West Africa: Supporting the Government to Negotiate Costs Reduction in the Electricity Sector
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3 octobre 2024
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With negotiations with the local privately-owned electricity operator on the horizon, the Energy Ministry of a West African country engaged FTI Consulting to provide advice to challenge electricity operator’s business plan. Our client was looking for incisive economic advice to strengthen their position in the negotiations, to secure significant cost reductions and improve efficiency in the electricity sector over the next three years. These costs reductions were critically needed to redirect savings towards impactful investments in the country’s power grid and electrification efforts.
Our Impact:
- Providing strong economic analysis and robust quantitative argumentation, the government was able to strengthen their negotiating position.
- The negotiations led by the government resulted in a substantial reduction in the electricity sector’s costs of around $90 million over a three-year period.
- In depth analysis allowed for an increase in cost efficiency of the electricity operator while guaranteeing the quality, price and accessibility of electricity for the population.
Our Role:
- With an in-depth analysis of the electricity operator’s historical costs and operational performance in order, our client was able to appropriately challenge the business plan proposed.
- Using our extensive benchmarking in electricity regulation in African countries, our client was able to define future efficiency gains and potential cost reductions for the electricity operator.
- Providing a structured methodology to the Ministry of Energy, our client was able to draw up the electricity operator’s future business plan and facilitate the three-year budget discussions.
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Date
3 octobre 2024
Contacts
Senior Managing Director