A regional market is worth more than the sum of its parts

Regional integration of energy markets is not a slogan: it is a concrete strategy to strengthen security of supply, reduce costs and accelerate industrialization in Africa. By connecting power grids, gas corridors and regulatory frameworks, African countries can transform dispersed resources into competitive and resilient value chains.

Cross-border gas corridors are a major lever. They facilitate the development of cross-border fields, enable consumer countries to access regional resources, and promote the creation of shared infrastructure—terminals, compressor stations, and industrial hubs—that create jobs and retain value on the continent. Joint corridor planning optimizes export capacity and resilience to disruptions.

Electricity interconnections, on the other hand, illustrate the immediate economic potential of integration. Well-thought-out cross-border lines make it possible to optimise the use of existing capacity, link surplus areas with deficit areas, and efficiently integrate variable renewable energies. In the short term, this reduces load shedding and unit costs; in the medium term, it creates a regional market that attracts investment in generation and storage.

Case in point: the TransSahara Gas Pipeline (TSGP)

The TransSahara Gas Pipeline project is a perfect example of the promises and challenges of regional integration. Designed to connect Nigeria’s fields to Algeria and the European market via a Sahelo-Saharan corridor, the TSGP highlights several key lessons:

• the importance of concerted technical and economic planning,
• the need to harmonise legal and tax frameworks between participating States;
• and the value of a robust financial package that shares risks and benefits.

Once completed, the TSGP will not only optimize the exploitation of resources, but also create industrial synergies along the route (processing, gas industries, local jobs).

However, the project requires strong institutional mechanisms and sustained regional leadership to achieve development milestones. Algeria and Nigeria are well suited to play this role successfully,

But integration requires much more than physical infrastructure. It requires the harmonization of regulatory, commercial, and fiscal frameworks to ensure predictability and fair competition. Non-physical barriers—tariffs, technical standards, permitting procedures, transit clauses, and invoicing rules—can offset the benefits of the best interconnected projects if left untouched.

To be successful, policy priorities must include:

• Regulatory standardization: Adopt common rules for pricing, congestion management, network access contracts, and operational security.
• Regional governance mechanisms: Strengthen coordination mechanisms (e.g. intergovernmental platforms and regional regulators) with operational mandates and arbitration capacities.
• Structured finance: developing appropriate financial instruments (concessional loans, revenue guarantees, corridor funds) to share risks between States and private investors with financial support from the BAE,
• Integrated pilot projects: launch priority corridors (electric and gas) with technical roadmaps, impact studies and timelines to demonstrate the model and catalyze other initiatives.
• Local inclusion and national content: linking integration to national industrial policies to maximize local value creation (refining, downstream industries, vocational training).
• Dispute resolution frameworks: Establish timely and predictable mechanisms to resolve cross-border disputes and secure investments.

APPO is at the crossroads of these agendas : our role is to facilitate policy dialogue, provide technical expertise for the development of harmonized standards, and promote cross-border pilot projects. By supporting the development of viable corridors and clear regulatory regimes, we are creating the conditions for a competitive regional market for the continent’s industrialization and energy sovereignty.

Regional integration is not a luxury: it is a strategic necessity. By uniting our networks, markets, and rules, we multiply the value created for each country. An integrated regional market means more investment, more jobs, and greater resilience—all imperatives for Africa in the twenty-first century.