Multi-Billion Dollar Commitment from the United States to Improve Access to Power in Africa. POWER AFRICA - A Landmark Initiative.

9 July 2013

July10, 2013 | Tunis  “…The Infrastructure Consortium for Africa is thrilled to hear this announcement today … says, ICA Coordinator, Mohamed Hassan. We have always enjoyed a great relationship with our energy colleagues in the U.S. government. The United States is championing the Energy Platform at the ICA – so we commend the people of the United States for making this additional commitment to help the continent of Africa…”

The Infrastructure Consortium for Africa (ICA) is a membership organization of G8 countries (including the United States and the African Development Bank) – and is currently working with various U.S. government organizations to strengthen the ICA energy platform.  The ICA secretariat office is housed within the African Development Bank office and functions as advocates for resource mobilization for transformational infrastructure projects in Africa. 

“ … The news of the POWER AFRICA Obama Presidential initiative is good news for the Infrastructure Consortium for Africa…” says Hassan. “…It not only demonstrates the U.S. commitment to transformational infrastructure in Africa ,  but it is also a very clear indicator that Africa has tremendous potential for private sector investments … which is our mission here at the ICA…” 

In his speech at the Business Leaders Forum on July 1^st,   2013,  in Dar es Salam, United States President Barak Obama thanked the African Development Bank for its partnership in rolling out a massive initiative to bring power to Africa.  POWER AFRICA: –is a new five year United States Presidential Initiative aimed at supporting economic growth and development by increasing access to reliable, affordable and sustainable power in Africa. 

POWER AFRICA is designed as a multi-stakeholder partnership among the governments of The United States of America, Tanzania, Kenya, Ethiopia, Ghana, Nigeria and Liberia, the U.S. and African private sector, and the African Development Bank (AfDB).  In his speech in Dar es Salam President Obama said, “… The United States is going to keep investing in efforts that unleash [Africas’] potential and its greatest natural resource – which is its citizens.  When we do, I’m absolutely convinced it won’t mean just growth and opportunity for Africa; it will mean greater prosperity for The United States and indeed the world …”

Ambitious Goals – Committed Partners

More than two-thirds of the population of sub-Saharan Africa is without electricity.  The POWER AFRICA initiative aims to double access to power in sub-Saharan Africa.  POWER AFRICA plans to build on Africa’s enormous power potential, including new discoveries of vast reserves of oil and gas, and the potential to develop clean geothermal, hydro, wind and solar energy.  POWER AFRICA aims to help countries develop newly discovered resources responsibly, build out power generation and transmission, and expand the reach of mini-grid and off-grid solutions. 

POWER AFRICA will leverage private sector investments, beginning with more than $9 billion dollars in initial commitments from private sector partners to support the development of more than 8,000 megawatts of new electricity generation in sub-Saharan Africa.  Commitments include:

• GENERAL ELECTRIC commits to help bring online 5,000 megawatts of new, affordable energy through the provision of its technologies, expertise and capital in Tanzania and Ghana.
• HEIRS HOLDINGS commits to $2.5 billion of investment in financing in energy; generating an additional 2,000 megawats of electricity capacity over the next five years.
• SYMBION POWER aims to catalyze $1.8 billion in investment to support 1,500 megawatts of new energy projects in Power Africa countries over the next five years.
• ALDWICH INTERNATIONAL commits to developing 400 MW of clean, wind powerin Kenya and Tanzania—which will represent the first large scale wind projects in each of these countries; an associated investment of $1.1 billion.
• HARITH GENERAL PARTNERS commits to $70 million in investment for clean, wind energy in Kenya and $500 million across the African power sector via a new fund.
• HUSK POWER SYSTEMS will seek to complete installation of 200 decentralized biomass-based mini power plants in Tanzania –providing affordable lighting for 60,000 households.
• The African Finance Corporation intends to invest $250million in the power sectors of Ghana, Kenya and Nigeria; catalyzing $1 billion in investment in sub-Saharan Africa energy projects.

The United States government and its’ private sector partners will work with an initial set of POWER AFRICA partner countries, including Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.  These countries have set ambitious goals in electric power generation and are making the utility and energy sector reforms to pave the way for investment and growth.  POWER AFRICA will also partner with Uganda and Mozambique on responsible oil and gas resources management.  POWER AFRICA will use a wide range U.S. government tools to support investment in Africa’s energy sector.  From policy and regulatory best practices, to pre-feasibility support and capacity building, to long-term financing, insurance guarantees, credit enhancements and technical assistance POWER AFRICA hopes to provide coordinated support to help African partners expand their generation capacity and access. 

The U.S. government will commit almost $8 billion in financial support over the next five years to this effort, including:

• The U.S. Agency for International Development (USAID) will provide more than$285 million in technical assistance, grants and risk mitigation to advance private sector energy transactions and help governments adopt and implement the policy, regulatory, and other reforms necessary to attract private sector investment in the energy and power sectors.
•  The Overseas Private Investment Corporation (OPIC) will commit up to $1.5 billion in support of U.S. exports for the development of power projects across sub-Saharan Africa.
• The U.S. Export-Import Bank (EX-IM) will make available up to $5 billion in support of U.S. exports for the development of power projects across sub-Saharan Africa.
• The Millennium Challenge Corporation (MCC) will invest up to $1 billion in African power systems to increase access and the reliability and sustainability of electricity supply through investments in energy infrastructure, policy and regulatory reforms and institutional capacity building.
• OPIC and the U.S. Trade and Development Agency (USTDA) will provide up to $20 million in project preparation, feasibility and technical assistance grants to develop renewable energy projects.  The efforts will be coordinated through the U.S. – Africa Clean Energy Finance Initiative (US-ACEF) and supported by the recently launched U.S. – Africa Clean Energy Development and Finance Center (CEDFC) in Johannesburg, South Africa.
• The U.S. African Development Foundation(USADF) will launch a $2 million Off-Grid Energy Challenge to provide grants of up to $1000,000 to African-owned and operated enterprises to develop or expand the use of proven technologies for off-grid technologies for rural and marginal populations.
• In 2014 OPIC and USAID will jointly host an African energy and infrastructure investment conference.  The conference should bring investors, developers and companies together with U.S. and African government officials to demonstrate the opportunities for investment and the tools and resources available from the U.S. government and other partners.

Learn more about the ICA Energy Platform

Contact: Mr. Calixte Kambanda, Engery Platform Expert – C.KAMBANDA@AFDB.org

Read more about POWER AFRICA

Category: Energy