Transforming utility systems in Sub-Saharan Africa: Key takeaways from the West Africa Utilities Roundtable

How can we make progress toward innovative, bold, and affordable power utility systems in Sub-Saharan Africa? With only 53% of West Africans currently having access to electricity — and the region’s population of 440 million expected to double by 2050 — we must urgently improve utility performance. 

Last month, Clean Air Task Force, in partnership with Arthur Energy Advisors, hosted the West Africa Utilities Roundtable in Accra, Ghana. The Roundtable brought together 24 utility leaders from six Sub-Saharan African countries to discuss common challenges and paths forward for establishing robust, low-carbon, and reliable energy systems in the region.

The discussions focused on several key issues utilities face in service provision, including:  

• Energy System Efficiency: Utilities across the region grapple with significant losses, both technical (energy lost in transmission and distribution) and commercial (losses due to non-payment). These inefficiencies reduce utilities’ abilities to invest in modern clean grids and in some cases increase the use of fossil-based energy. Effective mechanisms for mitigating these losses are critical for improving efficiency and expanding electricity access with significant climate benefits. Together with utilities in Sierra Leone and Northern Ghana, we have analyzed and characterized their losses and are working on new innovative initiatives to reduce them.   

• Renewables integration: Successful integration of variable renewables energy (VRE) sources such as wind and solar into the grid can diversify the energy mix, curb reliance on fossil fuels, and increase both energy security and access across the region. However, integrating these VREs presents challenges, particularly due to their intermittent nature and need for expanded transmission resources.  CATF is working with the utilities to develop detailed techno-economic and social assessment of long-term VRE generation into the grids. Additionally, we are analyzing the technological and infrastructure requirements to support the VRE deployment. Advanced grid management, availability of complementary firm resources, and storage solutions will be essential for the successful utilization of VREs while ensuring stable and cost-effective energy supply in the region.  

• Financial sustainability and investment attractiveness: Ensuring financial sustainability remains a key challenge, with many utilities struggling to cover their operational costs. To address this, innovative financing models, tariff structures, and programs are needed to attract investments, create a stable investment climate, and offer incentives that align with long-term sustainability goals while keeping energy affordable for consumers. 

• Aging infrastructure: Many utilities in West Africa are burdened with outdated infrastructure. Modernizing these systems is critical for meeting current and future energy demand in the region.  

What CATF is doing to close the electricity access gap in West Africa 

Addressing these issues is crucial for closing the electricity access gap and delivering affordable, reliable, and clean electricity to the growing population in West Africa. Beyond collaborating closely with local stakeholders, CATF experts are actively researching innovative solutions to overcoming these obstacles:  

• The Weighted Average Cost of Capital (WACC) in Africa: At the roundtable, CATF staff presented ongoing research on the power sector’s WACC, or the average rate that a business pays to finance its assets, for 48 African countries and five sub-regional groupings. The WACC analysis seeks to capture country-specific costs that can be applied to electricity technology investments and enables governments, multilateral development banks, and other stakeholders to create policies that encourage greater investments into the continent’s power sector. 

• Modeling Africa’s Energy Transition: To understand the state of knowledge generation focusing on the nexus of climate, energy policy, and economic development, CATF conducted a systematic review of model-based analysis focusing on Africa. We found that key technologies being advanced globally to address climate change (e.g., carbon capture, nuclear, geothermal etc.) are not widely considered in Africa-focused research. In addition, socio-economic development objectives and the full cost of energy transition for African countries are not factored into the research. We are working with the utilities to ensure their staff have adequate technical knowledge to adopt the diverse set technologies necessary to build a modern energy system and expand economic development across the continent. 

Going forward, CATF is committed to deepening its collaboration with key stakeholders in West Africa to accelerate access to reliable and affordable energy for communities across the region.  

Learn more about our CATF’s Africa Energy and Climate Innovation Program here.