Mitigating Risks of Privately Financed Power Projects in
Sub-Sahara Africa ('SSA')
Kingsley Osei, Lead Contracts Counsel, State University of New York, USA
In 2014, the forty-nine Sub-Sahara Africa (“SSA”) countries, with a combined population of more than 800 million, had an installed electric power generation capacity of 92 Gigawatts (GW). This figure compared to Spain, a country with a population of 45 million had 106 GW of installed electric power generation capacity. Thus, in 2014, while the average per capita consumption of electric power in SSA was 514 per kWh, that of Spain was 5356 per kWh. Examined differently, between 1990 and 2013, SSA (outside South Africa) added a net investment representing 15.63 GW capacity of installed electric power generation, far below its requirements. To remedy this requirements gap, countries in SSA will need about $288B to provide universal access to electric power for their citizens by 2030. Governments and developmental financial (“DIFs”) institutions such as the World Bank and the Overseas Investment Corporation (“OPIC”) are the principal funding sources of power projects in SSA. However, privately funded independent power producers (“IPPs”) has been the fastest-growing source of investment in recent times. Excluding South Africa, total IPP investment for projects in SSA between 1990 and 2013 was $8.7 billion. Added in 2014, was another $2.3 billion.
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