'Why I care about powering Africa'
At least 200 million people around the world are unemployed and, of those, around 27 million live in sub-Saharan Africa.
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The current economic boom across the continent offers an opportunity to change this and lift millions of Africans out of poverty, but it won't happen by itself.
Between now and 2015, two million more people will enter the African labour market, but, despite strong economic performance, many African countries are experiencing 'jobless' growth, especially among the young.
Around 60 per cent of Africa's unemployed are aged 15 to 24, and surveys suggest more than half of these have given up on finding work. Tackling this desperate issue - ensuring that growth produces a dividend of opportunity and jobs for people - should be top of mind for anyone interested in Africa's long-term future.
As a bank operating across 68 markets, we work with governments the world over to make sure the financing we provide supports sustainable growth and job creation in local economies. We spend a lot of time thinking about how we get this right -providing credit to key sectors of the economy, such as small and medium-sized enterprises.
Like finance, power - when it gets to the right places - acts as the oxygen of economies, fuelling growth, employment and wealth distribution. Big energy projects create jobs and access to electricity works as a multiplier on growth and jobs in local economies.
Africa, however - as is well known - suffers from a chronic shortage of electricity. The continent has 16 per cent of the world's population, but produces just four per cent of its power, most of it concentrated in South Africa and the North African countries. The Narita Airport area in Tokyo consumes about the same amount of electricity as is generated in the whole of Nigeria. Almost 600 million Africans have no electricity at all.
China's massive investments in recent years have been hugely transformative for the continent, helping to reverse the long-standing undervaluation of African assets and making investors see the continent in a new light.
But Chinese engagement in building Africa's infrastructure has been largely government-to-government. Though more private funding has started to come in from around the world during the past five years, there is still a huge gap to be filled by the private sector, including Africa's own corporates and banks.
Despite massive demand, and ample gas and coal to fuel generation, Africa has struggled for decades to attract sufficient private capital to large-scale power projects.
The problem isn't lack of interest. We work with large power sector clients right across Africa every day.
We know the interest is there, and growing. What's been missing till recently is a sufficient number of 'bankable' energy projects, unbundled assets with well-structured concessions, transparent regulation and cost-reflective electricity tariffs.
The private sector can't make successful projects happen by itself. That's why we're backing President Obama's initiative to 'Power Africa', with a pledge to finance USD2 billion in energy projects over the next five years, part of a total USD9 billion private commitment, in addition to USD7 billion from the US administration.
What makes 'Power Africa' significant is that it's a multi-agency, public-private partnership, bringing not just the money, but the political will, risk-sharing, technical expertise, legal advice and best practice needed to make large-scale energy projects happen.
Already, we're seeing signs of these elements coming together successfully in a number of African markets, such as Ghana and Nigeria, and this is helping to attract more private investors.
Despite being Africa's most populous country with over 160 million people, Nigeria currently generates just 4,000 MW of electricity - the grid power of a mid-size city in Europe. But significant sector-wide reform undertaken by the current government is helping to promote greater private investment.
Recently, we helped finance the Azura independent power project (IPP), the first of its kind in Nigeria for 15 years. Following the development of a comprehensive power investment framework - by the government and private sponsors - a number of other IPPs are expected to follow.
This is hugely encouraging and with 'Power Africa' we're hoping to see this kind of 'bankable' model replicated across other African markets.
Plugging Africa's power gap won't happen overnight. According to the International Energy Agency, Africa will need USD300 billion of investment by 2030 to provide everyone in Africa with access to electricity. But 'Power Africa' is a big step in the right direction and builds on a positive momentum already underway in several African countries. More power sector deals will go ahead as a result.
We're proud of our ground-breaking community programmes on health and education in Africa. But it is through financing the real economy, investing in the continent's infrastructure, supporting its trade and its people, that banks like us can really help transform Africa's prospects.
The writer, Mike Rees, is Group Executive Director & CEO, Wholesale Banking, Standard Chartered Bank
