Power to grow sub-Saharan Africa’s economy

While achieving a buoyant economic climate is a feat in itself, the real challenge lies in staying afloat. To sustain the economic optimism that Africa is now enjoying, it is imperative that governments, particularly in sub-Saharan Africa, address the critical issue of chronic power shortage, which hampers the development of various industries in the region.

Energize coverage June 2014
Africa has remained resilient in the face of the economic headwind of the previous years. This was the good news delivered by the African Development Bank (AfDB), which recently presented the African Economic Outlook 2014 in its annual meeting in Kigali, Rwanda. Africa’s economic growth, the continent-wide document suggested, was expected to reach 4,8% in 2014 and 5,7% in 2015, on its way to hitting the same numbers as it had before the 2009 economic downturn. The economic expansion, the report indicated, would be driven by domestic demand, infrastructure and a heightened continental trade in manufactured goods. Moreover, the report revealed that direct and portfolio foreign investments were projected to reach US$80-billion in 2014, and financial flows towards the continent were predicted to surpass $200-billion – four times its year 2000 level.

The above-mentioned growth projections bode well for the entire continent, and AfDB suggested that in order to sustain the momentum and achieve economic sustainability and a development breakthrough, Africa would need to participate more actively in the global production of goods and services. In this way, added AfDB, the continent could boost its economic diversification, domestic resource mobilisation and investments in critical infrastructure.

Is there enough power, though?

Since the industrial revolution, power has always been identified as a key factor in encouraging economic growth, and that still holds true today. In the light of Africa’s ambition of achieving economic sustainability, diversity and viability, the continent needs to ramp up its production and industrial activities, and to achieve that, it needs the staying power. The question, however, is “does the continent have enough energy supply to power its way to the future?”

Though the International Monetary Fund (IMF) concurred with AfDB, it sounded a caveat when it said that the observed power supply deficiency in the continent may rein in economic growth. It has been documented that some 25 countries in sub-Saharan Africa were facing an energy crisis, evidenced by rolling blackouts, and that some 30 countries in region had suffered acute energy crises in recent years. While the Key World Energy Statistics by the International Energy Agency reported that electricity generation in Africa rose from 1,8% in 1973 to 3,1% in 2011, the continent still remained to have the smallest share globally, despite being the second most populous continent.

Nigeria, for instance, a country that has three times the population of the South Africa, only has one-tenth of the power generation capacity of the latter, and enterprises are already complaining about regular power interruptions. In Tanzania, a month-long blackout was experienced in Zanzibar when the underwater cable lines supplying power to the archipelago failed, following a surge in demand. As a result, residents were paying $10 daily to run diesel powered domestic generators, while businesses requiring refrigeration or heating had to suspend operations until the power was restored. In Kenya, it has been observed that only 25% of the population had access to electricity, and that only 5% of the country’s rural areas had access to the grid. The occasional recession of the water level in some of Angola’s rivers affects power production, disturbing other services, like water distribution. Luanda’s water supply firm, EPAL, cited that various areas in Luanda experienced water supply shortage, owing to challenges related to power distribution.

Touted to be Africa’s biggest copper producer, the Democratic Republic of Congo (DRC) advised mining companies in the country to suspend any project expansion which would require more power, due to a power shortage that, the government said, would take years to resolve. While the country would reportedly institute an electricity-rationing program, mining companies were encouraged to postpone signing new contracts, in an effort to slowdown the growth of electricity demand in the country. Even the region’s largest economy, South Africa, was not exempt from power-related woes. In fact, in a recent communiqué, Eskom, supplier of 95% of the country’s electricity, warned residents of a rolling blackout due to load-shedding, which it said, was to protect the electricity grid from total failure. Eskom said it had begun scaling down maintenance to prepare for winter, but in the face of a rising demand, particularly during peak hours, it appealed to the public to reduce power consumption by at least 10%. If the power demand does not decline, then, the company said, load shedding would be the last resort to avoid a total power shutdown.

With Africa’s population expected to double to approximately 1.9 billion people by 2050, the World Bank said that a much higher investment would be needed to at least double Africa’s current levels of energy access by 2030. In fact, it is estimated that the sub-Saharan region would require more than $300-billion in investments to achieve total electrification by 2030.

