CAPE TOWN (Reuters) &#8211; The South African government may be forced to inject more money into state power firm Eskom by the end of March next year, should the struggling utility fail to meet its borrowing plan, a National Treasury presentation to parliament said on Wednesday.



Treasury has already earmarked 59 billion rand ($3.9 billion) to Eskom over the next two financial years as part of a special appropriation bill, with 26 billion rand allocated until the end of March 2020.



“Failure to execute its funding plan may result in Eskom experiencing liquidity shortfalls at 31 March 2020 and require additional funding in addition to funding provided through the Special Appropriation Bill,” National Treasury’s director general, Dondo Mogajane, told lawmakers.



($1 = 15.2369 rand)



Reporting by Wendell Roelf; Editing by Alexander Winning

South Africa’s power utility Eskom may need more bailouts by the end of March 2020

JOHANNESBURG (Reuters) &#8211; South Africa’s state power utility Eskom urgently needs a turnaround plan as its capital structure is unsustainable, credit ratings agency Moody’s said on Tuesday in a report which sent the rand lower.



“The company’s operational and financial performance has deteriorated, indicating the extent of the challenges facing Eskom in meeting its debt obligations absent government support,” Moody’s said in a note.



Eskom reported a mammoth 20.7 billion rand ($1.39 billion) annual loss a week ago. [nL8N24V5CB]



($1 = 14.9196 rand)



Reporting by Alistair Smout; Editing by Jan Harvey

South Africa’s state power utility Eskom urgently needs turnaround plan – Moody’s

HARARE (Reuters) &#8211; Zimbabwe will ramp up its electricity imports over the next few weeks, potentially easing rolling power cuts, after it agreed to make payments to clear its debt to a regional power utility, a treasury official said on Monday. 



The southern African nation has endured 18-hour daily power cuts since May as a result of a prolonged drought that has reduced output at its largest hydro plant and ageing coal-fired generators that keep breaking down.



Foreign power companies also stopped supplying Zimbabwe with electricity in 2017 after the country failed to pay its bills, although Zimbabwe resumed limited imports of 300 MW a month last week.



George Guvamatanga, secretary for the ministry of finance, told business leaders in Harare that Zimbabwe had agreed to make weekly payments to clear its debt to a regional power utility, which would start providing at least 400 MW of electricity a month, starting from this week.



That would take total imports to 700 MW a month.



Guvamatanga did not name the supplier. Zimbabwe typically buys electricity from South Africa’s Eskom and Hydro Cahora Bassa of Mozambique.



Zimbabwe owes more than $70 million to Eskom and Hydro Cahora Bassa of Mozambique for past power supplies.



“I think the arrangement that we have put in place now on electricity should hopefully guarantee us increased supply from tomorrow or Wednesday,” Guvamatanga said.



“Working with the mining sector we have been able to ring-fence adequate resources to pay for at least 400 megawatts of electricity a month.”



Power shortages, along with drought and a severe dollar crunch, will result in the economy shrinking this year, the finance minister said last week.



Energy and Power Development Minister Fortune Chasi was in South Africa at the end of July to try negotiate for a power deal with Eskom. He did not immediately respond to calls and messages on his mobile phone on Monday.



Eskom, which is itself struggling to meet South Africa’s electricity needs, had no immediate comment.



The government said last week that power utility ZESA Holdings was accessing 300 MW during off-peak hours from the Southern African Power Pool, a regional industry collaboration linking up national grids.



Guvamatanga said for now Zimbabwe would have to rely on electricity imports, which required foreign currency that is in short supply.



Last week finance minister Mthuli Ncube announced a three-fold increase in electricity tariffs, as the government seeks to raise more funds for power generation.



Reporting by MacDonald Dzirutwe; Editing by Susan Fenton

Zimbabwe ramps up its electricity imports to ease outages

ABUJA (Reuters) &#8211; Nigeria and German company Siemens have agreed a roadmap to increase Nigeria’s “reliable” power supply to 11,000 megawatts by 2023, President Muhammadu Buhari said on Monday.



The president of the West African country said that at present, “only an average of 4,000 megawatts reliably reaches consumers”. He said Nigeria would work with Siemens to achieve “7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023”.



Reporting by Felix Onuah; writing by Alexis Akwagyiram; editing by Jason Neely

What you need to  know about Nigeria’s roadmap agreement with Siemens to increase power

JOHANNESBURG (Reuters) &#8211; The group treasurer of South Africa’s Eskom, Andre Pillay, will leave the power utility at the end of August, it said on Monday, the latest high-profile exit after its chief executive quit earlier this year.



