“The aid from the US means continued growth for Sub- Saharan Africa. It may not be an end solution to the problem, instead it will provide a base for the region to build further on to,” Sven Richter, head of Africa and frontier markets at Renaissance Asset Managers told CNBC Africa on Tuesday.
This initiative, officially dubbed Power Africa, will build on Africa’s enormous power potential by assisting with new discoveries of oil and gas resources and how to manage them responsibly.
It will also develop clean geothermal, hydro, wind and solar energy, build out power generation and transmission as well as expand the reach of mini grid and off-grid solutions.
The US will partner up with Ethiopia, Kenya, Liberia, Nigeria, Tanzania, Uganda and Mozambique to roll out the Power Africa initiative.
Richter said that sub-Saharan Africa (SSA), excluding South Africa, is in dire need of power as it remains a great obstacle for development in the region.
It is reported that SSA, with a population of 800 million people, generates the same amount of electricity as Argentina does with a population of 40 million.
While the aid from the US may not eradicate the deficit of power within the region, it will certainly increase the current supply to a significant amount and allow for new development opportunities.
Richter believes that an increase in private-public partnerships could assist a great deal in addressing the region’s power deficit, as regional governments do not have sufficient capital to address the issue alone.
“I think that it will bring in a good balance in order to get the money into the region and create that much needed development,” he concluded.
According to the International Energy Agency, sub-Saharan Africa will require more than 300 billion dollars in investment to achieve universal electricity access by 2030.