Norfund is developing hydropower in Sub-Saharan Africa in partnership with Norway’s power group Statkraft, and has teamed up with Britain’s development fund CDC to invest in Globeleq Africa, a power company with an ambition to add 5,000 megawatt of new capacity.
“We expect to double or even to triple the capital invested in Africa by 2020, depending on the projects,” Kjell Roland, managing director of Norfund, told a conference in Oslo, which included energy ministers from Ghana and Zambia.
The fund, backed by the government of the oil-rich Nordic country, has invested more than 2 billion Norwegian crowns ($248.85 million) in Africa so far, mainly in Sub-Saharan Africa.
The fund is seeking to develop power projects in partnership with private investors, like Kenya’s 310 megawatt Lake Turkana wind power park, which will be the biggest wind park in Africa.
“The project is on track to start producing power in 2016, and it should become a showcase for wind power in Africa,” Mugo Kibati, a chairman of the project company, told Reuters.
Lack of access to electricity is holding back economic development in many African countries.
“Power deficit is the biggest single issue for Ghana’s economy,” Ghana’s Minister of Power Kwabena Donkor told the conference.
Sub-Saharan countries will need to invest $490 billion in power generation to reach 80 per cent of electrification in 25 years, a study by McKinsey&Company showed.
To bring investment into the power sector, African countries need to have cost-reflective electricity tariffs, clear regulations and a political will, said Adam Kendall, McKinsey’s head of power and gas in Africa.
Currently only about a third of the population have access to electricity in Sub-Saharan Africa, and in some countries, like Zambia, only 5 percent of rural and 26 percent of the urban population have electricity.