Regulatory, market reform gaps slow rollout of cross-border projects

Fairness Moyana in Victoria Falls

REGULATORY misalignment and uneven market reforms across Southern Africa are slowing the rollout of cross-border transmission projects needed to secure the region’s energy future.

This emerged during a high-level panel at the ongoing SADC Energy Indaba underway in Victoria Falls.

Speaking during a session on Infrastructure Financing for an Energy Secure Region, Mr Victor Utedzi, managing director of the African Transmission Corporation in Zimbabwe, said while regional interconnectors are widely recognised as critical, regulatory co-ordination remains a key bottleneck.

“Countries are at various stages of regulatory reform. In Zimbabwe, for example, there has been significant discussion around independent transmission. “But other countries still operate vertically integrated utilities. These differences create complexity when trying to structure cross-border projects,” Mr Utedzi noted.

Many transmission infrastructure projects in the region are regional in scope but implemented within national jurisdictions, creating regulatory and financial risks that must be carefully packaged.

Mr Utedzi cited a proposed Angola-Namibia transmission project as an example of how regulatory and co-ordination challenges can delay progress.

The project would unlock up to 2,000 megawatts of stranded generation capacity in Angola, which could help address shortages elsewhere in the Southern African region. However, he said cross-border initiatives face additional layers of market and political risk.

“When you go cross-border, the order of the market changes. You have to package risks differently. There are always gaps when dealing with cross-border issues,” said Mr Utedzi.

He argued that one solution is to involve an independent private partner alongside national utilities such as Namibia’s NamPower and its Angolan counterpart to co-ordinate activities and manage shared risks.

“It’s very important to have a private partner. Not just to bring in capital or raise debt, but also to co-ordinate cross-border issues so that it’s no longer just Namibia or Angola, there is an independent party helping align interests.”

Mr Utedzi emphasised that stronger regional co-ordination through the Southern African Power Pool (Sapp) is essential to unlocking the benefits of integrated planning.

The region, he said, contains both generation surpluses and deficits, but these imbalances are not always within the same national markets.

“There may be generation opportunities in Angola or Tanzania, but local consumption markets may not be fully developed. On a pool basis, however, demand is far more developed. There are shortages on one side and excess on the other,” he explained.

Coordinated regional planning would allow member states to optimise power flows across borders, improving reliability while reducing duplication of generation investments.

A recurring theme of the discussion was the urgent need to mobilise private sector financing for transmission infrastructure.

According to Mr Utedzi, the era when utilities relied on donor funding, concessional finance, or their own balance sheets is effectively over.

“Those days when we thought we would depend on donors and cheap ODA financing are gone. Utilities, depending on their balance sheets to raise funding- that is also gone,” he said.

Instead, he argued, transmission must be repositioned as an investable asset class capable of attracting large-scale private capital.

“Transmission can be packaged as an investible asset class. Private sector money can actually come in large quantities,” he said.

However, unlocking such investment will require regulatory certainty, transparent market frameworks, and effective risk pooling mechanisms, particularly for cross-border projects where political, currency and off-taker risks are heightened.

Delegates agreed that regional integration remains central to building an energy-secure Southern Africa, especially amid rising demand, ageing infrastructure, and growing renewable energy deployment.

With energy deficits persisting in parts of the region, improved transmission networks could allow surplus generation in one country to support shortages in another, enhancing resilience while reducing overall system costs.

But as Mr Utedzi cautioned, progress will depend on harmonised regulation, stronger coordination, and deliberate efforts to crowd in private capital.

“The more we plan regionally,” he said, “the more we can take advantage of generation opportunities across the region.”

As SADC Energy Week continues, policymakers, financiers and utilities are expected to intensify discussions on regulatory reform and blended financing models aimed at accelerating the region’s transmission build-out, seen as the backbone of a truly integrated Southern African power market.