Power Africa progress excites US gov’t

The United States government has expressed excitement about the substantial progress made toward the goal of increasing access to power for more than 20 million Africans by 2020.

 

President Obama announced the US Power Africa initiative on June 30, 2013 in South Africa. The initiative aims to bridge the gap between Africa's power shortage and its economic potential by doubling access to electricity across sub-Saharan Africa over the next decade.  

The United States and its partners are working with an initial set of Power Africa partner countries including Ethiopia, Kenya, Tanzania, Ghana, Liberia, and Nigeria to reach the goal of generating 10,000 megawatts of power by 2018 and increasing access to power for millions of Africans.  

Speaking during a telephonic press conference with selected African journalists to discuss the progress and opportunities for investors under the Power Africa initiative, Earl Gast -- USAID Assistant Administrator for Africa said: “I am really excited to report that we have made substantial progress in working with partners on the continent and internationally, and identifying a critical number of projects that eventually will lead up to 10,000 megawatts of new power and an increase of access for more than 20 million Africans on the continent by 2020.

“In fact, we have already identified about 80 percent of the 10,000 megawatts. And, also, some 25 percent of the overall amount of 10,000 megawatt has been secured in financial closure on projects.” 

Mr. Gast explained that the initiative is working with the power pools around the continent -- the East African Power Pool, Central African Power Pool, the Southern African Power Pool and the West African Power Pool -- to enhance capacity building. 

The initiative offers the expertise of 12 US government agencies in removing obstacles to energy sector transactions with financing, legal, engineering and other assistance which will propel necessary and specific reforms to bring energy infrastructure projects to a financial close.  

Mr. Gast said the countries of West Africa are very small; therefore least-cost options of generation are critically important to these small countries. 

“We see those countries benefitting from Power Africa through the power pools, which can distribute power that is being produced in other countries to some of the smaller countries.” 

Mr. Gast stressed that not only is the initiative looking at increasing the amount of power on grids, it is also looking at increasing access. 

“We want to increase access through several means. Getting to first addressing the point of affordable power is absolutely the goal of Power Africa. 

“There are indigenous resources in Africa; if harnessed and tapped into, they will provide very cheap affordable power.

“Also, we are looking at ways of going beyond the grid because -- in rural communities where the grid doesn’t appear, where transmission lines aren’t in place -- it might be prohibitively expensive, certainly on a commercial basis, to build a grid. 

“So we are looking at the idea of mini-grids and small energy projects that are commercially viable yet affordable, and which don’t require a lot of capital.”

Outlining some challenges, he explained that structuring a deal, and then reaching financial closure, is difficult because it involves so many partners.

This, he said, requires policy reforms that need to be implemented or measures that have been agreed to by government on improving the legal and regulatory environment to facilitate private sector investments. 

“[The] second challenge is helping private sector companies to start financing -- and that’s no sure deal. Often multiple parties are involved. And then the third challenge for us is basically sequencing the support that is coming in from USAID, other U.S. government agencies and other development agencies in a way that leads to project execution,” Mr. Gast said.