Boosting energy

As a response to this pressing need, countries in the region are mapping out strategies to supply more energy through alternative solutions. In the DRC, for instance, the Grand Inga hydroelectric project, expected to boost the country’s power supply by 44 000 MW, is said to be gaining traction, while in Zimbabwe upgrades to the Kariba South hydropower and the Hwange thermal coal plants, forecast to add about 300 MW and 600 MW, respectively, are reportedly in the pipeline. South Africa is also reported to be cooking up the building of two new coal-fired power stations at Kusile and Medupi, expected to individually add approximately 4 800 MW of capacity.

The afore-mentioned initiatives are a testament to the tremendous attention that these countries are paying to their respective power generation challenges. Governments and private entities alike have been putting years’ worth of research and investigation, and billions worth of investment, to draw up the myriad adverse economic and social effects of electricity supply deficiency. A crucial element in the equation, however, is time, and in a world governed by more stringent business practices, faster turnarounds and heightened interdependency, the essence of time transcends chronos. Today, time may mean the difference between profit and loss, between political unrest and stability, and between economic growth and uncertainty.

The price of power: Focus on Southern Africa

Southern Africa was observed to have absorbed the blow of the power crisis in recent years. Blackouts brought cities to a standstill and spelt terminal financial losses to small- and medium-size companies. One of the region’s flagship industries, mining, was also unfavorably affected, prompting mining companies to halt expansion plans and repress local power usage. When Eskom deemed to cut down its electricity export to support its power demand at home, the electricity supply in Botswana, Namibia, Mozambique, Lesotho, and Swaziland, countries that import power from South Africa, was severely affected.

The foregoing, however, was not unexpected. In 1998, the government of South Africa apparently acknowledged the necessity of investing in electricity infrastructure amidst the threat of a power crisis looming large. It deemed, therefore, to privatise Eskom to inject new capital, thus encouraging a ramp up on its efficiency. The finalisation of any agreement, however, was reported to have taken longer than expected, and by 2008, the utility found itself unable to support the then-existing power demand.

Other governments in the region were said to have admitted to underestimating the trajectory of power requirements. In 2008, Botswana Power Corporation said that the energy forecast was skewed by the proliferation of new mines, which meant a steep spike in power demand, not only in Botswana, but also in other countries, such as Zambia.

At present, solutions are underway – but they, naturally, will not come cheap. Economic reports indicated that, at the prevailing growth rate of the demand from industries and residents, the region would have to double its power generating capacity by 2025, at an approximate cost of $171-billion in South Africa alone. Of that amount, $45-billion would supposedly have been needed before 2013.

In order to sustain this projection, the governments have identified potential sources of funds, such as approved power rate hikes and foreign investment. Yet, power hikes could stir alarm and protest from the citizens and trade unions, and could prompt industrial entities, like mining corporations, to cut down on operations, putting jobs and production at risk. Foreign investment agreements, on the other hand, could take time to materialise, and the planning, designing, installation and commissioning of alternative power generation projects may entail years, if not decades.

Bridging the power gap now

Unstable electricity production and regular power interruptions bring about a multitude of negative impacts to any country’s economy, business and citizens. In today’s world, power has become a fundamental element for any economy to function, as every sector of the modern society, be it domestic, commercial or industrial, is heavily dependent on electricity. Nowadays, a power interruption affecting critical facilities, such as hospitals, airports, telecommunications towers, data centers, mining facilities and oil & gas installations, has the potential to put an entire country, region or city to a standstill, and in light of globalisation, the consequences could transcend national or regional borders.

Hiring interim power generation plants to bridge the gap between the demand and the supply of electricity yields many advantages, particularly when there is a foreseeable delay in the fruition of permanent power generation facilities or when the temporary power is immediately needed. It was clear in the above-mentioned examples that countries in sub-Saharan Africa are looking to mitigate the observed deficiency in power supply by upgrading existing facilities, soliciting foreign investment to build new power plants and harnessing the potential of alternative sources of energy, including geothermal, solar, hydro and nuclear. While the aforementioned initiatives have recognised and acknowledged merits and potential, they may require further research, planning, designing and legislation, and additional physical facilities to be operational; and this takes time.

