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Powering Your Progress Africa Edition: Energy and the Progress Towards Economic Development

“Sub-Saharan Africa is the only region in the world where urbanization is associated with negative economic growth. This adds to the enormity of the problems of urbanization in a region that is exactly most in need of growth and development to end and reverse its marginalization on the world stage” said Nelson Mandela, the former South African President. The urban population in Africa is growing at the highest annual rate in the world as a remarkable number of Africans move into cities to escape drought, environmental degradation, and rural poverty. The shift from rural to urban living does not guarantee any alleviation from these issues since most African cities are unprepared to accommodate the additional population. It is projected that there will be 300 million new urban residents in Africa by 2030. This will generate a massive need for more services, housing, security, schools, medical facilities, and transportation, which in essence all require electricity.

The electricity shortage in Africa is undeniably related to many of the key issues occurring in Africa today. In recent years, governments have been developing short, medium, and long- term strategies to address these energy shortages until new power stations can be brought online. The intentionally engineered electrical blackout, “load shedding”, is one of the most widely used short to medium-term strategy. Load shedding is a response to a situation where the demand for electricity exceeds the power supply capability of the network. Scheduled blackouts are an everyday occurrence in Africa, along with random power outages. In an interview done by Africa Recovery, United Nations, a Ghanaian entrepreneur, Cyril Francis, explains his daily experiences with power instability. Mr. Francis, who owns a canning factory, regularly loses at least one third of his consignment due to food spoilage when the blackouts occur. “The worst part is not knowing when the blackouts will hit. When you least expect it, everything comes to a standstill. It is so frustrating and damaging to business production, not to mention our reputation with people who depend on us to deliver orders on time.” Cyril Francis is not only losing his products on a regular basis, but also his employees, who cannot afford the unstable work environment.

Every industry in every country of the world is dependent on electricity to remain operational; therefore, it is not a surprise that the frequent power cuts are having devastating effects on Africa’s mining industry. The mining industry in Africa employs millions of people and accounts for 13 percent of the global mining sector’s economic activity. Many countries in Africa rely disproportionately on revenue from the mining sector. When this industry is shut down due to lack of power, a significant portion of the countries’ cash flow can be negatively impacted. For example, in South Africa the mining industry accounts for over 17.2 percent of GDP. Fanie Joubert, an economist at the Efficient Group in South Africa, estimates that the blackouts are costing local industries up to R2 billion a day based upon a three hour power cut. These revenue losses are terribly affecting the African people. Many employees must work overtime to keep up with their workload. In other instances employees experience a substantial reduction in earnings, or are sometimes even laid off. These losses do not take into account the missed opportunities for economic growth that power failures cause, such as deterring foreign investors from backing new ventures in Africa.

The absence and instability of electricity is even more severe in rural Africa, with it being estimated that no more than 20 percent, and in some countries as little as 5 percent, of the population has direct access to electricity. The World Economic Forum states, "Poor access to energy entrenches poverty, constrains the delivery of social services, limits opportunities for women and erodes environmental sustainability." There are more people in Africa who still depend on inefficient traditional energy sources such as wood, dung, kerosene, or crop wastes, than any other place in the world. The direct burning of these types of materials can be harmful to one’s health. Furthermore, the lack of electricity forces Africans to cut down trees in their desperate search for fuel, resulting in land degradation and deforestation. According to the United Nations, hundreds of millions of Africans, mainly women and children, spend several hours a day searching for energy sources and water to complete their household needs. Because of these demands, women and children are denied opportunities, such as economic activities and school attendance, respectively. Urban versus rural education is unjust with rural students experiencing a lower quality of teaching, inadequate infrastructure, and less future opportunity. A recent World Bank Report stated that when electrification is introduced in rural areas, the first educational benefit cited by households with school-age children is the improvement of homework and school performance, contributing to an increase in the rate of graduation to between 60 and 70 percent illustrating how important education is to improvement and change.

The lack of electricity is a major constraint in continuing business; maintaining standards of living, and increasing economic development in Africa. Most economic activity is not possible without energy, and no country in modern times has substantially reduced poverty without massively increasing its use of energy. Introducing flexible, efficient and reliable energy markets into African countries will result in long-lasting developmental and sustainable benefits, and in turn economic growth.

APR Energy LLC specializes in the rapid deployment of turnkey power generation solutions including comprehensive, reliable and cost effective operation and maintenance services. We offer multiple technologies including diesel power modules, HFO, gas engines and turbines. Our contracts enable customers to establish a short or long term relationship, as well as the possibility of entering into a “Build Own Operate Transfer” (BOOT) agreement, allowing for the transfer of assets to the customer at the end of the contract term. APR Energy’s commitment to providing fast-track energy solutions never changes, with a constant focus to satisfy the needs of not only its customers, but the local communities served.



Contact:

Corp Communications
paul.marcroft@aprenergy.com
APR Energy

voice +1 904 223 8488
fax +1 904 223 8955

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