African governments have been urged to create enabling environment for the private sector through regulatory frameworks that encourages private investment to increase efficiency, drive down costs and encourage investment.
The recent interest of the global capital market in Africa’s energy sector provides a possible new capital inflow, but also means that investment opportunities need to be created through partnerships with governments.
“Energy provision and regulation is critical and should be considered on a regional basis to most efficiently unlock growth and trade. Regionalization benefits will be felt through providing; harmonization of regulation regimes; access to adequate supply of energy; and power pools that encourage regional cooperation,” Zola Tsoti, Chairman, Eskom Holdings, South Africa said during a panel discussion session at the World Economic Forum on Africa in Cape Town.
He said that there should be no place in Africa where a country has generated power but has nowhere to sell it.
The private sector needs to view energy and infrastructure as not just a government responsibility. But to determine the level of support required, governments can consider the opportunity cost of increased energy capacity.
Government can also use tools such as risk insurance, guarantees schemes and packages to accelerate infrastructure.
“ Trillions of dollars are there ready to find the right investment opportunity in the energy sector – it is not an issue of capital, it is about creating the right opportunity,” Brian Herlihy, Chief Executive Officer and Founder, Black Rhino Group, USA said during the discussions.
The conversation needs to move to energy and not purely electricity so that governments focus on optimizing energy sources for the long-term benefit of a country and the region.
The ABN Digital