Electric Power in Africa
Current estimates are that Africa needs $40 billion of new energy investments each year to begin to meet current demand. Looking at a picture of the world at night, it is no surprise that the African continent is mostly dark, with a majority of Africa’s 54 countries generating insufficient power to meet the most basic needs. For a comparison, Sub-Saharan Africa generates 91 megawatts per million people, while the United States generates 3,360 megawatts per million.
A lack of power has significant, often debilitating economic and social impacts. Communities suffer when they have insufficient energy for schools, health clinics, or hospitals. The private sector is unable to function and grow due to unreliable and expensive power. Governments are subject to political instability do to their inability to provide and expand access to electricity.
Utilizing Standard PPA to Speed Up Power Production
IGD has identified the lengthy negotiations around Power Purchase Agreements (PPAs) as a bottleneck in the process of developing independent power projects (IPPs) throughout Africa. The typical time required to develop a power project in most of Africa, from inception to commercial operation start up, can be 5-10 years, or roughly twice to three times as long as it takes in many other parts of the world. As a result, fewer projects are successful and those that are can be more expensive due to lengthy – and costly – delays.
IGD was honored to be named a founding partner of the Power Africa Initiative. IGD’s Access to Power working group was launched with the goal of creating a standardized, replicable power development approach that could dramatically shorten the time to commercial operation of new power facilities in Africa. By streamlining the process and adding a greater degree of predictability, this approach is expected to bring more power online in less time.
As a business-oriented nonprofit organization, IGD is uniquely qualified to consolidate support around the adoption of country-specific standardized PPAs designed to reduce transaction costs, speed up project development time, and – eventually – produce a greater number of bankable power projects in Africa.
> Download this handout to learn more about IGD’s work in increasing access to reliable power through the Access to Power working group.
> Download this handout to learn more about utilizing PPA to speed up power production.
> Download the “Understanding Power Purchase Agreements” Handbook
> Follow the IGD Blog to learn more about our works in the power sector.
Contact us to learn more about this initiative or to get in touch with one of our experts.