By Drazen Jorgic
DAR ES SALAAM (Reuters) - Nigerian businessman Tony Elumelu, who backed President Barack Obama's Africa Power initiative with a $2.5 billion investment pledge, said on Tuesday the lack of competition in the continent's nascent power sector makes it an investment gem.
Obama's $7 billion plan to shine "light where currently there's darkness" in Africa by doubling access to power on the world's poorest continent, will be backed by another $9 billion in private sector money.
While growing access to bank credit and cheap mobile phones has transformed the lives of many Africans, the continent's poor infrastructure and lack of power supply have been a huge drag on economic growth across the continent.
Elumelu said he believed plugging the gap in power needs would take decades but, for investors who get in early, rewards would be similar to those realized when expansion began in Africa's telecommunications sector.
"When the telecommunication revolution started,
"But there is no competition in power now. No competition at all."
Elumelu's investment company Heirs Holdings has about $300 million invested in Nigeria's power sector through its Transnational Corporation of Nigeria (Transcorp). Earlier this year it bought a Nigerian power plant and it is in the process of raising its output to 1000 megawatts.
Elumelu said the plan is to acquire more power plants and to build new ones.
"We want to be the leading power company in Africa," said Elumelu, who pledged the most money to Obama's initiative.
Elumelu's investments in banks, oil and gas exploration, and power, are believed to be worth billions of dollars.
Other investors include Standard Chartered Bank
"What is going to drive where we invest outside those countries is seriousness and commitment to the power sector reform," Elumelu said.
He said his next large-scale project would be to set up a fertilizer plant, which would use gas from two exploration blocks Heirs Holdings owns in Niger Delta to create fertilizer.
(Editing by George Obulutsa, Toni Reinhold)