WHITE PAPER

This handbook seeks to address the critical deficit of transmission capacity in Sub-Saharan Africa. It is stated that roughly half the population of Sub-Saharan Africa (or 600 million people) lack reliable access to electricity. The lack of electricity access is particularly stark at a time when the global number of persons without access to electricity is falling. While there is no adequate information on the breakdown between generation, transmission, and distribution, historically investment in generation has been roughly four times higher than transmission and distribution combined. Furthermore, the distribution sector has also attracted more investment than transmission, leaving this segment of the African energy market as the most impacted by a lack of both public and private investment.

The critical nature of transmission infrastructure to the overall function of an energy market cannot be overstated. As generation expands, transmission is needed to bring electricity to the demand centres. Additional transmission capacity (including cross-border) can also provide access to large power generation sources and connect them to unserved demand. Transmission across national borders, often referred to as interconnection, enables economies of scale that bring down the cost of power and allow for greater efficiency in matching production with consumption. Current estimates place the total investment requirements for the period 2014-2040 at $80-$140 billion, which equates to $3.2–$5.4 billion per year.

Of the 38 Sub-Saharan African countries, 9 have no transmission lines above 100 kilovolts (kV). The scale of the transmission deficit is also significant when one considers that the combined length of transmission
in the 38 Sub-Saharan African countries is about 112,196 km, less than the length of the domestic transmission network of Brazil.
 

With these gaps identified, this handbook therefore provides an overview of the fundamental regulatory structure of transmission markets, the planning and procurement of transmission systems and the core principles of contracting and finance that are required to attract private investment. The intent is that with this essential background information in mind, the detailed explanation of private investment models will be easier to understand.