Across the globe, more nuclear power units are under construction today than at any other time in the last 25 years. This is happening despite the 2011 crisis in Japan at Fukushima. It is important to note the Fukushima crisis and resulting problems was not a result of a nuclear disaster, but rather a tsunami that laid waste to large parts of Japan and killed around 20,000 people.
At the start of 2015 there were 436 operating nuclear reactors across the globe. By year-end this had increased to 439, despite the closure of seven units during the year. The countries driving nuclear construction are largely in Asia, with China, at last count, building 30 new reactors to add to their fleet.
In South Africa, it’s clear that the government is intent on pressing ahead with a new nuclear build program. The Integrated Resource Plan calls for 9,600MW of nuclear power and this still seems to be the target for the new build. One reason seemingly being that since nuclear is an expensive and complicated industry; it would simply be more cost effective over the long term to invest in a fleet of reactors that can be supported by an underlying industry. If this should transpire, it will certainly lead to a boom in jobs across many sectors of industry.
The environment is another reason nuclear power is punted as an option for South Africa. At the United Nations Climate Change Conference in December, countries reached an agreement to hold the average global temperature increases to less than 2 degrees Celsius, compared to preindustrial levels. The targets agreed upon will require significant reductions in the global greenhouse gas emissions and one of the major areas targeted for reduction of carbon dioxide outputs would be energy generation. The bulk of the globe’s electricity is still generated by fossil fuels, with nuclear power supplying roughly 10% of global electricity. The use of nuclear power is recognized as being a means to achieve climate change targets.
Another serious question around South Africa’s energy future is the planned decommissioning of old power plants. By 2030, Eskom, by law, must close down 14,800MW of existing capacity, while Eskom’s new mega build projects will only add 10,932MW over the same period. These older plants are currently supplying a large part of South Africa’s baseload electricity. The country can ill afford to lose such a big part of its capacity and there is still no clear plan as to what will replace this baseload capacity. The role of renewables is limited; the availability of power output from renewable energy is still not comparable to that of fossil fuel or nuclear plants. Add into the mix the environmental considerations and there is only one option to replace old baseload with new baseload – nuclear.
The major constraint to a new nuclear build in South Africa is funding. Accurate estimates of what a 9,600MW fleet could cost are largely unavailable; they range between $45.4 billion and $68 billion. The only thing we know for sure is that is going to be very expensive. There are other concerns over safety, waste and the ability to run a corruption free and timeous build process.
However, there are also some benefits. The country cannot ignore the environmental issues and the need for a reliable baseload power system that can allow the economy to grow. The South African economy may be moving away from mining but there is no need to ignore the potential in the future of mining, as well as in added beneficiation. Reaching this potential would require a lot of electricity and of course, the more the economy grows, the greater the need for electricity.
Where will the first new plant be built? The Eastern Cape province still seems the most likely area. When will the first new reactor be built? The current economic downturn has given the country some breathing room and the pressure is off for now, but there can be little doubt that new construction could start within the next two years. Following that, the full fleet of 9,600MW could follow over the following 20 years. In addition, given government’s appetite for nuclear power, I would not be surprised if South Africa sees more than 9,600MW of nuclear power by 2050.
Is that a good thing? Time will tell.
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James-Brent Styan authored a book on the energy crisis called Blackout, The Eskom Crisis. It was published in 2015. He writes in his personal capacity.

