Powering Africa

Large parts of the African continent continue to face an acute shortage of energy. Hundreds of millions of people do not have any access to electricity. And the few that do enjoy access to the grid, are often not guaranteed continued power supply throughout the day. As governments struggle to boost power generation, they are increasingly being forced to make hard decisions and address numerous tradeoffs.

Most low-income countries are faced with a set of difficult choices. Should one simply say yes to short-term and adhoc measures (e.g introduction of diesel generators that require expensive fuel imports) when longer term solutions (building a power plant that can guarantee power for several decades) is not on the table?

Attracting investments, particularly from actors with proven expertise, is not easy, especially when they come with unpalatable conditions and restrictions. An illustrative example is a loan, which although may contain a concessional element, would nonetheless have to be repaid. Whether an investment worth several hundred million dollars or even a billion will pay off in the long-run is often difficult to ascertain with precision given the unpredictability associated with future demand, potential spillover effects in the economy and costs related to maintenance and expansion.

Consequently, thorough homework in the form of impact assessments and feasibility studies must be undertaken by impartial actors and institutions. But even when such studies are available, the decision to choose among a list of alternatives may not be easy, particularly when such alternatives do not differ much from one another.

A particularly vexing problem for many countries relates to the environmental impacts of their investment decisions. In recent years, such challenges have come to the forefront in regard to coal-powered power plants. Although supporters claim that coal is the “cleanest least costly option”, critics wonder why Africa should construct such projects when coal is being phased out in large parts of the world.

A proposal to build East Africa’s first coal-powered plant adjacent to the Lamu Archipelago in Kenya with a $2 billion Chinese loan is a good example in this context. While the Kenyan government claimed the project would strengthen energy security in addition to creating jobs and reducing poverty in the region, environmental activists and concerned citizens began a wave of protests citing the real threat of increased pollution, destruction of a Unesco world heritage site and a 700 percent increase of Kenya’s annual emissions of greenhouse gases.

Kenya’s National Environmental Tribunal has recently decided to halt the project citing environmental concerns and a failure to adequately consult the public. The activists, who are celebrating their hard-earned victory are demanding that their leaders should prioritise renewable sources of energy rather than coal-powered solutions.

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