UCT GSB partners with six other institutions to launch the African School of Regulation initiative

PRESS OFFICE: UCT Graduate School of Business

The initiative to create the African School of Regulation (ASR) was launched through a scientific knowledge partnership agreement between the European University Institute (EUI), the Graduate School of Business (GSB) of the University of Cape Town , the Pan-African University Institute for Water and Energy Sciences (PAUWES), the Enel Foundation, the Rocky Mountain Institute (RMI) and the Energy Nexus Network (TENN).

The launch brought together renowned institutions working in both the energy and climate change sectors with the aim of offering knowledge and capacity building initiatives, as well as applied research and a space for policy dialogue, for governments, regulators, utilities and other stakeholders to better regulate Africa’s energy sector in support of the continent’s socio-economic development and environmental sustainability.

“The Graduate School of Business at the University of Cape Town is pleased to be associated with this initiative to create an African School of Regulation in partnership with several other institutions on the continent. This will be an opportunity to build on our existing training on power sector reform and regulation, expanding the range and scope of activities in support of energy transition, and the provision of energy services. durable, reliable and affordable,” noted Professor UCT. , Anton Eberhard.

The Power Futures Lab has held annual courses since 2001 on power sector reform and regulation in Africa, with each course typically attracting around 70-130 participants (regulators, policy makers, utilities, end users, development finance institutions , private sector) of more than 20 African countries. Local faculty and practitioners are supported by leading international faculty.

“The launch of the African School of Regulation demonstrates our collective efforts to support Africa’s drive to achieve SDG7 with a particular focus on universal access to modern energy services for all,” said Kandeh Yumkella, Founder and CEO of TENN. “However, the massive investments required will only be possible when the appropriate regulatory and policy frameworks are in place. TENN is proud to be one of the institutions collaborating in the creation of the ASR,” he added.

At its core, the ASR aims to be the preeminent pan-African center of excellence on energy regulation and to provide capacity building on international regulatory best practices. Its creation was inspired by the mission of the Florence School of Regulation (FSR) of the EUI.

“The FSR wishes to share its knowledge and expertise in the creation of the ASR as a school specialized in energy regulation and to provide logistical and coordination support during the creation and start-up phase,” said Professor Ignacio Pérez-Arriaga, who represents the FSR in the ASR partnership.

Recognized for its diversity of experience and success in energy regulatory training with a focus on the European Union but also worldwide for nearly two decades, the FSR has recently made a special effort to provide the right training and support to respond to the reality and reality of Africa. needs in the areas of energy and climate change.

The setting up of the African School of Regulation will be carried out in two phases. Led by the Florence School of Regulation and in coordination with six partner institutions, the first phase will see the development of training programs, the implementation of specific activities in research and policy dialogue. During this first phase, the partners will decide to identify one or more African host institutions and establish the modalities of the future governance of the ASR, including the program of activities and a viable financing plan for a period of five years.

Specifically, the Power Futures Lab’s contribution to the ASR will include three short executive education courses currently offered:

1. Managing power sector reform and regulation in Africa.

The course equips managers and leaders working in this critical sector with the ability to contribute to power sector reform and deliver sustainable and affordable services to all, while accelerating economic growth. The course is focused on Africa’s needs and exposes participants to international best practices in managing new electricity markets and the regulatory environment. This specialized short course explores new research on energy transition, the utility of the future, provides in-depth training in the fundamentals and practice of economic regulation, and researches new models for efficiently managing electrical systems. https://www.gsb.uct.ac.za/power-reform-regulation

2. Financing, contracts and risk mitigation for private energy investments in Africa.

Finance, Contracts and Risk Mitigation for Private Investment in Power in Africa is a specialized short course at UCT GSB teaching the theory and practice of power project finance. This course aims to build capacity in the key areas of project finance, associated contracts such as Power Purchase Agreements (PPAs) and risk mitigation measures – including credit enhancement, security and political insurance – primarily for public sector officials. The specialized course aims to fill this skills gap and unlock growth and investment in the sector. https://www.gsb.uct.ac.za/power-financing

3. Financial modeling for utility pricing (new).

Financial modeling for tariff setting is a core skill set for professionals working in the regulatory, municipal and utility space of the continent’s electricity sector. The course equips utility managers, senior professionals and advisors, regulators and government decision-makers with the skills to set tariffs in a regulated environment. The course provides an advanced understanding of the building blocks of a financial pricing model. It teaches delegates to build a financial model – including all the building blocks such as regulatory asset base, weighted average cost of capital, and energy and input costs – that can run sensitivity analyzes and provide various tariff trajectories. https://www.gsb.uct.ac.za/financial-modeling

A Virtual Knowledge Center (hosted by PAUWES) has also been launched to complement the ongoing efforts of the new initiative. It will also provide an inventory of all relevant and ongoing capacity building activities of energy regulatory institutions in Africa, and a repository of freely accessible learning materials is made available to participants.

The second phase will see the transfer of the management and operations of the ASR to the identified institutions under new governance. This means that the ASR will officially have its headquarters in the host institution or institutions in Africa.

Institutions that have endorsed the ASR mission include – Africa-EU Energy Partnership (AEEP), Africa-Europe Foundation, World Bank Energy Sector Management Assistance Programs (ESMAP) , Friends of Europe, Sustainable Energy for ALL and the United Nations Economic Commission for Africa. (UNECA). They will offer support for the start-up and consolidation of the ASR according to growing needs.

Vera Songwe, United Nations Under-Secretary-General and Executive Secretary of ECA (Africa’s premier institution focused on generating knowledge and applying policy research in support of accelerated economic diversification and structural transformation ) commented when briefed on the launch of the ASR initiative: “During this Decade of Action for the SDGs, African countries need to dramatically increase investments in clean energy for access and climate action, which requires around $60 billion or more per year. With the growing fiscal impacts of COVID-19, innovative pandemic solutions, such as our SDG7 initiative and the Liquidity and Sustainability Facility (LSF), are needed to help countries leverage private sector investments. It is therefore urgent to remove regulatory barriers to ensure the openness, attractiveness and readiness of the market for private sector financing. The African Regulatory School is therefore a timely and very welcome initiative to support Africa with the necessary capacity for this, and ECA is proud to be part of it.

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