Working Paper 350

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Working Paper 350

The Reform of the Power Sector in Africa

Stephen Karekezi, John Kimani and Ayago Wambile

OVERVIEW

The overall objective of this working paper is to provide a broad overview of power sector reform and highlight the drivers of reforms in Africa. In addition, the paper discusses the implementation process of power sector reforms in Africa. Though there is a wide spectrum of reform options implemented in the region, this paper focuses on 5 of the most common reform options which include; Unbundling (also referred to as restructuring); Management Contracts, Corporatization/Commercialization; Independent Power Producers; and Electricity Law Amendment.

The working paper provides an overview of power sector reform by describing its genesis, key characteristics, and pace of implementation in Africa. It points out that power sector reforms were primarily designed to bridge short term generation shortfalls and improve the financial health of state-owned power utilities.

The paper is organized into two chapters with the first chapter providing the rationale and the status of power sector reform in Africa and the second chapter describing the 5 main reform options implemented in Africa.

The final section of the paper presents key overall conclusions about the principal characteristics and trends of power sector reforms in Africa.

TABLE OF CONTENTS

Introduction	6

Chapter 1 Reforms in the African energy sector	9
1.1 Rationale for Power Sector Reform in Africa	9
1.2 Typical restructuring and privatization paths followed by most African countries	9
1.3 Status of power sector reform in Africa	11

Chapter 2 Possible Reform options – experiences in Africa	15
2.1 Corporatization	15
2.2 Management contract	16
2.3 Unbundling	18
2.3.1 Vertical Unbundling	18
2.3.2 Horizontal Unbundling	19
2.4 Independent Power Producers	19
2.5 Electricity Law Amendment	24

Conclusions	26
References	30
Web site resources	32
Glossary / Definition of key concepts	34

This paper is available on an exchange basis. If you find it to be useful, we encourage you to send us any relevant publications from your organization. To request for the full paper, please fill in the
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This paper is available on an exchange basis. If you find it to be useful, we encourage you to send us any relevant publications from your organization. To request for the full paper, please fill in the publications request form

This paper is available on an exchange basis. If you find it to be useful, we encourage you to send us any relevant publications from your organization. To request for the full paper, please fill in the
publications request form