Nations in sub-Saharan Africa need to bolster their efforts to create more conducive climates for investment from independent power producers (IPPs) if they are to remedy their severe shortfall in power generating capacity, says Standard Bank Group, Africa’s biggest lender by assets and market capitalisation.
‘Africa’s deficit in power generating capacity is well documented but what is not always realised is that unless this is addressed timeously, other crucial investment activities cannot be actioned,’ said David Humphrey, global head of power and infrastructure at Standard Bank.
‘African governments need to make every effort to create a conducive climate for attracting private sector investment into their respective power sectors, as by themselves they do not have the financial resources necessary for the very high capital expenditure required.’
Excluding South Africa, the entire installed generation capacity of sub-Saharan Africa is only 28GW, roughly equivalent to that of Argentina. The World Bank estimates that between $120 and $160 billion needs to be invested each year – over and above existing levels of expenditure – to bring energy access to everyone in sub-Saharan Africa by 2030.