Market Trends of East Africa Battery Industry
This section covers the major market trends shaping the East Africa Battery Market according to our research experts:
Lithium-ion Battery Segment Expected to be the Fastest-growing Market
Lithium-ion batteries are a rechargeable type of battery that is commonly used in electronic devices and energy vehicles. These batteries are also being used for the storage of energy from renewable energy sources such as solar and wind.
The energy densities of these batteries are quite high and have a round trip efficiency of 85 to 95%, which indicates the ratio of energy output/released to energy input/stored. The lithium-ion battery is a low maintenance battery, and the cells of the battery cause little harm to the environment when disposed of.
The governments of the region's countries are promoting and continually supporting any foreign or local investments in electric vehicles (EV) in their countries. Many countries such as Uganda, Kenya, and Rwanda see electric cars as a long-term solution for reducing the carbon footprint in the region.
In August 2020, state-owned Kiira Motors Corp. announced plans to manufacture 5,000 electric vehicles per year, including buses. The company is planning to build an electric bus production facility in the country by 2022. These developments in the electric vehicle sector are likely going to have a positive impact on the lithium-ion battery segment as most electric vehicles use it to generate power.
Moreover, in June 2021, the Government of Rwanda announced a prioritization of the transition to e-mobility for all vehicle types. The estimated cost of transitioning to e-mobility and the adoption of electric vehicles in Rwanda is USD 900 million.
Hence, owing to the above factors, the lithium-ion segment is expected to be the fastest-growing segment in the East African battery market during the forecast period.
Ethiopia Expected to Witness Significant Market Growth
Ethiopia is the second-largest economy in Eastern Africa and has been continually seeking investments from other countries across the globe for the development of renewable energy manufacturing facilities. More renewable energy in the country is expected to open doors to the market for battery storage systems.
The Ethiopian government previously had a monopoly on telecom services, including mobile, internet, and data communications. For several years, Ethiopia's monopolistic control degraded innovation, restricted network expansion, and limited the scope of services. In recent years, the Government of Ethiopia approved legislation to open the market to competition and provide much-needed foreign investment. This announcement by the government is likely to boost the mobile battery market in the country.
In 2020, Ethiopia's total installed solar capacity was 20 megawatts (MW), which is comparatively higher than the 10 megawatts (MW) installed in 2015. Moreover, the government plans to increase solar installations in the future rapidly. This is likely to drive the battery market as batteries can be used to store extra power generated from renewable sources.
In June 2020, Lotus Energy Cooperative won a contract to build a solar complex combining solar, battery storage, and waste-to-energy capacity in Ethiopia. The 500 MW facility is expected to power the infrastructure of the Ethiopian conglomerate Effort Group (Tigray Rehabilitation Endowment Fund). The project has an investment cost of USD 4.3 billion.
Moreover, in December 2020, Sino Soar, with its consortium, won the bid for the 25 Villages PV-Diesel-Battery Micro-grid EPC project in Ethiopia. The project is funded by the African Development Bank and includes 2 MWp PV, 5.5 MWh Battery Energy Storage System, 450 kW Diesel Gen-set, and Energy Management Systems.
Hence, owing to the above factors, Ethiopia is expected to be the fastest-growing country in the East African battery market during the forecast period.
