TITLE:
Electricity Consumption Determinants and Investment Opportunity: A Prospective Analysis Based on the Context in Côte d’Ivoire
AUTHORS:
Remy Tehero, Emmanuel Brou Aka
KEYWORDS:
Electricity, Game Theory, Investment, Prospective, Regulation
JOURNAL NAME:
Modern Economy,
Vol.14 No.2,
February
28,
2023
ABSTRACT: In many countries, governments anticipate energy
consumption. In the electricity sector, heavy investments are required for
improving and extending infrastructure quality in order to satisfy demand.
Therefore, many governments, especially those of developing countries, are
soliciting private investments in order to face contemporary challenges. This
paper contributes to a scare literature about investment opportunity in the
power sector but is relatively abundant about determinant of electricity demand. It aims to
examine 1) The relationship between private investor and the government; 2) Electricity
consumption on the one side and population size and GDP on the other side in
Côte d’Ivoire. The analysis commenced by showing how far the return on
investment, so the price level, is a determinant factor for the investor’s
decision to enter or reinvest in the electricity market. From an empirical
point of view, the cointegration test confirmed the used of the Vector Error
Correction Model (VECM). It shows a long-run relationship between, electricity
consumption and the GDP and population. The Wald test indicates a causal
relationship of electricity consumption on GDP. Moreover, an overview of demand
forecast lets envisage business opportunities for investors through economic and
regulatory perspective suggestions.