Pow­er­ing the con­ti­nent

Un­lock­ing Africa’s growth­po­ten­tial can only be re­alised by im­prov­ing it­spower gen­er­a­tion

Financial Mail - - CORPORATE REPORT -

Lack of suf­fi­cient power is ar­guably Africa’s great­est im­ped­i­ment to growth. Be­hind this is an abid­ing be­lief that it is the states’ right and re­spon­si­bil­ity to pro­vide power, which ex­plains why parts of Nige­ria go with­out power for sev­eral days a week.

A 2015 Mckin­sey study, Pow­er­ing Africa, noted that the con­ti­nent is starved for elec­tric­ity: “The fact that sub-sa­ha­ran Africa’s res­i­den­tial and in­dus­trial sec­tors suf­fer elec­tric­ity short­ages means that coun­tries strug­gle to sus­tain GDP growth. The stakes are enor­mous. In­deed, ful­fill­ing the eco­nomic and so­cial prom­ise of the re­gion, and Africa in gen­eral, de­pends on the abil­ity of gov­ern­ment and in­vestors to de­velop the con­ti­nent’s huge elec­tric­ity ca­pac­ity.”

Elec­tric­ity con­sump­tion and eco­nomic growth are linked. Un­lock­ing Africa’s growth po­ten­tial will not hap­pen with­out a stepchange in power gen­er­a­tion. But how is this to hap­pen if sta­te­owned util­i­ties squat on their mo­nop­oly pow­ers and refuse to open the mar­ket to com­peti­tors?

“We can­not go on re­ly­ing on state-owned util­i­ties to fill the power de­mand short­age,” says Harith CEO Tshepo Mahloele. “The cost of re­new­able en­ergy has come down dra­mat­i­cally in the past decade, and that has pre­sented huge op­por­tu­ni­ties. Many com­pa­nies are now pro­duc­ing their own power. This is dis­rupt­ing the mar­ket in ways no-one could have en­vi­sioned 10 or 20 years ago.”

Power gen­er­a­tion and dis­tri­bu­tion forms a key com­po­nent of the Harith port­fo­lio. It bought 98% of Uk-based power com­pany Ald­wych In­ter­na­tional to spear­head its power strat­egy across the con­ti­nent. This was part of a much grander vi­sion to elec­trify Africa, named Project Edi­son, af­ter the in­ven­tor of the light bulb. In June 2016 Harith and Africa Fi­nance Corp (AFC) merged their power sec­tor as­sets, ex­per­tise and ex­pe­ri­ence to cre­ate a new en­ergy en­tity com­bin­ing both re­new­able and non­re­new­able power gen­er­at­ing as­sets in Africa, where an es­ti­mated 620m peo­ple live with­out power. This pool­ing of as­sets re­sulted in a com­bined gen­er­at­ing ca­pac­ity of 1,575 MW, val­ued at Us$3.3bn, sup­ply­ing power to more than

30m peo­ple in 10 coun­tries.

The joint ven­ture merged the AFC’S in­ter­ests in Cen­power, owner of the Kpone In­de­pen­dent Power Project un­der con­struc­tion in Ghana, and Cabe­olica, a wind farm that pro­vides 20% of Cape Verde’s en­ergy needs, with those of the Pan-africa In­fra­struc­ture De­vel­op­ment Fund 1 (PAIDF 1) which is man­aged by Harith.

These in­clude the Azura Edo

IPP in Nige­ria, the Lake Turkana Wind Power project in Kenya, Kelvin Power Sta­tion in SA and the Rabai Ther­mal project in Kenya. Col­lec­tively this port­fo­lio rep­re­sents some of the largest pri­vate projects in Africa’s en­ergy sec­tor. Some of these projects are ground­break­ing in their scope and in­ge­nu­ity.

● Harith sub­sidiary Ald­wych In­ter­na­tional is in­volved in the Lake Turkana Wind Power project in north­ern Kenya, which will sup­ply 310 MW of power to the na­tional grid from 365 wind tur­bines — mak­ing it the third-largest wind tur­bine project in the world. This is equiv­a­lent to 15% of na­tional power

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