Investing in Sub-Saharan African Power

Africa represents approximately 20% of the world’s land mass, 54 countries, 16% of its population, yet only 3% of global GDP. It carries a significant potential for economic growth and economic forecasts document this well. However, Africa’s growth will only be achieved if there is substantial investment in supporting infrastructure including power. Enabling low-cost power and reliable electricity supply is a critical factor in generating sustainable economic growth.

Africa maintains the lowest per capita levels of electricity, and simultaneously the lowest human development rankings of any region in the world. Access to electricity affects livelihoods from improved food storage to business productivity, to better health. Sub Saharan Africa currently consumes less electricity than Brazil, but it is forecast that by 2040, demand levels will equal the current combined consumption levels of Latin America and India.

While East Africa has access to some of the globe’s largest renewable energy resources, the region’s recent climate and weakening infrastructure have proven its power grid to be fragile. Calls have come out recently for increased stability in the power grid, as well as increased investment into new infrastructure and renewing of old infrastructure in order to sustain the region’s consistent economic growth.

Natural Gas in East Africa

While available, East Africa has yet to tap the true potential of its own natural resources. The Nile has for many decades powered the region. However, with increasing demand for low-carbon, reliable power while battling a growing pushback to the increasing number of proposed hydropower projects along the Nile, East Africa - Uganda in particular - is having to look to at alternative sources. Power produced from Natural Gas is seen as the perfect solution. Natural Gas is globally recognized as a green, transition fuel that can help provide reliable power 24/7 year round.

Uganda

From 1998 until 2018 Uganda displayed significant GDP growth but remains hampered by limited power distribution and production capacity despite presence of discovered resource base (gas). Driven by GDP, Uganda’s electricity consumption has increased by a 21% compounded annual growth rate in electricity consumption during that period, yet only 51% of the population is connected to the grid, with that number being substantially lower in rural communities. Uganda experiences regular shortfalls of reliable electric power in an era of rapid economic growth. The government has indicated that power shortages will again be experienced by 2023. Power shortages have resulted from heavy reliance on hydro-electric power and imported fuel reliance for thermal generation facilities. Supply disruptions tend to occur when rainfalls are low, or as recently experienced, if floods damage aging hydropower infrastructure.

AGL in Uganda

AGL has been approached by local officials to develop Natural Gas Power Plants in the region - including Uganda - in order to help stabilize and supply the increasing demand for reliable power. Countries including Uganda agree that Natural Gas is a solution the region needs at this time. The Ugandans have invited AGL to propose a viable solution that will allow the country to sustainably expand its much-needed power production for current and future needs. AGL has proposed and begun development on a 100MW Natural Gas-Fired Power Project.

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