At the 10th Southern Africa Energy Conference, JSE CEO Russell Loubser said that the US subprime crisis and its effects globally would have the same effect on the financial and derivative markets that 9/11 had on the airline industry – increased regulation.
“It will be up to well-run and well-regulated exchanges to help come up with these changes to regulations,” he commented. Loubser stated that panic had to be avoided without governments or exchanges tampering with markets.
In addition, he said that businesses and governments in Africa had to work together as best they could to ensure that economies could survive the financial crisis and that economic growth continued.
Investment bank Goldman Sachs head of the South African office Colin Coleman agreed, saying that cooperation between the state, business, and civil society was especially necessary when developing any infrastructure project, including energy-related projects. He said that private equity investors remained committed to Africa and that the value opportunities remained.
For starters, the Industrial Development Corporation (IDC) plans to increase its investment in energy projects in Africa. IDC strategic business unit head of public–private partnerships Lindi Toyi said that the corporation had the financial pipeline to invest in these projects, while many other organizations were walking away, owing to the credit crunch.
Toyi said that South Africa and Africa could have benefited more during the commodities boom, but missed out on these opportunities owing to infrastructure constraints.
However, there are plenty of opportunities for entrepreneurs in the energy sector and that bigger opportunities would also evolve in the operation and maintenance of energy project in Africa.
Further, nuclear energy and renewable energy were two areas where more investment would have to be made in future, said Toyi.