When time is of essence, rental power companies, like Altaaqa Global CAT Rental Power, are capable of providing solutions as needed, when needed. Utility companies in the region, can hire temporary power plants in times when demand outpaces the supply, when the electrical grid is unstable or when power distribution networks are unavailable, like in the rural areas. This will allow them to bridge the supply deficit without waiting for another day. Hiring power generators can prove to be a viable solution to power supply inefficiency, bridging the power gap while the permanent power solution is still in progress.

Powering the way to the future

The world welcomes the positive outlook of Africa’s economy. The continent that was once regarded as a tailender in terms of development, is now making an aggressive move towards economic stability and viability. While achieving a buoyant economic climate is a feat in itself, the real challenge lies in staying afloat. To sustain the economic optimism that Africa is now enjoying, it is imperative that the governments, particularly in sub-Saharan Africa, address the critical issue of chronic power shortage, which could hamper the development of various industries in the countries. The effort that the region’s governments are applying to address this predicament is commendable, but there exist other entities which can help them to further alleviate the situation. Rented power addresses the issues of urgency, cost-efficiency, reliability, energy-efficiency and environmental safety. In recognition of the indispensable role of electricity in today’s modern society, it is advisable that utility companies provide for a contingent power solution in cases of power interruption that may lead to operational delays and, ultimately, negative social, economic and financial consequences.

END

* The foregoing article was published in the June 2014 issue of Energize (EE Publishers, South Africa). To read more: http://bit.ly/1pTKEgj *

Energize June 2014 cover
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Altaaqa Global apre uffici nell’Africa orientale

Altaaqa Global CAT Rental Power, il fornitore globale di soluzioni di alimentazione elettrica provvisoria con sede a Dubai, Emirati Arabi Uniti, ha aperto recentemente una filiale a Nairobi, Kenia. Il nuovo ufficio servirà diversi paesi nell’Africa orientale.

Peter den Boogert, Gerente Generale di Altaaqa Global, ha detto, “Le nostre attività nell’Africa orientale sono fiorenti e l’economia della regione si dimostra prospera negli ultimi anni. Questo, però, traduce in un aumento della domanda di energia. L’obiettivo della nostra società è rispondere appena possibile quando i nostri clienti richiedano le nostre soluzioni. Il nostro nuovo ufficio ci permetterà di raggiungere loro più velocemente di prima. Siamo consapevoli che la nostra industria è guidata da esigenze di emergenza e da scadenze strette. Nello stesso tempo, però, l’attrezzatura che si utilizza in questo settore richiede un tempo considerevole per acquistare. Insieme alla flotta della nostra consociata in Arabia Saudita, Altaaqa Global ha circa 1.400 MW di potenza prontamente disponible, e questo ci permette di implementare rapidamente e, quindi, soddisfare i nostri clienti.”

Steven Meyrick, Rappresentante al Consiglio di Altaaqa Global, ha aggiunto, “Questa espansione strategica fa parte della nostra visione di essere il leader dell’industria ed il fornitore di soluzioni di alimentazione elettrica provvisoria più preferito entro il 2020. Durante la nostra espansione geografica, continueremo ad investire intensamente in risorse umane, a migliorare i nostri processi e ad espandere e diversificare la nostra flotta di elettrogeni CAT. Ora, abbiamo la capacità di fornire elettrogeni a vari tipi di combustibile, tra cui gas naturale di città, gas di petrolio liquefatto (GPL), gas naturale compresso (GNC), gas naturale liquefatto (GNL), gas bruciato in torcia, gasolio, dual-fuel (70% gas e 30% gasolio) e, molto presto, combustibile pesante.

Altaaqa Global adotterà, inoltre, dei programmi ambientali e sociali nell’Africa orientale. Meyrick ha aggiunto, “Come parte del nostro impegno di aiutare le comunità locali nell’Africa orientale ed, eventualmente, in tutta la regione subsahariana, stiamo adottando iniziative di risponsabilità sociale (CSR) rivolte ad alleviare i problemi sociali delle nostre immediate vicinanze.”

