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Power and energy infrastructure critical to Africa’s economic success

Africa’s economic success is reliant on infrastructure development. The continent needs reliable electricity, water and roads to improve its trading capability and attract significant investment opportunities, says Linda Cele, new business development manager: power and energy, for consulting engineering firm, GIBB.

“From a strategic perspective, Africa is held back by its lack of infrastructure across the board, particularly its lack of electricity infrastructure. Electrical infrastructure development is pivotal to Africa’s development. Without it, water cannot be pumped to consumption points and tar cannot be processed for road infrastructure development. A robust electrical infrastructure will improve productivity, attract investors and open up greater opportunities for education and job creation.”

Some of GIBB’s recent projects in countries north of South Africa include electrical engineering services and civil and structural services for the Selebi-Phikwe Waterworks Project in Botswana; electrical infrastructure master planning and design for a project in Port Harcourt, Nigeria; and design and construction monitoring for various developments in Angola, Namibia and Botswana.

GIBB believes it is important to ensure completed installations can be operated and maintained after contractors have handed over. This provides skills transfer prospects for the local populace, as well as sustainable business opportunities for local businesses.

Cele says, “As much as we are on the same continent, people behave differently in different countries, which impacts on the solution you provide. The best way to understand the culture and behaviour of your customer is to partner with them. You will also gain deeper insight into the potential social impact of your intervention.”

“Most of our involvement to date has been in the Southern region of the continent and largely in countries where English is the predominant business language. We are cognisant that language can be a barrier to success in Africa, especially with regards to engineering where every challenge needs to be clearly understood in order to provide a solution that accurately deals with it.”

He says most English speaking countries in Africa lean toward British specification standards, which tend to be common in the engineering field. “This makes it relatively easy to understand and adhere to in terms of the work we produce for the various countries. Importantly, FDIC practices apply on the contractual side, which also makes it easier to adopt projects in these countries.”

Another reason that GIBB has conducted the majority of its business south of the Sahara until now relates to logistics and cost to business. “We need to consider what makes the most business sense for us, bearing in mind that we’re operating from the tip of Africa. Southern African Development Community (SADC) countries are relatively close, which keeps travel and logistics costs down. In addition, European countries have a fairly strong foothold in the northern part of Africa, which translates into high competition and high overheads for us,” Cele says.

He says real professional fees need to weighed-up against preliminary and general costs. “For example, a lack of proper road infrastructure might mean having to fly rather than drive, which pushes up preliminary and general costs. If you want to set up an office in a particular country there may be challenges such as a lack of electricity (and having to buy diesel); the need to import all office supplies and vehicles, and having to buy office space rather than rent.”

Importantly, when it comes to infrastructure development, revenues are largely generated for government institutions. This means guarantees for funds need to be backed by government in a particular country. “At the end of day it is government that will be the custodian of the infrastructure. Funders will only to release their funds after looking at the government and weighing up factors such as revenue generation and political stability against the project cost.

In this respect, GIBB has set up a division to assist African countries in structuring models that attract funders and benefit the country. “We have already recorded a number of success stories and foresee this as a constructive way of helping customers to structure a model that will benefit them and offer security to the funder,” Cele says.