Lankan power producers to venture into Africa
The government is mooting mutual cooperation in the power and energy sector between Sri Lanka and some African countries, in a bid to capitalise on the renewable energy projects in those nations, officials said.
“We had a meeting recently to prepare a working model to streamline processes for private sector firms involved in renewable energy to venture into African countries,” Dr. Nishantha Nanayakkara, member – Small Hydro Power Association told the Business Times.
This meeting is one of the follow up actions of the state visits by President Mahinda Rajapaksa to countries in Africa, he said. “Many countries in this region have requested or signed MoUs with Sri Lanka for mutual cooperation in the power and energy sector,” he said, adding that most of the requests are for the development of their renewable energy sector. Several MoUs were signed during these visits and mutual cooperation in the energy sector is an area agreed upon, he noted.
Swaziland, Seychelles, Kenya, Nigeria, Tanzania and Uganda are some of the targeted countries for the local firms to enter into, he said. “Many of our private sector developers are involved in development projects in some of these countries on an individual basis. It has already been felt that Sri Lankan developers and investors need government intervention to penetrate those markets and obtain more and more investment and contracting opportunities,” Bhathiya Ranathunga also from the association told the Business Times.
He added that a need has arisen for the Government to address both above issues through a dialogue and a follow up programme in a more formal way. Among the concerns of the private sector, difficulty in obtaining Performance Guarantees for the projects in Africa was discussed and it was said that an Exim Bank for Sri Lanka is a long felt need to bridge this gap.
Mr. Ranathunga said that Exchange Control mechanisms and Central Bank clearances are too stringent in Sri Lanka and the local firms wanted a mechanism that is required for investment promotion as well as protection.
“A match making exercise by the Government in this regard was mooted and Government to Government dialogue was an area that was discussed pertaining to this exercise,” he added. At the meeting, it was transpired that a local company had constructed more than 1,000 km of transmission lines with another contract for 1,000km is in the pipe line. It was said that such firms need more financial assistance.
Obstacles to repatriate money to Sri Lanka were also discussed at the meeting and the Ministry of External Affairs (MEA) is to submit all signed MoUs, and to arrange a meeting at the MEA with the Central Bank, Treasury and relevant stakeholders. The Treasury and the Central Bank was requested to consider speeding up the process of setting up of a Sri Lankan Exim Bank and they will also initiate action to obtain the membership of the African Development Bank and other required facilities.
Mr. Nanayakkara said that the MEA and the Board of Investment are to submit the details of Investment Protection Treaties and Double Taxation Agreements and it was suggested to have a desk or a knowledge hub to provide necessary services to the private sector developers and investors.
It was revealed that the level of electrification in many areas in Africa is in the range of 5 per cent implying abundant opportunities for Sri Lanka, he said. “Africa’s pace of development is slower than Asia and there is a major shortage of technical competence/designers and investors,” he said, adding that electricity grids are interconnected mostly in Eastern Africa and Central Africa. However, there are many technical problems which Sri Lanka can help to solve.