The partnership between the financial services provider, [DATA SBK:Standard Bank Group Limited], and the multinational corporation, General Electric, was reaffirmed at the 2014 US-Africa Leaders’ Summit held in Washington DC.
(READ MORE: US working to power Africa's electricity goals)
“On-going strategic partnerships with stakeholders like GE, allows us the opportunity to provide access to energy across the continent. In tandem, we are also playing an active role in supporting the policy reform process that should facilitate additional private sector investment in power,” said Sim Tshabalala, chief executive of the Standard Bank Group.
(READ MORE: Standard Bank improving economic presence in Africa)
According to the International Energy Agency, sub-Saharan Africa requires more than 300 billion US dollars in investment to achieve universal electricity access by 2030.
The Standard Bank Group said that Africa, which is home to 15 per cent of the world’s population yet only produces three per cent of its energy output, requires an extra 300 gigawatts of power generating capacity over the next 15 years to meet its demand which grows at an annual rate of three per cent over the next two decades.
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The company added that Africa’s energy gap remains a serious constraint to sustained growth and creates significant transaction costs for businesses operating on the continent.
Inadequate infrastructure, lack of policy clarity and poor planning by regional governments led to Africa’s power challenges resulting in costs over five per cent of gross domestic product (GDP) in countries such as Malawi, Uganda and South Africa.
The group said however that global investors who usually focused on Africa’s natural resources sector, are quickly realising the potential investment opportunities that lie in the continent’s power and infrastructure sectors.
“Standard Bank’s view is that there are many financing options on the table, if the economic opportunity is considered seriously. Critical to success is the need for greater certainty in terms of creating environments conducive to investment which then makes it easier to attract the required investment into the sector, especially within emerging markets,” added Tshabalala.
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“The bottom line is that African governments need to take these harsh economic realities into consideration and advance sector reforms. Only then will they boost their access to capital markets and better position themselves to fund the large-scale power developments that are crucial to their economic futures.”