BLOGS

Power Africa helps provide first-time electricity access to homes and businesses in Africa. Access to electricity is fundamental to the social and economic development of any country. Power provides light for children to study into the night. Power gives farmers tools to increase and improve agricultural output.

Power Africa aims to double access to electricity in sub- Saharan Africa to improve lives, strengthen economies, and help people emerge from poverty with self-reliance and dignity. More than 570 million people in Africa are without access to electricity. Power Africa’s goal is to drive power projects that will provide more than 30,000 megawatts (MW) of new power generation and help create 60 million new electricity connections for homes and businesses by 2030. If you estimate that there are, on average, five people per household, reaching Power Africa’s goal means turning lights on for approximately 300 million people.

Power redefines development partnerships through energy diplomacy. Power Africa’s approach is different. Flipping the traditional development model on its head, they have taken a demand-driven, transactional approach. They look at actual transactions between the private-sector entities working in the energy sector—such as investors, local entrepreneurs and manufacturers—and governments to identify obstacles, from environmental to regulatory, that prevent these transactions from moving forward. They use the power of diplomacy to level the playing field for U.S. investments in the energy sector.

The program is field-driven and has a broad geographic scope. Led by USAID, the 12 U.S. government agencies that implement Power Africa activities have provided financing and technical assistance to support the power sector in 40 countries over the past six years. They maintain a robust “boots on the ground” presence with hundreds of dedicated power experts situated around the continent. In short, they are a team of roving diplomats, bankers, and technical experts, all focused on the same mission—increasing access to electricity.

he Power Africa Coordinator’s Office established and leads a regular interagency working group where we discuss openly the challenges and opportunities to reach our shared mission. While each agency has its own resources to support Power Africa’s mission, some agency resources are limited, and USAID frequently works through the Coordinator’s Office to help different agencies step up their efforts. The Millennium Challenge Corporation, for example, has spent hundreds of millions of dollars on power compacts in sub-Saharan Africa. At the same time, the Coordinator’s Office funded two deal teams that helped the Overseas Private Investment Corporation far exceed its initial commitment of financing $2 billion, with a current deal pipeline of more than $2.5 billion.

The Coordinator’s Office has staff dedicated to liaise full time with agencies to ensure they have the best information and tools available to help partner countries and private-sector developers overcome obstacles and get power project deals done. Businesses and governments can knock on one door to draw on an array of tools from across the U.S. government. Assistance ranges from mitigating risk and promoting exports to designing new policies and regulations, and even teaching households how to read an electricity meter. If there’s a tool out there that can help a project move forward, they find it, learn about it, and inform businesses and governments about it. The aim is to get deals across the finish line and turn lights on for people and businesses as quickly as possible.

Power Africa actively recruits private-sector partners to help achieve our goals. These partners are required to commit to supporting Power Africa goals by adding new megawatts, new connections, or financing essential energy infrastructure. Currently, Power Africa counts more than 150 companies and nongovernmental organizations among its partners, of which 75 are U.S. companies.

One significant obstacle to advancing power projects is the absence of enforced laws and regulations that support transparent practices. Power Africa works closely with governments and regulators to institute reforms and create the right conditions to attract investment, and it’s succeeding.

In Nigeria, for example, a major gas project poised to bring power to a million people was stalled due to a legal position taken by the country’s previous attorney general. He wanted any disputes to be resolved in Nigeria, rather than via an international tribunal; but no lenders would invest with this condition. In response, Power Africa rallied our partners to elevate the issue and focused efforts on a state visit by Nigerian President Muhammadu Buhari to the United States. A week after President Buhari returned to Nigeria, the attorney general changed his position. That decision allowed the private sector to commit to the project. Phase 1 of the project was commissioned in May 2018 and is now delivering reliable electricity to Nigeria’s national grid.

As China becomes an increasingly important player in African infrastructure, including in the energy sector, Power Africa is rallying the tools of the U.S. government to improve the business climate for American companies and investors, help African public and private partners develop energy plans and procurement policies that account for critical factors beyond lowest cost, and streamline collaboration between like-minded partners. With the recent launch of Prosper Africa, another U.S. government initiative coordinated by USAID to advance two-way trade between the United States and the African continent, Power Africa can further its progress by working hand in hand with the private sector and African partners to achieve lasting development outcomes and expand investment opportunities.

The Power Africa model is producing results and attracting public and private investment commitments to the African energy sector. Through Power Africa, the United States has mobilized more than $56 billion in commitments from the public and private sectors, of which more than $40 billion comes from private companies.