Good News for Power Consumers as Eastern Africa Set to Launch Regional Power Market in 2025
MOMBASA, Kenya December 9, 2024 Eastern Africa Power Pool member nations announced plans to launch a centralized Day Ahead Market (DAM) in 2025, a regional power trading initiative expected to benefit more than 620 million people.
The competitive power market will integrate shared physical infrastructure with mechanisms for trading low-cost energy, including renewable sources. Officials say the initiative will deliver reliable, affordable, and sustainable electricity across the region, boosting economic productivity. Energy is key to economic development, and better access through the regional power market is expected to improve economic productivity in the region.
The announcement was made at a high-level ministerial conference hosted by the Government of Kenya, the Eastern Africa Power Pool and the World Bank today in Mombasa, Kenya. The conference brought together ministers, regulators, utilities, international experts, development partners, and other regional stakeholders to assess the region's preparedness for the future regional power market and pave the way towards the launch of the day ahead market.
"As policy makers, it is our duty to create an enabling environment for this market to thrive. This includes fostering a culture of cooperation, addressing any bottlenecks in the regulatory or technical frameworks, and ensuring that our national priorities align with regional goals," said Hon. James Opiyo Wandayi, EGH, the Cabinet Secretary, Ministry of Energy and Petroleum.
The region's initial focus was to develop the physical infrastructure necessary for cross-border trade. Now, member countries are committed to creating institutional mechanisms, processes, and platforms needed for the launch of an efficient regional power market. "Aligning regional and national policies is key to achieving a seamless transition to a unified market framework. By championing the benefits of regional integration-lower costs, enhanced resilience, and accelerated renewable energy development—we can inspire the collective action needed for sustainable progress," said Hon. Okasai Opolot, the Chairperson of the EAPP Council of Ministers.
The regional energy ministers highlighted the benefits of using a market-driven approach to boost regional power trade, discuss the roadmap for the market launch, and share insights, knowledge, and best practices from other regional and international power pools.
Power trade within the EAPP will enable member countries to harness the region's tremendous endowment of low-cost renewable energy resources with a vision to increase both access to electricity as well as enhance reliability and affordability of electricity supply.
"As we finalise the comprehensive market rules and agreements, the technical design of the market trading platform is also approaching completion. The EAPP power market is designed for adaptability, accommodating national differences and aligned with international standards. This ensures seamless collaboration among member states and paves the way for future integration with other power pools," said James K. Wahogo, the EAPP Secretary General.
ABOUT THE EAST AFRICA POWER POOL
The Eastern Africa Power Pool (EAPP) was established in 2005 with the signing of an Inter- Governmental Memorandum of Understanding (IGMOU) by seven Eastern Africa countries, namely: Burundi, Democratic Republic of Congo (DRC), Egypt, Ethiopia, Kenya, Rwanda and Sudan. In further development, EAPP was adopted as a specialized institution to foster power system interconnectivity by the heads of states of the Common Market for Eastern and Southern Africa (COMESA) region. Tanzania, Libya, and Uganda, South Sudan, Somalia and Djibouti have also since joined the power pool.
ABOUT THE ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM (ESMAP)
ESMAP is a partnership between the World Bank and over 20 partners to help low- and middle- income countries reduce poverty and boost growth through sustainable energy solutions. ESMAP's analytical and advisory services are fully integrated within the World Bank's country financing and policy dialogue in the energy sector. Through the World Bank, ESMAP works to accelerate the energy transition required to achieve Sustainable Development Goal 7 (SDG 7), which ensures access to affordable, reliable, sustainable, and modern energy for all. It helps shape WB strategies and programs to achieve the WB Climate Change Action Plan targets.
CONTACTS:
Albert Mwangi,
Communications Consultant,
Email: amwangi1@worldbank.org
Cell: +254-722-406-400