Standard Chartered said it is ramping up its investment commitment to Power Africa projects with an additional $3 billion, bringing its total pledge to $5 billion.

With the additional investment, Standard Chartered plans to add around 7,500 megawatts to Africa’s power grid–equivalent to the electricity production capacity of Nigeria and Cote d’Ivoire, Standard Chartered Chief Executive Officer Peter Sands said.

The bank, which ran out of its initial $2 billion commitment it made to the program after President Obama launched it in July 2013, is the largest private-sector contributor to the initiative with over $1 billion invested alone in Nigeria’s power sector, including in privately owned and funded greenfield independent power plants Azura-Edo Power Project and Okija Power Project.

In total, these plants will contribute 945 megawatts of electricity to Nigeria. Both plants will harness the country’s domestic gas resources to generate electricity.

Standard Chartered is the global coordinating mandated lead arranger and structuring bank.
Through its private equity Africa unit, Standard Chartered has also invested $57 million in Zambian Energy Corporation, which will flow into its regional operation, CEC Africa (CECA). CECA has acquired a power plant and distributor within Nigeria’s privatization plans (600-megawatt Shiroro Hydro Plant in Niger State and Abuja Electricity Distribution Company). This will support CECA’s power infrastructure expansion strategy in Nigeria and other Sub-Saharan Africa countries.

The governments of Ghana, Tanzania, Kenya, Nigeria, Ethiopia and Liberia and a group of private-sector firms are taking part in the initiative to improve access to clean, reliable power in Africa, and ultimately deliver electricity to more than 20 million new households and companies by 2018.

One of Africa’s most critical challenges is underdeveloped power infrastructure or lack of access to electricity, which in many ways has restricted economic growth, reducing per capita GDP growth by 0.11 per cent per year for the continent as a whole.
In Nigeria, for example, the country’s electricity demand of 10,000 megawatts outpaces its current power output estimated to be 4,000 megawatts.

It is estimated that if Nigeria could close this infrastructure gap, it would raise economic growth by 3 percentage points, equating to just over $15 billion annually.
More than two-thirds of its population, especially in sub-Saharan Africa is without electricity, and more than 85 percent of those living in rural areas lack access.

These countries have set ambitious goals in electric power generation and are making the utility and energy sector reforms to pave the way for investment and growth.