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ERB explains challenge of electricity supply in Africa

ERB explains challenge of electricity supply in Africa
By Chibaula Silwamba
Thursday April 17, 2008 [03:59]

ENERGY Regulation Board (ERB) chairperson Sikota Wina has said it will be folly to assume that any African country can single-handedly overcome the challenge of electricity supply. Speaking at the 2008 Africa Power and Electricity Congress and Exhibition under the theme: ‘Africa’s electricity supply challenges: A regulatory perspective’ in Johannesburg, South Africa, Wina said there was need to ensure that the regulatory environment encouraged the development of interconnections and regional electricity markets.

He said given the strong correlation between electricity access and human progress, Africa shall remain in the Third World for another 200 years if access to electricity did not truly become widespread.

Wina observed that the electricity crisis for southern Africa was more evident this year.

“To add salt to injury, even the most optimistic projections show that electricity supplies by and large shall continue to be outstripped by demand in this region for the next few years given the likelihood of continued strong economic performance and the high capital costs and long lead times of the required infrastructure enhancements,” he said.

He observed that the reasons for the poor state of power supply in sub Saharan Africa included the overall policy environment that was perceived to be weak or overly dynamic.

“For example, poor balance sheets and overall operational difficulties encountered by the state-owned and predominantly vertically integrated utilities and more recently the increasing costs for primary energy sources such as coal, gas and diesel,” Wina said.

“As regulators, perhaps our greatest impact can be made in the area of policy environment and to some extent utility performance, though I do believe that the shareholders of those utilities, who are by and large the governments, have a significant role to play.”

Wina urged governments to adopt measures that include re-capitalisation, equity restructuring and the infusing of corporate governance best practice into these firms.

“As for regulators, we will have to do more to encourage both local and foreign investment into the sector and strategies for this include improving regulatory predictability and allowing the electricity supply industry in our various countries to move to cost reflective tariffs,” said Wina.

“Given the pressures that are being brought to bear on the electricity supply industry by the unprecedented rise of the cost of primary energy sources and that of environmental lobby, regulators shall also need to ensure that the ‘level playing field’ that they create encompasses diverse energy sources including wind and solar to the extent that these are feasible.”

Labels: ENERGY, ERB, SIKOTA WINA

posted by MrK @ 5:43 AM