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Revisiting Reforms in the Power Sector in Africa
This report updates previous African Development Bank (AfDB) and Association of Power Utilities of Africa (APUA) assessments of power sector reforms in Africa. APUA conducted a study in 2008 on reforms in the African power sector, focusing on 19 countries.
The 2008 study examined the reasons, drivers, and triggers underlying reforms; actors promoting the reforms; the design and implementation of reforms; the impacts on utility performance; and the key success and failure factors of reforms. The 2008 study was complemented by a Compendium of best practices (2009), drawn from nine country case studies. The case studies provide implementation guidelines in three categories: financing investments; improving efficiency; and designing legislative and regulatory frameworks to meet reform objectives.
In 2016, the AfDB introduced a new partnership-driven initiative, called the New Deal on Energy for Africa (NDEA). This initiative aims to “Light up and Power Africa” with a stated target to achieve universal access to electricity on the continent by 2025. The AfDB’s Vice-Presidency for Power, Energy, Climate and Green Growth (PEVP) works to support the AfDB’s member countries and power sector actors to achieve the aims of the NDEA, including through providing technical assistance for planning, development, and financing projects that will increase generation capacity; extend and strengthen power networks, build regional power markets, and improve the performance of power utilities.
The AfDB launched the “Sustainable Utility Transformation (SUT)” Agenda, in 2017, which aims to accelerate turning around of African power utilities towards creditworthiness and internationally benchmarked performance. The SUT’s main action areas are 1) leastcost integrated resource planning; 2) sector and utility governance, management and leadership; 3) sector and organizational reforms, and financial sustainability; 4) human capital development; and 5) smart partnerships.
With this report, the AfDB and APUA examine African experiences to provide valuable lessons on the implementation and success factors of reforms. These lessons should guide the design of policies, programs, and regulatory frameworks to adapt to new challenges. Understanding the policy implications is essential to support efforts to catalyze Africa’s progress, or to facilitate a ‘leapfrog’ development with respect to other regions. This report also sharpens the focus on mapping and answering new needs and concerns that derive from recent technological trends, innovations, and transformations affecting the economy, politics, and power sector.