Product Code: 2398-0877
BMI View: Limited power sector reform, a history of underinvestment in power generation facilities and
feedstock/water shortages will mean that many of the countries in the region will continue to face power
supply shortfalls. Coal is the dominant source of power generation in the SSA - largely due to South Africa's
well established coal mining and power generation sector. Cross-regional power sector expansion efforts
tend to be centred on boosting hydropower, which represents a relatively cheap and available - albeit
volatile - source of power.
- The SSA region has severe limitations in the power sector, due to a history of underinvestment, which translates into widespread generation shortfalls amid rampant population growth.
- The inability of SSA governments to ensure that electricity tariffs reflect the cost of maintenance and investment will remain a pertinent hurdle to improving the region's power sector. Barriers to liberalisation will remain substantial, due to vested interests in state-owned utilities, which have culminated in tariffs being set low in order to appease populations with limited spending power. This has in turn weighed on private investment.
- Cote d'Ivoire maintains its leading position in the SSA Power RRI this quarter; whereas, Zimbabwe continues to trail the pack. Numerous markets have suffered from a deterioration of scores, notably Kenya, Nigeria and Angola - as project delays, feedstock issues and lower oil prices cloud the outlook. The precarious power supply situation in South Africa and Ghana has eased for the time-being, boosting their respective scores marginally
- In the face of reduced off-take from traditional buyers, power demand growth in SSA holds potential as a niche LNG export destination. We identify Cote d'Ivoire, Ghana and South Africa as the markets with the highest potential. Government support through pricing and offtake agreements is crucial for long-term gas import growth.
- The SSA will maintain its overreliance on hydropower generation over the next decade, as weak consumer spending power, and opposition to power tariff hikes, will centre power sector expansion efforts on relatively cheap hydropower generation. Hydrological fluctuations will therefore continue to threaten energy security in the region, which will weigh on investor confidence in energy intensive sectors.
Table of Contents
BMI Industry View
- BMI View
- Table: SSA Headline Power Forecasts
Regional Forecast Analysis
- MEA: Key Themes
- Table: UAE - Huge Bid Reductions Cements Outperformer Status
Industry Risk Reward Index
- SSA Power Risk/Reward Index
- Table: SSA Power Risk/Reward Index (Scores Out Of 100)
- Sub Saharan Africa - Power Demand Growth Supports Niche LNG Offtake
- Table: Select SAA Countries - Forecast Annual Average Growth Rates, % (2016-2025)
- Sub Saharan: Hydropower Overreliance To Define Regional Power Landscape
- Replicating REIPPP Success Faces Significant Hurdles
- Methodology And Sources
- Industry Forecast Methodology
- Risk/Reward Index Methodology
- Table: Power Risk/Reward Index Indicators
- Table: Weighting Of Indicators