News

Source: The Independent

Of the 1.2 billion people who live in Africa, it’s estimated that more than 650 million have no access to energy, relying instead on fossil fuels like diesel for electricity generation and harmful cooking fuels like wood, charcoal, and kerosene.

This sets Africa back on meeting energy access goals and diminishes the continent’s economic growth by two to four percent every year. We have much to learn from developing countries across Asia that are making significant progress, with many on track to reach universal energy access by 2030.

India, with a 1.34 billion population, will reach universal access by the early 2020s. We believe Africa presents a compelling energy investment case for our long-standing Indian trade partners, for many reasons.

Developing economies across Africa are in a unique position to leapfrog more developed nations by investing in cleaner, environmentally friendlier sources of power at a lower cost – key factors contributing to improved use of renewable energy power across the continent. Countries like Morocco, Tanzania, Mozambique, Kenya, Mauritius, South Africa, Uganda and Ghana have taken initiatives in the development of renewable and clean energy projects, particularly solar and gas to power.

With the current low cost of gas compared to several years ago (through the shale gas revolution in the USA), gas power plants have increasingly become more competitive compared to clean coal technologies and are an affordable solution. Although renewable energy resources hold great promise and can provide energy while overcoming Africa’s infrastructural challenges, this form of energy would still need to be stored. That is why lithium ion batteries could be a game changer for Africa.

There’ve been massive investments in the field of battery storage research and development by leading global companies like Samsung, Tesla, and Total over the past five years. As the costs of Li-Fe battery storage falls, coupled with already low cost of solar photovoltaic modules, the future of the electricity market could be solar photovoltaic plants.

South Africa alone holds almost 80% of the world’s known reserves of manganese (producing 5.3 million MT per annum) – an important component of the Li-Fe battery. A growing market will justify the creation of a local battery production plant, but serious investment is first needed for a large-scale facility.

Mozambique has the 9th largest gas reserves in the world while Tanzania shares the same gas-rich
Rovuma Basin. One of the region’s largest project financing transactions (Coral LNG) closed recently in
Mozambique with a deal value in excess of USD30 billion, with two more similar deals imminent.

Many other countries in Africa like Nigeria, Ghana, Angola, and South Sudan have impressive oil and gas reserves. The spin-off effects from this will be huge for local economies with the possibilities of cracker plants, fertiliser and petrochemical plants, pipelines, gas-to-power plants, and LNG export terminals posing sizeable opportunities for Indian corporates.

The political and economic climate across Africa has steadily improved over the last two decades, and
despite the frustratingly long lead times for infrastructure projects, on a risk-return adjusted basis, Africa boasts better returns than developed markets. With the right investment in the right infrastructure, and with the right partners, Africa is well poised for solid socio-economic growth and sustainable development.