It is no secret that since late 2006, Africa’s power shortages have terribly impacted the emerging continent both socially and economically. In 2007, the government of South Africa admitted that it was experiencing an “electricity emergency” and this is still very much the case in the majority of the continent today. In total, chronic power problems have influenced at least 30 countries and affected over 56 percent of all Africans in some portion of their daily lives.

Overall, there are two main issues that the continent of Africa continues to encounter in regard to their power deficits, with both being especially apparent in the regions of Southern and Sub- Saharan Africa. The first of these is the continuing lack of access to electricity that more remote rural regions of the continent have constantly faced. According to a recent World Bank Report, only 20 to 25 percent of the Sub- Saharan African population has access to electricity, with household access to electricity in urban areas approximately 71 percent, compared with only 12 percent in rural areas. This number is staggering when compared to other geographic regions that are similar in both economics and population, such as South Asia and Latin America. About 50 percent of the population of South Asia and more than 80 percent of the population of Latin America currently has access to electricity.

In addition to this general lack of electricity access that continues to threaten the development of Southern and Sub- Saharan Africa, recent events causing deficiencies in the current available installed capacity of the region have forced officials to initiate a variety of load shedding programs in areas that have in the past enjoyed a reliable source of power. These frequent power outages in urban and other well- developed areas also means enormous losses in sales, productivity, and jobs within the local industries and in some cases damaging their equipment too. According to the World Bank, ongoing power outages account for a six percent turnover loss on average within large industrial companies, and as much as a 16 percent loss for smaller scale enterprises unable to provide their own backup generation when the utility grid loses power.

Neither of these issues will entirely be resolved until additional capacity is added both to the current grid as well as in several critical isolated regions of the continent that still suffer from a complete lack of access to electricity. Africa’s generation capacity has remained stagnant since the 1980’s and is today by far insufficient for the needs of the developing continent. According to World Bank staff from the Africa Energy Department, this supply- demand balance will remain insecure for at least the next five years, up to 2015, until new base- load generation capacity comes online. Even once new base- load generation becomes operational, it could take almost a decade for the electricity within each affected country to reach rural regions which account for over two- thirds of the population and truly achieve universal access within the continent. A recent World Bank Report stated that if current trends continue, fewer than 40 percent of African countries will attain universal access to electricity by 2050.

The most common and often most effective response to both the immediate crisis of an emergency electricity shortage as well as the ongoing lack of access to electricity is to purchase short- term emergency power from an interim power provider. Unlike traditional power generation projects, this capacity can be installed and operational in a few weeks, providing the most rapid response to urgent shortages. Because of its often modular design, this emergency generation can also be installed in remote and rural locations that may not typically be considered urban enough for a grid connection or an installation of a permanent power project. According to the World Bank, this type of temporary power generation represents a significant proportion of the total installed capacity in many countries throughout Africa. Short- term emergency power installations account for 17 percent of the electricity supplied in West Africa as a whole.

In addition to power shortage issues that affect Africa as a whole, Southern and Sub- Saharan countries have been particularly suffering due to cuts in imported power from the South African state- owned electricity supplier, Eskom. Eskom has in years past provided up to 70 percent of the electricity for Southern and Sub- Saharan Africa. South Africa has historically been a dependable repository of inexpensive and reliable power, however in early 2007, Eskom began experiencing a lack of capacity in their electrical system. Soon after, the South African government initiated a program of rationing electricity. This led to an inability to meet the routine demands of industries and consumers, resulting in rolling blackouts within the country as well as decreasing the amount of power exported to neighboring countries.

One applicable example of the way that South Africa’s power exportation cuts have affected the rest of Southern and Sub- Saharan Africa is the nation of Botswana’s recent struggle with Eskom. According to the Botswana Power Corporation (BPC), local generation within the country has been far less than the Botswana demand for many years and the remaining need for electricity has often been satisfied through importation. The nation has traditionally imported the majority of its power from South Africa. In 2009 alone, South African electricity accounted for more than 72 percent of Botswana’s required power. Mr. Kgomotso Abi, Director of the Department of Mines, Ministry of Minerals, Energy and Water Rescores in Botswana recently stated that South Africa is phasing out its power exports to Botswana and the region faces severe load shedding. This phasing out process amounts to South Africa cutting their exportation of electricity to Botswana by 100MW in 2010, reducing the amount of power coming into the country regularly from 350MW to 250MW.

In August of 2009, as a response to this emergency power situation APR Energy (APR) and the Botswana Power Corporation (BPC) signed a contract for the supply of a 70MW/ 11kV power solution to be located just outside of Francistown, Botswana. The Francistown power project was designed and installed by APR Energy and continues to be operated during peak periods to ensure a reliable and secure supply of electricity to consumers as well as industrial customers within Botswana. Power from the Francistown facility is delivered from the plant to the regional primary power grid serving Botswana, known as the Southern African Power Pool. According to the BPC, the additional 70MW of power was requested to counteract “electricity shortages driven by demand growth and supply constraints in the Southern Africa region”. This power plant is an interim solution until the existing BPC-owned capacity is increased either through upgrades or new plants coming online. APR’s Francistown power project is currently the largest temporary power solution of its kind to be implemented within the infrastructure of the Southern African Power Pool. In his recent State of the Nation address, President Lieut. Gen. Ian Khama said that the APR power facility was one of several immediate interventions to reduce the impact of the current power deficit.

Africa has arguably been coping with power shortages for over a decade and has self- admittedly been experiencing an "electricity emergency" for almost five years. If nothing is done immediately to alleviate this power deficiency, it will mean many more years of waiting in the dark until new generation comes online. Many experts estimate that it will be another decade until new permanent capacity can be installed that would provide the region the ability to reach universal access to electricity. What APR Energy has to offer for Southern and Sub- Saharan Africa is the ability to operate temporary emergency power facilities in urban areas, connected to a pre- existing grid as well as in rural areas operating in island mode. This allows electricity to reach communities or companies who may not be located within reach of a power grid.

With its proven track record as one of the leaders in the field of temporary power solutions, APR Energy has the experience and expertise to rapidly install power facilities to directly supply utilities or industrial companies in need of capacity within a matter of weeks. This fast- track installation allows electricity to be available on an interim basis while additions to the current capacity are installed or improvements are made to the pre- existing infrastructure. APR Energy also offers the possibility of a long- term solution to the power deficits by way of “Build Own Operate Transfer” (BOOT) contracts, allowing for the transfer of assets to the customer at the end of the contract term. Through flexible contractual terms as well as our knowledge of and lengthy experience in the power generation industry, APR can provide a comprehensive- service to meet with any customer's specific operational and financial requirements.

Contact:

Corp Communications
paul.marcroft@aprenergy.com
APR Energy
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