Hope and scepticism are both running high in the wake of a historic US$35-billion commitment by African leaders and a raft of multilateral development banks to deliver electricity to 300 million Africans within the next five years.
Attended by heads of state from more than half of Africa’s countries, along with representatives of the African Development Bank and the World Bank, the Mission 300 Energy Summit held in Dar es Salaam, Tanzania, last month concluded with a commitment to provide “the biggest burst of spending on electric-power generation in Africa’s history,” reports the New York Times.
The Islamic Development Bank, the Asia Infrastructure Investment Bank, the OPEC Fund, and l’Agence Française de Développement were also on hand, alongside 1,000 business leaders and other development partners, said the UN-supported Sustainable Energy for All (SEforAll), in a press release.
SEforALL, partnering with The Rockefeller Foundation and the Global Energy Alliance for People and Planet, will play a role in delivering Mission 300, helping to develop energy transition plans and “innovative financing instruments.”
Roughly half of the US$35 billion will go towards solar mini-grids, with the remainder used to extend traditional hydro- and fossil-powered grids.
African leaders and lenders are betting on distributed solar as costs plunge and installation becomes easier, Rockefeller Foundation President Rajiv Shah told the Times. He said a growing recognition of the link between poverty, energy access, and political instability is also driving the shift.
“It’s the tech and the pricing. That’s why this is finally happening now,” Shah said. “Almost 30 heads of state are here because they now see this is the quickest, least-cost way to create jobs and prevent the kind of instability they see growing in their countries.”
Critical to the success of Mission 300 will be regulatory reforms that level the playing field between private electricity providers and state-run utilities.
In what the Times describes as a “cautionary tale,” Colorado-based solar mini-grid developer Husk Power Systems recently departed Tanzania after years of trying to make a profit despite government insistence that it sell electricity at the same price as the heavily-subsidized public utility.
The departure of Husk was a cruel blow to Tanzanians who were delighted to secure electricity for the first time in their lives and happy to pay Husk’s own set price for reliable power.
Reliability is not the strong suit of Tanesco, the utility that ended Husk’s venture in Tanzania.
“Like all but four of Africa’s dozens of electric utility companies, Tanzania’s runs at a steep loss and lack of maintenance leads to frequent and lengthy power cuts,” writes the Times.
Signed at the Mission 300 summit, the Dar es Salaam Energy Declaration outlines the actions that all participants will take to implement regulatory reforms, writes SEforAll.
Twelve countries—Chad, Côte d’Ivoire, the Democratic Republic of Congo, Liberia, Madagascar, Malawi, Mauritania, Niger, Nigeria, Senegal, Tanzania, and Zambia—have agreed to submit a first set of National Energy Compacts, “which will serve as blueprints with country-specific targets and timelines for implementation of critical reforms,” SEforAll adds. Eighteen more are expected to follow suit over the coming months, writes the Times.
Still, providing electrification to 300 million people by 2030 means heavy lifting ahead, warned William Brent, Husk’s chief marketing officer.
“Husk is building one minigrid a day and that’s the fastest in the industry,” Brent told the Times. But “even if you added 10 more Husks, you’d still only get a fraction of the way there.”
