In West Africa, an institutional breakthrough occurred in October that deserves closer scrutiny from Southern Africa’s energy and infrastructure community. ECOWAS, through its Regional Electricity Regulatory Authority (ERERA), formally operationalised a regional electricity market framework via the adoption of a Regional Market Code and harmonised transmission tariffs. This decision signalled more than regulatory housekeeping — it marked a clear pivot from politically orchestrated, bilateral transactions to a regional, rules-based market designed to drive efficiency, attract private capital, and accelerate electrification.
Southern Africa, through the Southern African Power Pool (SAPP), is already structurally ahead. Established in 1995, SAPP remains the continent’s most advanced power pool with real-time and day-ahead market mechanisms, a well-established transmission network, and formal protocols underpinned by the Southern African Development Community (SADC). It has delivered substantial integration at the technical and institutional levels, including coordinated generation and transmission planning through the Southern African Transmission Expansion Planning (SATEP) framework and oversight from the Regional Electricity Regulators Association (RERA). However, while the foundational architecture is sound, market activity remains tepid. Most electricity trade in the region still occurs through opaque, bilateral arrangements that neither optimise grid assets nor send efficient price signals.
What Southern Africa lacks is not policy infrastructure but market liquidity and investor-led participation. The West African precedent demonstrates the importance of unlocking a single well-structured, cross-border transaction to catalyse regulatory alignment, deepen trading volumes, and reframe investor sentiment. In SAPP’s case, the moment for private capital to anchor the next stage of regional integration is now.
Independent Power Producers (IPPs) must be actively brought into the Day-Ahead Market. At present, utility-driven procurement remains dominant, often constrained by domestic procurement frameworks and legacy PPAs. Governments should consider mandating partial procurement via the SAPP exchange to create demand-side liquidity and send forward price signals. Utilities, in turn, should be incentivised through performance-linked regulatory mechanisms to trade on the platform, not just on the basis of least-cost, but also grid congestion management and reserve sharing.
Equally, large industrial and commercial users should be enabled to act as market-makers. Mining houses, data centre operators, fertiliser manufacturers, and steel plants across the region account for a significant portion of grid-connected demand. Policymakers must expedite the liberalisation of wheeling frameworks and ensure that cross-border open access is not hampered by unnecessary red tape. The opportunity cost of ringfencing these users within domestic procurement systems is significant, both in terms of tariff relief and broader macroeconomic competitiveness.
Another critical enabler is the emergence of energy service aggregators and cross-border traders. These entities can aggregate supply from multiple IPPs, optimise dispatch based on real-time market signals, and structure blended offtake arrangements across multiple jurisdictions. The ability of aggregators to unlock economies of scale from small and medium-scale renewables cannot be overstated. Regional regulators should facilitate their entry by issuing standardised market licences, recognising flexible contract templates, and expediting grid access approvals for their operations.
Private sector capital must also be leveraged to close the region’s remaining transmission investment gaps. While SAPP is well-connected, critical corridors such as Zambia–Tanzania–Kenya and Mozambique–Malawi still require bankable project structures and long-term offtake underpinned by predictable regulatory returns. Public-private partnerships, underpinned by regional guarantees and credit enhancement mechanisms from DFIs, can bring these projects to market faster and with better cost-to-risk profiles.
Beyond hard infrastructure, there is enormous scope for grid-enhancing digital technologies. Real-time analytics, AI-driven load forecasting, automated frequency response systems, and dynamic line rating can all increase the transfer capacity of existing infrastructure without the need for new build. Startups and digital utilities operating in this space should be given policy visibility and direct procurement routes into national control centres and regional dispatch facilities.
The macro-financial logic for regional trade has never been clearer. Sovereign balance sheets are increasingly constrained, and the appetite for providing payment guarantees for large generation projects is weakening. A liquid, transparent regional market provides a structural alternative — one where projects are de-risked not by political assurances, but by diversified revenue streams and robust trading platforms. If power can be dispatched to multiple counterparties across borders, it improves receivables certainty and enables project sponsors to tap global green capital without reliance on sovereign credit.
Regulators and market operators must also deepen the sophistication of SAPP’s offering. Building on the success of the Day-Ahead Market, the next frontier should be the introduction of forward and capacity markets. This would provide long-term hedging instruments for buyers and create investable revenue streams for generators. Standardisation of contracts, alignment of grid codes, and investment in clearing and settlement mechanisms must accompany this next stage of market evolution.
South Africa, as the regional system anchor, must take a leadership stance. Export constraints and slow regulatory approvals for cross-border trade must be reformed as a matter of strategic urgency. As Eskom restructures and the domestic market opens up, its integration into SAPP should become not only deeper but also more market-oriented. Similarly, regulatory alignment from Angola, Malawi, and Zimbabwe will be critical in unlocking further market scale.
What the ECOWAS experience teaches us is that political will must converge with commercial pragmatism. Southern Africa does not need more frameworks — it needs transactions. The ability to turn agreements into flows, plans into power, and memoranda into megawatts is what will determine whether the region leverages its infrastructure advantage.
The fundamentals are in place. The grid is ready. The policy tools exist. Now the baton must pass to investors, developers, traders, and end-users to energise the market. Southern Africa’s next growth story will not be written in strategy documents, but on trading screens, in power corridors, and through reliable, affordable electricity lighting up homes, industries, and cities across the region.
Written by Ama T. Mensah, Head of Infrastructure Strategy at Sankofa Capital, where she leads regional energy and transport investment portfolios across sub-Saharan Africa. With over 15 years of experience in infrastructure finance, power market reform, and cross-border project structuring, she advises governments, DFIs, and private equity funds on unlocking value in Africa’s utility-scale and distributed energy sectors.
