Working with one of its power sector clients, ISI attended African Utility Week last week in Cape Town, where hundreds of exhibitors and over 6,000 attendees shared the latest technologies and solutions. The event brought together the leading design engineering, construction, OEM, and field services firms working on power projects across Africa, who shared project updates and identified opportunities to collaborate.
Discussions with a number of companies in generation, transmission, distribution, renewables, and finance, provided a good indicator of the current state of the power sector in Africa. There were a variety of issues facing the sector that were discussed but the common denominators that most companies mentioned were mismanagement, poor planning and resource allocation, and a lack of emphasis on operations. These issues are further complicated by payment issues in several markets that make it difficult for the top equipment and service providers to participate in projects.
While, for some, this has meant scaling back their pan-African presence in the short-term, for those with both the expertise to solve these issues as well as the knowledge to navigate the challenges there are many lucrative opportunities. The number of commercially viable markets for companies in the power space is growing with a healthy trajectory of projects slated to be actualized over the next several years. And many companies in attendance have built healthy pipelines in all corners of the continent. The key differentiators of those companies that have been successful in Africa appear to be a good knowledge of where to focus amongst the 54 markets of Africa, an ability to view African markets as a long-term play and to build strong networks and relationships in target markets.
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