By Paul Shortell
Mexico’s electricity industry appears poised to outperform oil and gas in 2015. Ambitious plans to boost investment and increase production in the hydrocarbons sector, widely consider the poster child for President Enrique Peña Nieto’s wide-ranging economic reforms, have been complicated by the collapse of crude oil prices. State oil company Pemex recently reduced its estimate of investment this year by the oil and gas sector from $35bn to $25bn and may be forced to delay licensing of certain unconventional and offshore blocks. In January, more than 10,000 workers contracted by Pemex lost their jobs as the indebted company undertook new austerity measures.
Though not without its own challenges, the power sector shines by comparison. Read more
By Tassos Stassopoulos of AllianceBernstein
What’s the connection between electricity and women? Electricity is an agent of empowerment, able to transform societies and economies in emerging markets. It paves the way to buying home appliances like electric cookers, refrigerators and washing machines, freeing up women from hours of daily housework. In our view, more access to electricity in developing countries will be a catalyst for more women to join the workforce, leading to huge changes in consumer spending patterns. Read more
By Timi Soleye of CRYO Gas
Seated on the dais at an investment conference in one of Lagos’s posher hotels are the luminaries of the Nigerian power sector: the minister of power, the head of the national electricity regulator, the chairman of the presidential task-force on power and chief executives of the newly privatised electricity generation companies and distribution companies. They are desperate for the money of the reluctant foreign private equity managers and local investors who mill about the room.
It is a tough call. On November 1 a year will have passed since the effective privatisation of electricity generation and distribution in Nigeria and it must now be acknowledged that the privatisation is on the brink of collapse. Yet this is a good thing for Nigerians and for future investors. Read more
Last week India’s Central Electricity Regulatory Commission (CERC) made two big announcements. Both have moved shares – and both mark a step change in the country’s power sector.
First, the commission published tariff regulations for the next five years – an announcement which helping push shares in NTPC, the power producer, down 11.4 per cent on Monday and another 0.9 per cent on Tuesday to close at Rs115.85. Read more
Nigeria has been beloved of investors lately, the accessible face of an irresistible rising demographic in sub-Saharan Africa. But it faces challenges, and none more so than the paucity of its infrastructure.
A new report this week by Ecobank spells out just how big that infrastructure gap is, and how it is replicated widely almost everywhere in mid-Africa. And it does so at a vital moment, as Nigeria is about to move to the second stage in its privatisation programme, involving the completion and sale of 10 national integrated power projects (NPPs), with a target of the end of March. Read more
You tell a lot by a country’s electricity supply – in fact, some people prefer it to GDP when it comes to assessing China. So how is Africa doing?
A new Afrobarometer survey of 34 African countries – What people want from government – has named the best and worst countries in terms of power supply in Africa. Read more
As beyondbrics was landing on Monday evening, Venezuela’s capital gave it a warm welcome: a massive blackout. A big chunk of the country was without power, including much of Caracas.
Roving the streets of one of the world’s most dangerous cities in complete darkness was quite an experience – even for your correspondent’s seasoned driver, desperately calling family and friends to check if they were doing fine. Read more
Back in September, to much fanfare, Nigerian President Goodluck Jonathan officially handed over share certificates and licenses to the handful of energy consortiums who successfully bid $2.5bn for ownership of ten distribution companies and five power generation plants.
But investors are starting to grumble about breakdowns in communication, procedural confusion and the government’s failure to properly think through how the new system will work. Read more
Actis, a British private equity investor, wants to provide Cameroonians with power. On Thursday it agreed to pay $220mn to acquire 56 per cent of Cameroon’s national grid, Société Nationale d’Electricité (Sonel), and two power plants in the country, Kribi and Dibambe.
The grid’s current majority owner, US energy titan AES, is credited for giving Cameroon greater access to more reliable supply of power. Cameroon is now level with Spain in terms of ease of getting electricity according to World Bank data. Can Actis continue AES’s legacy? Read more
As the French author Victor Hugo put it: “All the forces in the world are not as powerful as an idea whose time has come.”
