ACCESS TO SUSTAINABLE ENERGY

 

More than three-quarters of all Africans – over 500 million people – do not have access to electricity. Where they do, it is often expensive and unreliable, making it difficult to establish businesses especially in value-adding agriculture and manufacturing.

The Africa Commission’s initiative will improve access to energy for enterprises, institutions and households in local communities that are not connected to the national grid. This will be done by promoting small and medium scale production, distribution and end-use of sustainable energy

Major contraint for doing business

Close to 50 percent of African companies identify electricity as a major constraint for doing business, and irregular supply of electricity accounts for average losses of 6 percent of total sales. For enterprises in the informal economy the losses are as high as 20 percent.

For the vast majority outside the national energy system, the absence of electricity and other modern forms of energy has profound implications for productivity, employment, communication, health-care and education.

Untapped energy sources

In rural areas, access to electricity is close to zero. But Africa has abundant untapped renewable energy sources, such as hydro, residues from agriculture and forestry, solar and wind. These can become the backbone of a reliable, affordable and climate friendly
energy system. Most small businesses and households in rural Africa are willing and able to pay for energy services if these were available and closer to international standards.

There are, thus, market opportunities for small and medium sized enterprises both as energy producers and energy consumers, be it in agriculture, agro-industries, tourism or commerce.

Technologies exist

Technologies for affordable, sustainable and small-scale energy production, distribution and end-use are well-known and have proven to be reliable and profitable.

If these technologies are made available they could lead to more stable energy prices, enhanced job creation and income generation, increased competitiveness, and improved conditions for entrepreneurship, including women entrepreneurs. Also in households, women stand to benefit as modern energy substitute traditional energy sources.

Renewable energy and energy-efficient technologies are climate-friendly and an important part of a future energy system.

A huge potential

The Africa Commission’s initiative on energy will address some of the key constraints for private sector based energy production in local communities.

These include lack of knowledge and skills to develop investment proposals, poor access to risk capital and loans, poorly developed markets, and a sometimes rigid regulatory environment.

There is, in other words, an urgent need and a huge potential for improving access to clean and sustainable energy for small businesses and communities in rural Africa.