- Electricity on agenda in presidential contests across Africa
- Uganda, Ghana and Zambia vote this year amid power cuts
More than a quarter of the African nations south of the Sahara Desert have presidential elections this year, and renewable energy developers could stand to benefit.
The region has the world’s biggest concentration of people -- more than 620 million according to the International Energy Agency-- living without reliable electricity supplies. From Uganda to Zambia and Ghana, politicians are using the issue to lure votes, turning to clean energy as the quickest way to power rural areas.
“The power issue is really going to drive elections,” said NJ Ayuk, managing partner at Centurion LLP, a law firm based in Malabo, Equatorial Guinea. “It will be a key campaign issue. Africa is moving in a direction of industrialization. People are beginning to see power as a right.”
Investors see an opportunity for African nations to leapfrog beyond traditional coal-fired power plants where electricity is distributed by sprawling grids. They’re proposing smaller-scale renewable plants closer to the consumers, bypassing a generation of technology much as mobile phones have spread across Africa quicker than the fixed-line alternative.
The trend is making Africa one of the leading emerging markets for renewables, drawing $25 billion in investment in the past six years, according data compiled by Bloomberg New Energy Finance. Investment rose 68 percent to $5.2 billion last year alone.
“There has been significant growth in investment in renewables in Africa since 2011,” said Nico Tyabji, an analyst at the research arm of Bloomberg LP in London. “The majority has been in South Africa. There are some question marks over whether project pipelines in other countries will actually build out.”
With 48 countries south of the Sahara, 14 are having presidential elections this year, and in many of those places, electricity is high on the agenda.
In first contest in Uganda on Feb. 18, President Yoweri Museveni boasted that he extended the power grid to cover 15 percent of households and that hydropower and along with geothermal will expand the proportion further in his next term.
Zambia’s President Edgar Lungu reversed a sharp increase in power prices last month when he announced his reelection bid and is looking for ways to make up for supplies lost due to drought reducing flows through the Kariba hydropower dam on the Zambezi River. Ghana’s President John Dramani Mahama faces voters in November promising to build new power plants that halt the blackouts roiling the capital Accra. The West African country’s minister of power resigned on Dec. 31 in protest of the prolonged electricity crisis.
“When elections are coming up, the ruling party sometimes tries to accelerate development of power projects in the pipeline so they’re up and running before the elections,” said Anthony Marsh, chief executive officer of Frontier Markets Fund Managers Ltd. in London. The firm manages the Emerging Africa Infrastructure Fund Ltd., which has invested in 12 power projects in Sub-Saharan Africa.
Across the continent, power usage is a fraction of the norm in America, with a per-capita consumption that’s on average less than what’s needed by a 50-watt lightbulb, the IEA estimates. The entire installed generation capacity south of the Sahara is 90 gigawatts, about the same as Britain’s network, according to the IEA. There is often less power available due to disrepair.
It’s not certain that power politics will change many of the results at the polls, said Alex Vines, head of the Africa Program at the Chatham House research group in London.
“Chad, Gabon, Congo-Brazzaville, Equatorial Guinea and Uganda are run by strongmen and so it will not tilt the results in any dramatic way,” Vines said. “But it is a massive issue in the presidential elections in Ghana and Zambia and the municipal elections in South Africa. The energy debate will be really quite central.”
Elections aren’t always good news for power developers, since officials can hold up paperwork while the campaign. Marsh at Frontier Markets said the financial close of a gas-fired project in Nigeria was delayed by almost a year before President Muhammadu Buhari took office in 2015. Elections “can cause a delay if you need to have a document signed off,” Marsh said.
At Amsterdam-based Gigawatt Global Cooperatief UA, President Yosef Abramowitz is planning to install 1 gigawatt of solar energy in the continent, beginning with Burundi, Liberia and Benin.
“Leaders will have to decide if they want to be re-elected, having literally delivered power to their people. Or do they want to use their position for personal gain while their people continue to suffer,” Abramowitz said. “These are real battles that are gripping many African countries.”