Millions in Southern Africa face energy insecurity, with the Southern African Power Pool (SAPP) at a critical juncture. Despite its potential for sustainable development, economic troubles, political discord, and an aging grid threaten its progress. Can the SAPP overcome these challenges to brighten Southern Africa's future and set an example for the continent?

Across Southern Africa, the shadows stretch far and wide. More than half the population lacks access to electricity, the lowest rate in the world. Even South Africa, the economic engine of the region, grapples with a chronic energy crisis. In 2023, the country endured its worst year of blackouts yet, with "load shedding" – planned power outages – plunging millions into darkness almost every day of the year¨

In this context of energy insecurity, the quest for sustainable development in Africa hinges on a crucial question: how can the continent achieve widespread electrification? One promising solution lies in regional energy integration, particularly through power pools – interconnected grids enabling electricity trading between neighboring nations.

This has, for example, been shown to be very effective in the case of Nord Pool, the largest market for electrical energy in Europe, operating in Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Norway, Sweden and the UK.

The Southern African Power Pool (SAPP), established in 1995, embodies this model. It connects 12 Southern African countries. Its goals are to make the best use of resources, postpone the need for new infrastructure, and improve regional power security. Imagine a scenario where Namibia's hydroelectric dams power Zambia's copper mines, and South Africa's industrial heart receives a boost from Mozambique's natural gas reserves. This was the vision for SAPP and was considered to be a potential game changer for the region.

According to Grasian Mkodzongi, a Postdoctoral fellow at the Centre for African Studies at University of Cape Town and visiting scholar at NAI, the power pool was initially a big success. “There was adequate electricity supply and a lot of optimism, nobody had envisaged these dramatic cutoffs.”. He explains that in 1992, severe drought struck Southern Africa, profoundly affecting hydropower producers like Zambia, Malawi, and Zimbabwe. This crisis underscored the necessity for establishing a regional pool particularly between hydro-rich nations in the north and South Africa in the south, then boasting a surplus of electricity due to its coal reserves.

NAI Senior researcher Patience Mususa says that the effectiveness of the power pool decreased due to several factors including urbanization and the massive surge in energy demand, particularly from the extractive industries, far exceeding the current capacity of the power grid. This not only limits the ability of these industries to operate efficiently but also disrupts everyday life due to power cuts.

“Most people are employed in small and medium sized enterprises across the region and these power cuts impede their productive capacity and growth”, says Mususa.

A seismic shift in market dynamics unfolded during the latter half of the 2000s, precipitated by the waning availability of South Africa's reserves of low-cost, coal-generated electricity. This forced a fundamental recalibration of the political and economic calculus underpinning the SAPP's operations. Despite a surge in local industry demand, particularly propelled by energy-intensive mining activities, and a notable expansion in electricity access among citizens, investments in innovative or more efficient electricity production capacities failed to keep pace. The repercussions were profound, casting a shadow over the SAPP's operational viability, which had long relied heavily on South African energy contributions.

Mususa points out that this could be resolved through economic investments and upgrading the grid. But this is difficult to achieve due to a prolonged austerity in much of the region, largely due to debt distress and because the majority of the region's energy production is directed towards the extractive industries, leaving limited resources for other sectors to thrive.

One major obstacle to overcoming these challenges is the high interest rates charged on loans for infrastructure investment in African countries. This, coupled with the perception of higher risk associated with the continent, creates a self-fulfilling cycle that locks Southern African countries into their roles as extractive economies, serving the interests of former colonial powers and current financial centers. “This neo-colonial dynamic perpetuates an unfair system that hinders the region's potential for broader economic development,” she says.

Debt forgiveness or access to more affordable loans is seen as a potential solution to break this cycle and allow for investment in energy infrastructure that benefits the entire region, not just the extractive industries. This could lead to the creation of a more balanced and sustainable economy, with increased regional trade.

An additional problem, says Mkodzongi, is that the SAPP changed from a “co-operative pool to a competitive pool”

Member countries have restricted electricity exports during shortages, prioritized domestic grid projects over regional transmission infrastructure, and competed for scarce resources, leading to unreliable power supply for some, uneven access, and ultimately hindering the pool's potential to function as a cohesive and efficient energy exchange system for the entire Southern African region.

He underscores the critical role of political leadership in shaping the energy agenda: “There was a vision in the early days of the pool but now regional dynamics affect the effectiveness of it. For example, the governments of Zimbabwe and Zambia are not ideologically aligned so that makes it difficult for long term regional planning.”

He believes this has also affected critical investment in the green transition. “There are both economic and political sectors that have undermined the investment in alternative energy sources, which are more sustainable in terms of going forward. And I think this is quite ironic considering the fact that a lot of the minerals needed for the green energy transition are in are in this region,” he says.

But despite all these hindrances both Mususa and Mkodzongi believe that the pool still has tremendous potential to boost the region’s economic development and serve as an example to other African regions.

“The regional collaboration is there and getting stronger, especially after COVID when African countries realized they needed to be more self-sufficient when it came to the purchase of vaccines,” says Mususa.

“I think it's an evolutionary process, not a revolutionary process, evolutionary in the sense that it's painfully slow. This was a pioneering initiative and I think the right leadership will come and build on it” Mkodzongi observes

Text: Heba Habib