“Le prospettive economiche dell’Africa orientale, particolarmente nell’ambito dell’energia e dell’ingegneria, sono promettenti,” ha detto Majid Zahid, Responsabile dei Clienti Strategici. “Siamo lieti di aprire il nostro nuovo ufficio che ci permetterà di fornire impianti provvisori di dimensioni variabili e di ultime tecnologie. Siamo determinati a servire diversi settori, tra cui il settorio del petroleo e del gas, dell’energia elettrica, petrochimico, minerario, manifatturiero industriale e marittimo. Grazie alla nostra filiale locale nell’Africa orientale, siamo in grado di fornire ai nostri clienti un servizio dedicato e personalizzato. Nell’industria dell’alimentazione provvisoria, tutti i requisiti sono considerati come unici, e con la nostra conoscenza locale e competenza globale, saremo capaci di fornire centrali elettriche secondo le prescrizioni dei nostri clienti.”

Le prospettive economiche dell’Africa orientale continuano ad essere incoraggianti, e la regione si sta gradualmente manifestando come un importante partner economico per diversi paesi di tutto il mondo. Gli analisti di mercato attribuiscono la crescita dell’economia della regione a diversi fattori, tra cui lo sviluppo delle infrastrutture di grandi dimensioni, le riforme economiche e la scoperta di nuove fonti di energia e dei risorsi naturali. Il Kenia, tra altri paesi africani, sta emergendo come uno dei centri finanziari e commerciali nella regione, con un costante crescita economica dal 5% al 7% di anno in anno. La Tanzania, la Somalia, e l’Uganda sono inoltre previsti a raggiungere la stabilità economica, dopo la scoperta del petrolio e del gas nei loro territori. L’Etiopia e il Ruanda sono anche previsti a mostrare un notevole sviluppo, grazie all’espansione delle attività agricole ed ad un notevole record di riforme politiche ed economiche, rispettivamente.

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 Su Altaaqa Global

Altaaqa Global, una società controllata dal Gruppo Zahid (Zahid Group), è stata scelta da Caterpillar Inc. per fornire soluzioni di alimentazione elettrica provvisoria da multi-megawatt chiavi in mano al livello mondiale. La società possiede, mobilita, installa e gestisce efficaci centrali elettriche independenti temporanee presso gli stabilimenti dei clienti, particolarmente nei mercati emergenti, tra cui l’Africa subsahariana, l’Asia centrale, il subcontinente indiano, l’America Latina, il Sud-Est asiatico, il Medio Oriente ed il Nordafrica. Altaaqa Global, che offre attrezzature energetiche a noleggio a diversi tipi di combustibile, come gasolio, gas naturale e dual fuel (70% gas e 30% gasolio), è ben posizionato a provvedere ed implementare rapidamente centrali elettriche temporanee che forniscono elettricità in qualsisasi momento e luogo quando sia necessaria.

http://www.altaaqaglobal.com/press-media/press-releases

 

Sul Gruppo Zahid (Zahid Group)

Il Gruppo Zahid (Zahid Group) è composto da una vasta gamma di società che offrono soluzioni globali focalizzate sui clienti in diverse industrie emergenti. Alcune di queste industrie sono i settori edile, minerario, petrolifero e del gas, agricolo, energetico, idrico, turistico ed alberghiero. Il gruppo opera, inoltre, nell’ambito dei settori di manipolazione del materiale, dei materiali da costruzione, del trasporto e della logistica, e di sviluppo immobiliare.

http://www.zahid.com/

 

PER ULTERIORI INFORMAZIONI:

Robert Bagatsing

Altaaqa Global

Tel: +971 56 1749505

rbagatsing@altaaqaglobal.com

 

PER ACQUISIRE UNA COPIA:

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Altaaqa Global Opens East Africa Office

The new Nairobi office will serve as a hub for Altaaqa Global’s sales and operations in the East Africa region

Dubai-based Altaaqa Global CAT Rental Power, a global provider of temporary power solutions, has recently opened a branch in Nairobi, Kenya to serve the East Africa territory.

