Africa’s Energy Reality – Poor Productivity on Megaprojects
More solar megaprojects are sprouting out of Africa. From Morocco to Botswana, the drive to diversify the continent’s energy source is shifting from mere subsistence to massive, outbound supply to regions as far as Europe. In a recent report titled, ‘The State of African Energy: 2023 Outlook,’ the African Energy Chamber profiled some of Africa’s largest solar PV projects. Topping the list amongst a few randomly sampled others is the Aman Project in Mauritania; a $40 billion, 12 GW solar power generating facility.
- In Mauritania, the Aman project forms part of a green hydrogen development currently happening in the Dakhlet Nouadhibou and Inchiri regions of Mauritania. Planned in three stages (2030, 2034 and 2036), the facility is expected to accelerate the country’s energy transition, economic growth and create thousands of jobs.
- In Morocco, the Amunsolar PV facility will have a total capacity of 7.5 GW. It will serve as feedstock for green hydrogen development, connecting into the national grid to improve clean power supply. Like the Aman project, it will also go online in three stages—2027, 2030 and 2032. But Morocco has bigger plans. Its “UK Export Project” will have a total capacity of 7 GW and will export some of that green energy to United Kingdom. With 2029 as its commissioning date, the project forms part of a large-scale renewable energy generation, transmission and storage programme designed to generate 10.5 GW of energy, 3.6 GW of which will be exported to the UK.
- In Nigeria, the Federal Ministry of Industry, Trade and Investment is partnering with Sun Africa LLC, the largest US renewable energy company operating in Africa. The deal will provide 5,000 MW of solar power to over 30 million people, spanning 360 communities. Valued at $10 billion, it is the single largest solar power megaproject in the country’s history, with the first phase of the project likely to begin in Q1 of this year.
But like all megaprojects, complexity comes with its bespoke risks too. Several studies have shown that megaproject delivery ranks poorly on the metrics of time, budget and specifications. A McKinsey & Company study estimates that 98% of megaprojects suffer cost overruns of more than 30% while 77% of megaprojects are at least 40% late. The same study also showed an average of 80% increase in original value over time and an average delay of 20 months.
One major cause for this dismal reality is poor productivity on megaprojects.
Compared to other industries, such as manufacturing, where productivity has nearly doubled since the start of the century, infrastructure is considerably lagging. Several factors are responsible: Poor or inadequate communication, contractual loopholes, poor organisation, insufficient risk management, poor scenario planning (with too much emphasis on best-case scenarios), poor short-term planning, etc.
As Africa gradually inches towards renewable energy sources, more megaprojects will sprout across the continent. Therefore, project managers must be wary of these pitfalls as they plan big for the future.