Nexans plans Africa cables manufacturing expansion
France’s Nexans plans to extend its sub-Saharan manufacturing capacity to make cables for domestic connectivity and supply renewable energy industries, Vijay Mahadevan, executive vice president for Africa, tells The Africa Report.
The company, mainly focused until now on northwest Africa, is evaluating whether to expand in eastern or southern Africa, says Mahadevan in Paris. A decision is likely to be taken in 2021. The countries being considered are “stable” in governance terms, he adds.
Nexans will choose between eastern and southern Africa rather than trying to enter both regions at the same time, Mahadevan says. The expansion, intended to create long-term manufacturing capability rather than to service one-off projects, is likely to create between 100 and 500 jobs. It could be carried out alone or with joint-venture partners, he adds.
Mahadevan will be looking for local suppliers to avoid carbon-costly long-haul logistics.
- Suppliers will have to meet the company’s environmental, social and governance (ESG) criteria.
- He sees African infrastructure as capable of supporting the manufacturing operations. “There are pockets of good infrastructure and sizeable populations” to serve, he said.
- Dispruption to Nexans operations in Africa has been “minimal.” At the start of the COVID-19 pandemic, Nexans’ operations in China meant that the company was able to learn fast and transmit key learnings, says Mahadevan, who is also executive vice president for the Middle East, Russia and South America. Sanitary measures were in place and masks available before they became the norm, he says.
Drop in the ocean
Nexans in September committed to achieving carbon neutrality by 2030, through a 4.2% average annual reduction of company greenhouse gas emissions. Future R&D projects will be 100% dedicated to energy efficiency and energy transition.
Scale is the key missing element. Africa needs large-scale deployment of renewable energy if it is to get anywhere near meeting future electricity needs. According to the International Energy Agency (IEA), current and planned efforts to provide access to modern energy services “barely outpace population growth”.
- The result, the IEA says, is that in 2040, 90% of the global population without access to modern energy will be living in Africa.
- Over a longer timeframe, the need for power just keeps rising. Researchers led by Randall Spalding-Fecher of Carbon Limits in Norway have estimated that electricity demand in southern Africa could increase by between eight and 14 times by 2070.
- The International Renewable Energy Agency (IRENA) says that renewable energy could provide half the continent’s electricity generation capacity.
But such a transformation would require average annual investment of US$70b to 2030, it says.
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Nexans has about 500 employees in Morocco, and 100 in the Côte d’Ivoire. This year, Engie was chosen by Nexans Morocco to build a 2.5 MWp solar power plant on the roof of its cable manufacturing plant in Mohammédia, near Casablanca. Nexans also plans to extend its distribution activities in the northeast of the continent, says Mahadevan.
But, he adds, it’s not yet possible to build a factory in Africa to supply renewable energy industries alone. As long as that’s the case, Africa’s electrification will remain a source of corporate slogans rather than a reality.
Renewable energy investment needs a jump in scale if it is to make a dent in Africa’s ever-growing population without access to power.