Published: May, 2017
The fragmented Africa small hydropower market is dominated primarily by three players – Siemens AG, ESKOM Holdings, and Africa Infrastructure Investment Managers. These three players are likely to account for more than one third of the Africa small hydropower market in the coming years. The economic dynamics of the Africa small hydropower market are likely to offer major promise to leading players in the global hydropower sector in the coming years, as the market has received extensive government support in recent years. Government entities are thus likely to a determinant factor in the Africa small hydropower market in the coming years.
According to Transparency Market Research (TMR), the Africa small hydropower market is expected to exhibit a robust CAGR of 19.2% between 2016 and 2024. The total capacity of the Africa small hydropower market was more than 10,000 MW in 2016 and is likely to rise to close to 50,000 MW by 2024.
Zambia, Ghana Likely to Lead Demand for Small Hydropower Capacity Installation
Regionally, the leading small hydropower markets in Africa are Ghana, Tanzania, Zambia, Nigeria, South Africa, Morocco, and the Rest of Africa. Of these, Ghana and Zambia are likely to remain the leaders in the Africa small hydropower market, playing a key role in Southern and Western Africa remaining the key geographical segments of the Africa small hydropower market. Tanzania and South Africa are also likely to exhibit a steady rise in the demand from the Africa small hydropower market in the coming years, while Nigeria is a leading economy in West Africa and is also likely to remain a key player in the small hydropower market.
Government Participation Crucial in Overcoming Lack of Funding, Infrastructure
The small hydropower market is hamstrung in a majority of African countries due to the lack of advanced infrastructure to even construct locally sustainable hydropower projects. The challenging topography of some regions has also cost them the opportunity to construct small hydropower plants, as overcoming natural challenges requires further expenditure. This has made the development of conventional hydropower projects a near-impossibility in Africa. The rising awareness among governments in Africa about the viability of small hydropower projects as an alternative to conventional modes of harnessing hydropower has thus become vital for the Africa small hydropower market.
The widening foreign investment channels in Africa are also likely to play a key role in the development of the small hydropower sector. Due to the steady urbanization in developing economies in Africa and the economic scope presented by the rising disposable income of consumers in the region, foreign aid for infrastructure projects has risen steadily in Africa over the last few years.
The high power conversion efficiency of small hydropower projects is a key reason driving the demand from the Africa small hydropower market. While several types of alternative energy are being harnessed by developing economies in Africa due to the abundant availability of natural resources, the demand for small hydropower has grown consistently compared to solar or wind power due to its high efficiency and low expenditure. Small hydropower projects have an exponentially reduced effect on the environment as compared to conventional large hydropower projects, which has also been crucial in driving their demand.
The information in this preview comes from a TMR report titled ‘Small Hydropower Market - Africa Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024.’
The Africa small hydropower market is segmented as follows:
Africa Small Hydropower Market: Country Analysis
- South Africa
- Rest of Africa
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