Africa Must Aim for Inclusive Reforms in the Power Sector to Improve the Performance of its Utilities
In most African countries, utilities fail to deliver adequate, reliable electricity at competitive prices despite the growing number of reforms in the power sector, Peter Twesigye explains in an research paper that examines the structural, policy, and regulatory incentives required to improve the performance of African utilities. Twesigye is the Research Lead for Power Market Reforms and Regulation at Power Futures Lab, part of the Graduate School of Business at the University of Cape Town.
In his paper, Twesigye outlines the lack of financial viability and poor utility performance in the power sector and the negative effect it has on a country’s development. He exemplifies the effect by exploring the power sector reforms and utility performance in three countries: Tanzania, a country with few reforms, Kenya, where some reforms have taken place, including an increase in the number of Power Sector Projects (PSP), and Uganda where reforms and regulations have progressed the furthest.
By exploring the links between electricity sector reforms, governance arrangements, and technical and operational performance, Twesigye concludes that the existence of independent regulators is essential for improvement, as long as the regulators remain truly independent and unbiased. Furthermore, he concludes that countries where the reforms were designed in an inclusive way, were more successful in the adoption, depth, and extent of the reforms. Nevertheless, at an operational level, conventional reforms are insufficient, instead additional incentives are needed to improve reliability, billings, and revenue collections.
In sum, Twesigye settles that achieving financial viability and sustainability remains critical for creating power sector projects that attract private investments for the development of the energy system. Projects with successful funding will pave the way for more comprehensive energy access and economic development.
Read the full research paper.
About Power Futures Lab
The Power Futures Lab (PFL) is a leading centre of excellence and expertise at the University of Cape Town’s Graduate School of Business. PFL works to create enhanced knowledge and capability in key network infrastructures in Africa that promote economic development and improve social welfare within the bounds of environmental sustainability. The AEEP supports PFL’s efforts to enhance the specialised skills required to design efficient regulatory regimes for modern energy services in Africa.
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