OBG talks to Izak Elyashiv, CEO, Telemenia

Interview: Izak Elyashiv

What are the challenges in connecting isolated areas into national power grids?

IZAK ELYASHIV: The main challenge is the long distances between cities, with the cost of high-tension electrification lines making the provision of electricity to those areas particularly difficult. Most of the time, that price is higher than any other cost related to the construction of these kinds of infrastructure. Between large cities, only small villages and a few people need electricity, so this cost must be lowered.

There are several fundamentals to take into consideration such as the cost of power stations and fuel. The price of fuel has been rising and in some cases, is twice the price of natural gas. One should not forget the cost of transporting electricity, nor the cost of the grid. That kind of infrastructure requires massive investment.

Additionally, taxes and other administrative costs on fuel should be removed so that isolated communities can be reached. Ultimately, it would help private companies to produce electricity at a much cheaper price. For instance, inland transportation of fuel is very costly, as opposed to offshore where you just need to send a ship. Building an efficient interconnecting system within the country is key, and the private sector can help local authorities meet that goal.

Where do you see scope for additional upgrades in Gabon’s electricity sector?

ELYASHIV: As gas is abundant, the price of electricity in the country is reasonable. At around €0.08 per KWh, it is even cheaper than in Europe. Nevertheless, the pipeline network needs to be expanded, as there are only two grids, one in Libreville and one in Port-Gentil. Investments are also needed in places like Mayumba. Transportation lines surrounding the towns and cities also need to be developed.

What fuel types can provide sustainable power?

ELYASHIV: Countries like Côte d’Ivoire and Ghana have abundant gas resources, and in that sense, if adequate power stations are built, they could easily double their current electricity production. However, because they do not have any other options, countries like Burkina Faso and Guinea Conakry base their electricity consumption on heavy fuel, and therefore the cost is very high.

The development of hydroelectric power generation represents the best sustainable energy production, as it can generate electricity for many years. While there are large investments in biomass research and development, the continent cannot rely on that alone. Biomass products could, however, be used as an alternative source in smaller cities.

How can public-private partnerships facilitate electrical interconnection in Africa?

ELYASHIV: Ultimately, governments need to go further to open their markets to developers and investors. In some cases, local laws need to be adjusted or a better legal framework implemented, so that investors are attracted to the country. Improving the business environment is a prerequisite. Overall, African countries must implement additional incentives for investors because there are a lot of other places in the world where investors can go. However, great opportunities are found in Africa; the market is huge.

African governments also need to speak to each other in order to sell their energy to neighbouring countries. Firstly, they need to have strong agreements and partnerships in place, so that the costs of electricity can be reduced and help finance infrastructure projects. Unfortunately, most of the time countries that produce and export their energy to other nations often apply high margins. More harmonisation and coherence between countries will be key.

No one can deny that many African countries are dependent on one another, especially for energy matters. Therefore, they need to share their infrastructure and build high-tension lines between countries. Only then can power stations and grids be constructed so as to guarantee an efficient distribution of electricity.