The World Bank calls on private sector to increase investment in the African transmission industry

The World Bank calls on private sector to increase investment in the African transmission industry

2017-06-13
The World Bank calls on private sector to increase investment in the African transmission industry


The World Bank calls on private sector to increase investment in the African transmission industry


A new report from the World Bank calls 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.

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

The report examines the private sector-led global transmission of electricity and how it applies to sub-Saharan Africa. The private sector has successfully participated in transmission networks in many countries in Latin America and Asia, so this approach can be replicated.

"Private financing has already supported the expansion of transmission infrastructure in many parts of the world, which can also be achieved in Africa.However, in order to attract private sector investment, the government needs to adopt a policy of support to establish the right business, regulatory and legal environment to maintain investment "Said Riccardo Puliti, senior director and head of energy at the World Bank.

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.