News Column

Standard Bank Seeks to Finance Power Deals in Africa

August 5, 2014

Nume Ekeghe

The Standard Bank Group Limited will seek to finance renewable-energy projects and arrange the sale of power infrastructure in Africa as it meets with governments and United States companies this week in Washington.

The continent's largest lender wants to broker deals that will let nations sell power assets to US companies, similar to one in Nigeria last year, its co-Chief Executive Officer Sim Tshabalala, was quoted by Bloomberg to have said in an interview yesterday.

He declined to name whom he is meeting.

"We are talking either with authorities or clients to put in place the transactions," he said, adding: "A lot of policy makers, a lot of the people providing the equipment and a lot of the people providing the finance and the risk mitigation instruments will be here."

President Barack Obama invited more than 40 heads of state or government from Africa to Washington this week to meet with US companies to discuss business opportunities as he tries to shift the US role from aid to investment.

Sub-Saharan Africa will probably expand 5.4 percent this year, faster than the average growth of 1.8 percent in developed economies, including the U.S. and Germany, according to the International Monetary Fund. Nigeria's government raised about $2.4 billion last year when it sold 15 power generation and distribution companies.

Local lenders financed a majority of the deals. Standard Bank, with its subsidiary Cfc Stanbic Bank, underwrote $90 million of debt to help build a wind farm in Kenya.

The facility will be Africa's largest and will be operational next year, according to a statement on Standard Bank's website.

"The idea is to reduce the strain on the environment, which is economically and philosophically sound thing to do," Tshabalala said.

"It works for South Africa and the same argument applies in the rest of the continent. Fossil fuels are more expensive than wind power, biomass."

Standard Bank shares increased 1.3 percent to 146.32 rand yesterday. Meanwhile, sales of African corporate and sovereign bonds in 2014 are set to beat last year's record amount of $16.6 billion, according to the Standard Bank Group Limited.

"There's still a huge amount of interest and appetite," Megan McDonald, the lender's head of debt primary markets, told reporters in Johannesburg. "Issuance will no longer be dominated by sovereigns" as increased debt sales are expected from companies and state-owned corporations, she said.

With Agency Report

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Source: AllAfrica

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