Throughout most countries of Eastern Africa and the Great Lakes Region, the economical development is feeling the negative impact of electricity shortages and power-cuts.
In order to significantly improve the overall economical efficiency and provide manufacturing enterprises with a stable and sustainable investment surrounding, it is crucial to be able to supply factories and businesses with sufficient electricity.
In countries like Kenya, where drought and low water levels in rivers and dams have reduced the output of hydropower plants drastically, sometimes even forcing the closing down of entire hydropower stations due to lack of rainfall, it becomes increasingly clear that dependence on a few major hydropower plants as main energy source is not a good way to ensure stable electricity supply, and is certainly not sufficient to further economical development or grow a manufacturing sector.
For Ethiopa, further development of huge hydropower plants may in fact be more adequate, as Ethiopia’s water resources are more likely to allow for the construction and operation of many more hydropower stations.
East African countries such as Kenya, Uganda, Burundi and Tanzania on the other are starting to diversify their energy supply sector, by implementing new generation techniques and using other resources. Local resources are sometimes available in abundance, however the technology and the means of taking better advantage of these resources are often not given.
East Africa comes with plenty of resources and opportunities to take advantage of clean and eco-friendly geothermal energy generation. Geothermal energy possesses many advantages over traditional energy generation.
Another option that is currently being discussed is the employment of smaller hydropower plants. These are easier to spread out, faster to build and set-up and need less initial investments. At the same time these mini hydropower plants create a certain redundancy.
Each country has natural advantages for different forms of energy generation. Due to the discovery of the recent oil fields in Uganda, it is anticipated that a lot of energy will be generated from oil and gas resources throughout Uganda, and then exported into neighboring countries. Ethiopia is focusing on hydropower technology due to its wast water resources, while Kenya is planning to implement several main geothermal plants throughout the next years.
Another interesting trend that is currently taking place in Kenya, is the admittance of a second power transmission and distribution companies to diversify from the sole monopolies and encourage private investments in the energy sector, as well as reducing the cost of electricity by creating a more competitive business surrounding.
A large number of energy related investment projects are currently being planned and implemented throughout East Africa and the Grate Lakes Region. We’ve gathered some of current projects in Ethiopia, Uganda and Kenya for your overview:
China’s Sinohydro and GCCG have closed several agreements with the Ethiopian Electric Power Authority for the construction of two new hydropower dams for more than 2.000 MW, worth around US$ 2.70 billion.
With this move the total power aggregation of Ethiopia mounts to over 5,000 MW.
Due to the newest discovery of large oil reservers, Uganda is having a particularly ambitious outlook on investments in energy projects. Some of these projects include:
- Heritage Oil from the UK is forecasting oil production starting from 2010.
- Large oil refineries are in the planning phase. The newly discovered oil fields in Uganda are estimated to have reserves of more than 2 billion barrels.
- Two new hydropower plants, one in Bujagali with a capacity of 250 MW and Karuma Falls with 700 MW are expected to go operational by the end of 2010.
Kenya is currently restructuring its energy sector by admitting new players to invest in major energy projects, both regarding generation and also electricity distribution, and has been scheduling the investment of US$ 8 billion to generate another 2.000 MW before 2013/2014.
Diversifying into geothermal energy, clean coal, wind turbines and mini-hydropower plants, Kenya is currently full of opportunity for constructors and investors in the energy sector. Geothermal power generation is highly cost-effective in the Rift area of Kenya. KenGen is planning to boost geothermal power generation by another 600 MW by 2017, thus being able to cover more than 25% of Kenya’s electricity needs by using geothermal power, and thereby also reducing dependency on imported oil. Currently a multitude of new projects in the energy sector are presenting interesting opportunities to investors and construction companies. Some of these projects are:
- Chinese Sinohydro Corporation Ltd. is building a US$ 65 million hydropower plant in Sondu Miriu
- Several fuel-powered plants throughout Kenya are planned by Kenya Electricity Generating Company (KenGen)
- A new geothermal power plant in Kipevu that is expected to go operational with 120MW by end of 2010
- Sangoro plant is expected to inject an additional 21.2 MW by 2011
- Lake Turkana Wind Power, planned operational with 300 MW before end of 2012
- KenGen is outsourcing generation of 140 MW of emergency thermal power
- The Mombasa-Eldoret oil pipeline will be extend past Eldoret to reach Uganda by end 2010, and double it capacity as to better enable Kenya to benefit from the newly discovered oil reserves in Uganda.
- Essar Group of India is currently about to upgrade the Mombasa refinery by injecting new technology and investments of more than US$ 400 million
- Kenya is planning to construct a large number of mini-hydropower plants in rural areas to better ensure redundancy of electricity supply throughout the country
Also in Tanzania, where the electricity demand is projected to rise drastically during the next few years, several main projects are currently in planing phase. Adequate energy supply and a stable electricity grid is a crucial factor in building up a local manufacturing industry and the first step in direction of industrial development.
While the solar energy is still a very costly investment, we’re probably going to see a lot more investments also from Chinese solar panel producers and solar energy solution providers throughout Africa. We reported about Chinese solar energy investments in Zimbabwe recently, and we sure to see increasing developments and Chinese involvement also in the solar energy sector during the next few years.