MBA Renewables

Crispen Norman Zvidzai Zana

Master's thesis

The economic framework of productive use of renewable energy in the agricultural sector as a way of accelerating rural electrification in Africa - A comparative study of policy and economic framework of small hydropower for rural electrification, irrigation and agro-processing in Mozambique and Zimbabwe

Professional background

Mechanical Engineer – (Specialised in Construction and Energy) - Appropriate Technology Specialist - Rural Development Projects Manager

Abstract of the thesis
The hypothesis is that “the main problem for establishing a viable renewable energy sector in the rural areas of Mozambique and Zimbabwe is because the efforts are normally not directly linked to the main source of rural economy which is agriculture”.
This research was triggered by the desire to eradicate Poverty in Africa which is still extreme where, according to the MDG Report of 2013, the number of people living on less than $1.25 per day is the highest in the world. This is strange though considering that the irrigation development in Africa is estimated at 600million hectares of potential and only less than 6% is utilised.
Despite abundance of renewable energy resources in Africa the development progress in energy development is amazingly slow. According to IEA over 620 million people in Africa have no access to modern energy services, and as low as only two percent of those living in rural areas have no access to any electricity. Although there is potential to generate 1,750TWh/year in Africa, the total installed hydropower capacity to date in the whole continent is only about 20.3GW that is generating only 76TWh/year which is 4.3% of the potential.
The objective of this research was to investigate where the problem is in terms of policies and strategic frame conditions and what concrete added value would electricity bring to the agricultural sector in the rural areas of Mozambique and Zimbabwe.  This research focused on Small Hydropower (SHP) because the technology is much more mature and has more potential for decentralised rural electrification in the two countries and has had a long history as well.
The Research Results of the Energy Policies and Strategic Frameworks established that several global, continental, regional and national policies exist that could pave an efficient way of Promoting Small Hydropower to boost rural electrification including the Sustainable Energy for All (SE4All) Initiative calling for universal access for all by 2030; the Programme for Infrastructure Development in Africa (PIDA) to promote industrialization and structural economic transformation through value addition strategies in the agricultural and industrial sectors; and both Mozambique and Zimbabwe have made significant progress in shaping their Renewable Energy policies. The research results on the demand for electricity in rural areas established that the demand is very high however the purchasing power is not obvious for the investors. In terms of investment and financing potential of SHP and associated risk the research results showed that if productive use of energy component would be included in the financial modelling of rural electrification projects they would be viable and the PBP would be reduced to less than a third making it more attractive for the investors.
 In conclusion the productive use of energy should be at the centre of rural electrification with irrigation and agro-processing at the top of the list in order to make rural electrification and renewable energy projects successful and profitable. There is need for harmonisation of national sector policies and strategic plans for energy development, agriculture and agro-processing industry. In order to guarantee sustainability it is important to integrate rural electrification using small hydropower and irrigation schemes that will eventually improve the attitude of rural people as investors and beneficiaries of electricity making them proactive and thereby remove the donor dependency syndrome.