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High-Level Workshop on “Public-Private Partnerships’ implementation in
the Energy Sector in Africa: Challenges, Best Practices and New Trends”,
Addis Ababa, 30.06-01.07.2011
Addressing Africa's Energy Sector:
Status Analysis and Main Challenges
Callixte KAMBANDA
Infrastructure Specialist
Outline of the Presentation
1. Status Analysis: Some key figures
2. Status Analysis: financing needs
3. Main Challenges
4. Opportunities
5. Conclusions
Status Analysis: Some key figures
 7% GDP growth needed to achieve the
Millennium Development Goals (MDGs);
 What role can play infrastructure development?
 e.g., if all African countries were to catch up
with the level of Mauritius, per capita growth in
the region could increase by 2.2 percentage
points and with Korea this would be 2.6;
 Meeting Africa’s infrastructure needs calls for
US$93 billion every year (about 15 percent of
the continent’s GDP).
Status Analysis:
financing needs (1/2)
US$ billion
Source: AICD, 2009
Status Analysis:
financing needs (2/2)
 Generation capacity has been stagnant for >20
years;
 The US$ 40.8 billion per year would allow to
finance substantial investment and
maintenance programs:
 additional 7,000 MW per year of new power
generation capacity;
 enable regional power trade by laying 22,000 MW of
regional TL;
 More than five million new power connections per
year.
Challenges (1/3)
Total ICA members Financial Support to African
Infrastructure per sector (in Billions of US$).
Transport
 Trend in finance for
the energy sector is
encouraging: US$
12.9bn in 2010 (the
upward trend started in
2008 (US$ 3.7 bn ) to
2009 (US$ 6.6 bn ));
 The financing gap
remains still high
(AICD findings: US$
Water
ICT
Multi
Unlocated
14.0
12.9
12.0
10.0
7.5
6.7
8.0
4.0
2.0
0.0
6.9
5.9
6.0
29.2 bn required
every year).
Energy
3.2
2.4
3.6
3.9
3.6
2.9
1.8
0.9
0.5
0.0
2006
3.8
0.9
0.5
0.0
2007
2.6
4.4
2.2
1.3
0.3
2008
0.8
0.3
0.7
0.0
0.0
2009
2010
Source: ICA 2010 Annual Report preliminary results
Challenges (2/3)
 How to involve more the private sector?







Regulatory, legal and institutional frameworks required to
attract private financing;
Political stability;
Market size:53 States, from which the bulk have
populations of fewer than 20 million and economies smaller
than $10 billion => need for enhanced Regional Integration;
Lack of capacity to deal with PPPs (risks allocation,
financial modeling, sovereign guarantees, etc.);
Implementation of PPPs at regional level;
Need to empower regional bodies to deal direct with
private investors, e.g. Power Pool signing a PPA;
High level political support needed.
Challenges (3/3)
 Power is Africa’s largest Infrastructure
Challenge:
 Up to 2008, more than 30 African countries
experienced power shortages and regular
interruptions to service;
 Overall, the economic costs of power outages can
easily rise to 1–2 percent of GDP;
 About 44% of financing needs are for the power
sector.
Opportunities (1/3)
 Untapped potential Hydropower resources (only
about 8% used);
 RECs with their specialized institutions (Power
Pools) as an institutional strength;
 Observed appetite for private sector participation;
 Policies: Africa is setting consensual continental
priorities: PIDA (Progr. for infrastr. dev. in Africa)
and Institutional Architecture for Infrastructure
Development (IAIDA).
Opportunities (2/3)
Overall Africa’s economic growth trend is encouraging;
Source: Africa Economic Outlook, 2009
Opportunities (3/3)
Africa is behind all other regions in
developing its hydro-potential
Untapped
potential
Hydropower
resources
(only about
8% used)
Source: AICD, 2010
CONCLUSION






Africa’s infrastructure financing needs are huge:
public finance alone not sufficient;
Private sector involvement is required;
African countries need to strategize how to engage
with private sector, including building required
capacity and business environment;
Huge opportunities for Africans and partners in power
infrastructure development;
Regional integration and more empowerment of
regional power pools are key;
Overall requirement: high level political support,
especially for regional programs.
Thank you
ICA Secretariat
c/o African Development
Bank
PO Box 323
1002 TUNIS BELVEDERE
TUNISIA
Callixte KAMBANDA
Infrastructure Specialist
[email protected]
www.icafrica.org