Eskom supplies more than 90% of South Africa’s electricity, but has implemented severe power cuts this year and is failing to generate sufficient profit.



It is hinging its recovery hopes on a 230 billion rand ($16 billion) bailout pledged by government in February.



Reporting by Mfuneko Toyana; Editing by Jan Harvey

Treasurer of South Africa’s Eskom quits, what you need to know

HARARA (Reuters) &#8211; Zimbabwe’s state power utility imposed the worst rolling blackouts in three years on Monday, with households and industries including mines set to be without electricity for up to eight hours daily.



The power cuts are bound to stoke mounting public anger against President Emmerson Mnangagwa’s government as Zimbabweans grapple with an economic crisis that has seen shortages of U.S. dollars, fuel, food and medicines as well as soaring inflation that is eroding earnings and savings.



Many Zimbabweans say life is getting harder and that Mnangagwa is failing to deliver on pre-election promises last year to rebuild an economy shattered during Robert Mugabe’s 37-year rule.



The Zimbabwe Electricity Transmission and Distribution Company (ZETDC), citing reduced output at its largest hydro plant and ageing coal-fired generators, said power cuts would start on Monday and last up to eight hours during morning and evening peak periods.



The country last experienced such serious blackouts in 2016 following a devastating drought.



Isaac Kwesu, chief executive of Chamber of Mines, which groups Zimbabwe’s biggest mining companies said critical industries like mining should be spared from the black-outs, locally known as load shedding.



“Mining requires electricity for both operations and safety. It will be very costly to have production stoppages, that is why we will be engaging ZETDC to find ways to minimize any costly disruptions due to the electricity cuts,” Kwesu told Reuters.



Mining accounted for more than two-thirds of Zimbabwe’s $4.8 billion in total export earnings last year and any power cuts in the sector will affect production and exports.



In the past, some of the big mines, including platinum and gold producers, have resorted to directly importing electricity from neighbouring countries like Mozambique and South Africa.



“The power shortfall is being managed through load shedding in order to balance the power supply available and the demand,” ZETDC said in a public notice.



Zimbabwe is also experiencing shortages of fuel, forcing motorists to queue for hours and the government has so far failed to deliver on previous promises to end the shortage.



The southern African nation, which is producing 969 MW daily against peak demand of 2,100 MW, is entering its peak winter power demand season, which will increase electricity consumption.



Energy and Power Development Minister Joram Gumbo was quoted by a local newspaper saying he would travel to Mozambique this week to try to agree an electricity supply deal with that country’s power utility Hydro Cahora Bassa.



Reporting by MacDonald Dzirutwe; editing by Emelia Sithole-Matarise

Here’s why Zimbabwe faces worst power cuts in 3 years

JOHANNESBURG (Reuters) &#8211; South African power utility Eskom will reduce its executive management to 10 from 21, it said internal memo seen by Reuters, part of cash-strapped company to reduce its wage bill.



“It is crucial that we set ourselves up for the future, and I believe that the steps we’ve take so far are already placing us on a path towards stability,” Chief Executive Phakamani Hadebe said in the memo.



Eskom spokesman Khulu Phasiwe confirmed that the company had approved the reorganisation of the top management structure.



Eskom, which has implemented power cuts in recent months due to coal shortages and poor plant performance, is fighting for survival after a decade of financial decline.



It previously stated that it wants to substantiality cut its 48,000 workforce.



Among those leaving the utility is Dave Nicholls, the head of nuclear energy, who was due to retire next year. He is leaving at the end of month as are seven other executives, according to the memo



Reporting by Alexander Winning; Editing by Alison Williams

Why South Africa’s power utility Eskom is planning to cut 10 executive jobs

LAGOS (Reuters) &#8211; Plans to build another privately-financed power station in Nigeria to help end decades of chronic blackouts have been delayed because of concerns about persistent shortfalls in payments for electricity across the sector.



The $1.1 billion Qua Iboe Power Plant being developed by energy infrastructure company Black Rhino and the state-owned Nigerian National Petroleum Corporation won’t get a green light by the end of 2018 as planned and it was unclear when the deal might close, NNPC told Reuters.



The delay is a setback for Africa’s biggest oil producer where 80 million people don’t have access to grid power supplies and it exposes the difficulties in attracting private investment to a sector that successive governments have tried to reform.



