Think small to go big: this is a condensed version of a paper delivered to the Zenith Bank/Africa Advisory power conference in Lagos, Nigeria, in May this year by African Business associate editor Tom Nevin. He puts forward the case for small power projects.

Author:Nevin, Tom
Position:Energy
 
FREE EXCERPT

One of the major hindrances to Africa's efficient and rapid energy infrastructure development is that it often thinks too big.

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Africa is facing some serious questions about its performance in infrastructure development. Acknowledgement is emerging that trying to solve all of Africa's economic and social development problems with massive projects most often does not work. Very big projects frequently languish with the reluctance of donors and loan-makers to fund, for a lack of cooperation between the countries they cross, and because of the extreme amount of time required to complete them.

The very big projects mark time through funder reluctance to commit. And that may be because of Africa's demands for massive energy installations, transport systems and other very large infrastructure.

Although the G8 recently recommitted itself to financial aid for Africa, most in the developing world have learned a lesson from Gleneagles. Three years ago $50bn a year was pledged for at least five years to kick-start Africa's economies through poverty relief, and for social and industrial infrastructure. Very little of the promised money has materialised.

It is becoming increasingly difficult to pin funders down to writing the very big cheques for the very big projects Africa wants capitalised, or even to secure funding for project early phases, like pre-feasibility, pre-project studies and design.

Africa's economic growth, grand as it might sound at an average of around 5% for the past three years, does not stand close scrutiny. Some 3.5-4% of that growth came in the oil and minerals extractive industries. More sustainable growth will only happen when electricity reaches more people to stimulate, especially, manufacture and agriculture.

"Most of the world's 45,000 large dams do not do their jobs properly, are largely unprofitable and a waste of much of the $2 trillion (two thousand billion dollars!) spent on them over the last 100 years." The World Commission on Dams.

The Commission further found that one in four large dams irrigated less than 35% of the land they were supposed to; cost over-runs of construction of large dams are 56% on average; two-thirds of large dams deliver less water to cities than promised and a quarter delivered less than half the promised water; over half of large hydroelectric dams do not generate as much power as promised; and some flood-control large dams "have increased the vulnerability of river communities to floods".

As importantly, Africa is experiencing massive and unprecedented urbanisation. The UN's housing organisation, Habitat, says half Africa's population, around 400m people, now lives in urban areas. Worse is to come. The AU reports that the combined...

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