Africa Energy Poverty : G8 Energy Ministers Meeting 2009

Worldwide, about 1.6 billion people lack
access to electricity services. There are also large
populations without access in the poorer countries of Asia
and Latin America, as well as in the rural and peri-urban
areas of middle income countries. However large-scale
electrification programs that is currently underway in
middle income countries and the poor countries of Asia will
increase household electricity access more rapidly than in
sub-Saharan Africa. Africa has the lowest electrification
rate of all the regions at 26 percent of households, meaning
that as many as 547 million people are without access to
electricity. On current trends less than half of African
countries will reach universal access to electricity even by
2050. Without access to electricity services, the poor are
deprived of opportunities to improve their living standards
and the delivery of health and education services is
compromised when electricity is not available in clinics, in
schools and in the households of students and teachers. The
total financing needs for Africa to resolve the power supply
crisis are of the order of approximately US$40 billion per
annum or 6.4 percent of region's Gross Domestic Product
(GDP). In response to the power crisis, donors have
increased their support to the power sector, though more is
needed. From the mid-1990s to the mid-2000s, donor
assistance for the African power sector averaged no more
than US$500 million per year. The private sector will be key
to energy access expansion. For example, private sector
expertise will be needed to develop the large complex
generation and transmission projects (especially
cross-border projects) that are necessary and for which a
project finance approach will be often the most appropriate.
The current global credit crisis poses additional challenges
to mobilizing financing for energy infrastructure and
especially for projects with perceived higher risk or higher
costs. Nevertheless, governments can still access finance in
the private markets for sound investments.