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Gambian Energy Minister calls for greater public-private sector partnership
Tuesday, 01 June 2010 00:43
By Abdoulie JohnThe Minister of Energy in Gambia has called for increased partnership between the private and the public sectors in Africa in a bid to bring development to an area that has been seriously hit by the financial meltdown.
Sira Wally Ndow-Njie made this call as part of her opening speech of the African Forum for Utility Regulators (AFUR), which commenced on Monday, in Banjul.
The five-day conclave, which is being held at the Kairaba Beach Hotel, aims at identifying an organized electric power market structure and model.
The participants, who came from across the continent, are expected to go through a series of training sessions that will afford them an idea about the options available for power market structure and models.
The Gambian Energy Minister said that electric power in Africa is grossly inadequate, unreliable and very expensive.
“This makes it difficult for the region to achieve most of its development aspirations,” she told the participants, adding that normally, the provision of electric power service is seen as the sole responsibility of governments, but that due to the huge investment requirement involved, governments are finding it difficult to raise the required investment needed to meet the energy needs.
“The global financial crisis is causing a number of electric power projects to be funded by multilateral funding agencies to be delayed or cancelled. More of the role of the private sector is ignored,” she stated.
According to the Minister, the private sector have huge amount of funds looking for investment opportunities. “There are many facets to the electricity that the private sector can invest on. This therefore calls for partnership between the public and the private sector to increase our sub sector electric power capacities to meet the current and future electric demand,” she said.
To attract funds of the private sector, Minister Ndow added, it is a pre-requisite for African Power Utilities to be more efficient and financially viable.
She said: “Poor management of power utilities results in inefficient operation and large technical and non-technical losses; this reduces their ability to honor their obligation to their creditors and pay dividend to shareholders.”
Speaking earlier, Alhagi B. Gaye, Director General of the Gambia Public Utilities Regulatory Authority (PURA), recalled that the first generation reforms of Africa’s power markets, like other infrastructures of African economies in the 1980s and 90s which led to some private sector participation in the management and ownership of vertical monopolies were spurred by the imperative of reducing the fiscal deficits generated by inefficient public enterprises. “These reforms while leading to a curtailment of the fiscal deficits did not sustainably address the financing gap for the much needed investments in the power sector,” he told the gathering.
Considering that Africa as a region, excluding North Africa, has the lowest electrification rate in the world with an average of 28%, he emphasized the need for more comprehensive reforms in the electricity market and innovative mechanisms for generation, transmission and distribution of electricity.
He said: “This public-private partnership can take various forms in the allocation of ownership, operational, financial, political and other risks between public and private sector.”
Among the objectives of the Banjul meeting is to provide to participants an overview of methods for attracting private investment into power activities through public-private partnership.
Additionally, participants will also have the opportunity to brainstorm on the principles and practices of economic regulation in the field of electric power, including economic, technical, financial and customer service aspects.
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