1.3 Status of the Electricity Industry in Eastern Africa7
The main country foci of this Eastern Africa sub-regional report are Kenya and Uganda. Before delving into the case studies in detail, the following section provides a broad overview of the Eastern African power sector.
6 The Centers involved in the “Energy Access” Working Group (WG) and their respective regional coverage are listed below:
• African Energy Policy Research Network (AFREPREN/FWD) – East Africa
• Asia Institute of Technology (AIT) – South and South East Asia
• Energy and Development Research Center (EDRC) now Energy Research Centre (ERC) – Southern Africa
• Energy Research Institute (ERI) – China
• Environnement et Developpement du Tiers Monde (ENDA-TM) – West Africa
• Federal University of Rio de Janeiro (COPPE/UFRJ) – Brazil
• Fundacion Bariloche – Latin America and the Caribbean
• The Energy and Resources Institute (TERI) – South and South East Asia
• Energy Research Institute (ERI - China) – China
The “Energy Access” WG Centres are assisted by an interim-Secretariat (GNESD Secretariat) provisionally located at the UNEP Collaborating Centre on Energy and Environment in Riso, Denmark
7 In this report, the term eastern Africa as used in this paper refers to Ethiopia, Kenya, Uganda, Mauritius and Tanzania. East Africa refers to Kenya and Uganda.
The supply segment of the electricity industry in eastern Africa is relatively small compared to other regions of the African continent. eastern Africa contributes to only 2% of the total installed capacity in the continent. By comparison, North and South Africa contribute 83% of the total installed capacity in the continent, while the rest of the countries account for 15%, as demonstrated in the following chart:
Figure 1 Share of Installed Capacity in Africa (2000).
Sources: World Bank 2003, IEA 2002.
Electricity production in eastern Africa8 is heavily dependent on hydro, with close to 73% of the production coming from large and small hydro generating units (Figure 2). The balance is shared between thermal generating units, geothermal and bagasse based cogeneration. Co-generation capacity is mainly found in Mauritius. Geothermal energy is in its initial stages of exploitation, with only Kenya and Ethiopia having attempted to use it for electricity generation.
Figure 2 Electricity Production in Eastern Africa (2000)
Sources: Karekezi et al (eds), 2002b, AFREPREN, 2002, IEA, 2002
Electricity demand and consumption in the eastern Africa sub-region also appears to be comparatively low. A comparison with other low and middle-income regions of the world shows that the eastern African region has considerably lower levels of electricity consumption per capita (table 1):
8The term eastern Africa as used in this paper refers to Ethiopia, Kenya, Uganda, Mauritius and Tanzania. East Africa, in the context of this report, refers to Kenya and Uganda.
North Africa 36%
South Africa 47%
Rest of Africa 15%
Eastern Africa 2%
Bagasse-based cogeneration
2.81%
Geothermal 3.25%
Thermal 21.49%
Hydro 72.45%
Table 1 Electricity Consumption per capita for Selected Developing Regions of the World
Region Annual Electricity Consumption per capita (kWh) – 2000
Latin America and the Caribbean 1,528
East Asia and the Pacific 760
South Asia 323
Sub-Saharan Africa9 432
Eastern Africa 60
Sources: World Bank 2003, AFREPREN 2002, UEB 1999, and UNDP 2002.
Until recently, the electricity industry in eastern Africa was characterized by a monopoly structure, dominated by vertically integrated, state-owned power utilities. This is true for almost all countries, with the exception of Uganda and Kenya, which have recently unbundled their power utilities. This monopoly structure, is thought to be a large contributor to the under performance of the region’s power utilities. With the exception of Mauritius, power sector institutions are mainly characterized by unreliability of power supply, low capacity utilization and availability factor, deficient maintenance, poor procurement of spare parts, and high transmission and distribution losses.
Secure and low cost supply of electricity is crucial for economic growth and social progress.
However, provision of electricity in Eastern Africa, is largely confined to high and middle income groups in urban areas, as well as the formal commercial and industrial sectors. With the exception of Mauritius, the poor, who are the majority and live mostly in rural areas, have limited access to electricity.
Household electrification is low especially in rural areas, where the majority of the population resides. In eastern Africa, low electrification levels are also prevalent in urban areas. Again, with the exception of Mauritius, all eastern African countries record national electrification levels of 10% or less (table 2). This is very low when compared to other developing regions such as Asia and Latin America, where many countries record an electrification level as high as 70%
(Shrestha and Kumar, 2003).
Table 2 Electrification Levels in Eastern Africa Country National Electrification levels (%) -
2001
** This figure only refers to the proportion of households connected to the electricity grid and may differ significantly from other sources which indicate the proportion of electrified population derived from the total number of grid electricity customers.
Sources: AFREPREN, 2002, Karekezi et al (eds), 2002b; Republic of Kenya, 2002; Okumu, 2003; Kinuthia, 2003
Mauritius uniquely high electrification levels are as a result of its early start and political commitment to rural electrification. In 1961, following a major cyclone that severely damaged the system, the Government obtained a US$ 7 million loan from the World Bank. Among other uses of loan, was an intensive electrification of villages throughout the island (Veragoo, 2003).
This effort continued progressively over the years and 40 years later the entire population has
9 The figure for sub-Saharan Africa appears to be high because it includes South Africa which, if excluded, would reduce this figure by half.
access to electricity. It is notable that it is only now after achieving 100% electrification coverage is Mauritius embarking on deeper market oriented power sector reform.
Financial performance of East African utilities is equally unsatisfactory. Development and expansion of the sector has been hampered by an inability to mobilize sufficient investment capital. With the exception of Mauritius, most public utilities have been unable to collect revenues from customers in a timely fashion, which has contributed to poor financial performance.
The need to address this poor performance of utilities has been a key driver for the far-reaching structural, legal and regulatory reforms that are being implemented in the power sector of eastern Africa sub-region. The next chapter discusses the status and trend of power sector reforms in the sub-region.