Africa’s energy projects can expect a US$3bn boost, compliments of the Blackstone Group, reports Bloomberg Businessweek.
The investment comes as the African continent faces a steadily escalating demand for power. David Foley, senior managing director of New York-based Blackstone, says the company will be investing mainly in hydropower and geothermal projects.The Blackstone Group has already announced that it is investing in southern Tanzania’s 360-480MW Ruhudji hydropower plant. The company will do this through its Sithe Global Power unit. Rwanda’s 150MW Ruzizi hydro project, which will supply power to Burundi and the Democratic Republic of Congo, will also receive a financial boost from the New York-based company.
This is not the first time that Blackstone has been involved with energy investments in Africa. Blackstone, via its Sithe Global Power LLP unit, is already a partial owner of Uganda's 250-MW Bujagali hydropower plant. The construction of Uganda’s US$900mn plant is Blackstone’s biggest energy investment in Africa to date. The project, which was launched in 2007, replaced the nation’s dependence on 100MW of thermal power, whilst eliminating a power deficit of 170MW. The plant, located 80km (50 miles) east of Kampala and run by Bujagali Energy Ltd., will be transferred to the government for a token US$1 after 30 years.
Africa is host to 15% of the world’s population but only accounts for 3% of its energy consumption. This is according to a 2011 report compiled by the African Union and other continental organizations that studied the demand of power markets for the next 30 years. Africa’s electricity demand is likely to increase from 2.4% to 5.7% annually. According to the study, a staggering 59% of Africa’s population is still without access to electricity. This is compared to 21% in developing nations in Asia.
Africa’s per capita electricity consumption is about 100 times less than the European average, writes Africa and Europe in Partnership. This is despite Africa’s impressive sustainable power-generating potential, according to the European Commission’s Joint Research Centre. The continent boasts rich sources of solar, geothermal, wind and hydro power which has yet to be fully harnessed. It is mostly the remote and rural areas that do not have access to grid electricity as connection in these areas are not considered to be cost-effective for utilities. For this reason, renewable energy will be the answer for these rural communities.
Last year, UN Secretary General Ban-Ki Moon launched his ‘Sustainable Energy for All’ Initiative to bring safe and sustainable power to those without.
Without access to energy, the Millennium Development Goals will be largely unattainable and economic development out of reach, explains Capacity4dev.
Experts say that Africa has “no excuse” for its poor electrification [Read: Africa’s Poor Electrification-No Excuse! Say Experts]. The continent has an abundance of renewable energy sources and with the right financial and government backing; Africa could be the world’s powerhouse.