ABIDJAN, December 8, 2022- The African Development Bank and the World Bank have joined forces to launch parallel reports, respectively capturing the state of electricity sector regulation in Africa and, more broadly, across the developing world. The launch event was attended by 240 attendees, including government officials, regulators, development finance institutions, and African and international private sector stakeholders.
The African Development Bank’s Electricity Regulation Index (ERI), in operation since 2018, has been widely adopted by regulators and other stakeholders across the African continent to compare electricity regulatory environments and guide reforms in the sector. The new fifth edition covers 44 of the 45 African countries that host independent regulatory authorities.
This year also marks the inaugural edition of the Global Electricity Regulatory Index (GERI) 2022, sponsored by the World Bank’s Energy Sector Management Assistance Program (ESMAP) and conducted in partnership with the African Development Bank. GERI surveys 82 non-OECD countries around the world, about half in sub-Saharan Africa and the rest in Asia, Europe, the Middle East and Latin America, and is part of the World Bank’s global effort to promote a more solid. regulatory environment.
Wale Shonibare, Director of Energy Finance Solutions, Policy and Regulation at the African Development Bank, noted that the Bank has been a pioneer in efforts to mainstream the regulatory issues of the power sector in Africa since 2018, supporting the establishment of legal and regulatory frameworks. strong and creating enabling environments for the private sector. industry investment.
“This year heralds a crucial new stage for our research thanks to our collaboration with the World Bank. This allows us to compare African regulation with that of other developing regions, and shows that the ERI has been influential not only in Africa but also in the rest of the world,” Shonibare said.
“While much progress has been made in establishing regulatory frameworks, the Global Electricity Regulation Index report highlights some systemic gaps, particularly with regard to regulatory independence and the practice of tariff regulation,” said Vivien Foster. , World Bank Chief Economist for Infrastructure.
ERI Highlights
Although still at a low level of development, the average score for the 2022 ERI has improved slightly to 0.495 compared to 0.456 in 2021. This year’s ERI shows that most countries have continued to strengthen their regulatory governance structures and have registered improvements in technical regulation to improve regulatory capacity. Among other findings, the ERI highlights that thirty out of forty-five African countries have amended their laws and regulatory instruments or have enacted new ones, addressing the weaknesses that were identified through the ERI. Countries have made progress in implementing the recommendations, and many have enacted various reforms and developed regulatory codes and tools to strengthen the level of regulation in their countries.
GERI Highlights
The average global GERI score was 59 percent in 2021, representing an intermediate stage of development of electricity sector regulations in developing countries, with considerable room for improvement and the need for further action to strengthen frameworks. regulatory. Average scores for the two GERI pillars stood at 65 percent for the Regulatory Governance Index (RGI) and 54 percent for the Regulatory Substance Index (RSI). When it comes to regulatory governance, the most frequent deficiencies are related to regulatory autonomy, with a global average score of 29 percent on regulatory independence from stakeholders. Regarding regulatory substance, the lowest score is due to the weak performance of countries globally in the economic regulation of tariffs with a global average score of 37 percent. This is not indicative of a lack of rate methodologies, but rather the fact that rate methodologies are often poorly specified.