Hugo died long before electricity became commonplace in Europe’s major cities, but his aphorism could easily be applied to electricity itself – and even to Turkey’s Karadeniz Holding, which has come up with a novel and successful means of taking power to parts of the world where existing supply has problems meeting growing demand. Read more
By Bright Simons of IMANI Ghana
On the fourth day of Barack Obama’s 6-day Africa tour, the president has unveiled a multibillion dollar initiative to help Africa tackle its crippling power deficit. White House aides made it known that this is the ‘signature’ Obama initiative for Africa that many have been expecting since he came to office, the absence of which has given rise to concern in certain circles.
As one of the people who have in the past complained about the seeming lack of new ideas for a “strategic engagement with Africa” from the White House, I welcome renewed energy towards that direction. The issue selected – Africa’s electricity challenges – is clearly a vital one. Read more
A bit more evidence of China’s economic growth recovery in the shape of official electricity statistics. The State Electricity Regulatory Commission (SERC) said on Thursday that power consumption is expected to grow more than 9 per cent this year, according to Reuters.
Given that Li Keqiang, the prime minister-designate, once indicated that he put more faith in the electricity numbers than in the GDP data, these figures are worth considering. Read more
Egypt’s President Mohamed Morsi arrived in office pledging to deal with the country’s chronic power problems but – like his long-ruling predecessor Hosni Mubarak – he has instead been confounded by a continuing crisis, writes Dina Salah Eldin.
The nation’s creaking electricity network has groaned ever louder as fuel supply shortages have triggered repeated outages, while political turmoil has kept foreign investors at bay and left Egyptian officials chary about signing off deals and opening themselves to possible corruption allegations. Read more
Fancy a bit of east African power? Umeme, the Ugandan power company, was successfully floated on Friday by Actis, a private equity group. So far, it’s been a hit, with the IPO oversubscribed and shares jumping 9 per cent on Monday.
But despite the investor thumbs-up, the stock is already rated by one analyst as a sell. Read more
Fixing Nigeria’s power woes through privatisation was never going to easy. Staying employed while trying to do so seems equally challenging.
First to fall was Barth Nnaji (right), the power minister who had been credited with moving forward the privatisation process but was pressured to resign in August due a conflict of interest. On Tuesday he was followed out the door by Bolanle Onogorowa (left), head of the Bureau of Public Enterprises (BPE), the agency that oversees the sell-off of government assets. Read more
Somebody has to get squeezed. In South Africa, the price of electricity is set to rise, as power generation costs go up. The question is by how much.
Eskom, the state-owned power company, says it needs put prices up by 16 per cent to avoid shortages. But the company chief executive, Brian Dames, has said they could climb even higher unless costs can be kept under control. And the spotlight is firmly on coal – and the mining companies that supply Eskom. Read more
Emerging markets usually warrant a risk premium because they tend to be pretty risky – as CEZ, the Czech utility, is finding out with its troubled Albanian investment.
CEZ is moving to claim a World Bank guarantee on its investment in CEZ Shperndarje, a power distribution company in which it holds a 76 per cent stake (with the Albanian government holding the rest) – and a complete writedown of its total €160m investment is looking increasingly likely. Read more
After a decade of virtually frozen tariffs that has pushed them to the brink of collapse, and a major power cut earlier this month, electricity and gas companies in Argentina have finally heard the magic words they have been longing for the government to say: higher tariffs.
Unfortunately for them, there’s a catch. They won’t get the money. A special government-administered fund will. Read more
This was downtown Buenos Aires in the rush hour on Wednesday night. Ouch.
A gigantic power cut crippled the centre of the capital, causing three hours of chaos and misery for 3m people, some of whom were trapped in the metro or ended up having to walk miles home through gridlocked streets choked by failed traffic lights. It could get worse on Thursday. Read more
The State Grid Corporation of China has made a public protest over recent moves to cancel visas and work permits for 28 of its technical staff in the Philippines, where it owns a big chunk of the power transmission operating company.
It’s not entirely clear what’s behind Manila’s actions. But energy officials are keen to ensure that control over power grid operations is in the hands of Philippine rather than Chinese nationals. Read more