WHY MCDAAN ENERGY?

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Sub Saharan Africa is characterised by extreme energy poverty. The energy sector suffers one of the greatest gaps in infrastructure development. Daily per capita electricity use in Africa is reported to be just 124 kilowatt-hours and the average electrification rate in the region is around 30%. On average more than 90% of primary energy demand in the region is covered through unsustainable biomass. Overall less than 3% of the rural population and less than 32% of the urban population have access to the national electricity grid. In effect more than Two thirds of the SSA population , over 620 million people live without electricity.

SSA’s population and economies are growing and the needs for adequate power infrastructure to sustain this growth is harder to ignore. Africa doesn’t have the energy it needs to maintain and increase its forward momentum. The fact is that the pace and volume of investment has been hampered by the dearth of bankable projects in which to invest.

The African continent is diverse with its countries differing significantly in terms of growth rates, economy size, political stability and levels of financial sophistication. In addition, the infrastructure investment spectrum has a broad range of risk/return profiles and characteristics. There is therefore no one size fits all approach. Local knowledge and experience is critical to developing a portfolio through which strong risk adjusted returns can be delivered.

For many countries on the African continent mobilising capital may be beyond the capacity of the governments and they will require private investment. The accumulation of investment risk makes financing difficult. Perceived risk that may be associated with renewable energy technologies is exacerbated by investment risks typical for developing countries; political risk, currency risk and commercial risk.

In addition to the obstacles undermining private investment in power infrastructure for reliable electricity supply, existing infrastructure also has its share in the reliable electricity supply problem that developing countries are facing. In most developing countries rapid economic growth is accompanied by a rapid increase in the electricity demand. Utilities are often compelled to skip some necessary maintenance to be able to cope with the growing demand. This leads to overloading and eventually a loss in generating capacity. Adding to this, capacity degradation due to aging power plants, high cost generation arising from the choice of technology and lack of long term planning are some other examples of the drags on developing countries.

Our Mission

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Our mission is to increase renewable energy investment in Sub Saharan Africa to accelerate and scale up the harnessing of the continents huge renewable energy potential in order to enhance wellbeing and economic development.

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