Electricity Regulatory index
Over the past two decades, African governments have made tremendous strides in developing robust electricity sector regulatory frameworks. Unfortunately, progress has been uneven across the continent and just under 600 million Africans still have no access to electricity. Delivering access to sustainable, affordable sources of electricity at this scale represents one of the greatest challenges faced by governments across the continent.
To help meet this challenge, in 2016, the African Development Bank launched the New Deal on Energy for Africa, a partnership-driven effort with the aspirational goal of achieving universal access to electricity in Africa by 2025. The New Deal unifies all Bank initiatives currently geared towards attaining this goal. Supporting African governments to strengthen their energy policy, regulation, and sector governance is a key component of the New Deal. A robust regulatory system, grounded in a strong policy framework and transparent governance structure, is crucial to maintaining the reliability of power supply and sustainability of the electricity sector.
African governments, with the support of development partners, including the African Development Bank, have made material progress in recent years in reforming and building capacity among policymakers and regulators in their respective electricity sectors. Although the establishment of electricity sector regulators in Africa has been associated with numerous challenges, progress has nevertheless been made. Over the last decade, over thirty African countries have established electricity sector regulators. Private sector participation and improvements in overall sector performance, however, are only likely to happen once electricity sector regulation is enhanced to facilitate additional necessary reforms.
Among the efforts to identify electricity sector regulation challenges, the African Development Bank is launching this Electricity Regulatory Index (ERI) — a comparative, country-by-country assessment of the sector’s level of regulatory development. In compiling the ERI, the Bank, together with its partners, including the African Forum for Utility Regulators (AFUR) and the Association of Power Utilities of Africa (APUA), consulted more than twenty-five African national regulators and power utilities to collect information on the regulatory framework and quality of their respective electricity sectors.
The ERI is intended to serve as a diagnostic tool, highlighting key areas in regulatory design and practice that require improvement and reform. In this respect, the ERI is informative, noting that the majority of African countries in the first sampling have developed relatively robust institutional frameworks underpinning regulation of their electricity sectors. Credit for this goes mainly to national governments that, with the support of their development partners, have widely passed and implemented key laws establishing solid policies governing their respective electricity sectors and creating transparent and empowered regulators to oversee them. In spite of this progress, however, the ERI scores also capture the fact that much work remains in strengthening regulatory independence vis-a-vis the regulated industry and the executive branch of government, as well as capacity for regulators to be able to effectively regulate the electricity sector and ensure its long-term health and sustainability.
Our immediate goal for this first edition of the ERI is to incite action among key stakeholders in the African electricity sector—particularly African governments and their development partners. We believe this will help drive further targeted support and assistance aimed at improving national regulatory environments and building capacity among sector regulators. In the long run, the ERI is intended to be a benchmarking tool that will track progress made by African countries as they align the regulatory frameworks governing their electricity sectors with international standards and best practices.
Sound regulatory systems across the continent are critical to ensuring Africa mobilizes the financing it needs to deliver universal electricity access. The Bank is committed to supporting credible initiatives in support of this goal