Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries

Inadequate electricity services pose a major impediment to reducing extreme poverty and boosting shared prosperity in Sub-Saharan Africa. Simply put, Africa does not have enough power. Despite the abundant low-carbon and low-cost energy resources available to Sub-Saharan Africa, the region’s ent...

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Main Authors:	Eberhard, Anton, Gratwick, Katharine, Morella, Elvira, Antmann, Pedro
Format:	Book
Language:	English en_US
Published:	Washington, DC: World Bank 2016
Subjects:	INDEPENDENT POWER PROJECT INDEPENDENT POWER PRODUCER POWER PURCHASE AGREEMENT PRIVATE INVESTMENT PRIVATE PROJECT GENERATION PRIVATE PARTICIPATION ELECTRICITY
Online Access:	http://hdl.handle.net/10986/23970

id	okr-10986-23970
recordtype	oai_dc
spelling	okr-10986-239702021-04-23T14:04:18Z Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries Eberhard, Anton Gratwick, Katharine Morella, Elvira Antmann, Pedro INDEPENDENT POWER PROJECT INDEPENDENT POWER PRODUCER POWER PURCHASE AGREEMENT PRIVATE INVESTMENT PRIVATE PROJECT GENERATION PRIVATE PARTICIPATION ELECTRICITY Inadequate electricity services pose a major impediment to reducing extreme poverty and boosting shared prosperity in Sub-Saharan Africa. Simply put, Africa does not have enough power. Despite the abundant low-carbon and low-cost energy resources available to Sub-Saharan Africa, the region’s entire installed electricity capacity, at a little over 80 GW, is equivalent to that of the Republic of Korea. Looking ahead, Sub-Saharan Africa will need to ramp-up its power generation capacity substantially. The investment needed to meet this goal largely exceeds African countries’ already stretched public finances. Increasing private investment is critical to help expand and improve electricity supply. Historically, most private sector finance has been channeled through privately financed independent power projects (IPP), supported by nonrecourse or limited recourse loans, with long-term power purchase agreements with the state utility or another off-taker. Between 1990 and 2014, IPPs have spread across Sub-Saharan Africa and are now present in 17 countries. Currently, there are 125 IPPs, with an overall installed capacity of 10.7 GW and investments of $24.6 billion. However, private investment could be much greater and less concentrated. South Africa alone accounts for 67 IPPs, 4.3 GW of capacity and $14.4 billion of investments; the remaining projects are concentrated in a handful of countries. The objective of this study is to evaluate the experience of IPPs and identify lessons that can help African countries attract more and better private investment. At the core of this analysis is a reflection on whether IPPs have in fact benefited Sub-Saharan Africa, and how they might be improved. The analysis is based primarily on in depth case studies, carried out in five countries, including Kenya, Nigeria, South Africa, Tanzania and Uganda, which not only have the most numerous but also among the most extensive experience with IPPs. 2016-03-29T22:00:53Z 2016-03-29T22:00:53Z 2016-04-08 Book 978-1-4648-0800-5 http://hdl.handle.net/10986/23970 English en_US Directions in Development--Energy and Mining; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Publications & Research Publications & Research :: Publication Sub-Saharan Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	INDEPENDENT POWER PROJECT INDEPENDENT POWER PRODUCER POWER PURCHASE AGREEMENT PRIVATE INVESTMENT PRIVATE PROJECT GENERATION PRIVATE PARTICIPATION ELECTRICITY
spellingShingle	INDEPENDENT POWER PROJECT INDEPENDENT POWER PRODUCER POWER PURCHASE AGREEMENT PRIVATE INVESTMENT PRIVATE PROJECT GENERATION PRIVATE PARTICIPATION ELECTRICITY Eberhard, Anton Gratwick, Katharine Morella, Elvira Antmann, Pedro Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries
geographic_facet	Sub-Saharan Africa
relation	Directions in Development--Energy and Mining;
description	Inadequate electricity services pose a major impediment to reducing extreme poverty and boosting shared prosperity in Sub-Saharan Africa. Simply put, Africa does not have enough power. Despite the abundant low-carbon and low-cost energy resources available to Sub-Saharan Africa, the region’s entire installed electricity capacity, at a little over 80 GW, is equivalent to that of the Republic of Korea. Looking ahead, Sub-Saharan Africa will need to ramp-up its power generation capacity substantially. The investment needed to meet this goal largely exceeds African countries’ already stretched public finances. Increasing private investment is critical to help expand and improve electricity supply. Historically, most private sector finance has been channeled through privately financed independent power projects (IPP), supported by nonrecourse or limited recourse loans, with long-term power purchase agreements with the state utility or another off-taker. Between 1990 and 2014, IPPs have spread across Sub-Saharan Africa and are now present in 17 countries. Currently, there are 125 IPPs, with an overall installed capacity of 10.7 GW and investments of $24.6 billion. However, private investment could be much greater and less concentrated. South Africa alone accounts for 67 IPPs, 4.3 GW of capacity and $14.4 billion of investments; the remaining projects are concentrated in a handful of countries. The objective of this study is to evaluate the experience of IPPs and identify lessons that can help African countries attract more and better private investment. At the core of this analysis is a reflection on whether IPPs have in fact benefited Sub-Saharan Africa, and how they might be improved. The analysis is based primarily on in depth case studies, carried out in five countries, including Kenya, Nigeria, South Africa, Tanzania and Uganda, which not only have the most numerous but also among the most extensive experience with IPPs.
format	Book
author	Eberhard, Anton Gratwick, Katharine Morella, Elvira Antmann, Pedro
author_facet	Eberhard, Anton Gratwick, Katharine Morella, Elvira Antmann, Pedro
author_sort	Eberhard, Anton
title	Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries
title_short	Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries
title_full	Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries
title_fullStr	Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries
title_full_unstemmed	Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries
title_sort	independent power projects in sub-saharan africa : lessons from five key countries
publisher	Washington, DC: World Bank
publishDate	2016
url	http://hdl.handle.net/10986/23970
_version_	1764455302766264320

Independent Power Projects in Sub-Saharan Africa : Lessons from Five Key Countries

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