Judging by the headlines, 2014 has been a significant year for improving electricity supply in sub-Saharan Africa (SSA), where only 290m of the 915m population has access and the total number without grid connections is still rising, according to the International Energy Agency. Several independent power projects (IPPs) have reached financial close, including Ghana’s long-awaited Cenpower deal; others are almost there – most notably Nigeria’s template-setting Azura-Edo IPP, whose impending completion was a focus for participants at the 24-25 November Africa Investment Exchange: Energy (AIX:Energy) meeting in London. Multilaterals and governments report progress in efforts to develop ‘transformational’ schemes including Grand Inga and strategic transmission projects. US President Barack Obama’s Power Africa initiative has given political impetus to efforts to overcome SSA’s gaping energy deficits, as have UN secretary-general Ban Ki-moon’s Sustainable Energy for All and other initiatives. South Africa’s Renewable Energy Independent Power Producer Procurement programme has set new benchmarks for solar and wind project financing.
But headlines can be deceptive, according to the financiers and developers who clustered at AIX, organised by African Energy’s parent company Cross-border Information (CbI). In all but a very few countries, the sort of documentation and cost-reflective tariffs needed to make IPPs bankable remain elusive. According to one prominent developer, this means that even a much-discussed market such as Tanzania is “really only a potential opportunity rather than a real opportunity”.