The uncertainty surrounding the 540-megawatt Qua Iboe plant stems from the difficulties Nigeria’s first privately-financed independent power project &#8211; the 460-megawatt Azura-Edo plant &#8211; has encountered since it came online this year.



Azura was meant to be a model for a string of independent power plants financed by international investors. To give them confidence to invest in the first major plant since the power sector was privatised in 2013, the World Bank provided a safeguard known as a partial risk guarantee &#8211; meaning the lender would step in if Nigeria defaulted on payments.



Under the current system, the government-owned Nigerian Bulk Electricity Trading company (NBET) buys power from generators and passes it on to distributors who then collect money from customers and reimburse NBET.



But because NBET is not paid in full for the power it buys, generators such as Azura have been partly reimbursed from an emergency central bank loan fund created to keep the sector afloat.



NNPC told Reuters one of the reasons the Qua Iboe plant (QIPP), which is due to be built in the southern state of Akwa Ibom, had been delayed was because NBET appeared reluctant to commit to new projects to avoid increasing its liabilities.



“The continued delay relates to the current cashflow challenges at NBET, as highlighted by the Azura project,” a spokesman for NNPC said in an emailed statement. “This concern is justified by the fact that NBET is yet to see an improvement in collections from DISCOs (distribution companies).”



NBET did not immediately respond to a request for comment on NNPC’s statement about QIPP.



NBET chief executive Marilyn Amobi told Reuters in November that it was hard for the company to work because of poor infrastructure and shortfalls in cash from distributors needed to reimburse generators.



“You don’t have the infrastructure, you don’t have the financial position to do it, you don’t actually have the products, and you don’t have the grid,” she said.



<h3 class="wp-block-heading">WORLD BANK CONDITIONS</h3>



NNPC said another problem for QIPP was that the World Bank had made a partial risk guarantee, similar to the one that helped Azura attract investors, contingent on the government’s implementation of an agreed power sector recovery plan.



“In theory it is okay, but the risk is there are delays in the approvals which may impact QIPP,” NNPC said.



Power ministry officials and the World Bank have been in talks about long-term structural changes needed to trigger the release of a $1 billion loan to help pay for reforms.



A World Bank spokeswoman said the loan had yet to be submitted to its board for approval and that the Washington-based lender considered the recovery plan to be “critical for de-risking the sector for private investments”.



Problems that need to be tackled include decaying infrastructure, mounting debts, low tariffs for electricity and a dilapidated government-owned grid that would collapse if all the country’s power generators operated at full tilt.



Even though NBET has an agreement to buy 13 gigawatts (GW) from power generators, the system can only cope with distributors sending out an average of 4 GW, according to the ministry of power.



The World Bank spokeswoman confirmed any future guarantees for independent power plants (IPPs) would be linked to the plan’s implementation &#8211; because the economic and financial viability of generation capacity expansion was at risk.



A spokeswoman for Black Rhino, which is one of private equity firm Blackstone’s portfolio companies, declined to comment on NNPC’s announcement of a delay to QIPP.



When the project was unveiled, Nigerian cement giant Dangote Group was named as a joint venture partner &#8211; along with Black Rhino and the Nigerian National Petroleum Corporation.



But a Dangote executive told Reuters on condition of anonymity that the company, owned by Africa’s richest man, Aliko Dangote, had pulled out.



“The huge debt level, and, the fact the IPPs are not making profits, is another reason for prospective investors to be deterred,” he said. “Further, collecting revenue from the distribution companies is also becoming a mirage.”



A Dangote Group spokesman declined to comment on the delay to QIPP, or whether the company had pulled out.



<h3 class="wp-block-heading">‘ILLIQUID AND INSOLVENT’</h3>



The payment problems in the Nigerian power sector were thrust into the spotlight in March when four generating companies filed a lawsuit against the government and Azura.



To ensure the generating companies were paid in full throughout 2017 and 2018, the government created a 701 billion naira ($2.3 billion) loan fund at the central bank to guarantee payments. When the fund was established in 2017, Azura wasn’t part of the calculations.



But when Azura started producing electricity, the fund was also used to pay the new plant to ensure the terms of loan deals guaranteed by the World Bank were not breached. As a result, the other companies were told they would only receive 80 percent of the sums owed, according to the lawsuit filed in March.



The four energy companies want the fund to reimburse them in full, rather than allocating part of the money to the new plant.



Azura declined to comment on payments for power generated.



