Ethiopian Energy^Power Business Portal,eepBp

The Economic Commission for Africa’s Third Africa Business Forum ended in Addis Ababa Tuesday with high-level participants agreeing the continent can rise exponentially with good governance and creation of enabling policies for private capital to flow into the energy, health and ICT sectors.

Held under the theme; Investing in People, Planet and Prosperity, the Forum allowed delegates, among them Zimbabwe President Emmerson Mnangagwa, Mozambique’s Prime Minister, Carlos Agostinho do Rosário, ministers and investors, among them Scott Mather of Pacific Investment Management Company (PIMCO), to share ideas on innovative financing in the energy, health and ICT sectors.

The leaders discussed Africa’s readiness to seize renewable energy by creating the right mix; technologies being pioneered by its youth to help solve problems; and abundant opportunities that can be unleashed through the enactment of the right policies and regulatory frameworks, particularly in these three sectors, with the African Continental Free Trade Area (AfCFTA) set to become operational in July.

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The report presents the results of the second edition of the Electricity Regulatory Index (ERI) for Africa, covering thirty-four countries. The first edition was published in 2018, covering fifteen countries. The ERI measures the level of development of the regulatory framework for the electricity sector in African countries – rather than the level of development of the electricity sector itself. It is prepared for two main objectives:

  • to diagnose and identify key gaps in electricity sector regulations; and
  • to help regulators benchmark their own performance and progress against African peers and international best practices.

The ERI is made up of three pillars, or sub-indices.

  • The Regulatory Governance Index assesses how well the regulatory framework supports electricity sector reform, promotes efficiency and meets desired economic, financial, environmental and social objectives. It is concerned with the existence and content of electricity regulations.
  • The Regulatory Substance Index, assesses how well the regulatory framework is implemented in practice.
  • The Regulatory Outcome Index assesses the outcomes of regulatory processes from the point of view of regulated entities and power consumers, providing insights into how the actions of regulators have affected the performance of the sector.

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Renewable technologies are evolving at a rapid pace and have seen a dramatic decline in the costs associated with its procurement. This provides the opportunity for corporates to reap the benefits of procuring renewable energy directly from generators through the use of a power purchase agreement (corporate PPAs). Corporate PPAs aim to provide corporates with lower or more stable electricity costs and grid reliability and can contribute significantly to their sustainability targets.

Despite these benefits, corporate PPAs have struggled to take off in sub-Saharan Africa, commonly as a result of regulatory challenges. That being said, there are signals that several markets are evolving and opening up the potential for corporate PPAs. More regulators are considering options to change their power markets to favour this energy transition.

Baker McKenzie’s new report, Opportunities for Corporate Procurement of Power in Sub-Saharan Africa unpacks the opportunities, challenges and possible structures of corporate PPAs in Ethiopia, Ghana, Kenya, Namibia, Nigeria, South Africa, Tanzania, Zambia and Zimbabwe. The report is intended to serve as an enabling tool to facilitate the expansion of corporate PPAs in these countries.

 

Download the whole report here

 

Source: Africa Energy Portal, AEP

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The African Union Commission (AUC) is working on the establishment of continental energy and ICT markets in Africa.This was disclosed at the second Program for Infrastructure Development in Africa (PIDA) policy dialogue conference that was held from September 24-26 in Malabo, Equatorial Guinea. At a high-level panel discussion on continental frameworks for PIDA-II program Cheikh Bedda, Director of Infrastructure and Energy, disclosed that the AUC is planning to launch a continental energy market in ten years’ time. Bedda noted that the continental energy market would benefit all member states. “We all should collaborate to establish the continental energy market,” he said. He also noted that PIDA is working on fair investment projects on renewable energy.

Delegates have deliberated on the draft regulatory framework of electricity market in Africa. The African energy market aims at interconnecting African states through electric power transmission lines. It creates the platform by which member states that can generate surplus electric power can supply power to countries which have energy deficiencies. According to the African Development Bank (AfDB), Sub-Saharan Africa currently has 14 percent of the world’s population and accounts for four percent of global energy investment. In Africa more than 600 million people do not have access to electricity. Analysts at the AfDB note that several countries, including Ethiopia, Gabon, Ghana and Kenya, are on track to reaching universal electricity access by 2030.

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