The Good, Bad…  And expensive

In the last year, the cedi has lost more than 40% of its value and was the worst performing currency in Africa, the third worst in the world, in 2014. It was so bad that the government called in the International Monetary Fund.
To make matters worse, power cuts are plaguing the land. In the gloomy streets of Accra, they call it ‘dumsor’ – a colloquial expression meaning ‘on and off’.
Ghana is suffering from power rationing – a hark back to the dark days of 2007 – where people have to check a load shedding timetable to find out when their lights will go out. In February, the Ghanaian government purchased 80 megawatts (MW) from neighboring Abidjan so the nation could watch the African Nations Cup final between the Black Stars and the Mighty Elephants of Ivory Coast; it was the same story when Ghana celebrated 58 years of independence on March 6.
All of this is a blow to President John Dramani Mahama. When he took power, he promised to end load shedding in three months. Halfway through his tenure the lights are still going out.
One cause is the fall of water levels at the Akosombo Dam on the Volta River. The dam produces 558MW of power, or 20% of the Ghana’s needs, 17% down on the electricity it generates at full tilt.
The Ghanaian Institute of Statistical, Social and Economic Research has estimated that the power crisis has cost between approximately $85 million to $243 million.
Many who run businesses here say the power crisis has been devastating and expensive; as the number of generators sold increases, the rise in the price of fuel piles on the costs. It is estimated Ghana spends $3 million a day on diesel fuel for its generators. To remedy these rising costs, small and medium enterprises have even gone as far as having two price points for their services – a dumsor price and a non-dumsor price. Even if you have power, the rising cost of it is causing uproar among Ghanaians.
The Cocoa Processing Company and Nestle Ghana complain the lack of power has stalled new projects.
The government has made efforts to rectify the electricity shortage with new power plants in the pipeline. Ghana has also seen a new wave of entrepreneurs, in energy, step forward.
A few minutes’ drive from Kotoka International Airport, a meandering road running alongside the famous Accra Polo Grounds, solar powered streetlights light the way. The plan is to do the same on other roads.
Infrastructural development of Accra over the last few years has been immense but has come at a cost with the Electricity Company of Ghana (ECG) unable to keep up.
Despite the economic hardship, the country is still able to attract foreign direct investment and the government has made efforts to rectify the power shortage.
The Atuabo power plant, which will receive gas from Ghana’s offshore Jubilee oil field, has overcome teething problems and is now in operation. It could generate up to 550MW; Ghana’s power shortfall is estimated to be around 400MW.
Another solution could be the numerous thermal power plants scattered across the country, namely the Asogli, Kpone and Aboadze plants. The problem is a lack of maintenance has seen many of these thermal plants either closed or working below capacity.
Then there is the problem of the bureaucratic ECG; many in Ghana have called for it to be privatized. A poor revenue collection system has led to growing debt that is another unwelcome hazard when it is trying to keep the lights on.
Surely, for this to carry on, is dumsor.

The Dumsor Down Of The Economy

This year Lonmin, the world’s third largest platinum producer, will try to save its African business.
After a disastrous couple of years, the future of Lonmin hung in the balance in November as the platinum mining giant needed a $407-million bailout to keep going. It was the third capital raising in six years.
Wounded by declining platinum prices, electricity shortages, slow demand, and strikes, the company’s financial circumstances deteriorated sharply. To make matters worse, the company frittered away money.
“In the boom times around 2004 and 2005, Lonmin went and bought a ground in the Northern Province around the Plat Reef, a property called Akanani. Akanani was bought for almost a billion dollars. Today, in our books, it’s worth zero. So that billion dollars went down the drain,” admits Lonmin CEO, Ben Magara.
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Magara says a further billion dollars was wasted when Lonmin embarked on a failed mechanization program. The rock was too hard and shafts too narrow.
“To try and reverse all those challenges has needed even more money,” says Magara.
On the morning of November 19, Lonmin went cap in hand to its shareholders for an emergency capital injection. Prior to the meeting, other shareholders sold out of Lonmin. The share price went down from $8 in December 2010, to just 16c in November just before the meeting.
In London, Lonmin offered shareholders a 94% discount as part of its rebuilding plan. The Public Investment Corporation (PIC) saved the day by increasing its stake in Lonmin by 23% from 7%.
Even though the bailout was successful, 6,000 job losses are expected by September. Paul Theron, the CEO of asset management company, Vestact, reckons Lonmin’s shareholders are growing tired of bailouts.
“It’s a bit like SAA (South African Airways) where they say ‘this is one last bailout please’, but unfortunately that is exactly what happened in the past. The management team has raised additional funding in order to increase equity and to pay down debt, but then proceeded to run business in a way that didn’t result in a sustainable profitable scenario,” says Theron.
“No one anticipated that we would see this level of oversupply in the industry and this level of self-demand and this level of poor prices. A lot of people assumed that once the supply side started to calm down, there would be an immediate response in terms of higher platinum prices.”
Lonmin is hoping upon hope it can save its 106-year-old African operations and more than 30,000 jobs.

