The United States and its partners said they will work with an initial set of Power Africa partner countries, including Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania to make electricity accessible to these countries.
According to the U.S., 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.
President Barrack Obama on Monday July 1, announced Power Africa, a new initiative to double access to power in sub-Saharan Africa. More than two-thirds of the population of sub-Saharan Africa is without electricity, and more than 85 percent of those living in rural areas lack access.
According to a release from the U.S. Embassy, the Power Africa will 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. It will help countries develop newly-discovered resources responsibly; build up power generation and transmission, and expand the reach of mini-grid and off-grid solutions.
The International Energy Agency pointed out that sub-Saharan Africa will require more than $300 billion in investment to achieve universal electricity access by 2030. “Only with greater private sector investment can the promise of Power Africa be realized, with an initial set of six partner countries in its first phase. Power Africa will add more than 10,000 megawatts of cleaner, more efficient electricity generation capacity, and will increase electricity access by at least 20 million new households and commercial entities with on-grid, mini-grid, and off-grid solutions, as well as enhances energy resource management capabilities, allowing partner countries to meet their critical energy needs and achieve greater energy security”, according to the release.
The release narrated that Power Africa will bring to bear a wide range of 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 will provide coordinated support to help African partners expand their generation capacity and access.
The United States said they will commit more than $7 billion in financial support over the next five years to this effort, and the U.S. Agency for International Development (USAID) will provide $285 million in technical assistance, grants and risk mitigation to advance private sector energy transactions and help governments adopt and implement the policy and other reforms necessary to attract private sector investment in the energy and power sectors.
Also the Overseas Private Investment Corporation (OPIC) will commit up to $1.5 billion in financing and insurance to energy projects in sub-Saharan Africa, while 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, and the Millennium Challenge Corporation (MCC) will invest up to $1 billion in African power systems through its country compacts to increase access and the reliability and sustainability of electricity supply through investments in energy infrastructure, policy and regulatory reforms and institutional capacity building.
“The 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, these 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, and the U.S. African Development Foundation (USADF) will launch a $2 million Off-Grid Energy Challenge to provide grants of up to $100,000 to African-owned and operated enterprises to develop or expand the use of proven technologies for off-grid electricity benefitting rural and marginal populations,” the release noted.
The US Embassy said in 2014, OPIC and USAID will jointly host an African energy and infrastructure investment conference. The conference will 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 to support investment.
The release concluded that Power Africa will also leverage private sector investments, beginning with more than $9 billion 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.