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French firms launch partnership to expand power grid and telecoms in Africa


French telecoms company Orange and energy utility Engie have announced a partnership to expand the rural electrical grid in Africa and to “optimise power supply to telecoms infrastructure” on the continent.

Under the terms of the partnership agreement, signed by Orange’s chief executive officer Stephane Richard and Engie’s deputy CEO and chief operating officer Isabelle Kocher, the companies will support two projects.

Orange and Engie said in a joint statement: “Based on Orange’s expertise as a telecoms carrier and Engie’s experience in renewable energy production, aggregation and maintenance, the two groups will trial a range of domestic power supply solutions for rural populations that could then be marketed by Orange.”

The companies said “these solutions could, for instance, include individual solar kits and small-scale, local electricity networks”, which could be paid for using the Orange Money mobile payment service. “The trials will allow the companies to validate the technical solutions, the sales and distribution models, and the economic feasibility of the service before making it available on a larger scale.”

Orange, which has a presence in 19 countries in Africa and the Middle East, said it is “keen to take part in such a major challenge to expand the electricity grid in Africa and encourage responsible power consumption on the continent based on the expertise of Engie, one of the world’s leading energy companies”.

Engie, which currently supplies 760 megawatts of power in Africa, said it aims “to become one of the major energy leaders on the continent by 2025 with several major projects planned”.

According to figures published in December 2014 by the Infrastructure Consortium for Africa, total infrastructure funding commitments in Africa increased for the second year running in 2013, with the energy, transport, water and information and communications technology sectors the key beneficiaries.

Earlier this year, a report by McKinsey & Company said the electricity sector in sub-Saharan Africa (SSA) alone would need capital investment of about $835 billion by 2040 to be able to meet the continent’s increasing demand for electricity.

The report said SSA’s power sector offers “a unique combination of transformative potential and attractive investment opportunity”. However, the report said governments in the region must provide “clear, consistent and transparent regulations” to attract private-sector financing to the power sector.

Research by market analysts Ovum has projected (17-page / 752 KB PDF) that the number of mobile broadband connections in Africa will reach one billion in 2020, up from 147 million at the end of 2014.

Ovum’s index forecast that mobile data revenues in Africa will grow at a compound annual growth rate of 18.2% between 2014 and 2020, reaching $25.8bn by the end of 2020.

The African Union (AU) has said (104-page / 1.53 MB PDF) access to advanced ICT is “critical to the long-term economic and social development” of the continent. “It has increasingly become essential that appropriate ICT infrastructure, applications and skills are in place and accessible to the population to close the development gap between Africa and the rest of the world,” the AU said.

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