“If the central bank wasn’t paying, the system would collapse,” an official at a multilateral lender said on condition of anonymity. “Qua Iboe IPP would enter a system that is illiquid and insolvent. The liquidity is being provided by the central bank.”



The official said QIPP would need the same partial risk guarantee Azura received to get off the ground, but the handling of payments to Azura by the Nigerian authorities so far meant there was little appetite to offer the same support.



Fola Fagbule, senior vice president and head of advisory at Africa Finance Corporation (AFC) &#8211; one of the multilateral lenders that invested in Azura &#8211; agreed that the Qua Iboe project would struggle without payment guarantees.



“What you have is an insolvent system,” he said. “It is really difficult to make a case for a project on that scale.”



A person with direct knowledge of QIPP who declined to be named said Azura’s experience was damaging international investors’ view of Nigeria, Africa’s most populous nation.



“There has to be some understanding of how the sector is going to be able to afford new electrons coming into the grid,” the person said. “(Those involved) do not want QIPP to build a project that could just end up in a default situation.”



<h3 class="wp-block-heading">‘KNOTTY ISSUES’</h3>



Nigeria’s privatised power sector typically does not use meters to provide invoices, bill collections are low and energy tariffs have remained fixed for three years, meaning customers receive unsustainably cheap electricity.



The effect, say industry experts, is that electricity distribution companies recover so little revenue from customers that they pay less than a third of what they owe to generating companies &#8211; and that’s why debts have ballooned.



Sunday Oduntan, spokesman for the Association of Nigerian Electricity Distributors, said debt levels in the sector were caused by the artificial suppression of tariffs. He said there was a 1.3 trillion naira ($4.2 billion) market shortfall that meant distributors were unable to invest in improvements.



“You cannot be selling a product below cost price and expect high remittance. The shortfall in the sector is because of the lack of a cost-reflective tariff,” said Oduntan, who speaks on behalf of Nigeria’s 11 electricity distribution companies.



Debts across the sector partly stem from a currency crisis that took hold in 2016, just months after Azura secured its financing. The bulk of power company costs are in U.S. dollars but customers pay for power in naira.



The naira lost about 30 percent of its value against the U.S. dollar in June 2016 but the devaluation was not factored into a government tariff structure that has remained unchanged.



Louis Edozien, permanent secretary in the ministry of power, told Reuters there was evidence tariffs must rise, but it was also the responsibility of distributors to improve their collections, partly through better metering and infrastructure.



As for the future of QIPP, the state oil company said it would take six to eight months from whenever NBET executes an agreement to purchase power from the plant before a final investment decision could be taken.



The NNPC spokesman said there were a number of other “knotty issues”, including the completion of a transmission line from the project site. He said QIPP had now agreed in a major concession to pay $20 million for it to be finished.



He also said there was a disagreement between QIPP and the central bank about the exchange rate at which power producers could buy U.S. dollars with naira. He said this had been escalated to the minister of finance.



With the $1 billion World Bank power sector loan on hold for now, the government is considering putting another 600 billion naira into the central bank fund to pay generators when the initial amount runs out early next year, sources said.



It was not clear how the central bank loans to the sector would be repaid.



Central Bank Governor Godwin Emefiele told Reuters that payments from the fund could be made up to February and that the bank was holding talks with World Bank officials.



“The loan negotiations are still in progress with no terminal date yet fixed,” the power ministry’s Edozien said.



($1 = 306.6000 naira)



Reporting by Alexis Akwagyiram and Paul Carsten; additional reporting by Camillus Eboh in Abuja, Chijioke Ohuocha in Lagos and Karin Strohecker in London; editing by David Clarke

