Publication: Attracting Private Solutions and Participation in the Power Sector in Sub-Saharan Africa: Findings from a Survey of Investors and Financiers
Date
2020-06
ISSN
Published
2020-06
Author(s)
Probst, Benedict
Holcroft, Richard
Huenteler, Joern
Balabanyan, Ani
Tipping, Andrew
Robinson, Peter
Abstract
This paper develops a classification of
investor risks and surveys 51 private investors and
financiers in the power sector in Sub-Saharan Africa. The
paper aims for a better understanding of what can be done to
attract private solutions to fill the investment gap. It
finds that the average investor assigns more weight to power
sector policy and regulatory framework risks than to the
wider sector and country context risks. And, despite many
challenges, investors perceive three segments as ready for
private solutions in Sub-Saharan Africa: power generation,
off-grid electrification, and mini-grids. Investors see
lower readiness in distribution, transmission, and retail.
The paper finds that the average investor is
forward-looking, as neither the track record of the power
sector nor the firm’s personal track record is as important
as the growth potential in the market. The paper uses the
findings to reality-check data-based measures of regulatory
readiness, namely the Regulatory Indicators for Sustainable
Energy and Power Sector Reform Index and analyzes which
elements correlate best with investor sentiment to optimize
and streamline these indexes accordingly. The results
provide important lessons for governments and development
partners to devise appropriate de-risking instruments
tailored to the risks that matter most to investors.
Citation
“Probst, Benedict; Holcroft, Richard; Huenteler, Joern; Balabanyan, Ani; Tipping, Andrew; Robinson, Peter. 2020. Attracting Private Solutions and Participation in the Power Sector in Sub-Saharan Africa: Findings from a Survey of Investors and Financiers. Policy Research Working Paper;No. 9299. © World Bank, Washington, DC. http://hdl.handle.net/10986/33994 License: CC BY 3.0 IGO.”
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