Italian utility Enel targets Africa as growth market

Italian utility Enel plans huge investments in renewable energy and grids in Africa, where it expects to find the kind of growth it has enjoyed in Latin America.

Chief Executive Francesco Starace said that in five years, Enel expects to have built up to 5,000 megawatts of renewable energy assets in Africa via its 69 per cent owned Enel Green Power unit, which he headed until being appointed Enel chief executive in May last year.

He said parent company Enel, which has 96 gigawatts of net installed power capacity worldwide will also invest strongly in African power grids, which will probably make it Africa’s second-biggest power group after state utility Eskom. “For us, Africa is the next Latin America,” Starace said at the Business and Climate Summit in Paris. “In five years Latin America will no longer be emerging but emerged,” he said, adding that Enel is the largest player across that region in conventional energy, renewables and distribution.

Hydro energy

Enel is investing in renewable energy assets in energy starved South Africa with a balance of 60 per cent wind and 40 per cent solar. It also plans to spend heavily on wind, solar, geothermal and hydro energy in Kenya, Tanzania, Uganda, Mozambique and Ethiopia, while participating in a wind tender in Morocco. Enel will hope to improve on the chequered record of African power projects where governments and utilities have often struggled to maintain new turbines, transformers and power lines.

Those problems are illustrated by efforts to harness the Congo river’s enormous energy at the Inga rapids with a dam large enough to power half of Africa. Years of conflict and misrule in the Democratic Republic of Congo meant the project has never been realised.

Starace noted that Africa needs growth in every kind of energy infrastructure. Enel’s Africa investments could include some fossil fuel-powered plants, but for now Starace expects most of Enel’s investment will be in renewables and medium-sized hydro.

Enel also plans an investment in African grids in coming weeks. “In grids there is huge potential for Africa,” he said. He declined to give detail, but said microgrids, which connect renewable and other power sources in independent local networks, are the future of Africa.

He said that Europe’s electrification in the early 20th century followed the same pattern, as plants powering factories added lines to supply nearby residential customers. Eventually, all these small grids were connected to form Europe’s power network.