Increasing investment transmission industry in African

Jun 14, 2017

The World Bank has issued a new report calling for an increase in private sector investment in Africa's backward transmission infrastructure, which is an important factor in achieving Africa's energy goals.


Africa is lagging behind other countries in the world, with only 35% of the population gaining electricity and generating only 100 GW. Those who get electricity usually consume less electricity and face frequent power outages and high prices.


Transmission infrastructure is an important part of the power value chain. In addition to power generation and distribution, improving and increasing transmission infrastructure is key to narrowing the power gap. So far, Africa's electricity transmission has been financed by public resources, and new financing models involving private sector have not been paid enough attention by policy makers or financiers.


The report examines the private sector's dominant global transmission investment and how it applies to sub Saharan Africa. The private sector has been successfully involved in the transmission network in many Latin American and Asian countries, so this approach can be replicated.


Private financing has supported the expansion of transmission infrastructure in many parts of the world, which can also be achieved in africa. However, in order to attract investment in the private sector, the government needs to adopt a supportive policy to establish the right business, regulatory and legal environment to maintain the interests of investors.


Between 2015 and 2040, the annual investment required to expand the transmission network is estimated at about $ 3.2 billion to $ 4.3 billion. These investments are critical to providing cost-effective electricity for homes and industries.


The report examines independent transmission projects in five countries (Brazil, Chile, India, Peru and the Philippines), which have undertaken major power sector reforms to achieve privatization. For example, from 1998 to 2015, Brazil, Chile, Peru and India to raise private funds for transmission lines more than 24.5 billion US dollars, the construction of nearly 10 million km of new transmission lines.


The study provides countries with a set of recommendations tailored to specific local conditions, listing 10 steps, including correct legal and regulatory frameworks, new models of concessional loans, competitive tendering processes, adequate revenue streams and project credit appreciation To attract international investors.