SADC races against the clock on energy projects

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By Timo Shihepo

Windhoek – The ministers responsible for energy in the region are meeting this week in South Africa to review the progress of the energy projects mooted at last year’s summit in Swaziland.

Statistics have revealed that access to electricity in some South African Development Community (SADC) member states is below 20% and approximately 190 million people in the SADC region live without electricity.

As a result, in Swaziland last year, the ministers identified challenges that are hindering the implementation of energy projects in the region and came up with recommendations to tackle these energy barriers.

A major challenge identified is the continuing difficulties in mobilising financing for regional generation and transmission investments due to investors’ perceived higher risk for cross-border projects and in part because of different processes and regulations in the various SADC countries. Another challenge is the capacity constraints in national and regional organisations. Inconsistencies in policies, inadequacies in the regulatory frameworks and delays in approvals, licensing and permitting arrangements, are also other challenges identified.

The current short-term forecast compels the region to increase generation capacity by an average of 5,000 MW on annual basis until 2020, in order to maintain the desired reserves.

Information obtained from the SADC Secretariat shows that the objective of the meeting is to deliberate on issues of security of supply for energy.

The theme for this year’s summit is “Development of regional gas market and infrastructure”. This year’s theme is in line with a directive from last year’s SADC Summit of Heads of State and Government.

The directive compelled the SADC Secretariat to facilitate the establishment of a regional Natural Gas Committee to promote the inclusion of gas in the regional mix and in the promotion of industrial development.

Southern Africa is one of the regions that experience frequent power shortages but despite having yearly meetings on energy, natural gas has never featured on the agenda.

Prior to this summit, the Secretariat hosted electricity, petroleum and gas subcommittees meeting in Johannesburg, South Africa, from May 29-31 to address electricity, petroleum and gas issues.

SADC executive secretary, Dr Stergomena Lawrence Tax said the region has an abundant supply of solar, hydropower, wind and geothermal potential, as well as significant amounts of natural gas and in some countries coal deposits that need to be unlocked.

She said the region, therefore, has to move quickly to unlock the energy potential in order to accelerate the drive towards the goals of regional integration, through among others, a reliable baseload power to drive industrial growth and thus economic prosperity and poverty eradication.

“For this to happen, the region has to take advantage and effectively develop and utilise the abundant sources of energy through the emerging technologies and alternative business models that will facilitate investments in this critical socio-economic sector,” she said.

Speaking at the 37th SADC summit last year, the then SADC chairperson, Jacob Zuma, said the discovery and exploitation of natural gas within the region should constitute the backbone of SADC’s regional economic integration.

Southern Africa is estimated to be sitting on natural gas reserves of about 600 trillion cubic feet, which could reduce the heavy reliance on biomass energy once it is developed.

Only South Africa and Mozambique have so far developed some of the natural gas reserves. The reserves remain almost untapped due to lack of capital, gas feasibility studies and plan to extract these natural gas resources.

“The region must develop the natural gas reserves as soon as possible to accelerate the region’s development,” said Zuma.

Other challenges identified in Swaziland last year included the balance between the strong industrialisation agenda to develop competitive economies and a need for to have widespread access to a reliable power supply at an affordable cost, while still remaining financially, environmentally and socially sustainable.

Furthermore, there is a lack of a coherent regional integrated plan and strategy that balance the national and regional need while taking into account other regional plans. This is also coupled with lack of effective monitoring mechanism for regional commitments.

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