The International Energy Agency (IEA) says sub-Saharan Africa needs $300 billion in investments to achieve universal access to electricity by 2030.
This was announced by Africa Finance Corporation (AFC) President and CEO Andrew Alli at a ceremony to declare the AFC's commitment to be part of US President Barrack Obama's initiative to finance power projects across Africa.
AFC and the Standard Chartered Bank are jointly providing $9 billion as partners in the US president's Power Africa Initiative to support investment in the power sector across six countries on the continent over the next five years.
AFC is providing $7 billion, while Standard Chartered Bank is spending $2 billion to finance projects in Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.
"The key goal of the Power Africa Initiative is to increase access to clean geo-thermal, hydro, wind and solar energy. It will help African countries develop newly-discovered resources responsibly, build out power generation and transmission, and expand the reach of mini-grid and off-grid solutions, by providing the capacity and resources to generate an additional 10,000 MW of power," AFC said in a statement issued in Lagos.
The Power Africa Initiative coordinated by the US Agency for International Development (USAID), is a multi-stakeholder partnership involving the US Overseas Private Investment Corporation (OPIC), the US Export-Import Bank, the Millennium Challenge Corporation (MCC), the US Trade and Development Agency (USTDA), US-Africa Clean Energy Finance Initiative (US-ACEF) and the US African Development Foundation (USADF).
The statement said AFC, a multilateral finance institution established in 2007 with an initial capital base of $1 billion, is to be a catalyst for private sector infrastructure investment across Africa.
AFC will invest over $250 million in the power sectors of Ghana, Kenya and Nigeria, whilst catalyzing a further $1 billion in additional investments in sub-Saharan Africa energy projects, the statement said
"The AFC USAID partnership under the presidential Power Africa Initiative will mobilise the resources, tools and combined commitment of the US government, the six partner governments, and the private sector in a coordinated regional effort to assist governments and investors by accelerating the financial close of power transactions, stimulate new investment, and help build the regulatory, economic and policy foundation to meet Africa's increasing demand for electricity," AFC said.
Standard Chartered said it was committed to financing more than $2 billion in energy projects under the Power Africa Initiative, adding: "The partnership represents a coordinated cross-border effort to build the regulatory, economic and policy foundation in order to double access to power in sub-Saharan Africa."
Standard Chartered Bank (SCB) said that using its geographic coverage across 37 African countries, it will work closely with US agencies to develop the policy framework for specific projects and the introduction of best practice for infrastructure development in Africa.
"We are delighted to partner with the United States and the African governments involved in the Power Africa Initiative to address one of Africa's most critical infrastructure challenges," said Peter Sands, SCB group chief executive.