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African governments urged to shift policy in the energy sector
African governments have been called upon to consider shifting policy in the energy sector by investing in industrialisation and providing subsidies on electricity for people in rural areas who are extremely poor.
African Management Services Company (AMSCO) Chairperson Ali Mufuruki said governments should consider making a shift in policy for energy by providing subsidies for poor people to allow them to have access to energy.
Mufuruki proposed that government should consider powering their communities using renewable energy as it is an environmentally safe and easier to manage for people in remote areas as it is also readily available.
This was disclosed during a Wednesday panel discussion on the topic on green energy and innovation at the 2016 African Development Bank (AfDB) Annual Meetings at Mulungushi International Conference Centre in Lusaka, Zambia.
“A lot of money is being wasted in budgets on rural electrification, which uses extensive infrastructure just to light up one village when those villages can use renewable energy as an alternative,” he said.
Mufuruki said some of the constraints impeding the progress of providing power to communities in Africa is the control of power utility companies by politicians.
He said most African leaders have a tendency to use power utility firms for their political ambition.
Mufuruki called on governments look at investing in green energy as it can lead to greater productivity on the African continent.
He said the move will help many countries move forward at a faster rate.
Carbon Africa Project Manager Carsten Jung said some of the constraints hindering the progress of powering Africa include the lack of bankable projects.
For his part, Jung called for the increase in bankable projects if Africa is to achieve its goals in the energy sector.
He lamented that many projects lack funding, as most of the funds get used up in the initial stages.
“Many projects in Africa fail because the implementation process takes too long. Some projects take more than eight years to be implemented and these cause a strain on the resources,” he said.
Jung called for efficiency in the provision of projects and also the need for projects to take off quickly.
He further called on African countries to take centre stage in managing the affairs surrounding energy and to have a sense of ownership in energy-related matter and projects.
“Policy drives investment,” he said, matter-of-factly.
He also said that there were a lot of gaps in the energy sector, which include lack of technological advancement, lack of resources and lack of industrialisation for energy use.
Consolidated Infrastructure Group Chief Investment Officer Diron Moore said renewable energy has the potential to provide power to Africa because it is cheaper.
Moore advised that African countries should look at the option of renewable energy and to open up pathways for investors to consider exploring the avenue.
He said some African countries are endowed with natural resources, such as coal. Investing in renewable energy was good, he said, because it is reliable and has reliable cash flows.
The gaps that have been identified in the energy sector in Africa should be used as an opportunity for stakeholders to invest in the sector, Moore continued.
Meanwhile, Michael Gera, Managing Partner of Energy Access Venture, lamented the mindset of people in rural areas who do not see the need for electricity.
“Some of these people live right under the grid and they do not care about being connected,” he said.