Publication - Promoting Private Sector Participation in Africa's Grids

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Title

Promoting Private Sector Participation in Africa's Grids

Publisher

Res4Africa

Author

REs4Africa

Published in

October 2024

Abstract

Despite their crucial role in delivering power to homes and businesses, transmission, and distribution (T&D) networks in Africa have received less attention than electricity generation from both the public and private sectors. The continent received about USD 41 billion in total energy investments over the last decade, with 99.5% of capital going to generation projects1. In 2022 685.2 million Africans still did not have access to electricity, and in many other cases the supply is unreliable. On the generation side, issues with access and reliability are being addressed with the help of increasing private sector

participation, however, this is not matched by efforts on the T&D side. Transmission remains a critically neglected segment of Africa’s electricity network and received a mere 0.5% of total continental energy investment over the last decade. This problem will remain a bottleneck for African countries, stifling project developments and restricting energy access, unless significant investment is committed – around USD 45 billion over the next eight years.

Private sector participation (PSP) is pivotal, as it brings know-how and investment capital to bridge the gap from limited public sector funding. Unfortunately, private investment in transmission is not prevalent on the African continent, with few examples (e.g. the Copperbelt Energy Corporation in Zambia). This is vastly different from regions such as Latin America and India, where private sector participation, by contrast, is commonplace.

Notwithstanding, overcoming the barriers in Africa’s electricity sector requires consistent and parallel efforts in generation, transmission, and distribution and partnerships between the public and private sector.

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