HomeIndustry SectorsFinance and PolicyUS Power Africa summit: billions of dollars earmarked for energy sector

US Power Africa summit: billions of dollars earmarked for energy sector

General Electric has used the Power Africa summit in Washington as a platform to announce a US$1 billion investment in Angola supplying power and railway equipment.

The multinational will also supply new aeroderivative gas turbines to Algeria and Nigeria as part of a wider commitment to African infrastructure, expected to total US$2 billion.

At the summit, attended by nearly 50 African leaders, the African power sector is expected to benefit from a further US$1 billion in government-private partnership deals alongside agriculture and food.

From aid to trade

US President Barack Obama has invited the heads of state or government to Washington this week to meet with US companies to discuss business opportunities as he tries to shift the US role from aid to investment.

Power Africa is a privately funded programme launched by President Obama last year to install 10 000MW of new generation capacity and connect 20 million new customers across Africa by 2018.

The programme had already met that goal after just one year, Rajiv Shah, the administrator of the US Agency for International Development, told Reuters.

Mr Shah said while companies pledged US$7 billion to the programme last year, at this week’s event “there will be several billions of dollars” in new investments.

Financing energy projects

Meanwhile, Standard Bank Group is at the summit seeking to finance renewable energy projects and arrange the sale of power infrastructure in Africa.

Africa’s largest lender wants to broker deals that let nations sell power assets to US companies, similar to one in Nigeria last year, co-chief executive officer Sim Tshabalala said yesterday.

“We are talking either with authorities or clients to put in place the transactions,” he said. “A lot of policy makers, a lot of the people providing the equipment and a lot of the people providing the finance and the risk mitigation instruments will be here.”

Nigeria’s government raised about US$2.4 billion last year when it sold 15 power generation and distribution companies. Local banks financed a majority of the deals.

The Power Africa programme is active in six nations – Ethiopia, Kenya, Ghana, Liberia, Nigeria and Tanzania – but is likely to expand to other countries in the continent.