The World Bank has called for increased private sector investment in Africa’s under-developed electricity transmission infrastructure.
The report titled, Linking up: Public-Private Partnerships in Power Transmission in Africa, notes electricity transmission infrastructure as a vital ingredient for reaching Africa’s energy goals.
The Bank further highlights that alongside generation and distribution, improving and increasing transmission infrastructure is key to closing the access gap.
“So far, transmission in Africa has been financed from public sources and new models of financing involving the private sector have received insufficient attention from policymakers or financiers,” the World Bank stated.
The analysis examines private sector-led investments in transmission globally and how this approach is applicable in sub-Saharan Africa.
According to the study, the private sector has participated successfully in transmission networks in many countries in Latin America and Asia, and it is recommended that this approach could be replicated.
Senior director and head of energy and extractives industries at the World Bank, Riccardo Puliti, said: “Private finance has supported the expansion of electricity transmission infrastructure in many regions of the world and the same can happen in Africa.”
“To attract private sector investment, however, governments need to adopt policies supportive of this strategy and establish the right business, regulatory and legal environment to sustain investor interest,” Puliti added.
Estimates of annual investments required from 2015-2040 to expand the transmission network range from $3.2 billion to $4.3 billion.
These investments are critical to delivering cost-effective power to households and industries, the study highlighted.
The report examined independent power transmission projects in five countries including Brazil, Chile, India, Peru and the Philippines, where major power sector reforms were undertaken to privatize the sector.
The use of privately financed transmission lines in Brazil, Chile, Peru and India, for example, collectively raised over $24.5 billion of private investment between 1998 and 2015.
This resulted in close to 100,000 km of new transmission lines.