Trade in Electricity Services in the Southern African Customs Union: Towards a Negotiating Strategy
"The development of a country’s electricity sector is crucial for broader economic growth and economic and social development. The electricity sector in the Southern African Customs Union (SACU) member states is facing chronic challenges, including lack of surplus capacity, and underdeveloped power transmission and distribution infrastructure, resulting in losses in production. Hence, electricity’s contribution to the high cost of doing business in the region is increasing. Regional power utilities have enjoyed a monopolistic hold over their national electricity industries, which has contributed to the inadequate delivery of electricity services. The scale of capital requirements for new projects and the pressure this could place on countries’ balance sheets have increased the importance of private participation in the sector. Liberalisation in electricity services subsectors should be supported by a clear government policy in this regard and an appropriate legal framework in order to prevent abuses and provide incentives that encourage investment in the sector. Consequently, the Regional Energy Regulators Association has a role to play in supporting national regulators to open up domestic markets and thereby enhance regional expansion in electricity trade."