Powering Africa:
Facing the financing and reform challenges
______________________________
Prof Anton Eberhard
Graduate School of Business
University of Cape Town
AFD – PROPARCO – EUDN Conference
Paris 3 December 2014
@AntonEberhard
www.gsb.uct.a.za/mir
Africa is underpowered
• Installed capacity in SSA is around 80 GW
–
–
–
–
•
•
•
•
Spain has more
South Africa accounts for more than half SSA power
Only 12 countries have >1GW & account for 85% (ex RSA)
30 countries <500MW; 13 < 100 MW
Installed capacity per capita 7% of Latin America
Up to a quarter of capacity unavailable
Two in three people have no electricity
US$14bn needed per annum for power generation
Generation Capacity in Sub-Saharan Africa - MW
50,000
85,000
80,000
45,000
75,000
40,000
70,000
35,000
65,000
30,000
60,000
25,000
55,000
50,000
20,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
SSA (left axis)
SSA-RSA (right axis)
Very little power added between 1990 – 2000 (1.8GW ex RSA)
9.6GW added between 2000-2011 (ex RSA)
A dozen countries account for 90% MW additions
in SSA since 2000
Rest
Cameroon
Madagascar
Uganda
South Africa
Senegal
Cote d'Ivoire
Kenya
Sudan
Ghana
Angola
Ethiopia
Investment in power in SSA (ex RSA)
Excluding Government/Utility; US$m, 5 year moving average
1800
1600
Investment in $ Millions
1400
1200
1000
800
600
400
200
0
1990
1992
1994
1996
IPPs
1998
Chinese
2000
Arab
2002
2004
ODA (OECD)
2006
DFIs
2008
2010
2012
1200
1000
IPP investments in SSA (ex-RSA) US$m
800
600
400
200
0
1994 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014X
7GW of IPP capacity added between 1990 – 2014 in SSA ex RSA
RSA has added further 3.9GW since 2012 = US$14bn
SSA (ex RSA) countries with most IPP investment (US$m)
2500
2000
1500
1000
500
0
Number of IPPs per country
0
2
4
6
8
10
12
14
Uganda
Kenya
Mauritius
Senegal
Nigeria
Tanzania
Ghana
Cameroon
Côte d'Ivoire
Angola
Zambia
Togo
Cape Verde
Madagascar
Sierra Leone
Gambia
Rwanda
67 IPPs in SSA (ex RSA)
64 RE IPPs in RSA
16
18
20
IPP & China power investments in SSA (US$m)
4500
4000
3500
3000
2500
2000
1500
1000
500
0
1994
1996
1997
1998
1999
2001
2002
2003
2004
Ch fund
2005
IPP
2006
2007
2008
2009
2010
2011
RSA IPP
China has funded 5GW between 1990-2011
and a further 4.7MW between 2012-2014
A total of 30 projects
2012
2013
2014 2014X
Investment & Power Sector Reform
• Why have some countries been more successful
than others in attracting private investment?
• To what extent are power market reforms
(unbundling, privatisation, competition,
independent regulation) important in attracting
investment?
• Or are other reforms, such as effective planning,
competitive procurement and contracting
important?
Independent Regulation & IPPs
• 27 Sub-Saharan African Countries have independent regulators
• Half of countries with regulators have IPPs, half don’t
Power planning, procurement & contracting challenges
• Who should be responsible for generation expansion planning &
security of supply?
• How are new build opportunities allocated between the
incumbent SOE and IPPs?
• Who should initiate bids for IPPs?
• How should we deal with unsolicited bids?
• Who should be responsible for contract negotiations with new
IPPs?
• How do we avoid potential conflicts of interest when SOEs are
the Single-Buyer?
• Who should approve long term PPAs?
• How do we ensure fair dispatch between SOE generators and
IPPs?
Thank you for your attention
Prof Anton Eberhard
Graduate School of Business
University of Cape Town
@AntonEberhard
www.gsb.uct.a.za/mir