Letter from the Coordinator

By Andrew M. Herscowitz

During this year’s U.S.-Africa Leaders Summit, President Obama called on members of his Administration, officials representing American and African private sector companies and multilateral organizations, as well as government leaders in African countries to do more to increase dramatically the amount of electricity available to millions of sub-Saharan Africans.

The President tripled Power Africa’s goals to now bring 30,000 new megawatts (MW) online and add 60 million new home and business connections throughout all of sub-Saharan Africa.

Power Africa’s partners in Africa and around the globe responded immediately to President Obama’s new commitment. The private sector has committed over $20 billion, while the World Bank Group committed an additional $5 billion in support for power projects. The African Development Bank has committed $3 billion to Power Africa and the Government of Sweden added $1 billion. Partners like Citibank, the Standard Bank Group, and General Electric (GE) all stepped forward with new pledges to increase access to capital and resources for energy projects.

These commitments will advance projects of all shapes and sizes. From 1,000 MW gas projects to .5 MW mini-hydro projects and community-level solar projects that are part of Power Africa’s Beyond the Grid initiative, these private and public sector commitments will ensure that we reach our goals.

Just this past week, the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, closed financing for $50 million to support construction and operation of the Azura-Edo power plant project near Benin City in Edo State, Nigeria. The Azura-Edo power project - a 459MW open cycle gas turbine power station - is the largest transaction producing new megawatts to reach financial close under Power Africa. We estimate the plant will commence producing power as early as 2017.

African leaders are gaining greater appreciation for Power Africa’s model, which emphasizes our work with private companies to drive the development of Africa’s energy sector. Ethiopian Prime Minister Hailemariam Desalegn said to President Obama during their bilateral meeting at the U.N. General Assembly on September 25, “…we value also the support the United States has offered to us in terms of engaging the private sector, especially your initiative of the Power Africa program, which is taking shape. I think it's remarkable and a modern kind of approach. And in that sense, we are obliged to thank you very much for this program and to deepen this Power Africa initiative.”

Powering Africa, Project by Project, Step-by-Step

Helping deals close and increasing access are at the heart of what we’re doing. Even the smallest projects can have a huge impact.

As you can see from this newsletter’s cover photo, the American company Cummins has made significant progress in constructing its bio-digester project in Kenya. Cummins developed the idea for the project in consultation with our Power Africa team, and our Kenyan transaction advisor David Mwangi played a critical role in providing advice during the power purchasing agreement negotiation process.

As a result of this success in Kenya, Cummins continues to explore other projects in Kenya and elsewhere in sub-Saharan Africa, demonstrating how Power Africa is working creatively with investors and companies to bring renewable solutions to rural areas.

In Liberia, the Ebola epidemic presented our partners with new and more acute challenges. Power Africa responded immediately by working with the team on the ground to purchase power generators from local suppliers for the Ebola treatment unit at the Island Clinic in Monrovia, Liberia. These generators power lights, water pumps, and washing machines used to clean health workers’ hospital scrubs. Electricity is a key tool in helping treat patients and to prevent the spread of the virus.

Many Power Africa partners have reached out with their ideas and contributions for supporting our friends and partners in Liberia, and several partners helped shape our initial response.

Africa’s Emerging Economies & Technologies

In East Africa’s Rift Valley, there is an estimated 15,000 MW of geothermal energy generation that has the potential to be a backbone for East Africa’s energy future. The United States is the global leader in this field with nearly 3,500 MW of installed geothermal generation.

Power Africa, the African Union Commission (AUC), and the African Development Bank organized a first of its kind industry “roadshow” in September to bring the rapidly emerging East African geothermal industry together with the U.S. geothermal industry.

The successful roadshow started at the 38th Geothermal Resources Council (GRC) in Portland, Oregon, moved to Nevada for a series of high-level meetings with U.S. companies Ormat and ElectraTherm, and ended with a series of briefings and meetings in Washington, D.C. with officials from the finance and public sectors.

Beyond the Grid

Power Africa’s Beyond the Grid sub-initiative now has 40 partners who collectively have committed over $1 billion to bolster and grow Africa’s off-grid technology sector. In September, GE Africa along with the U.S. African Development Foundation (USADF) and USAID, announced 22 winners in the second round of the Power Africa Off-Grid Energy Challenge. The winning projects, from Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania, receiving grants of up to $100,000 each, included 14 solar developments, six biogas generation projects, one wind turbine system and a small hydroelectricity power plant. These projects focus on providing more power for commercial activities, including agriculture production and processing, off-farm businesses, and commercial enterprises.

Home Base for Coordinating Across All of Africa

Power Africa has been staffing up and opening new offices to help us reach our expanded goals. Our U.S. embassy teams and transaction advisors are the boots on the ground, delivering critical advice and tools so that our partners can evaluate, scope, and deliver on projects of various sizes.

We’ve established the Coordinator’s office at the U.S. Embassy in Pretoria, South Africa, where we are enhancing existing and developing new partnerships with African companies and investors. We expect this strategic move to help us identify new deal flow and to drive additional investment throughout the African continent. Power Africa partners headquartered in South Africa include Standard Bank, Harith, Nedbank, African Infrastructure Investment managers and Investec, which collectively have committed over $1.5 billion for power projects. Many other Power Africa partners, such as American Capital Energy and Infrastructure and Goldman, Sachs, use South Africa as a base to engage with every region on the continent. The Power Africa network around the continent continues to grow, making our teams well positioned to support our partners all over sub-Saharan Africa.

Pursuing Africa’s Power Vision

Reaching our 30,000 MW and 60 million connections goals requires buy-in from African leaders themselves. For this reason, Power Africa announced in September a new MOU with the African Union’s, New Partnership for Africa’s Development Agency (NEPAD) to focus on the Africa Power Vision projects. Working through NEPAD, Power Africa is helping support African leaders as they shape their energy infrastructure priorities for decades to come. With a focus on regional and innovative projects, the Africa Power Vision will help force energy trade across borders, increase energy security and reduce energy prices while increasing access.

Finally, we hope to see you in Washington, DC on January 28-30, 2015. Power Africa is the sponsor partner in the Powering Africa Summit hosted by EnergyNet, bringing together high level government officials, developers, banks, and suppliers for lively and frank discussions about issues related to investment in energy in Africa. We recognize this will be a unique moment for our U.S.-based private and public sector partners to come together. So please, save the date.

We will provide more details as they become available, and please do not hesitate to contact us with your interest in partnering with Power Africa.

Last updated: June 07, 2016

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