Advancing Public-Private Partnerships to Accelerate Energy-Sector Development
Watch training sessions on-demand and download our Understanding series to help build common understanding of best practices for successful power project development
Governments, utilities, power producers, and other entities in the energy sector need expertise in policy, regulatory, and legal frameworks to develop and institute reforms necessary to attract financing. Public-Private Partnerships (PPPs) are funding mechanisms for bridging the energy sector financing gap and accelerating infrastructure development. Power Africa, in collaboration with the Cyrus R. Vance Center for International Justice (the Vance Center), helped to meet this need by training lawyers, finance professionals, and technocrats in East Africa to advance generation and transmission projects through PPPs.
The African Development Bank estimates that Africa needs at least $170 billion a year by 2025 to finance infrastructure, with a shortfall of $68 to $108 billion a year. The energy sector requires $29 billion annually. However, most African governments are saddled with budget constraints that affect their development plans — a challenge exacerbated by COVID-19 and resulting response and recovery efforts.
With these constraints and the increasing demand for electricity, African governments are looking to access private-sector capital. PPPs can help bridge this financing gap to accelerate infrastructure development.
To develop and support the policy, legal and regulatory environment required to attract private sector capital and negotiate complex PPPs, Power Africa advisors work with regulators, ministries, and utilities. Together with the Vance Center, Power Africa held regional and country-specific training sessions targeting Ethiopia, Kenya, Nigeria, and Somalia. The training aimed to strengthen power project development, and specifically how to structure deals and negotiate complex energy transactions.
The 2019–2021 Power Africa/Vance Center trainings included the following topics:
- Challenges and case studies on reaching financial close in energy project development and financing;
- Legal aspects in building and analyzing financial models;
- Project finance, including types of financing, with special focus on bond securitizations; and
- Controls, corruption, conflicts, and arbitration related to PPP project management, structuring, and implementation.
These trainings were conducted in coordination with international law firms including Orrick Herrington & Sutcliffe LLP, Baker McKenzie, Linklaters, Sullivan & Cromwell, as well as a number of firms based in each country, to provide local context.
“The Vance training has exposed me to great insights regarding financial close. For instance, I previously didn’t know reaching financial close depends on the bankability.”
Ethiopian Electric Power (EEP) participant
ICYMI: Watch On-Demand & Download Slides
Recordings of the sessions and accompanying slides can be downloaded from Orrick’s website.
Power Africa also conducted a regional PPP training in collaboration with the Institute for Public-Private Partnerships (IP3), an internationally recognized PPP specialist certification body. Participants comprised of PPP experts from the DRC, Djibouti, Ethiopia, Kenya, Rwanda, Somalia, Tanzania, and Uganda. The 10-month intensive training program focused on the financial and legal intricacies of PPPs. The end goal was increased capacity across the region for improved procurement and management of PPPs.
Additional Power Africa Resources
Learn more about how Power Africa is creating a strong enabling environment for private sector investment in energy, and check out our resources on power project financing, power purchase agreements, and power project procurement from our acclaimed Understanding series.
Developed in collaboration with the U.S. Department of Commerce’s Commercial Law Development Program and the African Development Bank’s African Legal Support Facility, the Understanding book series helps build common understanding of best practices for successful power project development.