Africa’s Megaprojects: 326 Billion Reasons Africa Is On The Move
Africa’s Megaprojects had a total value of $326 billion in 2014 — an increase of 46% on the previous year. Major energy and infrastructure projects are boosting the continent’s economy, set to grow by 5.7% in 2015. A report by Deloitte projected that in 2014 the value of major construction projects on the continent totaled over $326 billion — an increase of 46% on the previous year.
overing energy and power, transport, mining, water, oil and gas, real estate, health care, manufacturing and technology, media and telecommunications, the report outlines “megaprojects” with an average value of $1.27 billion (up from $689 million) — all key drivers behind an African economy projected to grow 5.7% in 2015.
But with “megaprojects” in 2015, the distinctions between these sectors are becoming ever more blurred.
“Energy is still going to be a big player, but we will begin to see transport and interconnectedness a lot more,” says Jean-Pierre Labuschagne, Associate Director of Public-Private Partnerships at Deloitte South Africa.
Many projects such as the 500 kilometers Mbalam-Nabebea iron ore freight railway in Sudan and theKribi Deep Sea Port, Cameroon, are overlapping multiple sectors, and long-term megaprojects such as the East African Railway Master Plan are set to further open up the continent for business.
“The energy constraints that our economies are facing is really driving home the importance of huge projects,” says Labuschagne.
“Renewable energy is coming to the fore,” argues Labuschagne, and Africa is “ahead of the curve implementing renewable technologies.” Last year 65% of new energy and power projects on the continent were renewable, and advances in geothermal technology in Kenya and new wind farms in Ethiopia are setting a precedent globally.
“Coal will still be a significant generator” of both energy and income, and two new large coal-fired plants in South Africa at a cost of $37.4 billion mark a significant investment, says Labuschagne.
Despite this surge, however, there are still many challenges. A new report from the Population Reference Bureau projects Africa’s population will more than double to 2.47 billion by 2050. Paired with a growing middle class and greater urbanization, there is the potential for a lack of water-based projects to become a future “crunch point for economies,” according to Labuchagne. Failing to invest in adequate water and sanitation upgrades is a cause for concern, and if little is done, the issue is “going to be critical” in the long term.
When the new, expanded Suez Canal was inaugurated on August 6, the world marveled at the endeavor and single-mindedness that had born — and bored — 72 kilometers of new waterways through the Egyptian earth.
The $8 billion project was initially scheduled to take three years, but was completed in one. Three quarters of the world’s dredgers and 41,000 workers, operating around the clock, moved half a trillion cubic meters of earth by June this year — the equivalent of 200 Great Pyramids — meaning the canal will raise $13 billion annually by 2023 according to government projections.
But whilst the numbers are mind-boggling, they’re a drop in the ocean when it comes to major construction projects across Africa.
Africa’s Mega Projects:
Al Noor Tower, Morocco
Al Noor Tower, Morocco: $1bn – Still to begin construction, the Al Noor Tower, Morocco, would be the tallest building in Africa. The $1 billion project, financed by Middle East Development LLC and designed by French architects Valode and Pistre, is planned to be 114 stories of offices, apartments, a seven-star hotel and an art gallery, as well as housing shopping arcades.
Modderfontein development, South Africa
Modderfontein development, South Africa: $6.5bn – Chinese group Zendai are ploughing investment into a $6.5 billion future city, 20 kilometers from the heart of Johannesburg. Construction time is estimated to take between 15 and 20 years, and the 13 million meters square development will include commercial, industrial and residential complexes, including cultural and entertainment hubs. The project is anticipated to create 200,000 jobs and cater for 100,000 residents.
Suez Canal expansion, Egypt
Suez Canal expansion, Egypt: $8bn – Egypt’s $8 billion Suez Canal extension was initially scheduled to take three years, but was completed in one. Three quarters of the world’s dredgers and 41,000 workers, operating around the clock, moved half a trillion cubic meters of earth by June this year — the equivalent of 200 Great Pyramids — meaning the canal will raise $13 billion annually by 2023, according to government projections.
Mauritius oil: $2bn – Mauritius has sought to capitalize on its offshore oil reserves, and India’s Mangalore Refinery & Petrochemicals Ltd. is set to explore territory as part of an overarching project worth $2 billion according to Deloitte.
Kusile and Medupi Power Stations, South Africa
Kusile and Medupi Power Stations, South Africa: $20.4bn and $17bn – Representing a significant investment in coal-fired energy, the two power stations are amongst the costliest projects underway across the continent. Construction of Medupi Power Station (pictured) began in 2007 and is projected to generate 4,764mW when all six of its units are up and firing. Once completed the site will have used 20,200 tons of steel — more than the world’s tallest building, the Burj al Khalifa in Dubai.
Inga Dam, Democratic Republic of Congo
Inga Dam, Democratic Republic of Congo: $80bn (estimate) – The long-mooted Inga Dam has been tied up in finance issues for a while. The planned hydroelectric damn would generate a vast amount of power, but the $80 billion projected cost has been a sticking point thus far.
Geothermal energy, Kenya
Geothermal energy, Kenya: $400m – The World Bank was so impressed by Kenya’s roll-out of geothermal technology that it invested $400 million into furthering the country’s green initiative. Over 280mW have been added to the grid by company KenGen’s recent expansion — lowering the price of electricity by 30% — and there are plans for 1,015mW of geothermal energy by 2018.
East African Railways Masterplan
East African Railways Masterplan: $ 35.5bn (estimate) – A new railway line between Mombasa and Nairobi has started to turn the wheels on the vast East African Railway Masterplan. The standard gauge tracks will make the transport of goods and people faster and easier, and eventually intends to connect Tanzania, Kenya, Uganda, Rwanda, Burundi, South Sudan, Ethiopia, and beyond.
Bonga South West Project, Nigeria
Bonga South West Project, Nigeria: $12bn – Recent reports state that the vast oil project off the coast of Nigeria is mired in investment delays related to the recent downturn in oil prices. The project, which began producing oil 10 years ago, is the country’s first venture into deepwater exploration and has already yielded in excess of 500 million barrels of crude.
This article is published on CNN News and the author of the article is Thomas Page and the article is re-published here only to share the investment value of Africa.