Fewer than 43% of people in sub-Saharan Africa have access to grid electricity. The AU Commission reports that Africa needs to connect around 73 million people to electricity every year to reach the goal of affordable and sustainable energy for every African by 2030.
Africa’s rich solar, hydro and wind resources, together with increasingly cost-effective renewable energy technologies and new storage technologies, provide huge potential for African energy utilities to improve their energy generation capacity and efficiency. At present, however, renewable energy generation remains limited. Hydropower accounts for 16% of generation, solar and wind 1.3%, geothermal 0.57%, biofuels and waste-to-energy 0.23% and nuclear 1.57%. In the coming years, combined storage technologies, able to augment solar, wind and other renewable energy sources with gas generation during downtimes, for example, could see renewables becoming viable as a base load generation option for African economies. These new technologies will impact how energy and infrastructure, and how Africa’s existing utilities are structured, managed and generate income.
Genser Energy Ghana is an Independent Power Producer providing distributed power generation solutions to multinational industrial and mining companies. Genser engages in engineering, procurement and construction of its power generation assets, in addition to the operation and maintenance of these assets. It is the leading captive power producer in Ghana.
In 2019, Standard Bank was part of a consortium of South African banks which committed a USD265 million term loan facility to Genser for debt refinancing and further expansion. We provided USD50 million as part of the commercial debt portion of the facility. We also acted as the lead bank on the financing, and were appointed as onshore collection bank, facility agent, escrow account bank and contingency bank. Genser aims to use the finance to expand the total capacity of its existing plants from 107MW to 200MW. It also intends to build an additional 255km of natural gas pipeline to connect its power plants to be existing natural gas pipelines, owned by Ghana National Petroleum. Once completed, Genser will have increased the onshore natural gas pipeline infrastructure in Ghana by nearly 160%. Gold is the number one foreign currency earner for Ghana. The deal will reduce the production cost of the key gold mining company in Ghana by about 20%, while simultaneously easing pressure on the national grid – a development that has been welcomed by the Energy Commission of Ghana.
To ensure the security of petroleum supply in Namibia, the government approved construction of a National Fuel Storage Facility for petroleum products at Walvis Bay. The objective is to ensure that Namibia has adequate strategic fuel reserves owned by government, to cope with fuel supply interruptions or other crises in the national and international fuel supply markets. The fuel storage facility provides 75 000m³ of fuel storage capacity – enough to increase Namibia’s fuel reserves by an additional 30 days of fuel supply. The project consists of three infrastructure components: a dedicated fuel tanker berth, connected to shore by a concrete jetty; fuel pipelines to transport the petroleum products from the onshore station at the tanker berth to the tank farms in the existing industrial fuel storage area of Walvis Bay; and a bulk storage facility hosting seven above-ground fixed roof fuel storage tanks. Standard Bank was the sole commercial lender, together with the African Development Bank, to the project. We are also the main banker for the China Harbour Engineering Company, the main contractor on the project.
Umeme Limited is the largest energy distributor in Uganda, distributing 97% of electricity used in the country. In December 2019, Stanbic Bank Uganda acted as arranger and lender alongside the International Finance Corporation and Standard Chartered Bank in a syndicated loan with Umeme, which includes USD70 million of additional funds which will be used to upgrade the county’s electricity network, improve its distribution system, accelerate prepayment metering and reduce energy losses. Standard Bank has played a significant role in Umeme’s life cycle, as well as the Ugandan electricity transmission sector and continues to be a key financial partner for the company.
Globeleq aims to be a partner of choice within the African IPP industry, powering Africa’s growth through the development and operation of utilityscale power plants. Its eight power plants, located in Tanzania, South Africa, Côte d’Ivoire, Cameroon and Kenya, currently generate approximately 1 300MW. In 2019, Standard Bank financed Globeleq’s acquisition of five renewable energy generation plants in South Africa, comprising four solarpowered plants. The projects were developed in the first two rounds of South Africa’s renewable energy independent power producer procurement programme and began commercial operations in 2014. All have 20-year power purchase agreements with Eskom. The acquisition complements Globeleq’s existing renewable power business in South Africa. Globeleq aims to improve operations and social and economic development programmes associated with the plants. Standard Bank acted as the sole mandated underwriter and arranger of the acquisition debt facility.