PROJECTS

Model for Private Finance of Power Transmission, Africa

The problem

Inadequate electricity transmission in Africa means utilities often cannot access the cheapest sources of generation, gain economies of scale generation, or connect with neighboring grids to increase security of supply. The result is power that is more expensive and less reliable than it should be. A major reason for lack of transmission infrastructure is that governments and state-owned utilities are expected to finance the transmission investment, but lack the fiscal and financial resources to do so.

How we helped

Castalia showed how African countries can mobilize private finance for transmission investment. We researched and wrote up the ways in which other countries—including Brazil, Chile, Peru, India, and the Philippines—had adapted the Independent Power Producer model used to privately finance power generation to enable the private finance of transmission assets and provision of transmission services. We wrote a guide—“Linking Up: Public-Private Partnerships in Power Transmission in Africa”—showing how this approach could be applied in Africa and identified an initial pipeline of candidate projects.

Impact

Our work was presented at the Future Energy Central Africa conference in Yaoundé, Cameroon in October 2017. It has been viewed approximately 15,000 times. Work on privately finance transmission projects using the model we recommended is underway in Kenya and Nigeria.