W/Bank’s report faults non privatization of transmission segment of power sector
Latest report of the World Bank on power in Africa has faulted federal government’s idea of not involving private participation in transmission infrastructure, saying the segment is in need of massive investment which only the private sector can provide.
The new report, released today, is calling for increased private sector investment in Nigeria and Africa’s under-developed electricity transmission infrastructure.
The report titled, ‘Linking up: Public-Private Partnerships (PPP) in Power Transmission in Africa,’ notes electricity transmission infrastructure as a vital ingredient for reaching Africa’s energy goals.
The Bank further highlighted that alongside generation and distribution, improving and increasing transmission infrastructure is key to closing the access gap and sustainability capacity in the critical sector.
The report noted that “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 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, made it clear that “Private finance has supported the expansion of electricity transmission infrastructure in many regions of the world and the same can happen in Africa.”
According to him, “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”.
On expansion of transmission network, World Bank averred that 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.
World Bank pointed out that Africa and Nigeria should learn from Brazil, Chile, Peru and India, where the use of privately financed transmission lines collectively raised over $24.5 billion of private investment between 1998 and 2015 which gave way for over 100,000 km of new transmission lines in the countries.