Lonmin Tries A Lazarus

Agriculture has become an increasingly crucial issue for African governments. Poor infrastructure and lack of long-term finance have been fingered as the culprits blocking Africa’s path to food security.
Africa’s last decade belonged to telecommunications. To achieve meaningful development, the next decade must witness massive investment and progress in the education, healthcare, electricity, water, road, rail and air transport sectors. This means economic diversification, urban decongestion and its economic gains, namely, rural development, inclusive growth, innovation, heightened productivity and spiraling employment.
Solid infrastructure will boost knowledge and agro-produce exchange between African nations.
Beyond infrastructure development and food security concerns, expanding food production will also have a positive impact on local and regional labor markets, as more people are absorbed into the agribusiness value chain.
Small scale farms produce 80% of the food consumed across Africa. Consequently, the agribusiness value chain is a short one, delivering little value to national economies. According to the African Export-Import Bank, Africa’s global share of food processing is less than 20%.
The paucity of processing, trading and retail mechanisms has restricted Africa’s agribusiness sector to the bottom of the socio-economic pyramid. The current practice of just cultivating-to-sell restricts the value chain to a primary commodity-level activity. Service providers involved in input supplies (seeds, fertilizers, machinery), packaging, exporting, transportation, processing, and converting basic produce into finished goods are urgently needed to extend the value chain. De-risking the sector might also require the establishment of public and private-sector initiatives which enable farms and agro-allied concerns to access bio- and agro-technology, financial credit and risk assurance.
According to the World Bank, Africa’s agriculture sector could be worth $1 trillion by 2030 if infrastructure and financing challenges are overcome.
Slightly over 60% of all the uncultivated arable land in the world is in Africa. In Nigeria, only 40% of its 84 million hectares of arable land is cultivated. These productivity gaps can become Africa’s competitive edge.
Coming out of the 23rd AU Summit of Heads of State and Government in Malabo, Equatorial Guinea, last July, African leaders adopted the Malabo Declaration, reinforcing a decade-old commitment (the 2003 Maputo Declaration) to end hunger and cut poverty in half by 2025.
To meet this lofty goal, the leaders reaffirmed their resolve to devote at least 10% of their national budgets to agricultural development. Only 10 countries have so far met this target. The Malabo Declaration raises the bar of focus and commitment to smallholder farmers and rural communities across the continent, says One.org, a campaigning and advocacy group which helped to galvanize pan-African and global support for the pact.
Africa’s leaders however stopped short of agreeing on a common formula for measuring the 10% target. Whichever way one looks at this matter, the key point is that the local and international appetite for Africa’s agribusiness sector has picked up.
Embedded in the declaration are a set of risk management and strategic corporate social objectives namely, operationalization of the African Investment Bank; increased support for intra-regional trade; adoption of climate-resilient farming strategies; responsible private sector investment; youth inclusion and employment targets; and mutual accountability for results.
Hopefully, Africa’s next decade will be fruitful. Ethiopia, South Africa and Kenya seem well adjusted to the nuances of commercial and small-scale farming, producing and exporting excellent quality coffee, wine, citrus, vegetables, tea and flowers.
In Nigeria, an     Agricultural Transformation Agenda (ATA) has transformed a once comatose sector into an engine of growth. Food imports declined from $19 billion in 2011 to $4.35 billion in 2013; bank lending to the sector as a share of total loans has also risen from 0.7% to 6% within two years. Over $4 billion private sector investment commitments has also been attracted to Nigerian agriculture over the last three years.
Earlier this year, Aliko Dangote, president of Dangote Industries, reached out to Kenya for agro-expertise. The Kenyans initially hesitated, pointing at Boko Haram and Ebola as the reasons why they feared coming to West Africa. But when they were offered a remuneration package that was too sweet to refuse, they accepted the challenge. They are now supporting Dangote’s sugarcane fields in Nigeria.
Money talks and agriculture is a multi-billion dollar business.

