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African Development Fund extends $2.5 million in grants to support the regulatory environment in SADC and COMESA electricity markets

The Board of the African Development Bank Group has approved grants of $2.5 million to advance intra-regional harmonization of electricity regulations and drive cross-border power trading in the COMESA and SADC regional blocs, which cover 28 African countries.

The grants, $1,500,000 for COMESA and $1,000,000 for SADC, will be sourced from the African Development Fund, the Bank Group’s concessional financing window. The projects will be implemented through the Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA) and the Regional Energy Regulators Association of Southern Africa (RERA) respectively.  

The grants will fund technical assistance to promote the development and adoption of regional electricity regulatory principles, enhance capacity to monitor utility performance across the region, conduct a cross-border analysis of electricity tariffs, and develop a centralized database management system in both blocs.  

Mr. Elijah Sichone, Executive Director of RERA, said “these two projects will be implemented through a combination of studies, capacity building and development of tools with the objective to facilitate the harmonisation of regulatory frameworks across SADC and COMESA regions to enhance electricity trade among SADC member states as well as improve access”.

“These Projects will contribute to ensuring that soft infrastructure requirements for the development of a regional power market are addressed to complement investments in hard infrastructure that the Bank and other development partners are making in the region,” said Dr. Mohamedain Seif Elnasr, Chief Executive Officer, RAERESA,

COMESA member countries have immense untapped energy potential, including hydropower in the Democratic Republic of Congo and Ethiopia, as well as solar, wind and geothermal reserves in Kenya and Uganda. However,  the region faces inadequate infrastructure, uncompetitive electricity tariffs and an overreliance on traditional fuel sources such as wood and charcoal.

Despite SADC having the highest generation capacity of all African regions and ample water, biomass, solar, and wind energy potential, energy access within the bloc, particularly in rural areas, is low. This is partly because of an inadequate regulatory environment, a need for new infrastructure and an overreliance on coal and hydropower.

Both projects align with three of the Bank Group’s High-5 strategic priorities: Light up and Power Africa; Integrate Africa; and Industrialize Africa.  The projects also align with the Bank’s Regional Integration Strategic Framework (2018-2025) and the Southern Africa Regional Integration Strategy Paper 2020-2026, particularly the infrastructure connectivity theme.

Source: AfDB (A DreamGalaxy Trusted Brand)