Power rentals on the up in southern Africa

By Murray Pollok26 June 2009

In Cape Town in South Africa, Doka continues work on the Green Point stadium, the new football arena

In Cape Town in South Africa, Doka continues work on the Green Point stadium, the new football arena at the foot of Table Mountain that will host the 2010 Football World Cup.

The power rental market in sub-Saharan Africa is forecast to grow at a compound annual rate of 9.5% to 2014, according to a recently published report by consultant Frost & Sullivan.

The consultant valued the southern African power rental market at US$79.3 million for 2007 (covering Angola, Botswana, Egypt, Kenya, Nigeria, Mozambique and South Africa), and said this will increase to $164.2 million by 2014.

"A combination of limited generation capabilities, robust economic growth, driven by bullish metals, mining and construction sectors and more attractive payment models will support market expansion," said the Frost & Sullivan analyst, "In addition, a strong pipeline of infrastructure development projects will keep the market bullish over the long term."

The report said the market would be robust despite the lack of a rental culture in many African countries. The report said the below 100 KVA range - which accounted for 46% of the total demand in 2007 - is poised to continue as the most important power range. Government and utilities are the biggest end-user segments, accounting for 64.5% of the total demand.

The report said that service levels were important if rental companies were to be successful in the region; "Several public utilities link the quality of equipment with brand awareness, which they correlate to the experience of the selected rental supplier in sub-Saharan African countries. As a result, supplying reliable equipment is critical to establishing long-term relationships with these key customers."

Africa's electricity supply industry is expected to require a total investment of $563 billion over the next 20 years to meet the growing demand. Because of limited access to funding and dilapidated energy infrastructure in many African countries, the use of power rental equipment is increasingly becoming important.

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