High energy infrastructure cost impedes manufacturing sector growth

Source: High energy infrastructure cost impedes manufacturing sector growth | The Herald

Bulawayo Bureau
The Common Market for Eastern and Southern Africa (Comesa) says the high cost of operating energy infrastructure and inability to establish bankable projects are the major setbacks to manufacturing sector expansion in the region.

Comesa assistant secretary general in charge of programmes in Comesa Dr Kipyego Cheluget during the recently held Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA) 10th Annual General Meeting said high cost of operating energy infrastructure facilities and inability to prepare bankable projects are major impediment to the expansion of the manufacturing sector in the region.

“It is however, encouraging to note that most countries have realised that for any meaningful economic and human transformation to be realised, universal access to energy should be at the centre augmented by a strong political will and sustainable policy and legislative framework,” he said.

The total installed capacity for electric power in the 21-member bloc that include countries such as Zimbabwe, Zambia, Malawi, Swaziland, Kenya, Rwanda, Egypt, and Djibouti is around 92 000MW.

Comesa estimates that the percentage of the population in the region with access to electricity is on average around 60 percent with projections indicating that it will be around 80 percent by 2040.

“This will however, depend on heavily investing in energy infrastructure in the next ten years.

“The low level and coverage of physical energy infrastructure is due to insufficient investment in the energy sector, inefficiency and unreliability of existing energy infrastructure services, increased demand for economic and population growth,” it said.

Speaking at the same occasion, in a statement delivered by the executive chairperson of the Egyptian Electric Utility and Consumer Protection Regulatory Agency Dr Mohamed Omran, Egypt Minister of Electricity and Renewable Energy in Egypt Dr Mohamed Shaker, said the prevailing regional economic growth trends require a corresponding growth in energy infrastructure.

In this context, it was thus critical to address the supply side constraints especially energy infrastructure, to ensure accelerated regional integration and growth.

“Increased investment in infrastructure should be supported by associated policy initiatives that promote generation, maintenance and efficient utilisation of infrastructure capacity,” he said.

Comesa has established specialised agencies including RAERESA and the Eastern Africa Power Pool (EAPP) to support the region towards energy sufficiency.

It has also adopted the Comesa Model Energy Policy Framework which has introduced reforms in the energy sector in an effort to enhance energy security, accessibility, affordability and reliability in the region.

As a result, two countries, the Democratic in Republic of Congo and Djibouti have recently established their electricity regulators thus joining Ethiopia, Burundi, Egypt, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe in that group.

Chairperson of the Plenary of the RAERESA Mr Daniel Bargoria who is also the Energy and Petroleum Regulatory Authority (EPRA) acting director general in Kenya said market governance and regulatory related challenges impacts the implementation of energy projects.

“There is a huge energy gap in the region accounted for by missing links and maintenance backlog thereby calling for narrowing of the gap if the region is to accelerate regional economic development for the benefit of the people,” he said.

The meeting also called on RAERESA to continue engaging with the countries which are in the process of establishing their regulators to give impetus to the full establishment of effective energy regulators.