Reforms Inadequate, State Utilities Remain Dominant
BMI View : The competitive landscape for the power sector in Africa remains highly dominated by state-owned utilities, with private sector participation still mainly constrained to power generation. This current market structure is primarily due to the inability or reluctance of local governments to conduct reforms in the sector.
The competitive landscape for the power sector in Africa remains highly dominated by state-owned utilities, despite reforms initiated by the majority of countries since the 1990s. State utilities such as South Africa's Eskom, Electricidade de Mocambique (EDM), Botswana Power Corporation (BPC), Zimbabwe Electricity Supply Authority (ZESA) and NAMPower continue to dominate both generation and transmission and distribution (T&D) activities in their respective markets.
Although private sector participation in the African power sector has increased over the past two decades, this has primarily been confined to electricity generation. This is because state utilities have chosen to maintain their monopoly in T&D activities, while opening up the generation sector to the private sector to compensate for a lack of capital for investment. As such, state utilities remain the sole purchasers of electricity generated by independent power producers (IPPs) in the majority of African power markets, and both state utilities and IPPs are involved in new generation investments.
|East Africa Lagging Behind|
|Electrification Rates (%) 2009|