27 MAR 2018
How China is transforming the Power Sector in sub-Saharan Africa
In the past, it has been Europe and South-East Asia, which has attracted the international media headlines by announcing ambitious renewable energy targets and delivering major projects, but countries across sub-Saharan Africa are now undertaking their own energy transition.
Today more than 600 million people live without electricity across the sub-Saharan Africa and demand for electricity expected to more than triple by 2040. The region presents a huge market opportunity for the energy sector, with total power generation expected to quadruple to 385 GW during in the next twenty years.
Countries like China have recognised this potential and are already delivering major energy projects across the region, which is transforming the continent. China alone was responsible for 30% of new power in sub-Saharan Africa between 2010 and 2015, representing around USD $13 billion. By 2020, Chinese contractors will have delivered 17 gigawatts of new generation, equivalent to the total installed capacity of Finland.
Power plants and grids built by Chinese contractors in sub-Saharan Africa are having a direct impact on economic, social and environmental development across the region. Projects have allowed energy access and economic development, and renewable power plants built by Chinese firms are expediting Africa’s transition to lower CO2-emitting electricity systems by establishing relatively low-carbon electricity generation.
More than half of the energy projects that China has supported in the last decade have been renewable, with Chinese companies completing more than 20 dams since 2010, with around 20 more currently under construction. Chinese companies are also providing vital supply chains for wind and solar and working with regional leaders to deliver major projects.
Energy projects are not limited to generation. China is also transforming the region’s power transmission and distribution networks, from cross-border transmission lines to local urban and rural distribution systems. These projects have provided more than 120 million people in sub-Saharan Africa access to electricity.
Investing is Africa is a win-win for the continent and for China. Africa is benefiting from a reliable energy network, which is shifting away from fossil fuels, allowing the region to be less reliant on imports of oil and coal, while China is using Africa to diversify its investment portfolio.
China is not the only country helping Africa undertake its energy transformation. The United Arab Emirates is the second-biggest foreign investor in Africa. UAE companies are constructing projects across the region, for example Masdar in cooperation with the Egyptian New and Renewable Energy Authority of Egypt has installed 10 megawatt solar photovoltaic (PV) power plant in Siwa. The project is the first utility-scale solar power installation in the Arab Republic of Egypt, powering 6,000 homes and accounting for 30% of the grid capacity of Siwa City and its adjoining areas.
Through the new “Belt and Road” initiative, China has the opportunity to develop strategic commercial hubs and partnerships with countries like the UAE and the Kingdom of Saudi Arabia, which will unlock new markets across MENA. The energy projects that China and its partners invest in and construct will benefit hundreds of millions of people across Sub-Saharan Africa and the wider continent for generations to come.