JOHANNESBURG/KERUGOYA, Kenya (Reuters) - Mini hydro plants could be the answer to a lack of power in rural Africa, especially as larger power projects are put on hold due to limited cash and abundant red tape, industry officials say.

Workers stand next to a NuPlanet's mini hydro plant in Bethlehem September 2, 2009. REUTERS/Siphiwe Sibeko

Analysts say the continent could generate as much as 330,000 megawatts (MW) from its hydro reserves, yet only some 7 percent of that potential has been exploited so far.

But rather than trying to build big dams such as the Grand Inga dam in the Democratic Republic of Congo, which comes with political risk and an $80 billion price tag, communities and investors are looking into developing smaller plants.

“It’s a very effective way of providing electricity. The lifespan of a mini hydro scheme could be 20 years or more,” said Steven Hunt, an energy consultant based in London. Hunt said most projects in Africa would be 10 kilowatts to 10 MW.

So far only one in four Africans is linked to the grid, but power needs on the continent are estimated to triple by 2035.

Small hydro plants, involving small dams, pumps or water mills, can light villages with minimal environmental impact.

A 7 MW plant in the South African town of Bethlehem is expected to supply power to 15 percent of the roughly 70,000 people, at a total cost of 100 million rand ($13.24 million).

Mini plants satisfy people’s basic needs, like the 0.75 kilowatt turbine in Kenya’s Kerugoya village which gives access to power without forcing people to walk miles to the next town.

“Now people can walk from their homes to this site and access the Internet, print and charge their mobile phones,” said James Kinyua, the head of the project.

The part self-help, part donor-funded project is one of many initiatives across Africa to bring electricity to people not yet covered by national grids.

Zimbabwe is estimated to be able to generate up to 85 MW from small hydro on free-flowing rivers and irrigation dams to supply electricity to farmers whose production could help fight food shortages in the country.

“Power is essential for development. The minute power becomes available, it enables a number of activities,” said Felix Kiptum, a U.N. renewable energy consultant.

African governments say the extension of electricity lines to more people is a priority. Kenya is in the process of adding 200,000 new electricity consumers every year until 2012.

While South Africa plans to electrify the country by 2012, Rwanda has said it requires $200 million by the same year to add 220,000 new customers to the national grid.

Rwanda, which relies on diesel, high fuel oils (HFO) generators and imports to complement the 43 MW generated from hydro-electric power, has identified 333 potential hydro sites.

A mix of infrastructure bonds, mobilization of donor funds and even the small community’s initiative like the one in Kerugoya are all fair game to increase electrification.

Civic group Practical Action is building 15 mini hydro plants in Zimbabwe, Malawi and Mozambique to light homes, schools and clinics and to irrigate fields.

Kenya, the world’s largest exporter of black tea, also plans to build 10 mini hydro plants supplying a total of 23 MW to irrigate tea plantations.

Mini hydro projects will also help retain professionals such as teachers and health workers in rural areas.

“People will not be running away to go to the urban areas ... (power) is the thing they desire everyday,” Kinyua said.