Here’s what is delaying Nigeria’s next power plant

By Chris Bishop.
Business and households were given a pre-Christmas shock with a frank disclosure of the ruin of Africa’s biggest power generator amid claims of sabotage, corruption and decay where those who try to fix it are swept aside or forced out of their jobs. The only crumb of comfort is that the government promises to shake up South Africa’s power generator Eskom and has cancelled their Christmas holidays for its senior executives so they can tour the ageing power stations of the country to find out what is wrong.
“We have reshuffles in cabinet we are going to be reshuffles here as well,” says Pravin Gordhan, the public enterprises minister.
Gordhan and Eskom chairman Jabu Mabuza were called back from a road show for an emergency press conference at Eskom’s Megawatt Park in Sandton, Johannesburg. They painted a bleak picture of the failing national grid, supplied by Eskom, that has left many businesses and homes in the dark over the last few months. The grid of 47,000 MW is running on a mere 29,000 MW because of maintenance and breakdowns in the ageing power stations on the country, most of which were built in the 1970s. Eskom didn’t even know where the next break will be, he said.
“For business, we want to ensure by the time you get back to work in January we have a better situation,” says Gordhan.
But Gordhan acknowledged it was likely to be a grim fight against years of corruption and decay that has seen the pride of Africa’s power generation reduced to a load shedding shell.
“There has been declining production, the growing need for repairs, the lack of attention, we are not sure yet whether there is an undermining of the system, as well, let’s call it sabotage,” he says.
“Some of the problems can be ascribed to the age of the plant, but from about 2010 the investment in maintaining, repairing and big scale repairs were not done adequately. Enough money was not put into big repairs and mid-term repairs.” 
“ Often things were fixed with a very lousy old band aid supposed to last a week that comes unstuck in a few days, then you haven’t fixed it .We are looking at contactors not doing what they were supposed to do.”
Experts in Eskom who tried to fix the mess were either swept aside or forced to leave, Gordhan said.
The minister even admitted that his department was also a step behind what was going on at Eskom. It had merely on energy expert.
“The public was told we have a world class operation, but in the meantime all the malfeasance and mismanagment has gone on,” says Gordhan.
Eskom hopes to report back within ten days and plans to set up a team of experts to assess the damage to the power generation system.

Lights out, game on- No Christmas of rest and turkey for the bosses in a dingy tale of decay

JOHANNESBURG (Reuters) &#8211; South Africa’s struggling state-run power firm Eskom wants the government to take on 100 billion rand ($7 billion) of its debt as part of a turnaround plan to shore up its balance sheet, Eskom Chairman Jabu Mabuza told the Business Day newspaper.
Cash-strapped Eskom is struggling to emerge from a financial crisis characterised by declining electricity sales, ballooning debt and liquidity problems.
Mabuza made the comments to Business Day as Eskom was meeting investors on a roadshow to London and the United States this week.
A financial market source in London confirmed to Reuters that Mabuza had told investors about moving 100 billion rand of Eskom’s debt onto the government’s balance sheet during the roadshow.
Eskom spokesman Khulu Phasiwe declined to elaborate on Mabuza’s comments, saying the company’s turnaround plan was still the subject of discussions with key stakeholders in government.
Mabuza told a news conference last week that asset sales could not solve Eskom’s problems and that a bailout or debt relief were preferable. The utility expects to make a loss before tax of more than 11.2 billion rand this financial year.
($1 = 13.8394 rand)
Reporting by Alexander Winning; Editing by James Macharia

Why South Africa’s state-run power firm Eskom wants government to take on $7.2 billion of its debt

JOHANNESBURG (Reuters) &#8211; South Africa faces more power cuts, electricity utility Eskom warned on Monday as it sought to prevent the collapse of its power grid in a test for President Cyril Ramaphosa’s reforms.
Eskom implemented a fifth day of controlled power cuts on Monday, putting more strain on an economy already mired in recession only months before a national election.
“The entire week could be severely constrained if we are unable to replenish the diesel and water reserves, and reduce the high unplanned outages,” Eskom spokesman Khulu Phasiwe said.
Eskom, which is battling a severe financial crisis, coal shortages and breakdowns of its power plants, said it would cut up to 2,000 megawatts of power from the grid on Monday.
The utility, which last week called for a bailout or debt relief, began the controlled cuts, known as load-shedding, on Thursday as demand for power outstripped available capacity.
“Eskom teams are working hard to salvage the situation but the process is going to be hard, long and costly,” Phasiwe said.
Ramaphosa has made reforming Eskom a priority, but he has been hampered by fiscal constraints in a blow to his plan to woo investors who can help grow the economy ahead of an election likely to be held in May next year. nL8N1X61GL]
“Eskom as an institution and its ability to provide stable power supply is the single biggest risk to @CyrilRamaphosa’s investment drive and the South Africa fiscus,” Isaah Mhlanga, executive chief economist at Alexander Forbes Investments said on Twitter.
BNP Paribas South Africa senior economist Jeff Schultz said prolonged power cuts would likely hurt economic growth in the first quarter of 2019, although a slowdown in manufacturing over the Christmas period will buy Eskom some time.
“But come mid-January, if we are still facing load-shedding, that is when it is going to be a much more pressing issue for the economy,” Schultz said.
South Africa entered recession in the second quarter for the first time since 2009. Third-quarter gross domestic product numbers are due out on Tuesday, with analysts polled by Reuters predicting quarter-on-quarter GDP growth of 1.6 percent.
($1 = 13.6396 rand)
Editing by James Macharia and Alexander Smith

