Investors to give billions to ‘Power Africa’ initiative - Dangote, Citibank, World Bank amongst others

Citibank has pledged to source US$2.5bn in incremental capital to improve access to electricity for millions of people across Africa as part of the ‘Power Africa’ initiative. Business Day, Nigeria reports that Power Africa is a multi-stakeholder partnership between the US government, governments of several African countries and other public and private sector entities, working to accelerate investment in Africa’s power sector over the next several years. 

The report says Citi will also leverage its financing expertise in renewable energy to encourage the adoption and implementation of the appropriate technologies for specific markets. The bank will work with key stakeholders in local capital markets to introduce innovative debt securities and to enhance financial infrastructure. According to the report, Citi operates in over 40 countries in Africa with offices in 16 countries, including key markets such as Nigeria, Ghana, Kenya, Tanzania and SA.

The World Bank Group has also announced it would commit US$5bn in new technical and financial support for the electricity project. THISDAY reports that the World Bank’s financial commitment was announced on the second day of the inaugural US-Africa Summit by the president of World Bank Group, Dr Jim Yong Kim.

Also from the on fringes of the US-Africa Summit:

The Boss of Nigerian industrial conglomerate Dangote Industries Aliko Dangote has announced a 50/50 partnership with New York private equity company Blackstone to invest US$5 billion in Africa’s energy infrastructure over the next five years.

Mr Dangote, who outlined the deal while at the Power Africa summit taking place in Washington, said there will be a particular emphasis on power, transmission and pipeline projects.

Dangote said: “For too long, inadequate energy infrastructure in Africa has been a major obstacle to the continent as it seeks to fulfill its economic potential. I am pleased to partner with Blackstone and the Black Rhino team, who have experience of successfully developing large-scale infrastructure projects, to address this issue in a socially conscious way.”

The two companies have agreed to jointly incorporate, own and operate a management company that would be responsible for the development and management of projects identified and agreed upon across the sub-Saharan African.

The investment is facilitated by Black Rhino, a portfolio company of Blackstone Energy Partners and affiliated funds managed by Blackstone, and Dangote Industries.

Nigeria, US Sign MoU To Build US$2.5bn Power Plant

At least 15,000 megawatts (MW) of electricity is expected to be added to the national grid following an agreement signed between Nigeria and Global Edison Corporation for the construction of a US$2.5 billion gas-powered plant.

The plant to be located in Anambra State is part a memorandum of understanding (MoU) signed between Nigeria and the United States (US) president’s, Power Africa Initiative.

The US president, Barack Obama, last year unveiled the Power Africa Initiative which aims to add at least 10,000MW of electricity to selected African countries. Nigeria is among the six countries selected to benefit from the initiative.

The MoU which would outline the roles to be played by Nigeria and the US was signed yesterday in Abuja by the US ambassador to Nigeria, James Entwistle, and the minister of power, Prof. Chinedu Nebo, on behalf of both countries.

Also to be achieved through the MoU is a 70MW solar manufacturing plant to be built in Nigeria.

During the signing ceremony, Entwistle explained that the initiative is about transforming the lives of Africans through increased job opportunities to be created from better electricity supply.

He further stated that the Power Africa “supports the strengthening of the energy sector through credit enhancement, grants, technical assistance and investment promotion efforts.