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Linking Up: Public-Private Partnerships in Power Transmission in Africa


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STORY HIGHLIGHTS
  • A new World Bank report finds that the private sector can play a vital role in financing, building, operating and building power transmission lines in Africa, helping take electricity to millions in the region.
  • To attract the private sector, African governments should focus on improving the investment climate and having the appropriate regulations and incentives in place.
  • Report draws on successful experiences in Latin America and Asia where private sector participation in the sector has resulted in reduced project costs and helped expand electricity coverage.

A new World Bank report entitled Linking Up: Public-Private Partnerships in Power Transmission in Africa suggests that it is possible for the private sector to finance, build and maintain Africa’s electricity transmission infrastructure - also known as the independent power transmission model (IPT) - and help expand electricity coverage in the region.

The report examines similar models in Brazil, Chile, India, Peru and the Philippines where the private sector has successfully built transmission network infrastructure and proposes that the same is possible in Africa, where two in three people still live without access to electricity.

to those who need it most. – something the region’s electricity utilities that are often state-run, will not be able to fulfill on their own.

These investments are critical to delivering cost-effective power to households and industries, making it all the more important for the private sector participate.

The report outlines 10 steps that African governments must take to make it attractive for the private sector to invest in the region’s electricity transmission infrastructure:

  1. Develop policies that support IPTs
  2. Develop legal and regulatory frameworks to support IPTs
  3. Conduct trials of IPTs alongside existing business models of transmission
  4. Introduce new models for concessional finance
  5. Identify the stage at which to tender transmission projects
  6. Determine payments to IPTs based on transmission availability
  7. Ensure adequate revenue flow and credit enhancement for projects
  8. Tailor IPT projects to attract international investors
  9. Prepare to implement IPT transactions, and
  10. Run competitive tenders for IPTs

The report suggests that the next key step will be to begin piloting a few new projects in Africa to scale up electricity access and pave the way for a sustainable power sector.