Johannesburg-based Standard Bank and US giant General Electric (GE) have formed a ‘strategic’ partnership to finance US$350 million in the aim of improving Africa’s power infrastructure.
The announcement was made this week at a power financing roundtable held in Washington DC, off the back of the US-Africa summit currently taking place in the US.
Africa’s inadequate power infrastructure is a serious constraint to sustained growth, the continent’s leading bank said, adding that the constraint created significant transaction costs for firms operating on the continent.
Africa, which is home to 15% of the world’s population, produces only 3% of the world’s energy output.
Standard Bank said Africa needed to add an extra 300 gigawatts (GW) of power generating capacity over the next 15 years to meet the annual growing demand of 3% over the next two decades.
Standard Bank CEO Sim Tshabalala said solutions to meet Africa’s growing energy demands would only be possible once developers, governments and funders reach a common understanding of the risks, pricing and regulatory imperatives needed to facilitate the required investment.
“There are significant opportunities and a viable investment case for governments across Africa to provide the lion’s share of long tenor debt funding given the solid returns on investments in power generation and distribution,” Tshabalala explained in a statement.
He also said Standard Bank was working with investors to offer them a sustainable and structured model to finance power and infrastructure projects appropriately.
“On-going strategic partnerships with stakeholders like GE, allows us the opportunity to provide access to energy across the continent.
“In tandem, we are also playing an active role in supporting the policy reform process that should facilitate additional private sector investment in power.”
Photo: African Business Review