution, with 60% energy savings and increased visibility and safety. In addition to enhanced streetlight offerings, Bridgelux will enable CG’s entry into the premium and retail indoor lighting product segment and help Bridgelux gain even more access to the fast-growing Indian market. Success in India could also pave way for success in Africa.
The Santa Clara, California based company, MiaSolé, is a leading maker of solar panels that can be used as roof tiles that generate electricity as economically as gas-fired power plants. Like Bridgelux, it has recently announced an energy project in India – in one of the largest solar power plants in Rajasthan. The project is supported with $9 million U.S. Export-Import Bank financing. MiaSolé’s ability to scale solar technology at a price that is attractive for both solar developers and utilities positions the company as the leading supplier of high efficiency solar modules and solar solutions in India. This comes at a time when hundreds of millions faced a huge outage from the national grid last month. Coal India cannot meet energy demands and in lieu of buying expensive imported coal, India is looking towards alternative energy sources. Similar to sub-Saharan Africa, 700 million, or more than half of the Indian population, suffer unreliable connections to the national grid, or none at all. MiaSolé’s ultimate goal is to enable grid parity between solar energy and traditional energy sources.
Another clean-energy tech company is BrightSource Energy, based in Oakland, California. It is responsible for the world’s largest solar plant in California’s Mojave desert. According to the company’s website, it plans to partner with blue-chip development, finance and EPCs within each international market it enters. For example, BrightSource is currently partnered with Alstom in markets where they are strong like Southern and Northern Africa.
According to USAID, it will take a scale of investment of about $15 – $20 billion per year, every year through 2030, in order for sub-Saharan Africa to achieve universal energy access. The agency believes that the only way to achieve this goal is to use public funds to leverage private investment. Current USAID private-sector energy partners for powering Africa include:
· Washington, D.C. based Symbion-Power,
· Fairfield, Connecticut based General Electric,
· Nashville, Tennessee based Hecate Energy, LLC,
· Reno, Nevada’s Ormat.
– Maria Caluag
Sources: The White House , U.S. House Committee on Foreign Affairs , International Energy Agency , U.S. Environmental Protection Agency , Brudgelux , BrightSource Energy , MiaSole , The Economist , USAID