UK could tap into Africa's $24bn market for off-grid solar power

As the economic situation in the United Kingdom is about to take a turn for the better, the country is looking at new investment avenues to create value. The latest among such opportunities that investors of the country are looking for is the African Solar power industry. Africa, which is one of the lowest developed parts of the world, also has one of the lowest penetrations of Grid-based conventional electricity. In recent times the solar power infrastructure has made rapid strides in the continent trying to fill the void in the under-penetrated areas of the continent. The size of the market is also massive with nearly six hundred million people currently out of access of electricity. Solar power infrastructure, which does not require massive capital outlays on a per unit basis, has caught the fancy of service providers and has been priming up to cater to a burgeoning market within a very short time.

The opportunity, which is valued at $24 billion is already helping millions in the country and is being showcased to the investors of United Kingdom. The technology setup, which is unique in itself, is bringing about quite a revolution in the continent. Pay-as-you-go home solar package, as it is called, lets the users lease solar panels so that they use it to recharge their cell phones and small LED strip lights to light up their homes and pay for the solar panels as per agreed terms. Over a period of time when these panels get paid for, the user is encouraged to lease more panels to add more electronic equipment in his home. The set up obviates the need for large scale electrical grid infrastructure which could take decades to build and require billions of dollars of investment that the respective countries can ill afford. These panels are not only bringing in investment into the continent but slowly and steadily are also bringing about development in the region. Healthcare and education sectors, which have always faced logistical issues while operating in Africa, are now able to extend their benefits to the poorest and the most underprivileged riding on the opportunities extended by the use of information technology.

It’s a boon in disguise and an irony of sorts what today’s modern technology is capable of doing. The developed countries have, over several decades if not centuries, invested trillions of dollars to achieve an extent of development. This can now be achieved and extended to the poorest and the neediest for a fraction of the cost. LED light technology, which not too long ago was only of decorative interest, has now caught the imagination of the world as one of the lowest energy consuming sources of light. Several countries have started to extensively produce LED light bulbs and started to replace traditional lamps with LED lighting devices. The biggest benefit of LED lighting, of course, is in providing adequate lighting in far flung areas which are not possible to connected to a centralized power infrastructure. While previously a florescent light tube could be lit for only a few hours with a full day charge of an eight cell solar panel, an LED light strip will emit amount of light for more than twelve hours; imagine the possibilities that it gives rise to in rural electrification in far flung areas of the world. The same is the case with cellular phone technology. Only a few decades ago, thousand of kilometers of copper wire were laid across the world and were used to carry voice signals from one place to another requiring massive expenditure on infrastructure. With the advent of cell phone technology, the need for this massive infrastructure was not required any more. With the help of satellites and advanced terrestrial wireless technologies, cell phones are now used in every nook and corner of the world. The third and the most important technology that is proving to be most useful is the technology of internet which, through the use of cell phones, is able to dissipate information at a much faster pace and much more effectively than with any previous known technology. This technology, over the years, has brought about massive strides in the spread of education, healthcare and governance in some of the far-flung areas of the world. Many of the African countries and many other countries in remote parts of the world have been able to take a technological leap to bridge the gap between the developed and the underdeveloped world because of these technological advances. Fifteen of the African nations today are amongst the fastest growing economies in the world, creating massive possibilities for their people and international investors looking for suitable investment avenues.

The massive investment opportunity thus arising in Africa could very well be a boom for investors and companies in the United Kingdom to be a part of the development process that is transforming the poorest of African nations. The biggest benefit, however, will come when these technologies spur growth in other sectors of these African economies. The development will open the gates to other businesses and investment in the continent will give rise to long term value creation opportunities. Several Members of Parliament of United Kingdom and politicians across party lines, including former prime minister Tony Blair, have spoken about this opportunity and have supported the idea of United Kingdom playing a greater role in the development of Africa. Former prime minister Tony Blair while speaking in the 2020 UK Africa investment summit held in London on 20 January 2020 said that there is now need for the relationship between Africa and the United Kingdom to transform from a donor recipient relationship to a relationship of partners in economic development. He also emphasized that such a relationship will be of tremendous strategic benefit for both Africa and the United Kingdom. The African continent has been making rapid economic development in the recent past with its population set to cross the 2 billion figure in the next few decades, which will not only create a massive market for businesses to seek opportunities and flourish but will also require massive development expenditure. The 2020 UK Africa investment summit held on 20 January 2020 was meant to address many of these issues other than transforming the nature of relationship between United Kingdom and the African continent.

New energy technologies like Solar technology are currently witnessing a period of boom across the world. There is now an increased impetus among countries to invest and develop renewable energy technology infrastructure in order to reduce their dependence on conventional energy resources like coal and crude oil, which are not only highly polluting but are also becoming more expensive by the day. United Kingdom domestically is also moving faster to completely stop the use of coal in its power generation, steel and other such industries. The business opportunities arising domestically within the country will find an extended market in the African countries. The opportunities will not only bring about more business to the British solar technology providers but will also bring down the cost of rebuilding new renewable infrastructure in United Kingdom.

United Kingdom, which is currently facing a economic transformation after the Brexit event day of 31 January 2020, will do a great service to itself if it partners with this opportunity in Africa.