African Utility Week taking place in May 2015 in Cape Town will be host to a Germany country pavilion. We caught up with Dr Konrad Bauer, consultant for the German Federal Ministry of Economic Affairs and Energy (BMWi), who will be manning the German exhibition area, on where he sees opportunity in Africa.
Q: What can German utility product and services companies offer Africa?
A: Africa is a very strong market and German companies see the high potential there.
German companies supply innovative new products that are often developed together with local partners. Especially in the field of renewable energy and energy efficiency, German companies offer a wide variety of specific products that can be used in Africa to increase a sustainable energy supply.
Q: Tell us about ongoing African energy projects?
A: Germany is very active in the African market especially with innovative projects financed by the German government.
The German Development Organization GIZ together with German and local industry partners conduct a lot of projects.
Thereby, German companies give support to energy projects in the local market for example in the field of solar or bio energy.
Also the German Development bank KfW finances projects in the African market. On the other side Germany also supports local governments to develop political frameworks for a sustainable energy market.
Q: Where in Africa do you see opportunity? And in what sectors?
A: Germany looks at the entire African market. However, there is a specific focus in North Africa, especially the MENA region. This is due to the close geographical location of this area and the very high potential for the use of solar energy in the desert region with a very high insulation.
German companies are also very interested in South Africa where we see a very good market in the field of solar energy, wind energy but also bioenergy.
Q: What are the main challenges of doing business in Africa?
A: Africa has a very high potential for the specific technologies but there are some challenges that we have to meet, for example financing capacity is not so high and very often projects cannot be developed because relevant investors cannot be found.
Also the infrastructure in the country is sometimes not adequate to conduct projects and install technologies, and there are shortages of skilled workers to supervise or deploy new technology.
But all together, we think that the chances in the African market are much higher than the challenges that we meet.
Q: What lessons can Africa learn from German utilities?
A: From our experience in Germany, the political frameworks for the utility industry have to be well defined and transparent for all local partners.
With this, the companies have security for their investments and their activities.
The local energy market has to be open for different market players, so that best products at best price can find their way into the market.
For this it is good to have an open market that is not strongly regulated by the government.
However, there has to be political framework conditions that allow companies to have good access to specific market sections, so that they can offer their products and services at a good price.
On the other side, the local government should create the conditions for cooperation between local and foreign companies to adapt the technology and services to the local demand.
Q: What will be your message at African Utility Week?
A: At African Utility Week we want to bring information about new and sustainable technology in the field of energy efficiency and renewable energy.
We also have German companies with us that would like to enter the market and would like to cooperate with local companies, multipliers and decision makers.
So our message is that we want to be in the South African market, we are open for cooperation, and we would like to contribute to develop the local utility market to have a safe and sustainable energy supply for the future in South Africa.
African Utility Week is taking place on 12-14 May, 2015 in Cape Town, South Africa.