Africa's looming energy crisis

Everyone agrees that the growing economies of China and India are placing enormous demands on the world's resources and unprecedented stress on the global commons. An environmental catastrophe of untold proportions is a lock if China and the U.S. continue to pursue their current economic development strategies that are driven by fossil fuel combustion.

So where does that leave the countries of Africa? How can they possibly lift themselves from the depths of poverty when they can't keep the lights on?

A massive global clean energy mobilization and deployment effort needs to be undertaken -- as quickly as possible. This has to be a priority for the next U.S. president. (GW)

Uganda Outgrows Its Electricity Supply

By Katy Pownall
The Washington Post
Tuesday, June 5, 2007

KAMPALA, Uganda -- Samuel Kizito gives his business a month before it goes belly-up.

Uganda, once one of the fastest-growing economies in Africa, is suffering through a power crisis that makes doing business here difficult, expensive, and for Kizito, at least not worth the trouble.

Kizito said his blanket manufacturing company, which employs 300 people in the Ugandan capital, Kampala, is losing $30,000 a month.

"We have less than 50 percent of the power that we had a couple of years ago and yet our bills are four times what they used to be."

Uganda was once heralded as East Africa's power house, exporting surplus electricity to neighboring countries. But Uganda has outgrown its supply, forcing a rationing schedule that leaves Kampala in the dark for up to 30 hours at a time.

Electricity prices have doubled in the past year to an average of 26 cents per unit. That means, for an example, a resident of a three-room house in Kampala who burns just one light bulb in each room spends about $12 a month on electricity - about half the per capita income in this country of 28 million.

Uganda, like many of its sub-Saharan counterparts, relies on hydro power from Lake Victoria, the vast lake shared by Uganda, Kenya and Tanzania. Since 2000, Uganda has sapped all the electricity its dams can produce. Making the problem worse, the dams are running below capacity due to falling water levels on Lake Victoria.

"Inevitably the shortage has affected the growth rate," says Uganda's Minister of State for Energy, Simon D'Ujanga. "Factories are laying off staff because when there is no power the machines are idle. There are not enough shifts for everybody. Productivity has been scaled back in a very big way."

According to the World Bank, annual economic growth in Uganda has stagnated at 5.6 percent since 2000. Previously, the economy had been growing at around 6.8 percent, a shining example of progress in a region marked by corruption and poverty. Uganda's neighbor Kenya, by comparison, was experiencing negative growth rates in the early 1990s and now has recouped to 5.8 percent growth in 2005.

"The situation now is worse than I've ever seen," D'Ujanga said. "We can't even think of exporting power. Now Kenya supply us whenever it has a surplus."

The energy crisis has been caused in part by Uganda's rapid growth. The economy has doubled in the past decade, according to Uganda's Investment Authority. And the population has exploded at a rate of about 3.6 percent a year - the highest rate in Africa, according to the United Nations.

To help close the energy gap, the government installed two diesel generators last year producing 50 megawatts each. But fuel is costly, with each unit consuming about 42,000 gallons each day - the equivalent of four tankers. The government, which subsidizes the fuel to the tune of $150 million each year, and consumers have carried the cost burden.

"Even to bring in the diesel stations was a very painful decision for us," D'Ujanga said. "We thought, how will our people pay for this? But the other alternative is to have darkness. So we thought maybe it is better to have expensive power than to have darkness."

The biggest potential boost in energy is from the planned Bujagali hydro damn, across the picturesque Bujagali Falls some 60 miles east of Kampala and slated to produce 250 megawatts by 2011. Construction could begin in June, but environmental concerns and allegations of corruption have delayed the project ever since it was conceived in 1994.

Herbert Zake, head of Corporate Affairs at Standard Chartered Bank in Uganda, said investors in Uganda are struggling.

"We can only assume that it would be even harder for potential new entrants, who we believe may have had to reassess their view on investing in the country with regard to location and scale of operation," he said.

D'Ujanga, the deputy energy minister, said that besides more planned hydro projects and an additional diesel generator, Uganda's future energy supply will come from renewable energy sources, such as solar and wind power. He hopes that in 15 years, 20 percent of Uganda's energy will be derived from such renewable sources.

But for businessmen like Kizito, the blanket manufacturer, even six months is simply too far off.

"If we had known that the situation was going to be so prolonged we would have closed 18 months ago," he said. "But we kept believing the government that things would get better."