Resource Mobilization Strategy For Energy In The African .

Resource Mobilization Strategy forEnergy in the African ContinentByNEPAD Secretariat01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South1

Industry Background Generation– Hydro Power Generation– Thermal Power Generation– Wind Power Generation– etc. Transmission Distribution01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South2

Types of electricitysector organization Vertically Integrated Utility Wholesale electricity market Retail electricity market01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South4

Nature ofElectricityInvestment Long term investment Asset specific Capital intensive01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South5

Pre-Requisites forResourceMobilization Government SupportStrong regulatory frameworkCredit worthiness of the off-takerProcess transparency01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South6

African Priorities The African priorities with respect to energyremain the same as spelled out in thefounding document of NEPAD in 2001. Still,access to reliable and affordable energysupply is an issue.01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South7

01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South8

Challenges Conflicting Regional and National InterestsFinancial ResourcesInternal Market RegulationsCross Border Market RegulationsCapacity BuildingAccurate and Timely Information01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South9

Strategy to Advancethe AfricanPriorities The strategy shall meet the following criteria:I. Prudent utilization of public and donorresources to unlock private sector potentialII. Projects which are bankable are categorized asPPP candidatesIII. Increase knowledge transfer to the Africancountries.IV. Maximize positive impact on the employmentlevel01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South10

Our Strategy OnMega Projects- Establish an investment conduciveenvironment in Energy Infrastructure. Thisincludes working towards the advancement ofproposed pan continental “directives” wrtinternal market regulations and cross borderones- Boosting the investment environment in Africaat large01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South11

Our Strategy OnMega ProjectsCont’d Direct ODA and public funds should bedirected to unlocking projects Work with development partners oninnovative financing schemes drawn fromlessons learnt from successful interventions Set prioritization criteria for projects offeredfor PPP to establish the credit history ofenergy projects in the continent01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South12

Our Strategy OnMega ProjectsCont’d Boost and strengthen the structure of regionalorganizations as legal non-state entities with aclear definition of responsibilities andliabilities01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South13

SMB as a parallelPath for MegaProjects Building upon the continent inventory ofentrepreneurship, seeking business opportunities SMB especially in renewables offers advantagesof modularity and economic competitiveness It is a parallel fast track to electrify the continent A study of SMB in energy is sought01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South14

AVenues forCooperation withOECD countries1. Assist in key strategic projects that will enable privatesector development of generation facilities2. Technical support to establish a pan-Africanlegislation for internal market regulation and crossborder trade similar to the European best practicetogether with the appropriate benchmarkingmechanism3. Capacity building and knowledge dissemination toestablish a Private sector friendly environment01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South15

AVenues forCooperation withOECD countries4. Support a study of the non-OECD intervention inAfrica and the core reasons behind its success andpropose solutions to be cloned to financiers fromother domains5. Provide support and investment in the area ofdistribution and distributed generation equipmentmanufacturing on a regional basis to reduce the costof rural electrification6. Technical support for establishment of anenvironment appealing to distributed generation(SMB) ventures01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South16

In Conclusion Upstream ground work on the investmentenvironment lie ahead Prioritization is key Two parallel streams for implementation,Mega Projects and SMBs approach01-Dec-2009NEPAD-OECD Africa Investment Initiative,Annual Ministerial Meeting, 11-12November, 2009, Johannesburg South17

Mega Projects - Establish an investment conducive environment in Energy Infrastructure. This . Mega Projects Cont’d Direct ODA and public funds should be directed to unlocking projects Work with development partners on . AVenues for Cooperation with