East Africa Renewable energy development needs government investment

November 4, 2014

There is need for government across East African region to jump starts the development of new and renewable energies by reducing their dependence on fossil fuels and subsidizing the renewable energies sector. A significant percentage of subsidies should be channeled toward developing new and renewable energy programs, as the governments have been subsidizing fuel for too long. According to an expert I met recently, the East African Governments, not the state-owned oil corporations should spearhead development and financing of the programs. In his own words, “The governments should bear the burden of subsidy because the new and renewable energies programs will create more benefits, including huge clusters of industries, just like in other countries. The region should direct a certain percentage of subsidies toward the development of new and renewable energies, especially given the fiscal room created by recent slashing of the wasteful spending in Kenya, Uganda and Tanzania. With a sustainable mixed-energy program, the region could achieve an electricity-usage ratio of 70 percent, up from 45 percent at the moment in two years.

Regional governments expect to double the amount of electricity generated from renewable resources within five years, a move that would require some $10 billion in investment. To encourage the use of renewable energy, the region should incentivize automobile companies to manufacture vehicles with fuel tanks that could use new types of biofuel, such as ethanol. For example imposing a tax on vehicles incompatible with biofuels and as studies shows from where such policies have been implemented like in Brazil automotive industry responded positively, because it created a huge incentive for them. Some countries in Europe have also successfully promoted biofuel particularly bioethanol which was now being sold at the same price as fossil fuels in the European market. In East African region, the imported raw material for producing bioethanol is pricey and therefore they should try to find and develop other energies like solar and wind. What is encouraging is that the countries are considering new and renewable energy programs and in Kenya there us biomass-fuel program as a promising sector and the government there has promised to help build gas electricity generating facilities, as cost of energy is deemed cost-prohibitive for the manufacturing industry in Africa’s ninth largest economy. In Tanzania and Uganda there are corporate social responsibility programs where oil palm farmers are developing plasma as a raw material for biodiesel production.

Contador Harrison