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| Power - Africa’s largest infrastructure challenge ECA Press Release No. 97/2011 Addis Ababa, 05 July 2011 (ECA) - It may come as no surprise, but a study by the Economic Commission for Africa on Public-Private Partnerships in Africa’s Energy Sector says on average, Sub-Saharan Africa experiences approximately 56 power outages a year. This results in lost sales revenues, damage to equipment and the cost of running generators. As Africa’s energy demands increase, power remains the biggest infrastructure challenge and overall, the economic costs of power outages can easily rise to 1–2 percent of GDP, according to Callixte Kambanda, Infrastructure Specialist with the Infrastructure Consortium for Africa (ICA). Kambanda, who attended the 31June-1 July High-level Workshop on Public-Private Partnerships in Africa’s Energy Sector in Addis Ababa, stated that the Continent needs to meet an annual funding gap of US$ 29.2 bn for the energy sector – a figure estimated by his organization’s Africa Infrastructure Country Diagnostic. The shortfalls in funding cannot be met through public financing alone – “It is not sufficient,” he emphasized. “Private sector involvement is required and countries need to strategize how to engage with private sector and that also includes building the required capacity and business environment.” It is no mean feat. In short, the experts said that attracting billions of dollars to the sector will require nothing short of a miracle and enormous changes in terms of political will, regulatory reform and capacity to pave the way for large-scale energy projects. “Power is in particular need of investment; and significant change is required if investment in Africa’s infrastructure is to reach the required levels,” said Elan Cusiac-Barr, with the IFC Advisory Services in Public Private Partnerships. Both Kambanda and Cusiac-Barr understand the complexities of Private-Public Partnerships. Their respective organizations have made a mark in PPP arrangements on the continent. But the question of financing, according to the meeting, is complex, in part, due to the nature of the sector and the economics of scale required. Yet, ICA sees an encouraging financing trend. “Having started with US$ 3.7 bn in 2008, we spent US$ 12.9bn in 2010 and US$ 6.6 bn in 2009,” said Kambanda. Apart from ensuring existing legislative and regulatory framework are in line with PPP aspirations, policy makers are advised to embed such arrangements in the context of a national infrastructure strategy and to push reforms as necessary through a strong Champion. Nigeria’s ‘big bang approach’ to reform has achieved global acclaim and South Africa’s upstarts and slow starts are yielding important lessons that the rest of SSA is paying attention to. “You cannot overemphasize the importance of transparency, urged Cusiac-Barr, adding that many problems can be avoided with good communication and good public relations that focus on engaging stakeholders. Kambanda underscored the huge opportunities and potential in “going regional”, but called for more empowerment of regional power pools. “Overall, high-level political support, especially for regional programs is very crucial,” he said. Although by and large, most Africans have adopted an uneasy co-existence with power shortages and absences, the message from the high-level meeting could not be louder - outages do not augur well for Africa’s continued path of growth and sustainable development and the impact on the health sector, education and on businesses, large or small cannot be overstated.
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