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Africa Energy Forum 2017 – A big chance for ‘off-grid’ companies to shine

As most delegates will tell you, the primary reason for attending the Africa Energy Forum (AEF) is networking. At last year’s event, $2 billion dollars’ worth of deals were struck. In the past, these revolved mainly around massive power station projects secured by big players. But there is an emerging participant in the energy game that is expected to ramp up some important deals this year: off-the-grid energy providers.

‘Off-grid’ energy is not uncommon in Africa. Chances are the hotel you stayed in when paying a visit to the continent had its own reserve energy production. Anyone who has been to some of Nigeria’s largest malls will likely tell you that the shopping centre has a few diesel generators rumbling in the back, just in case the central grid is forced to cut off power.

Mike Peo, an investment banker and one of the writers featured on AEF’s website, says the reason for these energy fallbacks is simple: “Africa doesn’t have the energy it needs to maintain and increase its forward momentum. There are many reasons for this, including a historical lack of investment into energy both by Africa and into Africa. Furthermore, a general lack of access to coal in large parts of the continent, and possibly most significantly, the prohibitively high costs of energy distribution across vast expanses to reach the many rural communities and villages that characterise so much of the African landscape.”

It is Peo’s last point that is especially revealing why ‘off-grid’ power solutions should be embraced rather than continue to be a dirty secret. Africa is a vast and geographically diverse continent with the majority of its population living in rural, isolated communities. In Rwanda, one of Africa’s most successful developing countries, 91 percent of the rural population had no access in 2014, in the Democratic Republic of Congo energy access did not even reach one percent. Even with enough resources to feed the power plants, many of these remote areas are impossible, or financially irrational, to penetrate. Sustainable, off-the-grid power solutions therefore become a viable alternative. Especially since many such agglomerations are located near potential energy sources – namely the sun and water.

This is the reason why AEF 2017 will see the return of last year’s successful ‘Off the Grid Village’ a special networking hub that acts as a business accelerator for the energy access and ‘off-grid’ community. It will give governments and investors alike, the chance to meet representatives of a sector that boasts some of Africa’s most revolutionary inventions in recent years. These devices include the famous pay-as-you go solar panels, which are now rapidly advancing beyond just lighting and phone charging. Hydropower, usually a popular source for grid energy, is also seeing adaptation. The government of Ghana is currently exploring the possibility of using lakes as large batteries for remote communities around Lake Volta.

Aside from the village, the forum will also feature a number of seminars specifically focused on financing opportunities and developing ‘off-grid’ power solutions with high-level energy representatives from governments, public institutions, and the private sector. Finally, Tanzania is set to host AEF’s second ‘Off the Grid Summit’ as a roundtable held together with the UN in January 2018.

The rapid growth of Africa’s cities and their central role in economies means grid power projects are likely to remain the main issue in Copenhagen. It is undoubtable, however, that ‘off-grid’ energy is becoming an ever-larger source of investment.

There is also another reason why this power source may be an important addition to the AEF. Since the 2015 migrant crisis, European governments have pledged large amounts of money towards ensuring Africa’s development is successful. In fact, development financing institutions have been announced as the central theme of this year’s conference and they will be present at a number of roundtables. With off-grid power systems seen as vital in solving linkage problems inside the energy-food-water nexus, three core systems central to human welfare, such agencies are likely to promote them. Off-grid power presents not only a quick solution to the infrastructure problem, but also a welcome help in reaching sustainable development targets. In light of these facts, can we look forward to off-grid energy being this year’s dark horse, perhaps becoming the surprise breakthrough for alternative energy sources?

By Thomas McEnchroe, Djembe Communications