Seeds of Opportunity: The African Growth Series
July 2023 | Issue 4
In this week's issue, you will learn more about:
- AFRICA TREND: South Africa's Most Recent Loadshedding Woes
- AFRICA OPPORTUNITY: Making use of Start-Ups to Solve Water Solutions in Africa
- AFRICA OPPORTUNITY: Leveraging the Rise in Digital Banking
- UPCOMING EVENT: Transport Evolution Africa Awards 2023
- UPCOMING EVENT: Africa Energy Week (AEW) 2023
AFRICA TREND: South Africa's Most Recent Loadshedding Woes
Were we a bit too ambitious in hoping that loadshedding is finally a thing of the past? Until last week, Eskom has seen an increase in its Energy Availability Factor (EAF) in recent weeks. There is certainly work going on at Eskom’s coal power plants to improve the availability of capacity of the ailing and ageing coal fleet and to improve the overall operation of units (including bringing some back online after months or even years of being out of commission). While the country has been witnessing lower stages of loadshedding (until recently at least), the trend we are seeing is not necessarily only due to the work at Eskom’s power stations. The EAF always climbs during winter months as demand increases and then tails off into the summer months as demand decreases and more planned maintenance is done, effectively lowering the available capacity. The lower stages of loadshedding are mainly attributed to lower-than-expected demand from end-users (increased off-grid installations of residential/industrial solar PV), preferential weather conditions in the coastal areas resulting in higher available capacity from wind generation and lowered planned maintenance of the coal fleet. Another reason for the growth in the EAF could be the running of the available coal fleet at capacities beyond their designed recommendations, resulting in a high potential of breakdowns in the long term, elevating the unplanned capacity load factor. Opinions are being voiced that Eskom should invest less in additional renewable capacity (which requires a large-scale investment into the grid) and more into fixing and extending the lifetime of the existing coal fleet, with Eskom unable to fund both simultaneously. While this would arguably make sense for a short-term fix, the country needs to look at the issue in the long term. South Africa increasingly relies on investment from the developed world, pushing the green energy transition agenda (and rightfully so), necessitating the country to adjust its long-term objectives. The existing coal fleet’s average age is 40+ years, and the associated costs to install emission-capturing technology to adhere to globally agreed standards are far beyond Eskom’s current financial capabilities. The age of coal-powered generation is ending, and while complete reliance on only a select few technologies is undoubtedly not advisable (see Europe’s natural gas dilemma in early 2022), green technology is the future. And South Africa, like the rest of Africa, has massive opportunities it can take advantage of, from increased renewable capacity (solar, wind, run of river, geothermal, etc.) to developing a green hydrogen economy. The opportunities are endless. All that is needed is well-thought-through policies and regulations, private sector participation, unbundling and ethical leadership that values local industrialisation. Nonetheless, while the proper steps are finally slowly being taken, there is no miracle short-term fix to Eskom’s struggles. Eskom’s system will remain under pressure in the long term until significant reliable capacity has been added to the grid, the coal fleet reaches well-maintained levels, corruption and embezzling of funds are stopped, and the transmission network is expanded and upgraded to a stage where it can effectively transmit capacity from remote supply areas to high-demand centres.
AFRICA OPPORTUNITY: Making use of Start-Ups to Solve Water Solutions in Africa
In sub – Saharan Africa, about 40% of the population lacks access to clean drinking water. In 2020, the World Bank reported that over 300 million Africans do not have access to clean drinking water, over 700 million live without good sanitation, and more than 800 million lack or have limited access to basic hygiene services. As water remains an essential need, various start-ups throughout the region and the world have committed to using technology to ensure that many have access to clean drinking water. Non-profit organisations such as Innovation Africa, utilise solar energy to provide light and electricity to off-grid schools and medical centres and, crucially, to pump clean water throughout remote villages across 10 African countries. In a recent competition, Innovation Africa awarded three Israeli startup companies focusing on clean water to pilot their technologies in Africa. These three start-ups (EZMEMS, NanoClear Water Solutions, and SoLED) will work alongside Innovation Africa to ensure that various villages can access clean groundwater pumped through solar panels. EZMEMs make use of multi-sensing technology that is integrated into water systems to provide data on the water. NanoClear Water Solutions has developed a porous nano-ceramic material infused with beneficial bacteria to clean water. At the same time, SoLED created a UV LED-based water disinfection device that can be used without electricity.
Overall, the collaboration between the Israeli clean water startups and Innovation Africa aims to create sustainable solutions that will positively impact communities, improve access to clean water and contribute to the overall well-being and development of the continent.
AFRICA OPPORTUNITY: Leveraging the Rise in Digital Banking
Digital banking is on the rise in Africa, but cash still accounts for about 90% of transactions. In 2022, banking access had more than doubled from 23% in 2017 to 48% of the population utilising banking services. Mobile money, a growing urban middle class, a lack of card payment infrastructure, and the adoption of digital banking drove this increase. Yet, with half the continent still unbanked, there is an opportunity for significant growth. Since there is an expected 10% yearly growth in Africa's financial services, yielding US$230 billion in annual revenues by 2025. Leading to the launch of the Fingo Africa App by Kenya's president in May 2023. Ecobank collaboratively developed the app with Fingo to cater to the specific needs of the youth in Kenya, while ensuring financial inclusion and convenience of digital banking. As Africa's youth grows, there is a rising opportunity to offer a comprehensive range of digital banking services.
UPCOMING EVENT: Transport Evolution Africa Awards 2023
As part of the Transport Evolution Africa Forum & Expo, the Women in Transport Awards has evolved into the Transport Evolution Africa Awards. Running in Durban on 21 September 2023, the awards will bring together Africa’s most renowned transport industry professionals, many of them longstanding attendees of the Transport Evolution Africa Forum & Expo.
This platform will recognise, reward and celebrate the success of trailblazers who are transforming the transport sector, as well as those who have made significant impact in driving enterprise development, sustainability, and inclusivity.
Looking for more information or have a nominee in mind? Click the link below to learn more about the Awards and to submit your entry - https://lnkd.in/eEdGqBqk
Please note: The deadline for submission is Friday 4 August 2023
UPCOMING EVENT: Africa Energy Week (AEW) 2023
Frost & Sullivan Africa is proud to be a Knowledge Partner of AEC African Energy Week 2023 and is excited to announce that its CEO Hendrik Malan will be speaking at the event.
📅 Join us from 16-20 October in Cape Town, South Africa, at the V & A Waterfront. Experience Africa's booming energy markets and unlock unmatched opportunities in oil and gas, power, green hydrogen, and renewable energy.
⏰ Secure your spot now! Be part of 'The African Energy Renaissance: Prioritizing Energy Poverty, People, the Planet, Industrialization, and Free Markets.'
Enquire more: https://aecweek.com/
To find out more about opportunities in Africa, please get in touch with Lynne Martin.
