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Procurement key for sustainable power

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Key power sector stakeholders say best practice in procurement, deal structuring and financing models have a crucial role to play in ensuring a sustainable power sector across Africa.
This emerged at a meeting of the advisory boards of Power-Gen Africa and DistribuTech Africa in Sandton during January. The advisory boards, comprising experts, academics and executives from sub-Saharan power stakeholders, met to review papers and identify the most pressing issues facing the power generation and distribution sectors ahead of the annual co-located conferences and exhibition later this year.
Noting that African economic development depended on a healthy and sustainable power sector, advisory board members said utilities alone were not responsible for power sector challenges. Management, deal structuring and skills shortages at a local government level had to be addressed to ensure that projects delivered effectively, they said. Funding models and procurement practices had to be carefully assessed to ensure new project plans were viable, and more high level technical resources were needed to optimise ageing power infrastructure.
Nelisiwe Magubane, chairman of Matleng Energy Solutions and former Department of Energy (DoE) director-general, says: “There is a need to ensure effective governance in procurement processes, to avoid costly project derailments.”  She adds that the introduction of independent power producers had helped to refine and streamline rules and processes, but that there was room for improvement.
Dr Willem de Beer, chairman of the Paower-Gen Africa and DistribuTech Africa Advisory Board, says research among power generation and distribution stakeholders in sub-Saharan Africa has found that the industry felt challenged from a financial perspective: “They are facing issues such as how to fund projects, and how to ensure they have the best suppliers aboard. Another major concern facing everyone we spoke to was how to manage ageing assets, and how to overlay new infrastructure on these assets.”
Advisory board members say African stakeholders were also facing issues such as developing new infrastructure that responds to the agreements made at COP21 in Paris; the growing trend toward distributed, stand-alone generation, and the integration of renewables onto the grid.
Nigel Blackaby, director of international conferences at event organiser PennWell, says Power-Gen Africa and DistribuTech Africa 2016 aim to focus on these top-of-mind challenges to support sustainability in the pan-African power sector.