YOU CAN GROW MONEY  AFTER ALL

Women are itching to get involved in Africa’s multibillion-dollar infrastructure industry.
It is no easy task. The sector is historically dominated by men, financial institutions turn up their noses at women attempting to access money and established companies are favored for big deals.
But Leading Women of Africa (LWA) is determined to help women not only get their foot in the door, but become the ones formulating the plans and signing deals. LWA is a network of 18,000 contacts, mostly in Africa, which links women in different countries. “If you are not on the table, you are on the menu,” says LWA president Madelein Mkunu.
LWA launched Women in Infrastructure Development in Africa (Wida) at the third Corporate G20-Africa Investment Conference in London in July. The initiative is starting to create a space for women to engage with infrastructure stakeholders in the public and private sector. “We want to support a mechanism that will increase the number of women-owned companies that are in the infrastructure sector. Also at a policy level and at a legal framework level&#8230; because that is where everything needs to start; where women need to be recognized.”
Wida aims to ensure that women’s agendas are taken seriously by institutions and by the Program for Infrastructure Development in Africa (Pida).
Pida was set up to accelerate the delivery of Africa’s current and future regional and continental infrastructure projects in transport, energy, information and telecommunications technologies, as well as trans-boundary waterways. It promotes regional economic integration by bridging Africa’s infrastructure gap. The con-tinent is the least integrated physically and economically, with intra-regional trade and global trade at 10% and 3%, respectively.
Pida, which will run until 2040, is supported by the African Union (AU) Commission, the New Partnership for Africa’s Development (Nepad), the African Development Bank (AfDB), the United Nations Economic Commission for Africa and the Regional Economic Communities.
African governments are increasingly focusing on infrastructure development to grow their economies. It is estimated that poor infrastructure alone saps the continent of 2% economic growth every year.
Earlier this year, the AfDB launched a $500 million development fund to sponsor feasibility studies of large infrastructure projects across sub-
Saharan Africa. Mkunu says the LWA is in talks with the AU, Nepad and AfDB, and that Wida has been well
received all round.
“At the G20 summit… there was a strong push by the LWA, Pida department and Nepad Business Council for more women representation in infrastructure development.
“We did not expect for them to be so receptive, because we know that the issue of women and infrastructure is a new issue we are bringing up. You know, nobody really ever thought that women would be interested in this sector. We were kind of amazed about how they were willing to listen to us.”
For the LWA, it makes business sense to focus on infrastructure. The industry is growing at a rapid pace, and if Africa is serious about development, much still needs to be done.
According to Pida, only 30% of people on the continent have access to electricity, while 34% have access to roads. Internet penetration in Africa stands at just 6% and only 4% of available water resources are developed. The total cost of implementing all the projects that Pida has identified to address projected infrastructure needs by 2040 will amount to $360 billion.
“For us at LWA, yes, we do agree that the economic empowerment of women needs to start at the bottom. Women have to put food on the table and send their children to school. However, when we look at the sustainability of women’s economic empowerment, it actually involves women getting access to real projects.
“Let’s just look at the next 30 years and Pida’s goals for 2040: we don’t want to be left behind. We want to get in there while they are planning. We don’t want, by the year 2040, that they realize, ‘oh women again have been left behind’,” says Mkunu.
One woman who is grabbing the bull by the horns is South African property developer Belinda Moleko. Moleko has gone where no African has gone before. She is spearheading a $500 million project to design and build a small town near Mount Kilimanjaro in Tanzania.
Last year Moleko approached the Tanzanian government for a piece of land to develop. The government agreed and gave her land near Kilimanjaro, to take advantage of the high number of tourists who flock to Africa’s highest mountain, and therefore attract international investors.
