British, Norwegian companies to boost power supply in Africa

Much of Africa still gropes in the dark. Only 32 percent of the population of Sub Sahara Africa has access to electricity, according to official statistics. This means that 68 percent of the people in the Sub Region yawn out their nights in darkness and still carry on their chores manually because of lack of electricity.

According to a study carried out by the World Bank in 2009, 48.70 percent of Cameroon population has access to electricity. But electricity supply remains epileptic and unreliable.

Cutting such a power problem to size is the very essence of a new partnership between the Norwegian Investment Fund for Developing Countries, Norfund, and CDC, the UK Development Finance Institution.

According to a press release, these institutions issued last week, the agreement will culminate in the buying of Globeleq Africa, an operating power company developing energy projects across Sub Sahara Africa.

The company has eight major generating assets in Cameroon, Ivory Coast, Kenya, South Africa and Tanzania with a total gross capacity of 1,095MW. The company develops electricity plants that support the continued development of the power sector in the regions and participates in the communities in which it operates.

The main substance of the agreement stipulates that Norfund will have 30 percent, while CDC will have 70 percent of Gobeleq shares. Going by the press release, the partnerships will enable both outfits to boost power generation in Africa by adding at least 5,000 megawatts of generating capacity over the next 10 years. They will explore other development opportunities in power generation in Africa to alleviate the critical shortage of reliable electricity.

Observers hold that Sub Sahara Africa still has a long way to go, since only 32 percent of its population has access to electricity. This percentage, going by expert analysis, is the same stage in which the United States and the Unite Kingdom were in 1920 and 1929 respectively.

It is a tell-tale of the snail pace in which energy development has been taking place in the Sub Region. Statistics indicate that between 2000 and 2010, power generation capacity in Sub Sahara Africa increased only by a total of 6,000MW, whereas China had a total electricity capacity increase of 8,000MW monthly in 2010.

By virtue of their partnership, Norfund and CDC aim at bringing more projects to the construction phase and expand access to reliable electricity in the region. If successful, their strategy will result in over 5,000MW of generating capacity. The Post learnt that 1,000MW are enough to support the development of over 20,000 businesses, which could provide over 800,000 jobs.

Norfund’s Chief Executive Officer, Roland Kjell, is quoted as having said they were determined to rescue Sub Sahara Africa from reliable power shortage. “This is a strategically important investment for Norfund.

Inadequate and unreliable power supply is a major constraint on economic and social development in Sub Sahara Africa. This investment establishes a platform for Norfund and CDC to expand power production in Africa, based on the combination of financial capacity, industrial expert, local partnerships and collaboration with authorities. The investment will expand Norfund’s presence in African power markets and widen choice”.

For his part, CDC CEO, Diana Noble, said they are delighted to partner with Norfund in this new chapter because, business power generation is a priority for Africa; given how vital it is for long-term economic growth and job creation.

Through the partnership, The Post learnt, Norfund will acquire a significant minority stake in Globeleq Africa from the ACTIS infrastructure to fund for a cash consideration of approximately US 225m. The capital is subject to completion, adjustments, including capital to further fund the expansion projects. CDC, that holds a major indirect investment in Globeleq via the ACTIS Fund, will concurrently sell a small part of its holding to Norfund and transfer its remaining majority stake into the new venture.