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19th Africa Energy Forum
7-9 June 2017
|
Copenhagen, Denmark

On 7 and 8 June, MEDREG President Mr. Santos took part in various panel discussions held in the framework of the Africa Energy Forum (AEF), which is a global investment meeting for Africa’s power, energy, infrastructure and industrial sectors, bringing together senior-level representatives from governments, utilities, regulators, power developers, financial institutions, technology providers, consultants, law firms and large energy consumers to form partnerships, identify opportunities and collectively move the industry forward.

As part of the 3-day event, MEDREG President advocated the key role of regulation in leveraging investments in the energy sector in Africa.

Working Roundtable on the Importance of Regulators as Independent Entities

On 8 June, Mr. Santos participated in a working roundtable with regulators from a wide range of African countries including Ghana, Kenya, Mali, West African countries (ECOWAS), Zambia and Zimbabwe. They debated and exchanged on what characterises their independence, such as their ability to set tariffs. They confronted their views with investment funds on cost effective tariff methodologies and on the regulator’s independence towards government’s influence.

  • An important part of the discussion sought to understand the real degree of independence and power of regulators in the establishment of cost effective tariffs. Although all regulators acknowledged the fact that tariff setting is a politically sensitive issue, they stated that they are the responsible entities for defining them. Sometimes in consultation with their government, regulators set tariffs through public consultation involving licensees, consumers and all relevant stakeholders, in a way which balances the interests of all and which is viable, predictable and consistent. In order to handle the political influence and conflicting interests, tariffs are defined in a transparent and collective manner by regulators that justify their decision.
  • Tetra Tech, a consulting firm advising governments and investors, underlined that the regulator’s role is to ensure the efficiency, competitiveness, transparency and accountability of the energy power, requiring a well-designed structure. He added that investors want predictability, consistency and certainty. Mr. Santos agreed with this statement and added that what matters most is how much regulators can influence governments rather than being independent. He recalled that MEDREG gathers countries of diverse stages of regulation, meaning that one measure does not fit all. He further emphasised the importance of having a stable regulatory framework in place in setting cost effective tariffs.
  • Some regulators stated that there is still some political reluctance to empower them setting tariffs. They were challenged to demonstrate their real independence when being asked about the appointment mode of their Commissioners, as most are nominated by governments. Regulators reaffirmed their independence highlighting that their mandates goes beyond the political elections while others indicated that their legal framework was strong enough to ensure political independence.

Panel Discussion on Morocco, providing insights into the next 5 years

MEDREG also attended a panel discussion which focused on Morocco, providing insights into the country’s energy policy for the next 5 years. Held on 8 June,  the session was opened by Mr. El Hafidi, Vice-Minister of Energy, Mines and Sustainable Development of Morocco who indicated the country’s ambitious RES target of 52% by 2030 as part of a programme of structural reforms towards a low carbon energy policy. He indicated that in order to reduce the energy dependency of the country, energy efficiency had become a national priority with a target of 20% by 2030 and a strategy to develop solar, wind and biomass energies had been adopted. 

  • Mr. El Hafidi called on investors to participate to the financing of this ambitious RES policy which is still insufficient. Morocco has set up a clear legal framework providing guarantees for private companies. This call was heard by investors represented by Tetra Tech and Legal Counsels who confirmed that since private companies have been given access to medium power grids and since a clear RES policy and objective have been adopted, Morocco has become an extremely competitive market, in particular for large scale RES projects. With a consistent and transparent regulatory framework in place, “companies want to be in”, emphasized the legal counsellor representative.
  • The effort made by Morocco in putting in place a strong regulatory framework was further applauded by Tetra Tech who stated that by having replicated the best practices in the world, the country had become an attractive market for investors.
  • Investors raised the question of the next phase for smaller players to be able to invest in such big scale projects. Setting smaller scale projects such as building refurbishing and the construction of small transmission accesses were mentioned as possible ways to unlock investment for smaller private companies.
  • In addition, a panellist indicated that since the first privatisation of the electricity market 20 years ago, Morocco had always honoured its obligations, and the that the country was now reaping the benefits of it. Another asset which was mentioned as contributing to the attractiveness of the Moroccan energy sector was the existence of a transport network covering the country’s territory, which will be upgraded in line with the distribution grid.
  • Mr. El Hafidi concluded stating that all the ingredients are there to attract investors.

In the margin of this event, MEDREG President was approached to support Morocco with the organization of a seminar on regulation which may take place in the next months in Rabat.

Working Roundtable entitled “Tapping into European Investors Investment Plans

The day before, on 7 June, Mr. Santos participated in the Working Roundtable entitled “Tapping into European Investors Investment Plans” where he underlined that a stable regulatory framework is a necessary condition for attracting investment. This vision was echoed by a representative of Swedfund, a Development Finance Institution of the Swedish state, who expressed interest in investing in Uganda, due to the policy, legal and regulatory framework in place offering a stable and predictable environment.

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