The Missing Link Programme
Investigating the effectiveness of policy and regulatory framework in enabling private-led investments along the electricity sector value chain in Africa
Rationale and programme background
Affordable and sustainable electricity access plays a key role in facilitating socioeconomic development, as recognized by UN SDG 7. Despite remarkable progress in the last decade, structural challenges remain within the electricity market in Africa and the latest Tracking SDG7 Report warns that business-as-usual would not allow to achieve universal electricity access by 2030. More impetus is required to accelerate electricity infrastructure investments.
Within the framework of their MoU, signed in October 2018, the United Nation Economic Commission for Africa (UNECA) and the RES4Africa Foundation has joined their forces to build a new programme based on their common view:
- Africa needs to speed-up electricity infrastructure investments to achieve universal electricity access by 2030 and support its socio-economic transformation in line with the African Union Agenda 2063.
- Crowding-in private sector would be central to diversify the investment pool and expand Africa’s future electricity markets.
It is with this backdrop that UNECA and RES4Africa are viewing a look at policy and regulatory environment in the energy sector of Africa as crucial element to enhancing the effective engagement of the private sector to accelerate progress.
Scope of the programme
The programme establishes an innovative and comprehensive analytical framework to investigate the ability of African countries’ electricity policy and regulatory framework in enabling private-led investments in generation, transmission, distribution and off-grid systems.
Taking a private sector perspective, the underlying project methodology clusters electricity sector-related policies, legislation and regulatory texts under three main dimensions:
- “Openness” – Power sector structure and governance: covers policies, laws and regulations meant to regulate market-entry, infrastructures planning, sector governance and market structures;
- “Attractiveness” – Sector economics: assesses policies, laws and regulations that ensure the economic viability of electricity infrastructures investments as well as a fair competition among market operators;
- “Readiness” – Sector maturity: investigates the technical regulations meant to ensure a correct implementation and an efficient integration and management of electricity infrastructures.
Expected programme outputs and outcomes
The assessment results will be delivered through country-by-country reports, as well as through regional reports able to:
- Give a comprehensive and detailed overview of the current effectiveness of policy, legal and regulatory elements identified for each of the assessed country;
- Allow to benchmark countries’ policy, legal and regulatory frameworks;
- Highlight best practices and to share experiences and lessons learned among countries.
The programme aim is to support African countries willing to crowd-in private sector investments in their electricity infrastructures to spotlight strengths and weaknesses of their current policy and regulatory actions and define potential roadmaps for reform. This would be possible through:
- A better understanding of national electricity-related policy and regulatory framework vis-à-vis private investments
- The definition of best-practices based on countries’ successful experiences and their dissemination
- The building of consensus around policy recommendations for reforms and the definition of a possible Road-Map for Change
The programme would initially be organized around 2 Phases: Phase 1 will run from February 2020 to December 2020, while Phase 2 will run from January 2021 to July 2021. The programme is expected to cover a total of 14 African countries under the 2 phases.
What is different?
While there are numerous methodologies in use today on regulatory issues, including governance and effectiveness indexes, our joint programme is a first-of-its-kind to look to regulatory reforms with a goal of facilitating private sector investment and its value-added is based on
- Applying a private sector perspective methodology on realising African countries’ commitment for a sustainable, affordable and reliable energy future.
- Merging private sector participation and multilateral development priorities through strategic alliances.
- Serving multiple objectives, involving multiple stakeholders and integrating with existing initiatives such as EU-led platforms, new instruments such as renewAfrica, and the policy dialogue on private sector investment led by the Private Sector unit of UNECA.