Private sector could own over half of African power generation by 2025

• 9 years ago (2015-08-17)
• David Flin

Africa 321

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A survey by PricewaterhouseCoopers (PwC) said that over 75 per cent of respondents said there was a “medium to high probability that the private sector will own and operate” more than half of African power generation projects by 2025. PwC surveyed 51 senior officials from governments, power utilities, regulators, and independent power producers in some of the worst affected countries in Africa, where electricity constraints cause frequent power cuts and damage economic growth.

Angeli Hoekstra, Africa Power and Utility Leader for PwC, said: They felt that there were a lot of opportunities for Africa to leapfrog forward.”

The report said that the investment required to improve electricity access in Africa will be “immense”, and the continent needs about $450 billion over the next 25 years to electrify all urban areas.

Respondents said they hope private sector investments will improve power production, noting that access to funding for new capital projects is a problem. They cited a lack of regulatory change, the failure to implement cost-effective tariffs, and overall difficulty of raising finances as barriers to investment.

The survey said: “In Africa, the challenges of financing infrastructure are compounded by limited institutional capacity, fragmented regulatory systems, and often underdeveloped banking and capital markets outside the larger economies of South Africa and Nigeria.”