More power cuts for South Africa could raise Ramaphosa reform risk

By: Amadou Hott, Vice-President of Power, Energy, Climate Change &amp; Green Growth at the African Development Bank
Accessible, reliable and affordable energy is the cornerstone of transformational socio-economic development. For Africa, delivering sustainable development is dependent on meeting the continent’s energy needs in order to lift populations out of poverty, catalyze industrialization, and stimulate economic growth.
Despite the continent’s abundant energy resources, energy poverty is still rife in the continent with close to 600 million people lacking access to electricity. This sets nations back on meeting energy access goals, retards industry progress, and diminishes the continent’s economic growth by 2 to 4 percent every year.
On a positive note, energy access has improved in recent years with the number of people without access in sub-Saharan Africa falling for the first time in absolute terms, and with countries such as Ethiopia, Kenya and Rwanda leading the pace. Africa is at the forefront of distributed energy systems that can increase energy access in rural areas faster, more cheaply, and more widely than conventional grid extension, driven by innovative business models and rapidly decreasing technology costs. At the same time, renewables are on the rise across the continent with significant renewable generation capacities added in countries such as Egypt, Morocco and South Africa.
Renewable energy investments are also on the rise across the continent from Senegal, to Kenya, and Zambia. While this progress is encouraging, the pace of energy access falls far short of meeting the universal energy access target by 2030.
Closing the gap on Africa’s energy challenges presents major opportunities for investors keen on engaging with the continent, especially on helping Africa meet the shortfall in the estimated $90 billion required to achieve universal energy access by 2030.
Clearly, these financing needs are of such magnitude that no single institution is capable of meeting them in isolation. This is why development finance institutions need a pragmatic shift in how they do business and leverage scarce public resources in order to mobilize private sector financing at scale, “from billions to trillions”.
The African Development Bank is leading by example. For instance, the Bank launched the Facility for Energy Inclusion to close funding gaps in the small-scale energy infrastructure sector, and catalyze last-mile energy access. Through a mix of commercial and concessional instruments, the facility provides low cost of capital, and mitigates key credit and currency risks. Additionally, the recently approved the Room2Run transaction allows the Bank to effectively transfer the credit risks of selected loan portfolios to investors, which lowers the total risk consumption of the Bank.
This initiative will enable the Bank to recycle capital efficiently in order to boost lending capacity and enhance private sector investments. The transaction has already attracted major support from partners like the European Commission who will provide a $100 million guarantee to be channeled into renewable energy projects in Africa. Ultimately, this will free up around $700 million, which can be re-allocated to new projects.
Multiple barriers hinder investments and private sector participation which could potentially fast-track energy access. These include lack of an enabling policy environment for investors, and other systemic bottlenecks that slow down transactions and escalate project costs. Transforming the energy landscape calls for a multi-faceted approach to unlock private sector capital by resolving these barriers in order to create the ideal conditions for investments in the continent.
The African Development Bank in close collaboration with other development partners is perched on the apex of creating a vibrant marketplace that will deliver the energy transformation necessary to move Africa forward. The Bank is dedicated to eliminating and minimizing barriers for investors, primarily through financial instruments to de-risk transactions, disseminating knowledge and market data, and facilitating peer-to peer learning and networking. Private sector engagement is on the rise, buoyed by various partnerships such as the New Deal on Energy for Africa and the US-led Power Africa Initiative.
To sustain this momentum, the bank convened the inaugural Africa Energy Market Place (AEMP) in Abidjan in July 2018. The AEMP is a platform for public private dialogue, and is set up to address barriers to mobilizing and scaling-up private investment into the energy sector. Effectively, AEMP reviews and prioritizes transformative energy transactions, and accelerates reforms in order to attract private investments and create a pipeline of bankable projects. Five countries participated in the inaugural edition: Côte d&#8217;Ivoire, Egypt, Ethiopia, Nigeria, and Zambia.
The conversations that began at the AEMP are set to continue in November’s Africa Investment Forum (AIF) in South Africa. The forum convenes project sponsors, borrowers, lenders and investors with a shared interest in closing Africa’s infrastructure gap which is estimated to be anywhere between $130–$170 billion per year.
By convening,and facilitating mutually beneficial dialogue amongst stakeholders who can dramatically impact Africa’s energy landscape, the Bank is creating the requisite foundation for accelerated private sector investments in Africa’s energy sector to achieve universal energy access.
Indisputably, this will put the continent steadily on the path to socio-economic growth, and sustainable development.

