New platform for power generation in Africa

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Three international development agencies have come together to mobilise more than $1 billion (Sh100 billion) for power generation across Africa, including the 147MW Ruzizi III project that will supply electricity to Burundi, eastern Democratic Republic of Congo and Rwanda.

The Aga Khan Fund for Economic Development (AKFED), its industrial and infrastructure development arm, Industrial Promotion Services (IPS) and CDC Group, the UK development finance arm, launched the joint power initiative with a promise to boost power generation, accelerate economic growth and benefit millions of people in sub-Saharan Africa.

The partnership will focus on new power projects in greater East Africa (including DRC, Mozambique and Madagascar) and West Africa. IPS’s existing projects in Kenya and Uganda will be housed under the joint platform.

The partners will invest $140m (Sh14 billion), and mobilise project funding of $1bn for new power projects, including the Ruzizi III project in the Great Lakes region.
Ruzizi project

“Power infrastructure is vital for Africa’s economic growth and job creation and CDC has identified early-stage development as the area with the greatest need for investment in this priority sector. The market needs long-term, committed investors like CDC and AKFED to bring the capital, time horizons and expertise necessary to boost power generation for the continent,” said Diana Noble, CDC’s chief executive.

The Ruzizi III project, for instance, is expected to double Burundi’s current capacity, increase Rwanda’s capacity by 26 per cent and provide much needed base-load power in eastern DRC, a region that is otherwise isolated from DRC’s interconnected grid. It will also reduce reliance on thermal (diesel) generation in these countries.

National grids

Besides developing regional and national power projects, both IPS and CDC intend to partner on mini and off-grid projects that will directly provide reliable and affordable electricity to rural populations away from regional and national grids.

IPS has been involved in the development of power projects in East and West Africa for 20 years, including sub-Saharan Africa’s pioneering independent power projects — the Azito power plant in Côte d’Ivoire, the Kipevu II (Tsavo Power) plant in Kenya, as well as the Bujagali Hydropower Project in Uganda.

“It has been an evolving journey, involving both public and private partners, which has seen a recent shift in focusing investments on renewable energy, taking advantage of advancement in solar and wind technologies, as well continuing to provide the reliable base load power which many sub-Saharan African countries need.

“We see in CDC a like-minded partner that is strategically aligned to our values and mandate for contributing to development, and have partnered with them previously on pioneering power projects in the region. This platform, therefore, will build on this existing partnership, accelerating and scaling the development of new power projects, spreading our impact across the sub-Saharan region and, ultimately, improving the quality of life of communities,” said Lutaf Kassam, the executive director of AKFED.

Local relationships

In 2015, CDC took direct ownership and control of Globeleq Africa, an independent power producer that partnered with IPS in the Azito Power project.

“With this new partnership, we are tapping into the AKFED Group’s proven power sector expertise, including in hydropower, and excellent local relationships, with the aim of bringing reliable power to many millions of individuals, families and businesses across Africa,” Ms Noble added.

(The East African)

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