Petronella Sibeene and Ephraim Munthali
26 September 2005
Windhoek — THE Regional Electricity and Investment Conference currently underway in Windhoek has called for the re-evaluation of regulatory policies in the energy sector if the region is to see substantial growth in investments.
Delegates at the conference on Tuesday indicated that though policies have been put in place to regulate the energy system in the respective countries, the implementation process appears ineffective.
Executive secretary of the Regional Electricity Regulators Association (RERA) Elijah Sichone said the way the industry structures are operated has left much to be desired particularly for potential investors.
The energy sector mainly lacks regulators who can deal with arbitrations should a need arise, said Sichone.
"The environment is not conducive enough. The policies need to be implemented and this should also include stakeholders," he stated.
RERA as a regulatory body is taking stock of what is happening in the regional energy sector and from the observations made so far, many countries seem to be faced with a great challenge of not knowing how to implement policies that would improve or encourage investments.
A lack of proper implementation of fundamental regulatory policies has similarly led to a limited foreign investment in the region and the African continent at large.
Speaking at the same conference, South African Minister of Minerals and Energy Lindiwe Hendricks noted that in the last decade, the continent has not been able to encourage and attract a big number of investors. Apart from assessing policies, Hendricks said regulation also needs to be harmonised for the benefit of investors and the region in general.
"There is a need to harmonise across borders just as much as it should be done at national levels," she stated. Once investors are attracted to the region, this would act as a catalyst to kick-start regional economies.
"The minister added that the Southern African region has great opportunities available but investors need to be assured of the integrity, clarity on roots and clear legislative policies among others before they think of putting in their resources.
As the continent strives to develop itself, other challenges have also acted as stumbling blocks towards capturing investors. Insufficient infrastructure to deliver energy resources, high levels of political uncertainty, lack of independent regulation and generally, a lack of provision for an enabling environment have all blocked the sector's performance to its utmost. Though the SADC region is affected, Namibia has been able to attract quite a good number of investors.
Managing director of NamPower Dr Leake Hangala told New Era that the interest shown by investors in Namibian projects is amazing.
"They have shown interest in the Caprivi, Kudu, WESCOR projects and it's good because it will turn around the economy of the country."
Investors look at the environment, particularly at the regulations to ensure cost reflection, sustainability and commerciality of projects, the credibility of players and the packaging of projects.
The Namibian Government has, therefore, ensured that it plays its part in attracting as many investors as possible for the good of the country, he said.
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