“Through LWA, I presented myself to say: ‘I can do this type of thing. You offer me the land, you offer me payment guarantees, I will offer you performance guarantees’,” she says confidently.
“I was very lucky with Tanzania. They said: ‘Belinda, I will give you the MOU (memorandum of understanding) to develop 20,000 houses. We want you to create a whole new (town), like they do in South Africa.’”
The first phase of the project will see the local municipality moving its employees on site. Currently they have to travel daily from Arusha, which is about 100 kilometers away. A total of 1,400 houses with sanitation, electri-city and running water are due to be built by March next year. The town will eventually have all the amenities of a modern urban space, including schools, a library, hotels and parks.
“I’m going to leave a legacy that a woman came in and changed the face of Africa forever,” Moleko says intently.
But her dream has not been without obstacles.
“I could see there is a problem of housing, there is a problem with sanitation and that somebody needs to go in there and change it. But with this huge project on this table… I’m still finding it difficult, I cannot do it alone. I find that all the people I’m interviewing,
99 percent of them are men, and cannot believe that a black woman from South Africa has landed this project. They look at you as if to say: ‘you must have done something to deserve this’.”
One of Moleko’s major headaches has been access to finance, a common problem for women in the construction industry as well as in other sectors.
Commercial banks and even development finance institutions believe that women are more of a risk than their male counterparts. And that is even though Moleko has 20 years’ experience in the industry and her company, Bella Casa, built the first housing cluster in a South African township, Tembisa, near Pretoria.
“Take this project in Tanzania now. I have contacted banks here, and the first thing is: ‘what sureties do you have?’ I don’t have sureties, but I have a project that can give me sureties. I’m yet to see a bank that supports women without those conditions.
“I have seen ladies getting a small tender of about R100,000 ($10,000)&#8230; She gets that tender, knocks at the bank (door) to say government has given me a tender to supply them A, B, C, D. That tender even expires. That is why you see a tendency of people selling tenders to sell that project because it’s either you settle for a R1,000 ($100) or you lose.
There is no bank that wants to listen to you. They just aren’t friendly from the reception up.”
Moleko says another concern is that many women do not know how to put together a business plan, but banks and development finance institutions refuse to help them.
Although the AfDB has launched its development fund for infrastructure, Mkunu says the LWA will eventually set up its own fund to help women in infrastructure.
Moleko credits South Africa’s Trade and Industry Department for enabling her to move on the Tanzanian project. She approached the department’s gender desk to fund a $1.7 million feasibility study. After nearly five months of thorough checking, the department agreed.
But as Moleko says, governments cannot support infrastructure development on their own. Public-private partnerships, a buzzword gaining traction on the continent, are essential.
Although they look good on paper, in practice these partnerships leave much to be desired. Often projects are not completed because of logistics, non-payment by government, or even because companies run off with the cash. There are also very few systems in place to monitor what is being done, and unfinished projects are common across the continent.
Although Moleko is facing her biggest challenge so far, she believes her town will not be another half-baked project, and that once she has proved her mettle, the world is her oyster.
“We hope that from this project, all the other projects I have identified in Rwanda and Kenya, they will open themselves up.”
As a woman, Moleko’s journey has not been easy.
“In our industry, you have to be strong. It forces you to change yourself, your culture, your mannerisms, your ‘womaness’, and beat the man at his own game.”
She offers unequivocal advice for women wanting to enter the industry or those wanting to further their careers. “I always tell ladies wherever I speak: ‘Take off that apron! Don’t knock, kick (down) the door!’ Gone are the days of wanting to play housewife, cleaning. Create jobs by getting a helper to do it. Get out of your cocoon and go out there.”

Tag: Electricity

FORBES AFRICA SOCIAL MEDIA

The Good, Bad… And expensive

The Dumsor Down Of The Economy

Lonmin Tries A Lazarus

YOU CAN GROW MONEY AFTER ALL

Women demand a slice OF THE INFRASTRUCTURE PIE