Africa needs a ‘new deal’ for the energy sector was the message delivered from Eskom board member Zethembe Khoza at the opening session of African Utility Week in Cape Town on Tuesday.
Khoza, who spoke on behalf of acting CEO of Eskom Brian Molefe, delivered a presentation centred on the New Deal changes that Franklin D. Roosevelt introduced in his first 100 days in office as Governor of New York.
The New Deal
Molefe said the New Deal fostered hope in the American people, and these changes can be replicated in Africa by restoring faith back into the communities who are currently living without access to the electricity grid.
Africa is both a resource and labour abundant country however with 60% of the African population without electricity, it is imperative for “us to commit to working together towards a ‘new deal’,” Molefe said.
Investing in Africa
According to Eskom, the International Energy Agency’s Africa Energy Outlook estimates that Africa needs an additional $450 billion investment into the sector to reduce power outages by half and achieve universal electricity access in urban areas.
The South African Department of Energy launched the Renewable Energy Independent Power Purchase Procurement Programme which has already attracted ZAR150 billion in foreign direct investment and added 1,500MW of renewable power to the grid since its launch in 2011.
Molefe said: “The $450 billion investment required is only 3% of the total global energy investment. The New Deal on African energy must incorporate ways of further co-operation in the region in order to attract a larger percentage of the global energy investment and enable multiple countries to benefit from it.”
Working to achieve the same objective
Eskom’s Molefe emphasised the importance of collaboration, which drives Africa to seek optimal solutions.
“One such success is the Southern African Power Pool that celebrated its 20 year anniversary this year. Through this vehicle we have seen the facilitation of socio-economic co-operation and integration among 15 southern African states, and seen the benefits to approximately 260 million Africans,” he said.
South Africa bridging the gap
Eskom currently has a R580 billion (R280 billion that remains to 2018) capacity expansion programme, the largest capital expenditure in South Africa and Africa.
“While there is a 3,000MW gap in South Africa, this gap can be closed. There are cross-border opportunities in terms of gas and renewables and additional renewable IPP opportunities in South Africa that we are exploring,” said Molefe.
He added: “We are really excited that the DRC will house one of the largest hydro power projects in the world. The Grand Inga Hydro Power Project at 40,000MW of hydro-electricity enables us to think more broadly of the potential benefits of such projects to the continent.”
Additional power supply opportunities such as Hydro have been identified in Ethiopia, Guinea and Mozambique, among others, according to Eskom.
“Our neighbour, Mozambique, also becomes one of the hubs of the east coast with the recent offshore discoveries of natural gas”, Molefe said.
He continued: “The natural gas on the east coast is expected to increase annual regional output to 75 billion cubic metre (bcm). We have the domestic markets for natural gas and the potential to make significant economic gains from its export.”
Khoza concluded the presentation with a pledge from Brian Molefe “for a ‘new deal’ for the African people. One that moves our people out of poverty through electrification, restores our collective dignity and improves our prosperity.”
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