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Generation

In a liberalized electricity market, private party electricity producers (Independent Power Producers or IPPs) can bring the required capital and technical know-how to increase generation capacity available to the national grid. Attracting private investors, however, requires a conducive investment environment, sound off-takers, and a solid regulatory system. A conducive investment environment also means an electricity price high enough to induce entry and compensate risk. Whilst obvious, is often difficult to achieve amongst end-consumers who have low ability (or willingness) to pay. If tariffs do not account for the total investment costs, this leads to under-investment and results in capacity shortages. As a result, governments require sound technical expertise when developing IPP projects and PPIAF is providing a pivotal role where needed.

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