(Vivien Foster, 2019), Rethinking Power Sector Reform in the Developing World report suggests that future power sector reforms should be shaped by context, driven by outcomes, and informed by alternatives with a clear departure from the normative 1990s power sector reform prescription which comprised a package of four structural reforms: Regulation (through the creation of an autonomous regulatory entity); Restructuring (entailing corporatization and full vertical and horizontal unbundling of the utility); Private sector participation (particularly in generation and distribution); Competition (ultimately in the form of a wholesale power market).
(AfDB, 2019), Revisiting Reforms in the Power Sector in Africa, asserts that the power sector in Africa still largely retains the traditional integrated monopoly utility structure, although many have included IPPs, despite the standard model Prescription of the reform targeting all segments of the power sector value-chain in Africa, and in very different ways pointing that the standard model reforms generally did not prioritize social and political goals of expanding access to electricity and clean energy sources, nor improving equity or affordability conditions.
Ethiopia being among the laggards in terms of implementing the standard policy prescription, it has taken the first few steps including setting up an independent regulator and vertically unbundling the state monopoly in to two separate utilities since the beginning of 2013. The reform process continues to unfold albeit a slow and cautious pace.
Apart from regulation, currency and land right issues are two of the biggest concerns for private investors in infrastructure developments in Ethiopia and so much so in Africa.
In Ethiopia for example, there are projects initiated to be developed on a public private partnership, PPP, business model where the private sector will finance, build and operate for a concession period of 20 to 25 years. The recent Scaling Solar tenders could be good examples. Independent Power Producers, IPPs, will generate energy and sell to the public entity with a pre-agreed sales agreement usually called Power Purchase agreement, PPA, for the energy and power sector. The tenders put a requirement for Special purpose Vehicle, SPV, projects to have a local content in the form of shares and using local resources in order to win the projects.
The Ministry of Water, Irrigation and Energy, #MoWIE, of Ethiopia hosted a Week of Water and Energy, #EWEW, with a theme of ‘ Transforming of the Water and Energy Sectors for Ethiopia’s New Horizon of Hope ‘ in Skylight hotel, Addis Ababa, Ethiopia. The program was officially opened on 7 June 2019 by her Excellency Ambassador Sahlework Zewde, the President of the Federal Democratic Republic of Ethiopia and it will continue up to 20 June 2019 covering different thematic areas.
Photo Credit: Tigabu
Open Africa Power 2019- Forging a New Generation of Clean Energy Leaders for Africa
The second round of the African module of the Open Africa Power, the educational program of Enel foundation, took place from 28 January _ 1st of February, 2019 in Addis Ababa, Ethiopia, involving 60 passionate, high profile, young and deeply engaged practitioners from the energy, power and sustainable development sectors selected across the continent with an aim of creating the African energy leaders of tomorrow who would make a difference in the continent’s clean energy future and beyond.
The program inspired the participants raising the expectation out of them given the existing challenges and opportunities of the energy sector across the continent and elsewhere and it was indeed a success by all measures. Thanks to the organizers.