The utility sector in Africa is at a critical juncture, facing an array of challenges amidst a
backdrop of global disruptions. Across Africa, utility companies grapple with financial woes,
teetering on the brink of collapse.
High operational costs juxtaposed with inadequate tariff structures render profitability elusive.
The COVID-19 pandemic and disruptions in global supply chains, exacerbated by the conflict in
Ukraine, have intensified these financial burdens.
Electricity Deficit:
Africa faces a significant shortage of electricity, leading to frequent blackouts in many areas.
This gap between supply and demand persists despite increasing population and economic
growth, as the pace of electricity generation struggles to keep up.
Broken supply chains:
Global disruptions have severely hampered the ability of African utilities to access essential
equipment and materials. Supply chain delays and shortages, catalyzed by the pandemic and
geopolitical unrest, further compound the sector’s woes.
Unaffordable Power Purchase Contracts:
The burden of exorbitant tariffs in power purchase agreements weighs heavily on utilities,
constraining revenue generation and exacerbating financial strains.
High cost of capital:
Accessing capital for infrastructure development and maintenance presents a formidable
challenge for utility companies. Soaring capital costs impede vital investments in infrastructure
upgrades and expansion efforts.
Low Public Investment
Insufficient government investment in the energy sector exacerbates the crisis, hindering
essential infrastructure development and maintenance initiatives.
Opportunities for Growth and Development
Africa’s vast renewable energy potential, including solar, wind, and hydroelectric power, offers a
promising avenue for reducing reliance on costly and environmentally detrimental fossil fuels.
Key Players
Eskom is South Africa’s state-owned electricity provider, responsible for generating,
transmitting, and distributing electricity to industrial, mining, commercial, agricultural, and
residential customers in South Africa and to neighboring countries.
KenGen is Kenya’s leading electric power generation company, responsible for generating about
70% of the electricity consumed in the country.
ECG is the main electricity distribution company in Ghana, responsible for distributing
electricity to homes and businesses across the country.
NERC is the regulatory body for the electricity sector in Nigeria, responsible for regulating the
generation, transmission, distribution, and sale of electricity.
Uganda Electricity Transmission Company Limited (UETCL) is responsible for bulk purchase
and transmission of electricity from the generating companies to the distribution companies and
large industrial consumers in Uganda.
Ethiopian Electric Power Corporation (EEPCo) is responsible for generating, transmitting, and
distributing electricity in Ethiopia.
Tanzania Electric Supply Company Limited – TANESCO is Tanzania’s public electric supply
company, responsible for generating, transmitting, and distributing electricity in the country.
ZESCO(Zambia) – The Zambia Electricity Supply Corporation (ZESCO) is responsible for
generating, transmitting, and distributing electricity in Zambia.
Sonelgaz (Algeria) – Sonelgaz is the state-owned electricity and gas utility company in Algeria,
responsible for generating, transmitting, and distributing electricity to consumers across the
country.
National Water and Electricity Company (NAWEC) (The Gambia) – NAWEC is responsible for
the generation, transmission, and distribution of electricity in The Gambia, as well as the
provision of water services.
Infrastructure Development
Strategic investments in upgrading and expanding energy infrastructure, encompassing
transmission and distribution networks and the construction of new power plants, are imperative
to enhance energy accessibility and reliability.
Public-Private Partnerships
Collaborative ventures between governments and private entities can unlock much-needed
investment and expertise, catalyzing infrastructure modernization and expansion endeavors.
Energy Efficiency Measures
Adopting energy-efficient technologies and practices holds the key to curbing energy waste and
mitigating costs. Embracing innovations such as smart grid technologies can drive sustainable
energy consumption patterns.
Regulatory Framework Improvements
Reforming regulatory frameworks is paramount to fostering an environment conducive to
investment and market stability. Policies that promote competition and incentivize energy sector
investment are instrumental in driving growth and resilience.
Conclusion
Africa’s utility sector faces tough challenges, but it also holds vast opportunities for growth.
Through partnerships, renewable energy, and strong regulations, Africa can overcome its energy
crisis.
Through concerted efforts, the continent can realize its vision of equitable access to clean,
reliable energy, thereby fueling sustainable economic development and prosperity.
for growth and resilience.
AFRICAN SUSTAINABILITY CONCERT 2024
