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NEWS

Japan joins the crusade and is vowing to forge new energy ties in Africa

CategoryPress Releases
TagsEnergy Access, Finance and Investment

Blazing a path forward for other multinationals, Mitsubishi Corp. is investing about $50 million with BBOXX Limited — a company that provides clean and affordable energy solutions to the continent of Africa. It delivers solar panels and battery storage to homes on a pay-as-you-go method.

Indeed, Japan is getting increasingly involved in Africa’s energy sector and according to its prime minister, Shinzo Abe, the private sector there will invest $20 billion over the next three years. According to Japan’s Foreign Ministry, there were 75,531 Japanese corporate offices overseas as of October 2017. Of those, 796, or roughly just 1%, were located in Africa. So Abe’s pledge is major step forward — one that commits support to Africa’s emerging economies. 

“The Japanese are taking the long view of energy,” says Simon Bransfield-Garth, chief executive and founder of Azuri Technologies that provides off-grid solar solutions in Africa, in an interview with this writer. “It is taking a progressive view of the sector. Japanese companies are taking a lead in relation to Africa: how can the latest technologies be rolled out there.” 

As for Azuri, it is serving 150,000 households that are connected with solar power and battery systems with operations in Kenya, Nigeria, Zambia, Uganda and Tanzania. It’s the most efficient solution, he adds, noting that the cost of wiring up remote villages is more than the lifetime of revenues that companies would get from customers, not to mention that their geographies are difficult to traverse. 

The potential for off-grid solar is therefore huge in Africa. Azuri, for example, received a $26 million investment from Marubeni, which is a large, multifaceted Japanese corporation. 

For context, the United Nations says that Sub-Saharan Africa will double in size to 2 billion people by 2045, meaning that the demand for energy and new infrastructure will only intensify. Already, about 600 million people there live off-grid and are without access to reliable power. That forces them to use kerosene lamps to survive. Having access to solar will not just light their houses but it will also empower them economically.

“We are in an era in which the challenges Africa faces will be resolved through S, T, and I — science, technology, and innovation,” Prime Minister Abe just told an African delegation visiting Japan. 

Tip of Iceberg

Africa’s emerging economies are on the cusp of becoming a hotbed for new foreign investment. Azuri’s Bransfield-Garth says that the falling solar panel prices coupled with the exponential growth of mobile phones means that access to electricity in remote regions of Africa is now possible. 

Pay-as-you-go allows customers to use their mobile device to pay only for the electricity that they use. Or they can have their usage paid through deductions in air time. At is most rudimentary level, customers can keep their lights on and charge their phones. At a more advanced level, they can operate major appliances. 

The thinking among experts is that once commercial banks recognize the opportunity, the off-grid industry’s growth in Africa will escalate. Right now, Power Africa, begun during the Obama administration, is comprised of 140 private partners who have committed to investing $54 billion. Its goal is to make 60 million new connections and to provide 30,000 megawatts of clean power. 

Power Africa is comprised of a who’s who of energy companies ranging from General Electric to Enel to the Shell Foundation. France’s Engie is also involved and in 2017, it bought Fenix International to provide power to 500,000 households. Meantime, BBOXX — Mitsubishi just invested in it — recently sold 50% of its operations in one African location to EDF Energy. 

While the United States, Europe and Japan have pursued African opportunities, the country best known for investing there is China: It has invested $43 billion, says Japan’s External Trade Organization. In 2018, China’s total import and export volume with Africa was $204 billion, a 20% increase from the year before. 

“Utilities are renown for being conservative,” says Azuri’s Bransfield-Garth. “A number of them have taken the view that there is a fundamental change and they need to be involved in it. It is about disruptive change. The pay-as-you-go industry has broken this down and has allowed for the sale of solar systems to households. The challenge in Africa is there are 600 million people off grid. At some point, you have to get the major corporations behind you. That will turn turn this sector from a niche to a mainstream industry. 

“In my view,” he adds, “China tends to invest in more conventional types of power plants whereas the Japan is also going mainstream but is furthermore investing in leading-edge technologies.” 

The bottom line is that Africa is awash in economic opportunities. And foreign energy companies have spotted that and especially those that provide off-grid solar power in combination with battery storage. The latest such forays are indication of those possibilities and they are just the tip-of-the iceberg.