HomeMagazine ArticleIn depth: Electricity in Africa: is the real problem payment?

In depth: Electricity in Africa: is the real problem payment?

In August 2014, US President Barack Obama announced a renewed commitment to Power Africa. This private sector-led initiative aims at doubling electricity access in subSaharan Africa, where an estimated 600 million people are without reliable access to power. He raised the bar, pledging to add 30 000MW of energy (triple last year’s goal of 10 000MW) and create new connections for at least 60 million households and businesses. He also pledged $300 million in grant assistance per year to expand Power Africa’s reach across the continent. meter

Installing prepaid meters is a big part of the solution, and will play a huge role in protecting electricity suppliers’ revenues, enabling them to provide sustainable power for the long term. These meters are already having an impact in a number of countries including Kenya, Nigeria, Uganda and Zambia, and the potential for growth is huge. In Nigeria alone, the prepaid electricity market is worth an estimated NGN150bn ($918 million), with 50% of the market yet to receive prepaid meters.

We are finally starting to see some real progress in lighting up the continent! But very soon, infrastructure won’t be the biggest obstacle – payment will be. While prepaid meters go halfway to solving the problem, making payment points widely available for people to purchase prepaid electricity vouchers is just as important. Unfortunately, it’s proving difficult in areas where retail is primarily informal, and where household incomes are so low that people can often only afford to purchase a couple of dollars’ worth of electricity at a time. In Zimbabwe for example, rolling out prepaid meters has been quite successful, with over 400 000 installed since…..

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