Last month we attended the Power Africa Partners Week. This year’s event was online and brought together companies, political organisations and investors from within the Power Africa partnership to discuss how to tackle Africa’s unique energy challenges.
Our CEO, Simon Hodson was asked to speak at one of the key panel sessions on Financing Transmission and Distribution alongside the IFC’s Senior Operations Office, Panos Vlahakis. The video from that session is now available and you can watch it in full below.
In his presentation Simon highlighted the fact that the vast majority of utilities in Africa’s electricity sectors are under-invested and financially unsustainable and are therefore not well placed to provide affordable high-quality power to business and consumers, or to expand their networks. He added that excess supply in some countries is increasing the burden on the state, while Government budgets are even more stretched as a result of COVID-19.
Simon set out how the status quo is failing Africa’s people and its businesses, and called for a greater recognition of the vital role that utility companies play, as well as the need for better coordination between donors, goverenments, investor and regulators.
“The reality is that this is a complicated area and these are challenging businesses. Investors are nervous of them, and donors sometimes prefer to focus on the new infrastructure they can fund, than worry about the challenging business models required to operate and maintain the infrastructure in the long term. But we cannot shy away from these challenges any longer. Without a solvent distribution sector, no country will be able to come close to reaching its connection targets, and rise to the challenge of meeting Sustainable Development Goal 7. Pursuing that goal without addressing this sector properly is likely to damage power sectors and government finances in the long run.”
Simon ended the discussion with a call to arms to all sector stakeholders.
“We can’t ignore the electricity industry’s challenges any longer. A greater degree of coordination is necessary between governments, donors and investors in order to focus on the changes to the utility sector in Africa and it needs to start quickly.”