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The electrification of developing countries is a business sector that offers many opportunities for the energy sector, but it is also a market that presents numerous challenges. However, many Portuguese companies have found here new growth opportunities that would not be guaranteed by focusing solely on the domestic market, which has also enabled them to make a significant contribution to improving the living conditions of local populations.
In the energy sector, which I know well, the African market, especially the Portuguese-speaking African countries (PALOP), is a fertile ground for energy companies due to their low electrification rates and urgent infrastructure development. I know that many Portuguese companies have recognized the potential of these markets very early, taking advantage of our linguistic and cultural proximity to these countries to facilitate our entry. However, I still believe that geographical diversification is essential to face and overcome the obstacles that come with doing business in these markets, from the lack of currency to political risks, seeking to mitigate the negative impact and ensure business continuity.
The social impact of electrification projects is not always easy to measure, especially since it is usually not immediate. But I know because I have witnessed through the Resul project that improved access to electricity has a direct impact on education, health, and economic development in local communities. As discussed in the study “The Impact of Electrification on Development in Africa: A Grey System Theory Analysis”, electrification is directly correlated with improvements in a range of socioeconomic indicators, including growth in GDP per capita, improvements in the Human Development Index (HDI), and reductions in CO2 emissions.
In Cape Verde, I worked with photovoltaic projects in remote villages to provide public lighting in places that previously had no lights after dark, which strengthened community spirit and, most importantly, safety. In São Tomé, I worked with the World Bank on a project to replace traditional light bulbs with LEDs, which not only reduced energy consumption but also enabled more people to have access to electricity. These initiatives are often simple, but they improve people’s quality of life and promote economic and social development.
But not everything is an opportunity; there are many challenges, ranging from a lack of infrastructure to more complex issues such as security and the need to modernize the network. The integration of renewable energy, the development of energy storage technologies and the maintenance of the network are essential to ensure a stable and reliable supply, which is one of the most common problems encountered. In addition, the need for significant external investment and the effective management of political and currency risks are issues that require strong strategies and experience.
Working in developing countries, especially in Africa, provides us with challenges that present both adversity and opportunity. Each project is a business opportunity and a chance to make a positive and lasting impact on the local community. Electrification is not just about providing energy, it is about changing lives, promoting sustainable development and building a better future. By committing to consistent and sustained efforts, and through collaboration between governments, businesses and local communities, we can look forward to the day when electricity is no longer a luxury, but a right for all.
Resul, SA Commercial Director
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