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Standard Bank commits more funding to Power Africa initiative

5th September 2014

By: Sashnee Moodley

Senior Deputy Editor Polity and Multimedia

  

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South Africa’s Standard Bank has reinforced its commitment to the Power Africa Initiative amidst an increasing pipeline of power projects across sub-Saharan Africa.

The Power Africa Initiative is a programme launched by US President Barack Obama last year to help kick-start power generation across six African countries, including Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.

These countries have pledged to increase their power generation capacities to enhance energy security, alleviate poverty and foster economic growth.

The programme aims to double access to power in Africa by significantly accelerating investment in the sector over the next five years.

The US government has committed more than $7-billion in financial support to Power Africa over five years.

Power Africa aims to add more than 10 000 MW of cleaner, more efficient electricity generating capacity.

At the US-Africa Leader Summit, held in Washington, US, last month, Obama announced that the US had tripled its goal in the initiative and now aimed to bring electricity to 60-million African homes and businesses, as opposed to an initial 20-million.

Standard Bank Group CEO Sim Tshabalala says that, in 2013, the bank committed to arrange funding of at least $150-million in debt in the near term for countries under the Power Africa Initiative.

He adds that, more recently, the amount has increased to $400-million, largely in Kenya and Nigeria, with smaller transactions in Ghana and Tanzania.

“Standard Bank is using its extensive balance sheet and on-the-ground presence across 20 markets [in] sub-Saharan Africa to help finance projects under the Power Africa Initiative while, at the same time, actively leading the policy reform process required to facilitate increased private-sector investment in Africa’s power sector,” he says.

The bank expects more than $1-billion in commercial projects to be realised across the six Power Africa partner countries by 2018, and as much as $5-billion when one includes the rest of sub-Saharan Africa.

Standard Bank executive VP for power and infrastructure finance George Kotsovos tells Engineering News that the bank will provide funding for projects following feasibility assessments that evaluate the environmental, technical and economical or financial parameters of the projects contemplated.

Further, if needed, the bank will work with government agencies, project developers and financing partners to secure an appropriate and sustainable financing solution.

“Standard Bank is a member of the Power Africa Initiative, as we share the vision and the hopes of this team to provide greater access to electricity to the people on our continent and support further economic development as a result,” Kotsovos says.

Tshabalala adds that Standard Bank will aim to arrange or underwrite at least half of the debt required for these projects and help fund an additional $600-million in debt in the Power Africa countries to 2018, taking its total since joining the initiative a year ago to $1-billion, and another $2-billion across the rest of sub-Saharan Africa over the same timescale.


Renewable energy generation is gaining trac-tion as a sustainable, efficient and financier-friendly solution to the power demands across Africa, Kotsovos notes.

Therefore, tapping into naturally abundant resources such as wind, solar and hydro to develop power solutions is economically sound when considering the economic and environmental constraints related to the cost of fuel and in the context of logistics and financial challenges presented by the contracting of fuel supply.

 

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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