Community post

A Real World Challenge for STEEMIT

Electricity in Africa

In my introductory post, I mentioned that one of my real interests regarding cryptocurrencies is the ability to access and utilize the same to help address real world problems. See what you think about this.

Africa’s population is rapidly approaching 1,000,000,000—yes, 1 billion! And, that figure is expected to double by 2050. Right now, two-thirds of the population does not have access to electricity; Africa truly is the “dark continent”.

![](https://vgy.me/UZZ425.jpg)

Nature of the Challenge

Think about this for a minute. Ten years ago or so in Kenya, there were more cell phones on a per capita basis, than in any other country. Overnight, the Masaai, Samburu (just to name a couple of tribes) in the remotest parts of the country could communicate with family, friends and relatives who had moved to urban centers seeking employment and a better life. So, how did they re-charge the phones?

Imagine, if you will, all the schools in rural African communities that have no power; but, they have been donated laptops to give the students access to a broader world view.

Without electricity, the cell phone, the laptop, become just other useless, Western inventions that cannot be effectively utilized in the Third World. But, there have been and continue to be dramatic changes; changes that will help turn this around.

Impact

The absence of electricity stifles economic growth and development, has a dramatic adverse impact on the provision of adequate health and education, and condemns masses of people to lives of unending poverty. (Importantly, Sustainable Development Goal (SDG) number 1 is “eradicate extreme poverty and hunger.”) For the most part, the government-owned public utilities responsible for providing power are terribly inefficient, bloated, and corrupt entities that are simply unable to provide reliable, affordable power.

![](https://vgy.me/Jc9GEl.jpg) What to do?

Replies (76)

We hydropower geeks call Inga (which could supply as much as 45GW to Africa - that's more than South Africa's entire installed capacity) a hydropower engineer's wet dream. Just saying. It's been studied to death for over half a century, and every engineering firm with bravado wants a piece of the work that would result if the project was financed.

I've been involved in a number of initiatives around getting Inga going, including an international roundtable convened by the African Development Bank, and the key problem is bankability of the project in a country which is so unstable. To be bankable, an infrastructure project needs to have creditworthy offtakers (customers). The main customers for this project would be SNEL (DRC's utility) and other regional electric utilities, all of which are in precarious financial situations, so not considered creditworthy.

That now includes Eskom, although in the 1990s Eskom was much stronger financially.

It's unfortunately too difficult for financiers in the current financial world to structure a project which would supply multiple private sector clients (who couldn't possibly take 45GW anyway) who might possibly be creditworthy, and to provide the financial guarantees and supports to the utilities which could buy Inga-generated electricity, which would be REALLY cheap to generate, probably just a couple of US cents/kWh. That would determine the selling price to customers, who would pay the running costs plus a reasonable margin for the energy they would buy.

If you consider hydropower to cost at least $1m/MW, or$ 1bn/GW, installed to build (just for simple numbers - all in, and including the long transmission lines, the investment cost would be higher), you'd be looking at a minimum of $45bn for the project. That's beyond the capacity of the multilateral development banks to finance, the DRC doesn't have that money and can't raise it and the Southern African Power Pool, as a potential offtaker, runs on about$ 5m a year in revenues.

Electricity in Africa

Nature of the Challenge

Impact

Congratulations!!

To receive upvotes from me on all your posts, please consider delegating SP to me as per this post.

The problem is not lack of knowledge

The World Bank wants Africa poor.