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Global inflation and supply chain issues will impact pricing of new projects and the energy demand from Europe is accelerating development in Africa, top officials from Siemens Energy told Zawya Projects during a media roundtable.
Dietmar Siersdorfer, Managing Director, Siemens Energy Middle East said global inflation and supply chain stress induced by the Russia-Ukraine war and Covid “will definitely lead to increase in project prices and this will stay”.
He said in the last few months, supply of metals, nickel and copper from Russia was affected, factories in China couldn’t produce and deliver, containers were not available and shipping costs increased three-four times.
“All this added up into the project cost and we had discussions with our customers to change the pricing on new projects. We have to manage this supply chain even more diligently than in the past and we have to find ways to diversify if not already done”, he said.
Commenting on how European demand for energy has galvanised Africa, Nadja Haakansson, Managing Director of Siemens Energy Africa, said: “African nations are coming together under the African Union (AU) leadership, and we are seeing interconnections and energy power pools being established. The African Free Trade Agreement (FTA) is going to stimulate Pan African trade. I see that as a core success factor that can help speed things up. The accelerated energy need from Europe is going to accelerate the entire energy development in Africa”.
She said some countries in North Africa have established a good path [to energy transition], adding that in South Africa, it’s about moving away from coal to other resources.
“All countries are in different stages of development and need individual roadmaps and leadership… from the governments and the private sector to progress swiftly,” she said.
Both agreed that natural gas would be needed as transition fuel in Africa to address energy security concerns.
(Reporting by Sowmya Sundar; Editing by Anoop Menon)
