Sunday, September 24, 2023

World Bank calls for innovation in energy sector

The World Bank has called for innovation in power generation to narrow the electricity gap that has continued to haunt Botswana and sub-Saharan Africa.
World Bank chief economist Albert Zeufack said as Sub-Saharan Africa continue to experience electricity challenges, innovation and diversifying to sources such as solar, will go a long way in narrowing the energy gap.

Speaking during a media teleconferencing from Washington DC this week, Zeufack said that, “access to electricity will lift productivity within and across sectors. African governments must fully embrace technology and leverage innovation to ensure quality, affordable and sustainable electricity.”

According to the 17th edition of World banks’ Africa Pulse report released this week, low access rates and lack of reliable and affordable electricity present a challenge to rapid economic development in Africa.

Technical innovations, especially in solar power, provide the possibility for faster progress in electricity provision by complementing grid expansion with mini-grids and home-scale systems, according to a new World Bank analysis of Sub-Saharan African economies

To accelerate electrification, the report notes that improving regulation of the electricity sector and better management of utilities remain key.

According to the report, the region’s household electricity rate averaged 42 percent in 2016 with access rates among urban households being about 71 percent while rural households only account for 22 percent.

About one-third of the population in Sub-Saharan Africa has access to electricity, although various estimates indicate that a larger share of the population lives under the grid, ranging from 61 percent to 78 percent.  

The report depicts that, take-up rates are high at 90 percent in a few countries (South Africa, Nigeria, Gabon, and Cameroon), and they are very low and often below 50 percent in other countries (Malawi, Liberia, Uganda, Niger, and Sierra Leone).

There is also within-country variation in take-up rates, with a high concentration around big cities and urban centers. For instance, Botswana, Namibia, Zimbabwe and only the central region of Uganda, which includes the capital, Kampala, has a take-up rate that exceeds 50 percent.

Botswana through the Botswana Power Corporation (BPC) is on a mission to provide more electricity connections to Batswana and cover the whole country within the next five years, through the Corporations’ Masa 2020 strategy. In terms of the rural electrification, 80.6 percent of the villages have been electrified and have access to the network, where BPC has connected 94 villages to the grid. 92 remaining villages are yet to be connected in the next two years.

Meanwhile, the World Bank experts have underscored that, to achieve universal access to electricity, more needs to be understood on the demand side.

Low take-up is an important issue for understanding the demand side of electricity, especially given that most off-grid communities are rural and poorer, hence, take-up rates would be even lower in such areas if they were covered. This situation underscores the need for a deeper understanding of the constraints on the demand side and the incentives for take-up.

To make electricity expansion financially viable and incentivize private sector participation in the sector, the report suggests that the take-up rates need to be higher.

Low income levels in the region especially in rural areas hinder the capacity of households to afford a meaningful level of electricity consumption. Initial connection costs are excessively high relative to household income. 


Read this week's paper