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Fifty percent of people in the world living without power reside here in Africa. In sub-Saharan Africa, that’s 600 million people without access to electricity. The installed electricity capacity in all of Sub-Saharan Africa, excluding South Africa, is only 28,000 megawatts, which is equal to the capacity in a single country – Argentina.

Perhaps most disconcerting is that despite a sustained focus on addressing this challenge by many stakeholders, in 37 sub-Saharan African countries the number of people without electricity has actually increased since 2000 as their populations are growing faster than electrification efforts. Adding insult to injury, one-quarter of Africa’s existing electric generation capacity is inoperative because of aging plants and poor maintenance.

The power deficit is not an abstraction.  The lack of reliable energy in Africa costs lives:  730 million people in sub-Saharan Africa heat their homes and cook using traditional fuels such as wood, charcoal, and other types of biomass.  Studies have shown that inhalation of the smoke and fumes results in an estimated four million deaths per year, mainly among women and children. That’s more deaths than from malaria and HIV/AIDS combined.

The impact of the energy deficit can be repeated in sector after sector – from healthcare to education, and, to something I am particularly passionate about – the ability of entrepreneurs to turn dreams in to reality in the face of exorbitant power costs.

On the flip side, increased power supply can have a massive impact on addressing the current youth job crisis in Africa.  If African industries can operate at full capacity and compete globally, tens of millions of new jobs will be created across the continent.  In addition, the power sector itself can generate 3 million new jobs.

The size and scope of the challenge we face is clear:  whatever has been done in the past to electrify the continent is insufficient.  We need new players, new partnerships, new policies, and new platforms to succeed – and what President Adesina is introducing here will help provide some much needed impetus.

Power and the Private Sector

It is my strong belief that the private sector must be an integral part of Africa’s energy future.   To begin to address this problem, 7,000 MW of new generation capacity must be built each year—seven times the annual average of the last 10 years – which equates to US$300 billion in investment if sub-Saharan Africa is to achieve the previously agreed upon goal of universal electricity access by 2030.  Only the private sector has the capital and the capacity to invest at such a scale over a sustained period of time.

As an investor in the power sector, there are a number of practical points I would like to make.

First, as can be seen from our Transcorp Power experience, capital is not the issue.  We have capital to deploy, but due to government policy, non-payment of offtake agreements, poor transmission infrastructure and other issues, we have had to put expansion on hold.    This is the case faced by many other investors like myself.  With the right frameworks in place, the capital will follow.  Even more importantly, success begets success and other investors will follow.

Second, considering the scale of the energy deficit, we cannot put too much emphasis on renewable energy as opposed to more traditional power generation sources.  Africa has an abundance of sources for renewable and non-renewable energy and so we should use both in abundance as and when appropriate.  As Africa contributes to less than 2% of global carbon emissions, it is not right to push Africa towards a low carbon development path considering the social and economic cost of insufficient power supply.  Any solution, and any platform to address the African energy deficit must include all types of power generation if we are to really make an impact at the scale required.

Third, we need less political interference in the power sector.  In the early days of the telecommunications liberalization across Africa, for the most part governments did not mandate tariffs.  While the costs were initially exorbitant, over time market forces led to an adjustments so that, for example, instead of paying large sums for SIM cards, they are now given out for free.  The power sector should be reformed with a similar approach.

Fourth, and finally, I call on the African Development Bank to play a bigger role in Africa’s power sector than capital provision.  The AfDB provides a unique and powerful pan African convening platform and bully pulpit that can be leveraged for greater effect across Africa.

The bottom line is that hundreds of millions of Africans need more from all of us if they expect to have consistent access to electricity in their life time.  And it will take a concerted effort by government, business, international organizations, and NGOs alike to make it happen.

The barriers to developing the energy sector in Africa are not just about money and skills but also a lack of political will.  Public leaders need to be willing to make the hard choices, and learn from successful privatization and liberalization processes in the past.  This is something that the AfDB is uniquely suited to address.

All of us need to work together, regardless of whether we are in the private, public, and social sector, and regardless of what type of development path we believe is best for Africa.

By Tony O. Elumelu, CON

Chairman of Heirs Holdings Limited, Transcorp PLC and founder of The Tony Elumelu Foundation. (Excerpts).