Rising Demand for Electricity Invigorates African Power Generation Industry

June 14, 2006

London, United Kingdom – Greater engagement with a globalised economy is energising the African power generation industry. Rising economic growth in the region will allow the power generation industry to achieve sustained turbines capacity addition. Notwithstanding the several risks involved in operating in Africa, the power generation industry will continue to grow, especially in Nigeria, South Africa and some countries of north, central and east Africa.

Frost & Sullivan (http://www.energy.frost.com) finds that the African Steam and Gas Turbine Markets earned revenues of $982.2 million in 2005 and estimates this to reach $1,235.2 million in 2012.

Current supply levels are incapable of meeting the ever-increasing demand for electricity. As a result, African countries are seeking to expand the installed capacity of their power plants. The presence of large proven reserves of fossil-fuels and natural gas will complement the growth of conventional power plants, particularly that of steam and gas turbine power plants.

“Owing to the sudden impetus in economic growth caused by various factors and the growing population, the demand for electricity has been increasing at a rapid pace,” says Frost & Sullivan Research Manager Harald Thaler. “In order to meet these escalating demands, a considerable amount of capacity needs to be installed throughout the continent, thus providing a boost to the African power generation market.”

Considering the vast opportunities apparent in the long term, market participants will need to view growth opportunities in a pan-regional rather than a country-specific manner. Enhanced external support in terms of funding mechanisms and trade are expected to rise due to the ongoing developmental phase, thereby cementing the basic fundamentals needed for the turbines market to move ahead.

However, political instability and the lack of security will cause serious concerns to foreign participants entering the African markets. Such volatility might deter prospective entrants despite the exciting opportunities that exist in the region.

“Although the political situation may be reasonably favourable in some countries, the numerous risks associated with doing business in Africa, especially the lack of security for equipment and people, is seen as a key challenge,” notes Mr. Thaler. “Due to this reason, foreign investors and multinational companies are wary of entering the African market.”

Potential entrants need to establish themselves in stable markets initially before moving to capitalise on the opportunities existing in other countries with relatively higher risk profiles. As the situation improves, they could foray into newer markets, thereby gaining a competitive edge.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the African Steam and Gas Turbine Markets then send an e-mail to Magdalena Oberland – Corporate Communications at magdalena.oberland@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information via email upon receipt of the above information.

African Steam and Gas Turbine Markets is part of the Energy & Power Subscription, which also includes research in the following markets: Middle East and North African Steam and Gas Turbines Market, Middle East and North African Power Plant Services Market and European Steam and Gas Turbine Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company’s industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit www.frost.com.

African Steam and Gas Turbine Markets
B922-14

Contact:
Magdalena Oberland
Corporate Communications – Europe
P: +44 (0) 20 7915 7876
E: magdalena.oberland@frost.com

Trisha Bradley
Corporate Communications – Americas
P: 210.247.3870
E: trisha.bradley@frost.com

Donna Jeremiah
Corporate Communications – Asia Pacific
P: +603 6304 5832
E: djeremiah@frost.com

Surbhi Dedhia
Corporate Communications – India
P: +91 22 2832 4705 Ext: 131
E: sdedhia@frost.com

Sharmin Jassal
Corporate Communications - Australia
P: +61 2 8247 8900
E: sjassal@frost.com

www.frost.com

List of keywords in this press release: Africa, steam and gas turbines, steam turbines, gas turbines, electricity, North Africa, Central Africa, East Africa, South Africa, Nigeria, power generation, turbines, fossil-fuels, natural gas, power plants, of conventional power plants, steam and gas turbine power plants

Contact Information

Magdalena Oberland

Corporate Communications - Europe

Frost & Sullivan

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