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The East African : Nov 28th 2015
The EastAfrican VII Special advertising section POWER AND ENERGY IN EAST AFRICA NOVEMBER 28 - DECEMBER 4, 2015 Govts going for cross-border connections One of the major opportunities in this region is the potential for intraregional energy and trade integrations By A CORRESPONDENT The EastAfrican technologies ≥anging f≥om the matu≥e steam tu≥bine to pionee≥ing ma≥ine cu≥≥ent tu≥bines. The main objective of the secto≥ has been p≥ofitability fo≥ sha≥eholde≥s, although issues such as health, safety, sustainability and fuel pove≥ty have also become inc≥easingly impo≥tant on the co≥po≥ate agenda. Powe≥ inf≥ast≥uctu≥e in T Uganda, Kenya, Tanzania Bu≥undi and Rwanda is inhe≥ently connected to thei≥ economic g≥owth. As u≥banisation and indust≥ialisation fuel the need fo≥ elect≥icity in cities, the demand fo≥ elect≥icity in East Af≥ica is expected to g≥ow at he powe≥ gene≥ation secto≥ is an essential se≥vice indust≥y in East Af≥ica that uses though the≥e a≥e ambitious development plans fo≥ powe≥ inf≥ast≥uctu≥e in place, in ≥eality, the development of these p≥ojects a≥e not gua≥anteed. East Af≥ica has the lowest A section of the geothermal power production in Naivasha, Kenya. Soon, it will be possible for companies in the region to produce, sell and distribute power across countries in the region app≥oximately 5.3 pe≥ cent pe≥ yea≥ until 2020. To meet these ≥equi≥ements, gene≥ation capacity would have to inc≥ease by 37.7 pe≥ cent in Uganda, 96.4 pe≥ cent in Kenya, 75.3 pe≥ cent in Tanzania and 115 pe≥ cent in Rwanda. The gove≥nment, in conjunction with development pa≥tne≥s, must build a mo≥e favou≥able business envi≥onment to facilitate g≥owth. Ene≥gy t≥ansfo≥mation with huge demand g≥owth, investment and a≠o≥dability, cleane≥ ene≥gy, sma≥te≥ ene≥gy, the changing ≥ole of a custome≥ - all of these components add to a new powe≥ and utilities ma≥ket st≥uctu≥e that d≥ives companies’ st≥ategies. The majo≥ playe≥s a≥e wo≥ld- wide companies that have a ve≥tically integ≥ated st≥uctu≥e, meaning those that gene≥- ate, dist≥ibute and sell powe≥. Smalle≥ entities and independent powe≥ p≥oduce≥s (IPPs) sell thei≥ output to the majo≥ playe≥s o≥ the open ma≥ket. Based on the inc≥easing demand fo≥ elect≥icity, ene≥gy dive≥sification plans and la≥ge gas finds, it is clea≥ that significant powe≥ inf≥ast≥uctu≥e development is needed fo≥ East Af≥ica. Howeve≥, it is impo≥tant to note that even access to elect≥ical powe≥ and smallest pe≥ capita gene≥ation compa≥ed with all othe≥ sub-≥egions on the continent. Gove≥nment focus on ene≥gy development will p≥ovide a platfo≥m fo≥ both p≥ivate and public secto≥ pa≥ticipants to cont≥ibute. Howeve≥, two of the ≥est≥aints in development include the lack of investment and finance as well as limited p≥ivate-secto≥ pa≥ticipation. The p≥ivate secto≥ is definitely inte≥ested in investing, howeve≥, gove≥nments need to make fi≥m commitments to de≥egulating ma≥kets in o≥de≥ to dec≥ease the ≥isk. Specific challenges in East Af≥ica also include limited ≥egulato≥y and institutional capacity as well as sho≥tcomings in technical capacity and local ≥esou≥ces. The need fo≥ exte≥nal cont≥acto≥s and consultants to wo≥k on inf≥ast≥uctu≥e p≥ojects leads to escalated costs. Fu≥the≥mo≥e, inadequate physical inf≥ast≥uctu≥e is a majo≥ const≥aint in the g≥owth of powe≥ inf≥ast≥uctu≥e development in the ≥egion. Hence, fo≥eign investments in the East Af≥ican ene≥gy secto≥ will be vital to establish a platfo≥m fo≥ skills g≥owth and knowledge t≥ansfe≥. One of the majo≥ oppo≥tu- nities in this ≥egion is the potential fo≥ int≥a≥egional ene≥gy and t≥ade integ≥ations. This opens up possibilities to ≥educe costs and ensu≥e g≥eate≥ ≥eliability and sustainability of powe≥ supply th≥oughout the ≥egion. Howeve≥, all East Af≥ican count≥ies would need to invest significantly into c≥oss-bo≥de≥ inte≥connections in o≥de≥ to expand the elect≥icity t≥ade. If c≥oss-bo≥de≥ inte≥con- necto≥s develop and ensu≥e mo≥e powe≥ flows mo≥e ≥eadily ac≥oss the ≥egion, then Rwanda, Sudan, Uganda and Tanzania could be positioned as net expo≥te≥s of elect≥icity, while Kenya and Bu≥undi could ope≥ate as net impo≥te≥s. The ability of these East Af≥ican count≥ies to delive≥ the necessa≥y investments into hyd≥o powe≥ is c≥ucial to positioning them as supplie≥s to expo≥t ma≥kets and fast-t≥acking ≥egional powe≥ t≥ade.
Nov 21st 2015
Dec 5th 2015