Africa remains an attractive prospect for power sector investors, but without regulatory certainty and a stable political environment, African nations will not attract the levels of foreign investment they need to meet the power needs of the continent.
This was the view of power sector experts addressing the first day POWER-GEN Africa and DistribuTECH Africa in Cape Town this week.
The three-day African power generation and distribution conferences and expo at the Cape Town International Convention Centre drew over a thousand power sector stakeholders from across Africa and abroad to discuss African power challenges, opportunities, investment and technologies.
Taylor Ruggles, the U.S. Department of State’s Regional Energy Counsellor for Africa, noted that it was virtually two years since US President Barack Obama had launched the Power Africa programme in Cape Town. The programme took a transaction-based approach to addressing the continent’s power challenges, he said. “A constant theme we see is the need for an environment that is enabling to investment. You need strong, transparent legal and regulatory frameworks.”
Arnaud de Limburg Chief Executive Officer at Avon Peaking Power Co, said what governments and utilities saw as a challenges, independent power producers (IPPs) saw as an opportunity. “Africa is the next big thing and is high on the agenda of international investors. But investment depends on political and regulatory stability, and totally transparent processes,” he said.
Leonard Kassana, senior consultant at Ngali Energy in Rwanda, said IPPs were often the best and fastest route to added capacity on the grid, but that governments play a critical role in identifying projects and bringing them to bankable levels.
Dr. Willie de Beer, Chairman of the POWER-GEN Africa and DistribuTECH Africa Advisory Board, and Jacob Mbele, Chief Director: Energy in the DoE , added that aggregating demand and promoting this to investors could create a more compelling business case.
Transmission and distribution are as big a challenge as generation, noted the panel. NelisiweMagubane, Chairman at Matleng Energy Solutions and former Department of Energy (DoE) director-general, explained: “The distribution network must be healthy. It is no use producing power if we cannot take it to the end users.”
De Limburg added: “The transmission infrastructure can be a bigger project than building an IPP.”
While numerous hurdles stand in the way of Africa’s vision of providing affordable, reliable electricity to 600 million people who currently don’t have access to power, the speakers agreed that with collaboration and innovation, Africa could present a solid business case for private sector investment in African power infrastructure that delivered benefits to investors and the continent’s economy as a whole.
The three-day POWER-GEN Africa and DistribuTECH Africa conferences and expo is underway at the Cape Town International Conference Centre until Friday 17 July.