Nigerian investment company Heirs Holdings said yesterday that it will invest $2.5 billion in the recently announced 'Power Africa' initiative aimed at bringing electricity to Sub-Saharan Africa in which the US also is a major partner.
The ambitious new venture was launched on Sunday by the US president Barack Obama during his visit to South Africa, as part of his wider Africa tour.
In his speech at the university of Cape Town Obama said that access to electricity will not only help education and business, but it will better connect Africa into the global economy.
The Africa Power initiative is a multi-stakeholder partnership between the US, Ethiopia, Ghana, Kenya, Liberia, Nigeria, Tanzania and African private sector with a common objective to boost investment in the power sector of Africa over the next five years.
The US has made an initial commitment of $7 billion for the initiative with an additional $9 billion to be lined up from private companies.
Nigeria-based Heirs invests in strategic sectors of African economy which include financial services, healthcare, infrastructure, real estate and hospitality, agriculture, oil and gas. The investment extends from start-up ventures to established high growth companies.
Nigerian business magnate and Heir's chairman Tony Elumelu said that the investment demonstrates his company's intent to become a significant player in the region's power sector.
"Heirs Holdings' investment in Power Africa is not just about creating value for shareholders. We want to conduct business in this strategic sector for the long term, in a way that links economic return to social benefits -- a key component of what I call Africapitalism," Elumelu said.
''Access to affordable, uninterrupted power will have an immeasurable impact on the economic ecosystem. The cost of doing business will come down, entrepreneurs will expand and innovate, and jobs will be created as a result,'' Elumelu further stated.
Earlier this year, Heirs bought the Ughelli power plant, one of the country's largest power assets, with the intention of achieving a capacity of 1,000 megawatts.
Africa Finance Corporation (AFC), a private sector-led finance institution and a key partner in the initiative also said that it will invest about $250 million in the power sectors of Ghana, Nigeria and Kenya and a further $1 billion in sub-Saharan Africa energy projects.
''AFC will provide additional investments in energy projects, far in excess of its commitment to the Power Africa initiative,'' AFC chief executive officer Andrew Alli said.
According to International Energy Agency, sub-Saharan African will require more than $300 billion investment to achieve universal access to power by 2030.
''We need more African companies to step up and get involved in Africa's development,'' Elumelu said.