What does the future look like?
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It is not all doom and gloom however, as the private sector begins to participate in what was, until recently, an industry run by the public sector – and arguably poorly so. There are, at the time of writing, just under 130 Independent power projects peppered across 18 countries. These projects account for roughly 13% of the continent total generating capacity.
So it would appear that better times are ahead (provided the legacy installations are maintained in working order.
The trouble with the energy generation is the prohibitive cost of implementation. Especially with a larger emphasis being placed on renewable energy these days. For example, to construct a plant it is likely to cost you no less than $1 million (USD) per Megawatt for wind and $7 million per MW for Solar. Not to mention the cost of distribution to the hundreds of non-electrified towns and villages. By comparison, thermal plants can be constructed for around $700,000 per MW (at the expense of the environment). Another debate to be had (at a later stage), is whether, and to what extent, the inter-continental “peer pressure” to be “carbon-free” works to our benefit or detriment.
The other issue that does not work in our favour is the large distances that need to be covered in order to electrify the entire continent. Many countries are vast, but relatively sparsely populated. A centralized grid does not work here. The establishment of smaller plants in closer proximity to bigger towns and villages would work better. There is also an argument, which is raised here, for the private sector to take charge of some of this type of infrastructure development and maintenance. This would arguably give rise to better management of the resources. It would also provide entrepreneurially-minded people the opportunity to render the sector more profitable, reliable and efficient.
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- Identify suitable businesses in countries on the African continent in which to invest
- Conduct market research and risk analysis
- Find suitable local partners OR set up your company/investment vehicle/Operation
- Ensure your venture is sustainable and future-proof
- Improve your bottom-line
- Rate your venture
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