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African Development Bank (AfDB) vice-president for corporate services, Arunma Oteh said studies by the bank revealed that the private sector is ready to invest in power generation, but requires others to take up distribution.
"Our experience shows that the private sector is more willing to invest in power generation and that is why African government should take up transmission," he told Reuters on the sidelines of the Euromoney Zambia Investment Conference.
Oteh said AfDB is involved in various hydro-power projects to be implemented between 2008 and 2009 that will generate and transmit up to 480 MW of electricity.
Oteh said existing national and regional power shortages threaten to reverse recent macroeconomic gains.
Oteh said that power supply projects accounted for 36 percent of AfDB's approved loans in 2007 and the bank is willing to continue lending African governments money to invest in electricity transmission.
"We will use our financial muscle and ability to manage risks to assist African governments and the private sector to get commercially viable projects in the energy sector off the ground," he said.
"Our role as AfDB is catalytical, the fact that we are in a transaction gives confidence to both private entrepreneurs and governments that the project can succeed," Oteh said.
Zambia, like others in southern Africa, has been hit by a power shortage and has been rationing electricity to the mining industry, including copper mining - the country's economic lifeblood - since January.
Regional economic powerhouse, South Africa has also suffered electricity shortages since the start of the year as power utility Eskom struggles to generate enough power to meet demand, and has also rationed power to mining houses.