OpEd: Why financing Africa’s energy infrastructure is a major opportunity for investors

JOHANNESBURG (Reuters) &#8211; South Africa’s state-run power firm Eskom said on Tuesday it is planning its first major battery storage project as President Cyril Ramaphosa seeks to boost renewable energy usage and reduce the country’s reliance on coal.
Prince Moyo, general manager for power delivery engineering at Eskom, told Reuters that the battery storage project would be rolled out in phases across 90 sites, with a tender for the first phase pencilled in for early next year.
“At this stage the focus is on storing energy for the benefit of all our customers. The aim is to ensure security of power supply,” Moyo said.
Although the 1,440 megawatt hour per day battery project would be able to store less than one percent of Eskom’s total generating capacity, it is a sign the utility is following through on promises to prioritise renewable energy ventures.
The project should also help smooth relations with the World Bank, which had become frustrated over the slow progress made on renewable power plans since it approved a more than $3 billion loan in 2010 to support green energy.
Eskom, which joins global firms like oil major BP and General Electric in investing in battery storage, is working on a new long-term strategy to assess whether its business model is sustainable.
The utility’s new management, appointed soon after Ramaphosa replaced scandal-plagued Jacob Zuma as leader of the ruling African National Congress last December, is fighting to rescue the firm after a period of steep financial decline.
It reported a 2.3 billion rand ($160 million) loss for the latest financial year, after which it said it was considering selling non-core assets and job cuts.
($1 = 14.3534 rand)
Reporting by Alexander Winning; Editing by Joe Brock

First major battery storage project in works for South Africa’s Eskom, what you need to know

JOHANNESBURG (Reuters) &#8211; South Africa’s struggling state-run power firm Eskom reported a 2.3 billion rand ($171 million) loss on Monday, underlining the enormity of the task facing President Cyril Ramaphosa, who has pledged to turn the company around.
Eskom, Africa’s largest public utility, was embroiled in corruption scandals under former president Jacob Zuma and narrowly avoided a liquidity crunch early this year after banks halted lending. Zuma has denied any wrongdoing.
It supplies more than 90 percent of South Africa’s electricity, and ratings agencies regularly cite its 220 billion rand of government-guaranteed debt as a threat to the country’s sovereign credit ratings.
Eskom pegged the loss for 2017/18 financial year ending March on increases in financing costs and depreciation compared with a profit of 888 million rand in the previous reporting period.
“Eskom is undoubtedly facing one of the most difficult times in its history,” Eskom chairman Jabu Mabuza said.
The utility’s executives told a news conference it had 22.7 billion rand liquidity by the end of the financial year.
Eskom reported about 20 billion rand of irregular expenditure incurred since 2012, as the firm combs its financials for evidence of wrongdoing.
Reporting by Alex Winning; Editing by James Macharia

How Eskom, South Africa’s power utility, lost $171 million

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Nigeria&#8217;s Minister for Power, Works and Housing, Babatunde Fashola says the power generating companies have a misapprehension about the kind of rights they have under the payment assurance guarantee.