Peter den Boogert, General Manager of Altaaqa Global, said, “The business activities in the East Africa region are flourishing and the economy has been thriving throughout recent years, resulting in an increased demand for power. At Altaaqa Global, our objective is to be on the ground as quickly as possible when customers require our energy solutions, and our new branch will enable us to reach this region faster than before. We realize that our industry is driven by emergency needs and hard deadlines, but uses equipment that requires substantial lead times to acquire. With the combined fleet of our sister company in Saudi Arabia, Altaaqa Global has approximately 1,400 MW of rental power readily available so that we can focus our efforts on rapid deployment and customer satisfaction.”

 

Steven Meyrick, Board Representative of Altaaqa Global, commented, “This strategic expansion is in line with our vision to be the leading and the most preferred temporary power solutions provider before year 2020. During our geographic expansion, we will continue to heavily invest in human resources, further improve our business processes, and expand and diversify our fleet of CAT power generators. We now have the capability to provide power plants running on various fuel, such as piped natural gas (PNG), liquefied petroleum gas (LPG), compressed natural gas (CNG), liquefied natural gas (LNG), flare gas, diesel, dual-fuel (70% gas and 30% diesel), and, very soon, heavy fuel oil (HFO).”

 

Altaaqa Global will also provide environmental and social programs in East Africa. Meyrick added, “As part of our commitment to help local communities in East Africa and, eventually, in the entire Sub-Saharan region, we are actively embracing corporate social responsibility initiatives that will help alleviate the social needs of our immediate environs.”

 

“East Africa has a promising economic outlook within the energy and engineering sectors,” said Majid Zahid, Strategic Accounts Director of Altaaqa Global. “We are delighted to open our new office to provide interim power plants ranging in size and with the latest power generation technologies. We are determined to serve various industries, such as oil & gas, petrochemicals, mining, electric power utilities, industrial manufacturing and maritime. Through our office in East Africa, Altaaqa Global will be able to provide our clients with uncompromising personalized service. In the energy rental industry, all requirements are treated as individual and unique, and we will be able to deliver the exact rental power station to all of our enquiries using our local knowledge and global expertise.”

 

East Africa has experienced encouraging economic growth in recent years, and is gradually being regarded as an important supplier to different markets around the world. Market analysts attribute the notable growth of the region to several factors, including large-scale infrastructure development, economic reforms and new discovery of energy and natural resources. Kenya, among other African countries, is expected to become a vital regional financial and business hub, with a consistent 5% to 7% economic improvement year-on-year. Tanzania, Somalia, and Uganda are also predicted to make inroads into economic stability, following the discovery of oil and gas in their territories. Additionally, Ethiopia and Rwanda are projected to show remarkable development, owing to an expansion in agricultural activities and a strong reform record, respectively.

 

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About Altaaqa Global

Altaaqa Global, a subsidiary of Zahid Group, has been selected by Caterpillar Inc. to deliver multi-megawatt turnkey temporary power solutions worldwide. The company owns, mobilizes, installs, and operates efficient temporary independent power plants (IPP’s) at customer sites, focusing on the emerging markets of Sub-Sahara Africa, Central Asia, the Indian Subcontinent, Latin America, South East Asia, the Middle East, and North Africa. Offering power rental equipment that will operate with different types of fuel such as diesel, natural gas, or dual-fuel, Altaaqa Global is positioned to rapidly deploy and provide temporary power plant solutions, delivering electricity whenever and wherever it may be needed.

http://www.altaaqaglobal.com/press-media/press-releases

 

 

About Zahid Group

Zahid Group represents a diverse range of companies, offering comprehensive, customer-centric solutions in a number of thriving industries. Some of those include construction; mining; oil & gas; agriculture; power, electricity & water generation; material handling; building materials; transportation & logistics; real estate development; travel & tourism; waste management & recycling; and hospitality.

http://www.zahid.com/

 

 

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Robert Bagatsing

Altaaqa Global

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READER REQUESTS

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Dubai, United Arab Emirates