The United Kingdom government’s foreign investment arm, CDC Group, has announced it will invest $300 million in power grid development in Africa over the next five years.
This contribution will be made through Gridworks, a company that will be launched shortly to this end. The company will make investments in African transmission networks, but also in the electricity distribution infrastructure.
CDC chief executive Nick O’Donohoe said, Gridworks Company, to be launched soon, will make funding in power transmission and distribution infrastructure, as well as off-grid electricity systems.
Mr O’Donohoe said that despite decades of investment in generating capacity in many African countries, at least 600m people are without access to electricity because of absence of networks to transmit and distribute power.
Focused primarily on Africa, Gridworks’ ambition is to invest over $300m of long-term capital in viable projects over the coming years.
A recent McKinsey report estimates that a $345 billion investment in transmission and distribution is required by 2040 to absorb current and planned power generation in Africa. Once generated, electricity still needs to reach its intended users, reliably and safely, and users in turn need to be able to pay for it in a practical and efficient way.
CDC aims to open a regional office for West Africa in Nigeria’s commercial hub of Lagos early next year and establish a presence in Nairobi. It will also expand in Johannesburg and open representative offices in Abidjan and Cairo.