Standard Chartered Zambia chief executive officer Andrew Okai, says Africa had recorded positive economic growth over the past decade and the continent needs sufficient electricity supply to support this growth.
Mr Okai said raising their financing commitment from US$2bn to USD5bn under Power Africa was one of the most significant commitments the bank had made in Africa this decade.
He said that it also demonstrated that Standard Chartered Bank remained a strategic business partner for the continent.
Under the Power Africa, the bank has been involved in a project with the Copperbelt Energy Corporation where its Private Equity Africa division invested US$57million into Zambian Energy Corporation, which will flow into its regional operation, CEC Africa (CECA).
The bank further said the CECA had acquired a power plant and distributor within Nigeria’s privatisation plans (600MW Shiroro Hydro Plant in Niger State and Abuja Electricity Distribution Company).
Standard Chartered Bank has pledged another US$ 3billion in an effort to double its commitment to Power Africa.
And the bank has noted that lack of access to electricity is one of Africa’s most critical infrastructure challenges.
Stanchart doubled its efforts after the bank reached its initial commitment in 12 months after US President Barak Obama’s launch of Power Africa in July 2013.
With its extended commitment of US$ 3billion making it US$ 5billion in total, the Bank remained the largest private sector contributor within the Power Africa partnership.
Bank’s group chief executive Peter Sands said they expected to add around 7,500 megawatts to Africa’s power grid, equivalent to the electricity production capacity of Nigeria and Cote d’Ivoire.
Mr Sands said over our 150 years of history in Africa, his bank had strived to contribute to social and economic development, financing trade and investment across the continent.
“A lack of access to electricity is one of Africa’s most critical infrastructure challenges. With our extended commitment to the “Power Africa” initiative we expect to add around 7,500 megawatts to Africa’s power grid which is equivalent to the electricity production capacity of Nigeria and Cote d’Ivoire.”
This would it said support CECA’s power infrastructure expansion strategy in Nigeria and other Sub-Saharan Africa countries.
The governments of Ghana, Tanzania, Kenya, Nigeria, Ethiopia and Liberia and a group of private-sector firms were taking part in the initiative to improve access to clean, reliable power in Africa, and ultimately deliver electricity to more than 20 million new households and companies by 2018.
On launching Power Africa in July 2013, the White House said: “More than two-thirds of the population of sub-Saharan Africa is without electricity, and more than 85 percent of those living in rural areas lack access.
These countries have set ambitious goals in electric power generation and are making the utility and energy sector reforms to pave the way for investment and growth.”
Over the last two decades, academic research had indicated that the under-performance of Africa’s power infrastructure had restricted economic growth, reducing per capita GDP growth by 0.11 per cent per year for the continent as a whole.
It also said that economic growth in Southern Africa reduced for as much as 0.2% where mining and manufacturing had traditionally been more important.
In Nigeria, current power output was approximately 4,000 megawatts, but the country’s demand was sitting at 10,000 megawatts. It was estimated that if Nigeria could close this infrastructure gap, it would raise economic growth by 3 percentage points, equating to just over USD15 billion annually.