Africa continues to face challenges with regards to its telecoms and electricity networks. Richard Metcalf and Oliver Stacey explore the headway being made by various projects and the opportunities for lawyers

Networking: everyone's at it. Law firms are busy building networks around the world. Lawyers are encouraged to build networks among their contacts as part of their career development. Hollywood has decided that there is money to be made from The Social Network. And Africa is very much part of this trend, with networking on the continent throwing up considerable opportunities for lawyers.

Earlier this year, Africa, and South Africa in particular, was in the spotlight for the 2010 FIFA World Cup. The drama and controversy on the pitch during the course of the tournament was matched by the levels of excitement in the period leading up to the first match. The organisers went all out to make sure all aspects of the tournament organisation were secure.

One pressure point was ensuring there would be sufficient electricity to keep the lights on and allow the matches to be broadcast to a watching world. To guarantee the tournament would go ahead uninterrupted, the organisers signed a £30m contract with Aggreko to provide temporary power and other services at all 10 World Cup stadia.

A second pressure point came in ensuring the World Cup could be communicated to the world. A huge investment was made in IT and telecommunication services in South Africa to ensure continued coverage of the tournament, and operators in South Africa received a welcome revenue boost, with fans eager to share their first-hand experiences, photos, blogs and other communications with friends and family. Vodacom reported a 500% increase in traffic on a single base station and during the final a record number of text messages were sent.

Telecoms and electricity are two industry sectors in Africa which in recent years have been providing significant opportunities for lawyers. The 2010 World Cup is just one illustration of the opportunities available within Africa as well as between Africa and the rest of the world.

Telecoms networks

Away from South Africa and into other parts of Africa, telecoms continue to attract significant attention from private investors in terms of both mobile networks and submarine cables. Witness Bharti Airtel's $10bn (£6.2bn) investment in the acquisition of Zain Africa and China Petroleum & Chemical's African assets and the ongoing interest of global telecoms players to create a pan-African mobile footprint.

The new submarine cables, such as MainOne, EASSy and others, will create huge capacity (over 21 terabits), connecting Africa to the rest of the world. They will also reduce dependence on traditional options such as satellite and the existing submarine cables (SAT-3 on the west coast and satellite connectivity on the east coast) which have proved expensive bandwidth bottlenecks in the past.

However, there still remains a challenge for African countries to create adequate fixed networks both within individual African nations and also to connect separate African countries. Governments have long recognised the role of telecommunications in the fields of healthcare, education and social welfare. Broadband internet can play a huge part in delivering this through e-learning, e-health and other programmes. In addition, high-quality networks can play a key role in connecting and integrating different communities within African nations.

Many governments are eager to develop fibre backbones to deliver these aims. For example, Ghana's fibre backbone, the first phase of which has completed, included an upgrade of the fibre ring and an extension of the fibre from 800km to 4,000km to connect 23 sites nationwide and Rwanda's fibre network is planned to cover 2,500km and link 230 institutions and all 30 districts.

The plans are ambitious, with both governments and private companies keen to lay new fibre. But challenges remain, including access. Agreeing the terms private companies can access and the re-sell capacity can often be difficult. Funding is also an issue, with all of these projects requiring significant capital expenditure.

The 'last mile' connection to allow individual access is a further significant hurdle. In the UK, Digital Britain promised a 2MB connection for every home and Virgin reports new service speeds of 100MB. For the vast majority of the African population, such access lies many years away, and most experiences of using the internet will undoubtedly be through mobile broadband as operators continue to develop 3G and 4G networks.

The other significant challenge, of course, lies in connecting African countries to each other.

Electricity transmission networks

The arrangements put in place for the 2010 World Cup to ensure that electricity supplies did not fail reflect what has now become standard for major world tournaments in terms of arranging emergency standby facilities. In South Africa this was also driven by the reality of a power crisis that has been deepening for a number of years. In 2008, the South African Government had to introduce electricity rationing, which even forced some the world's largest gold and platinum mining companies to shut down operations, and Eskom was issuing warnings urging residential customers to limit use of electricity earlier this year.

Yet at the same time, if one looks at the electricity sector both in South Africa and in the wider southern African region, there is evidence of numerous power projects ready for development – in Zambia, Botswana and, most notably, Mozambique. So if there are generation projects that need paying customers in order to guarantee a revenue stream and if there are markets that are desperately short of electricity, why is it proving so hard and taking so long to bring the two sides together?

Electricity transmission and interconnection of systems lie at the heart of the problem. It is an inconvenient truth that generation projects (especially if they are hydro or coal-fired) often have to be located a long way from their end customers. And at the moment the transmission networks in sub-Saharan Africa are inadequate to move power long distances and across borders. The problem is easy to state, but not necessarily so easy to solve. In these finance-constrained times people will look even more closely at the economics of such projects. Will there be enough customers to support the construction of new interconnections and the upgrade of existing lines? Will the cost of transporting power over long distances make the price of power in the buyer markets unacceptably high?

This situation is replicated across Africa. Both within and between countries there is a pressing need to develop electricity networks to connect supply and demand. This is recognised at the highest political level. The European Union and the African Union have formed an Africa-EU Energy Partnership which held its first meeting in September 2010. In the formal declaration issued at the end of the meeting it was resolved that within the next 10 years the target should be to "doubl[e] the capacity of cross-border electricity interconnections, both within Africa and between Africa and Europe, thus increasing trade in electricity while ensuring adequate levels of generation capacity".

But declarations are not always followed by action. The problems are well known. Countless market and technical studies are carried out. Year on year, the same presentations are repeated at conferences. Projects advance inch by inch when a much bolder approach is demanded. When the FIFA World Cup was awarded to South Africa there was widespread prediction of disaster. The doubters were proved wrong. A similar 'can-do' spirit is needed to unlock the paralysis in the electricity transmission sector. That spirit is now starting to break through, and finally the signs are encouraging.

Numerous projects are already in various stages of development across the length of the continent. At one end, the Moroccan Government has signed an agreement with the French-led, pan-European Transgreen project to establish an international electricity interconnection initiative looking at the feasibility of an underwater high-voltage direct-current network connecting both sides of the Mediterranean – possibly to carry solar power from the Desertec initiative. At the other end of Africa, the World Bank is funding new investment into the Tanzanian transmission system, which will be a central part of the Zambia-Tanzania-Kenya regional interconnector network. There are many other such projects underway. A common factor for all of them is the challenge of attracting finance. Commercial banks remain wary but the gap is being filled by a range of institutional investors, which means that finally these projects are moving forward.

For both the telecoms and electricity sectors, the increased availability of finance is a sign of greater investment confidence, both in the quality of the projects which are being brought forward and in the market fundamentals of the countries in which those projects are located. The impulse to increase connectivity and build networks in and with Africa is strong. For all those with expertise in the development of infrastructure projects (lawyers included) the opportunities are immense.

Richard Metcalf and Oliver Stacey are partners at Norton Rose.