Frost & Sullivan energy and power systems analyst Moses Duma said that about $563 billion would be needed over the next 25 years to avoid further energy woes.
Duma stated that an additional 270 GW would be required over the next 25 years, notwithstanding the current slowdown in demand as a result of the global economic crisis. Demand for electricity is still expected to continue to outstrip available capacity for the foreseeable future, with the long-term growth rate in power demand forecasted at 4.4% yearly over the period.
Frost & Sullivan said that the energy market could face many more obstacles as limited funding was available for new projects and delays in decision processes slow projects down. However, Duma did say that the region offered significant opportunities for foreign investors, with many countries seeking to partner with the private sector in new-build programs.
For example, Nigeria hoped that independent power producers (IPPs) would supply 6,000 MW by 2015. There were already four IPPs operating in Tanzania, while South Africa’s policy was for 30% of the country’s power needs to be supplied by IPPs, through power utility Eskom, by 2030.
The Democratic Republic of Congo’s hydro capacity was massive, but limited by political and funding challenges, while Angola planned to spend $8-billion on its power infrastructure over the next seven years with the ambition of supplying surplus capacity into the so-called Southern African Power Pool.
“The significant growth in power demand and the level of political stability in key African countries makes them a lucrative investment destination,” Duma said.