Africa Investment Forum: More needs to be done to increase access and affordability of power – AfDB

The power sector in Africa has been under the spotlight at the Africa Investment Forum, with discussions focusing on reform, regulation, and the growing importance of renewable energies. Angela Nalikka, Division Manager of National & Regional Power Systems for the African Development Bank, shared insights into the sector's progress and the challenges that lie ahead. Nalikka highlighted the positive trends in the power sector, particularly in generation, where over 270 Independent Power Producers (IPPs) are operational across 30 countries, with investments totaling around $51 billion. However, she emphasized the need for more investment in transmission to address the disparities in access to power across different countries. Nalikka noted the efforts to attract private capital into the transmission sector, citing examples like Kenya opening up national transmission lines. The regulatory space has also seen improvements, but further enhancements are needed to ensure financial sustainability and creditworthiness of utilities. The African Development Bank's sustainable utility agenda aims to support utilities in governance, planning, and financial management to facilitate private sector investment in power generation. A key focus area identified by Nalikka is increasing access and affordability of power, particularly in remote areas through mini-grid and off-grid solutions. While progress has been made in expanding access, regulatory frameworks for such initiatives need further development. Challenges related to grid stability and managing intermittent power sources like solar also need to be addressed to strengthen power networks. Despite these challenges, the energy sector has emerged as a lucrative investment opportunity, attracting a growing number of investors who are familiar with the regulatory landscape following reform processes in various countries. Tariffs, especially in solar energy, have been decreasing, making investments in the sector more attractive. Looking ahead, Nalikka emphasized a shift towards renewables in the energy mix, driven by the increasing cost-effectiveness of solar and wind power compared to thermal generation. As countries strive to meet growing energy demands sustainably, renewable energy sources are poised to play a key role in the future energy landscape of the continent. The power sector in Africa is at a critical juncture, with opportunities for growth and development, but also challenges that require concerted efforts to overcome. With a focus on reform, regulation, and renewable energy, stakeholders are working towards a more sustainable and inclusive power sector that can drive economic growth and improve livelihoods across the continent.