SPECIAL: Countries to Place Your RE Bets

Yesterday Alternative Energy Africa looked at figures from 2007’s top 10 African economies in our special Investor Watch piece. However, 2007 was three years ago – what’s going on in Africa right now?

 

First of all, a shift is beginning to occur that is propelling some unlikely candidates to be among the world’s top growing economies. The Economist said in its “The World in 2009” report that previously the fastest economic growth has been seen coming from countries that were producers of highly sought after commodities. The report said, “But with the 2008 reversal in commodities prices, the natural resources boom may be over.”

 

Many African economies have hit double digits in their growth rate, with five African countries making  the top 10 global economic increase list – and Africa is expected to continue its presence on the 2010 list with four countries. For 2009, Angola came in as second on the list with an expected economic boom of 9.8%; Congo in third with 8.5%; Malawi coming in at fourth with 8.3%; Madagascar in eighth holding 7.2%; and Mozambique ends the top ten list at ninth place with an increase of 7.1% expected.

 

Granted these top five African economies are fueled by commodities: Angola and Congo with oil; Malawi uranium; Madagascar and Mozambique with raw materials, nickel and steel respectively. For its 2010 predictions, The Economist has Botswana coming in at second place with a 14.4% growth, Congo in fourth with 11.9%, Angola in fifth with 9.3%, and Liberia in seventh with a 7.53% economic growth rate.

 

Among the African countries that are on the rise for greatest economic growth, the renewable energy sector is seeing a significant increase which could help other countries to climb up the economic growth ladder. In 1990, RE held only 4.5% of the global energy share increasing to 5.9% in 2000 according to the European Commission. This year, RE is expected to contribute 8.2% to the world’s energy mix, 10% in 2020, and 11.8% in 2030.

 

With the European Commission’s predictions on the RE sector and the anticipated growth of Liberia, the country is definitely due to receive credit for its efforts. Liberia, like many of its African counterparts, has seen years of instability. After many years of civil war where around 250,000 people were killed, the country held elections in 2005 with the first democratically elected female being chosen as the head of state, Ellen Johnson-Sirleaf.

 

US-educated, former finance minister, and a former World Bank employee, Johnson-Sirleaf’s economic insight is driving Liberia up from the depths of economic ruin. She has negotiated deals with the World Bank and the International Monetary Fund in addition to adding foreign direct investments. The Sirleaf-led government has helped the country’s development improve substantially, doubled primary school enrolment in three years, and most importantly has promoted stability.

 

In a recent cabinet meeting, the President pushed for the country’s power and energy sector to be the main focus of discussion, including talks on the rehabilitation of the Mt. Coffee hydropower station. The meeting concluded that Liberia’s electricity generation capacity will more than double within the next year from 10 MW to 23 MW with Johnson-Sirleaf saying, “We absolutely need to ensure that more Liberians have access to cheap, reliable electricity.”

 

The Rural and Renewable Energy Agency (RREA) has plans to promote rural electrification beginning with a pilot project at Yandohun using a micro-hydro electric plant. The Executive Director of RREA Augustus Goanue announced that a rural energy fund is being set up. "Lighting One Million Lives in Liberia" plans to have residents exchange their kerosene lanterns for solar lanterns. One company already striving to bring offgrid solutions to Liberians is Phaesun GmbH, installing offgrid solar power plants for police barracks in Liberia with locally trained electricians onsite for maintenance. Another company, Buchanan Renewables, continues to expand its efforts in Liberia by using woodchips from old rubber trees to generate 35 MW of electricity, selling the electricity to Liberian Electric Company (LEC).

 

4G Global Alternatives, LLC (4GGA), specializing in infrastructure and power solutions that are both sustainable and renewable, built a 22.5-MW power plant for the country. "There has been a renewed interest in the country of Liberia since Madam President’s election," President of 4GGA Hani Farid said. "There is a feeling that she has turned that country around and that Liberia has a bright future."

 

These examples combined with Johnson-Sirleaf’s financier background could indicate a strong investor outlook and generate confidence. The president has ties to the World Bank, which could expedite certain partnerships or at least offer the expertise needed to obtain the World Bank’s support for new projects within the country. Liberia is trying to ramp up its electricity generation capacity, and renewable energy can help in those efforts.

 

Buchanon Renewables President Joel Strickland told Alternative Energy Africa, “We see great potential for Liberia and its [renewable] sector.” He added, “It is very early days for this market and the demand is going to boom.”

 

We couldn’t agree more.

 

Continue to follow Alternative Energy Africa’s Investor Watch next week as more African countries that investors should keep an eye on will be featured.

 

SPECIAL: AEA’s Investor Watch Sunday, August 1, 2010

 

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