5 March 2010 – According to Obiageli Ezekwesili, vice president at the World Bank, the next developmental leap for Africa will be in the power sector. Just as new technology and legal reform transformed the African telecoms market, Ezekwesili believes that a similar transformation could make a difference to Africa’s power sector.
New technology and legal reforms in Africa’s telecoms market opened the way for a boom in affordable mobile phone service, said Obiageli Ezekwesili, vice president for Africa at the World Bank.
Speaking to Reuters, Ezekwesili said, "The next big thing that will happen on the continent is going to be massive investment of private capital into Africa’s energy sector."
The changes are being forced due to the critical power shortages facing Africa and stifling economies.
The South African energy shortage has forced the South African government to approach the World Bank for a R3.75 billion loan for the building of a coal-fired power station. This move has led to criticism from environmentalists due to the impact on climate change of coal-fired generation.
However, the urgent need for power has necessitated the need for such a project, although the government has also committed to a long term plan to investments in renewable energy sources.
"There is no viable alternative to safeguard South Africa’s energy security at this particular time," Ezekwesili said, adding that Eskom provides 95 % of the country’s power but also 45% of Africa’s needs.
Ezekwesili believe that the private sector investment could bring power to millions of people in the region through renewable sources, said Ezekwesili.
According to World Bank figures, only one in four people have access to electricity, and it is estimated that Africa needs to spend some $500 billion over the next two decades to meet power demand.
Countries such as Uganda, Cameroon, Mali, Rwanda, Kenya and Togo are teaming up with investors to expand their generation capacity, and the need for more power is a need that is regularly highlighted. According to President Yoweri Museveni of Uganada, the country wanted to increase energy capacity by more than double by exploiting both hydro and gas reserves.
However, the main obstacles to investment in the power sector are around red tape, lack of planning and lack of ‘bankable’ projects. It is in these spheres where the International Finance Corporation (IFC), the private lending arm of the World Bank, hopes to help by combining private capital and expertise.
Ezekwelisi believes that much of the change in Africa will come from the "neighborhood effect," in which successful change in one country influences others.
"The next generation of sector-specific reforms is in energy."