Fashola responds to power GenCos’ over payment suit

Jörg Peters, University of Passau
More than 1.1 billion people in developing countries lack access to electricity. Some 590 million live in Africa, where the rural electriﬁcation rate is particularly low at only 14%.
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A lack of access to electricity hampers development. It affects everything from people’s ability to learn to the creation of enterprises and the provision of public services like health care. This lies behind the United Nation’s goal of countries achieving universal access to electricity by 2030.
But the investment requirements to meet this goal are enormous. According to the International Energy Agency investments worth $640 billion will be needed if the UN goal is going to be met. About $19 billion is required every year in sub-Saharan Africa alone.
In spite of the importance of electrification, little evaluation has been done on the socioeconomic impact of investments into providing power. We set about plugging this gap in our paper that focuses on Rwanda. We looked at the eﬀects of electriﬁcation on households, ﬁrms, health centres and schools in rural areas.
Rwanda has implemented one of the most comprehensive electrification programmes in the world. In 2009 only 6% of Rwandans had access to electricity. The government’s aim is to lift this to 70% by 2018.
We studied the connection behaviour and electricity consumption patterns of households and looked at socioeconomic outcomes – such as education, income and health. We also explored the eﬀects of electriﬁcation on the uptake of appliances as well as on rural ﬁrms and on health centres.
We found that electrification had wide-ranging eﬀects on the living conditions of households whose daily lives were made easier on a range of fronts. We also found that the supply of power had some positive effects on certain businesses and clinics. Overall, our research confirms the importance of electrification has for the rural poor.
Yet, in our final analysis we had two major reservations. The first was that the provision of electricity hadn’t significantly improved the economic lives of people – which is often used to justify the massive costs involved in expanding the grid to all areas of the country.
The second insight was that, given people’s very low levels of consumption (households consume on average around 2 kWh per month per person which is less than 6% of the electricity an average US-American consumes per day), it would make much more sense to extend electricity coverage by promoting off-grid solutions such as solar. This would lead to governments and citizens getting much more bang for their buck.
These reservations aside, our research showed how electricity in the home changes lives, sometimes in the most unexpected ways.
<h2>Impact on household level</h2>
Among the households we studied we found that lighting consumption had more than tripled among connected households around two years after connecting to the electricity grid.
We also found that having electric lighting yielded significant benefits for households who have done away with torches, wick and hurricane lamps. For example, kids’ study time at home increased by between 19 and 44 minutes after nightfall, although the total time children study did not increase. The reason is that children shift their study time from daytime to nighttime, which nonetheless is an important indication for increased flexibility.
Electricity also had an impact on access to information. The most frequently bought electrical appliances after connection were TVs, radios and mobile phones.
Another major effect of electrification was that it significantly reduced expenditures on energy. The average amount that connected households spent on grid electricity was 1,500 FRW (about $2) per month after they had replaced traditional energy sources like kerosene and batteries. And they no longer needed to spend money on charging their mobile phones outside their homes. In total, they reduced expenditures on energy by around $2.50, which is an equivalent of about 4% of their total monthly expenditure.
<h2>Impacts on enterprises and health centres</h2>
Another major impact was that it extended people’s average waking hours by nearly an hour. We found that people were awake for 50 minutes per day more on average because they had better access to lighting and entertainment devices.
People didn’t necessarily use this additional time to pursue income generating activities. In fact, we didn’t find that electrification affected how people, many of whom were farmers, generated income.
We found that it had only a tiny effect on micro enterprises like mills, hairdressers, copy shops and welding shops. Mills were the main beneﬁciaries of being connected to the grid. Most switched from diesel engines to electricity. And new mills emerged because input costs were dramatically reduced and productivity increased.
Hairdressing shops also benefited for cost and convenience reasons. They used electricity for razors, phone charging services and radio or TV to entertain. Before grid electricity they had used power sources such as car batteries which were expensive and cost a lot to run.
Small kiosks, bars and restaurants mostly used electricity for lighting and in a few cases for radio, TV or refrigeration. Electricity meant that they were more attractive to customers.
Overall, we observed only a slight increase in business activities in connected communities. Some enterprises emerged while existing operations marginally extended their operating hours or their range of products and services.
In the case of health centres, those that had been connected to the grid said their work had improved. According to answers to an open question, the main use of grid electricity was for lighting (100%), followed by use for medical machines (79%) and for administrative tasks (43%). Nearly 30% cited medicine storage and sterilising.
The most important benefit was that it reduced costs. Centres that weren’t connected paid three times more for power because they used diesel.
<h2>A mixed solution</h2>
Our research showed that electricity is highly appreciated by rural communities in Rwanda, often leading to cost reductions and increases in convenience. But it does not significantly transform economic activities and income generation in rural areas.
The fact that electricity consumption levels are generally very low raises the political question of whether the high investment cost of on-grid electrification is justified compared to the lower cost of off-grid solutions. Especially the cost of off-grid solar technologies have decreased considerably in recent years and, while their performance is obviously lower, they still improve the living conditions quite substantially.
These observations suggest that instead of rolling out the grid to every rural village, on-grid investments could be concentrated in certain thriving rural regions with high business potential to create industrial zones where firms could relocate to. Off-grid solar could serve as a bridging technology for the majority of rural areas, potentially accompanied by subsidies to ensure access for the poor who cannot afford paying cost covering prices. Such an integrated on-grid-off-grid strategy would enable industrial development and at the same time achieve broad access to electricity at relatively low cost.
<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/91018/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />This article was originally published on The Conversation.

How electricity changes lives: a Rwandan case study

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Nigeria’s Minister of Power, Works and Housing, Babatunde Fashola says the private sector has the capacity to stir up more economic impact in the power sector than the government.

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