Once a premium destination for overseas investors, Turkey’s power sector has recently been struggling with the impact of lower-than-expected growth rates, partial market liberalisation and fixed, long-term natural gas contracts. Power generation firms face further stress as the economic impact of the pandemic bites. Efforts to arrange a new debt restructuring deal have been delayed by the virus and wider economic woes, casting uncertainty over future demand. However, the sector retains some high-grade assets, however, which may attract future investor interest.
The potential for grid interconnectivity and increased cross-border electricity trading in sub-Saharan Africa is significant. In addition to boosting energy security, it would likely bring down electricity costs and enable greater amounts of renewable energy to be integrated into the power mix, while also providing widespread investment opportunities for companies operating across the power sector. That said, infrastructure bottlenecks, regulatory hurdles and faltering political support remain hurdles to the successful realisation of a pan-African power grid.