Sub-Saharan Africa (SSA) could need up to $830 billion over the next 25 years to plug its power infrastructural deficit, global management consultancy, McKinsey, has said. According to McKinsey in its Brighter Africa report, inadequate electricity supply slows GDP growth by 1 – 3 percentage points annually, and leaves 600 million Africans without electricity. Only seven countries in the region have achieved 50 percent electrification, while other countries have an average of 20 percent grid access rate.
“Interest in the topic is growing due to governments’ increased openness to private sector participation, large gas discoveries, and initiatives such as the United Nation’s Sustainable Energy for All, and the United States’ Power Africa”, Adam Kendall, leader of McKinsey’s Electric Power and Natural Gas practice in Africa said. According to McKinsey, it will take 25 years for SSA to reach an 80 percent electrification rate. By then, SSA will consume as much electricity as both India and Latin America combined.
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“We expect electricity demand to quadruple by 2040, creating a nearly 1,600 terawatt-per-hour opportunity”, Kendall said. This could lead to more than 70 percent of the population connected to the grid. Amidst the dearth in power supply, potentials in power generation capacity abound. Available generating capacity within the 25 years could be up to 10 terawatts, if renewables such as solar, hydro and wind are included.
Already, up to 40 percent of electricity generated could come from gas. However, to succeed in unleashing the energy potential of SSA, McKinsey believes that “governments will have to take the initiative in ensuring the financial viability of the power sector, and that electricity tariffs reflect the true cost, and that costs are transparent”, said McKinsey in the report. It is also important to create an environment that will attract investment, as public-private cooperation will be key, the report said. Governments will also need to demonstrate political will, the report concludes
