Despite a number of laudable initiatives, chief of which is the Barack Obama-championed Power Africa initiative, lack of sustainable energy remains a significant bottleneck in Africa’s quest to becoming an advanced and industrialized continent.
German conglomerate Siemens is keen to play its part in changing this narrative. Sabine Dall’Omo, the CEO of Siemens for Southern and Eastern Africa, shares some of those plans with Footprint to Africa in this interview.
For as long as we can remember Africa has had a power problem. How would you describe Africa’s power challenge in one sentence?
The African power challenge is predominantly related to distribution. There is, currently, electricity available but at this point in time, the challenge is bringing the already available generation capacity to the consumers. That is one of the major challenges.
If you had the opportunity to proffer a solution, what do you think will sustainability and effectively reduce the power deficit in Africa?
First of all, we need to make use of the current power generation capacity already installed and that basically means the current generation capacity needs to be maintained. For example, in markets like Nigeria, you need to ensure there is availability of gas to run the power stations and on that basis you maintain the current existing generation capacity and basically fix the transmission and distribution environment to an extent that it actually can take the generation load and collect the required revenue for generated power. These are the first steps to developing the power market as you need this sort of mechanism to ensure power generated is actually paid for any financial proposition or to get viable investments into the sector.
Renewable energy is the current catch-phrase across the globe as countries are turning their attention towards cleaner energy. Do you think Africa is ready for this shift?
Definitely, and I think Africa is more ready for it than any other continent because Africa has the possibility, first of all, to the natural resources—the sun and wind—and the hydro environment to maximize this kind of energy sources for production. Secondly, looking at the development of the African electricity grid, with the exception of a few countries, you predominantly see development around the major cities or certain hubs, you don’t see really overhead lines and distribution cables going to the vast majority of the rural settlements and so having decentralized renewable energy can help in distributing power to these people rather quickly and then having a mechanism of building decentralized energy solutions that can be connected to virtual power plant rather than putting up big power stations like people would have done in the old times. This doesn’t mean we do not need big power stations but you need to start with something and ideally you start with a smaller generation capacity to give some of proof to the residents that power can change our lives.
Can you enlighten us on some of Siemens’ solutions capable of helping Africa meet is renewable energy goals?
So basically, we do see specifically in the wind environment, especially onshore wind, that many of the countries in Africa have a great possibility to harvest onshore wind that is available. We have exclusive onshore wind product off of our wind joint-venture in which we have a variety for low and high wind speed turbines which we can supply to the market and we can connect them to traditional grids. We have a great experience also in the election of solar powered fields. In several collaborations like under the AGOA agreement, we have worked together to develop solar farms and other renewable energy infrastructure which are on a bigger scale. However, all these renewable energy solutions you need to run in tandem with traditional diesel-fired energy sources to ensure a quick-response back-up in the case of low winds or unforeseen hiccups. That kind of technology shows how the combined energy mix can look like and we have great competencies and expertise in this field.
Apart from working with countries like Nigeria, Uganda and South Africa, how do you think Siemens can further engage other African governments in policy formulation and implementation to ensure Africa becomes ready for sustainable energy future?
One of the reasons Uganda is so attractive is because in Uganda the power market is liberalized. So Siemens is aggressively engaging the German government to work closely with African markets towards liberalizing more energy economies because, in order to bring in more foreign direct investment into a market, you do need to know what is the framework? what is the tariffed network? will the regulations change rather quickly? That is why is it very important to have a liberalized power market so the industry is not dominated by parliamentary decisions but rather by real financial and business objectives.
The industrialization of Africa has become a trending topic following the launch of the recent ETA Report on the organisation and industrialization of Africa. Can you shed more light the payment commitments towards creating local opportunities in Uganda and the obstacles towards industrial and financial growth?
When you look at Siemens as a company and our history in all the countries where we are you will notice we are those countries for a very long time. If you look at Africa, we are more than 157 years in South Africa, we are more than 45 years in Nigeria and when you look at these aspects what our intention is not just for the short term perspective on the business. In the short term we need to do business continuously in order to meet also our payroll but at the end our objective really is to develop together with the people in the country through partnerships as well as develop jobs locally because at the end when you want to serve the market properly irrespective of it being in Africa or anywhere else, even more so if the countries are a far distance from each other. So it is absolutely important that you develop these local capabilities to ensure that you participate in job creation but also to be able to do more business at the end of the day if the market is growing and the middle class is expanding, then it can consume additional products which will then lead to additional investment in the fields that we are operating in. So it makes absolute sense to develop local businesses around us and how we at Siemens measure that we have a business-to-society project which is now done in South Africa and Nigeria. In Ghana, and one in Ethiopia and we try to measure what time does it take a company like us to make strides in job creation, impacting the industry, achieve supplier development because the total mixture of engagement is very important to the success of a company like us.
Recently it was announced that GE and Uganda had partnered to construct the country’s first power refinery. What are your plans for oil and gas infrastructure development in Africa?
Definitely, we are interested in oil and gas environment and our competitors. We have partnered with the Ugandan government in the frame of our Memorandum of Understanding basically to ensure the capacity building around the oil and gas industry. What we believe is that we don’t have to single out individual projects because at the end of the day it is the diversity that will make a country develop properly and we want to assist Uganda specifically in that oil gas capacity building and we have excellent knowledge of the power, oil and gas as well as in the pipeline and refinery business over our competitors and our data is significant because we can offer the efficient and effective guide throughout the entire value chain and the simulation of the technology with regards the demand for electricity required for that kind of oil project.