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In 2020, electricity access in Africa in was estimated at about 54%, meaning that almost 600 million Africans do not have access to power supply (either grid-connected or off-grid).[1] Moreover, Africa’s population is one of the fastest growing in the world. With this in mind, access to reliable, affordable and modern energy services will play a key role in facilitating the continent’s economic development and improving the lives of its population.
As energy sector development progresses across the African continent, national energy regulators are working to craft appropriate regulatory frameworks that 1) enable private investment in system expansion, improvement, and innovation, and 2) foster the conditions for utilities to provide safe, reliable service at affordable rates. Energy regulatory authorities have a critical role to play in meeting their countries’ objectives related to resource utilization and development, electricity access, economic growth, climate change, and cross-border trade. They are also essential to providing the transparency, predictability, and effective governance required to attract and retain investment, while protecting consumers and furthering social policy objectives such as universal access to electricity.[2]
With support from the United States Agency for International Development (USAID) and Power Africa, NARUC works to advance the three Power Africa pillars of increasing electricity generation, expanding electricity connections, and unlocking energy sector potential. In doing so, we provide our partners with the means to create regulatory frameworks needed to meet national development goals and attract private sector investment in the energy sector.
Collaboration with the African Development Bank (AfDB)
NARUC is collaborating with the AfDB to assist African energy regulators in improving electricity sector governance. The model of collaboration between NARUC and the AfDB is based on the complementary efforts of the AfDB to identify regulatory gaps and common areas for improvement across the African continent and NARUC’s efforts to address these gaps through sharing best practices and lessons learned in energy regulation from the United States and other countries.
Guidelines for Advancing Economic and Quality of Service Regulation in Africa’s Electricity Sector
Through its Electricity Regulatory Index (ERI) for Africa survey-based reports (conducted annually since 2018), the AfDB methodologically assesses the level of development of electricity regulatory frameworks in 36 African countries, providing insights into regulatory trends and practices across the continent. These reports also serve to identify key regulatory gaps and help regulators to benchmark their performance against their African peers. In 2021, NARUC published Guidelines for Advancing Economic and Quality of Service Regulation in Africa’s Electricity Sector, which concentrates on providing action-oriented, contextualized strategies for addressing specific regulatory deficiencies identified in the AfDB’s ERI for Africa 2020 report.
The Guidelines report addresses regulatory gaps identified in the ERI, subsequently revealing the need for improvement and capacity-building along regulatory substance indicators measuring economic and quality of service (QoS) regulation. It also offers concrete, context-specific insights and strategies for African electricity regulators and other key stakeholders to consider in their efforts to support robust, equitable development in the sector.
Prior to publishing the Guidelines report, NARUC held a technical workshop in 2021 that gathered representatives from Africa’s electricity regulatory bodies, relevant ministries, and other sector stakeholders to 1) outline context-specific strategies for improving economic and QoS regulation for electricity sector activities in Africa and 2) gather input on the draft report. The participants’ constructive feedback was integral to informing the finalization of the report, and the activity provided a platform for participants to learn about and discuss relevant international best practices.
Regional Workshops on Emerging Issues and Key Topics in African Energy Sectors
In 2019, NARUC and the AfDB convened African regulatory authorities in both West and East Africa to highlight emerging issues in energy regulation, and to present NARUC’s Practical Guide to the Regulatory Treatment of Mini-Grids, the Practical Guide to Women in Energy Regulation, and the AfDB’s ERI for Africa 2018 report. To drive consistent progress in energy sector development, energy regulators must be attuned and responsive to emerging trends in the sector. Through these jointly facilitated trainings, NARUC and the AfDB outlined common challenges facing African regulators as detailed in the ERI for Africa 2018 report and provided a platform for commission leadership and staff to exchange ideas to address them with their regional, United States, and international counterparts.
As distributed energy resources (such as mini-grids) will be essential to meeting electricity access goals throughout the African continent, these forums also served as a helpful platform for participating regulators to develop their knowledge of key issues in regulating mini-grid and off-grid systems. In addition, participants gained a greater understanding of the importance of gender equity in energy regulation. Not only are women uniquely impacted by energy regulatory decisions, but women’s perspectives are critical to designing and enacting effective electricity regulatory frameworks.
Support for the Guinea Regulatory Authority of the Electricity and Water Sectors (AREE)
NARUC provided technical assistance to the AREE as it works to strengthen its institutional capacity. To create an enabling environment for the private sector investment necessary to meet Guinea’s long-term energy goals, the existence of a sound, transparent, and stable regulatory body and process is important for the government, consumers, and investors alike. As a new regulator, the AREE faces challenges common to all nascent regulatory organizations (such as staffing all positions, building technical capacity, and acquiring sufficient autonomy), as well as sector-specific challenges in asserting its regulatory authority and achieving the institutional capacity sufficient to fully execute its regulatory functions.
In 2021, NARUC supported the AREE by providing an organizational assessment designed to identify and address its overall regulatory capacities, evaluate and analyze its organizational structure, and provide recommendations for areas of capacity building support via an assessment report known as the New Regulator Assessment of Guinea. As a means of informing the report, NARUC engaged with stakeholders within the Guinean regulator, utility, government, and rural electrification departments. This assessment is an essential first step for the new regulator to define their current organizational and technical status, identify long-term goals, and provide a roadmap for capacities and regulatory frameworks to improve electricity sector governance. By following the contents of the Assessment, the AREE will be better equipped to fully comply with its legislative mandate and begin addressing energy sector challenges, both of which are key to meeting energy sector goals and attracting private investment.
For more information on our work in Africa and elsewhere, visit our “Where We Work” webpage.
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[1] “Population without access to electricity in Africa, 2000-2020.” International Energy Administration. https://www.iea.org/data-and-statistics/charts/population-without-access-to-electricity-in-africa-2000-2020
[2] “Guidelines for advancing economic and quality of service regulation in Africa’s electricity sector.” NARUC. https://pubs.naruc.org/pub.cfm?id=1E215369-1866-DAAC-99FB-B7EFFB08159E
