African states urged to create climate for private power

African governments are being urged to create a climate for private sector power companies to help develop much needed electricity resources, including hydropower.

That was a primary message December 12 of Financing Electricity for Growth in Africa, a conference in Tunis organized by the Infrastructure Consortium for Africa (ICA) and the African Development Bank (AfDB). Participants from around the world represented utility management, banking, law firms, regional power pools, and governments.

�The meeting was successful in sensitizing private sector companies to electricity projects which are near financing and prioritized by regional power pools,� ICA organizer Guillaume Grosso said.

Former Tanzania President Benjamin Mkapa, now co-chairman of the Investment Climate Facility for Africa, told the gathering it is ironic that sub-Saharan Africa has some of the most significant fuel reserves and largest hydropower-rich watercourses, while no more than 20 percent of the population has access to electricity. That figure is 2 percent in rural areas, he added.

�If governments are to secure the required investment, they must create the right climate for private sector power companies,� Mkapa said. �That would require, inter alia, a fair and transparent negotiated case that allocates risks between public and private parties, and appropriate institutional, legal, and regulatory frameworks supportive of private sector participation.�

Mkapa said African governments, financiers, and local private stakeholders must �think outside the box� and become active players in the energy sector. He said joint ventures in the energy sector would foster cross-border transportation of energy that would link low-cost production sites to high-cost markets.

AfDB Vice President Mandla Gantsho said the bank has been making �smart partnerships� in the infrastructure domain to support the continent’s development efforts. He added that the institution has been playing a greater role in development financing.

AfDB President Donald Kaberuka referred to preparation of a medium- to long-term strategic framework that will guide African infrastructure development for the next 15 to 20 years. He also commended the bank for development of the Clean Energy for Development Investment Framework.

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