General Electric has partnered with Mara Group and Atlas Merchant Capital in an initiative dedicated to investing in the highly underdeveloped African infrastructure sector.
The companies, through a statement, said the joint venture will seek to invest in infrastructure equity projects in selected countries throughout Africa.
The region has a plethora of hurdles that need urgent address and they range from electrification, water storage, transportation and port capacity.
“More than 50 per cent of our African nations including Nigeria, Kenya, Ethiopia, Tanzania and the DRC, don’t have access to electricity and an infrastructure investment of US$360bn in power production, power transmission, water storage, modern railways, port capacity and modern highways will be required until 2040,” said the statement.
“Furthermore, Africa needs to spend $90 billion a year for the next decade in order to upgrade and maintain its existing infrastructure alone.”
Africa's population is set to rise to 1.5 billion by 2025 and the surge will bring with it a strain to the current infrastructure.
“Africa presents high growth prospects in power generation, transport, oil and gas and other infrastructure areas including mining,” read the statement.
“The joint venture will focus on this broad set of segments by facilitating access to capital, thus offering the ability to execute and fully finance both advanced and early development stage projects.”
President and CEO of GE Africa, Jay Ireland, said the venture unifies three businesses with a strong commitment and expertise in infrastructure in Africa.
The joint venture is our response to an integrated infrastructure approach in Africa. We are proud to partner with the expertise and talent of Atlas Merchant Capital and Mara Group, who have an extensive footprint in Africa, to address the necessities of the African continent. We have been significantly involved in social enterprises to date and will seek to further enhance and promote social and community development in the region to complement their expertise, knowledge and entrepreneurial spirit.”
Mara Group Founder, Ashish Thakkar, said Africa has very low connectivity in the region.
“Intra-African trade, a key driver for economic growth, represents only a fraction of Africa’s total trade over the past decade and this is largely due to a growing shortfall in infrastructure development. Through our joint venture with GE and Atlas Merchant Capital, we hope to tackle the funding deficit by creating a platform that has the power to truly change the lives of those living on the continent.”
Akinwumi Ayodeji Adesina, President, African Development Bank, weighed in saying the joint venture was a welcome development for the region.
"We all know painfully well the imperative to fill Africa’s annual $50 billion infrastructure funding gap. Partnerships like these are a crucial part of the development agenda as we seek to promote social and economic development and fight poverty in Africa."