“So, a light where currently there is darkness; the energy needed to lift people out of poverty — that’s what opportunity looks like,” President Obama said launching his Power Africa initiative. (Image: One.org)
• Andrew Herscowitz
Co-ordinator
USAid
usaidpressofficers@usaid.gov
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Early in May, a year after being introduced in the US House of Representatives, the Electrify Africa Bill, HR 2548, passed with support from Democrats and Republicans. This is just the first hurdle in the bill becoming law, but it is a step closer to providing power to 500 million Africans by 2020.
The Electrify Africa Bill is one of the first programmes in President Barack Obama’s Power Africa initiative. The American plan – in co-operation with international and African business, the World Bank, the European Union, the African Development Bank and African governments – envisions a continent generating enough electricity to provide light and power for all its inhabitants.
As Africa’s economy grows and its population multiplies, a lack of electricity is stunting development. For the seven out of 10 Africans – 589 million people – who do not have access to any electricity, a reliable supply would really change their lives. It would allow communities to create more jobs through a flourishing private sector, make it possible for students to study long after dark and for hospitals to safely store lifesaving vaccines and expand the reach of medical services.
Without access to electricity, Africans are forced to pay ever larger percentages of their income on expensive and unhealthy alternatives. Diesel fumes running generators have increased the rate of respiratory disease and uncontrolled harvesting of wood has increased the rate of deforestation on the continent.
The dark continent, this graphic shows power use across the globe today. (Image: One.org)
Partnership model
When he announced the programme in a speech at the University of Cape Town in June 2013, Obama said: “We are moving beyond the simple provision of assistance, foreign aid, to a new model of partnership between America and Africa, a partnership of equals that focuses on your capacity to solve problems, and your capacity to grow.”
At least $7-billion (about R73-billion) has been earmarked by the US government in loan guarantees, financial support and the cost of the support and expertise of 12 American government agencies. The International Energy Agency says that it will take $300-billion in investment to supply all of Africa with a safe, regular power supply. Ideally small businesses as well as large corporations should benefit from the American investment but language in the Electrify Africa legislation and the Power Africa initiative is loaded in favour of multinationals.
The programmes will be run by the Overseas Private Investment Corporation (Opic), an independent government agency set up to advance US foreign policy by aiding American corporations to invest in new or difficult markets.
Africa is a minefield of regulations and legal frameworks governing the use of natural resources. Companies have very often been shy of doing business in some African markets because local standards of good governance have not provided the transparency required and have meant they run the risk of sanctions under European and American foreign trade practice legislation. In essence, it means a chief executive could be held legally responsible if his company knew of or could reasonably expected to know that profits and royalties from their operations were being diverted to enrich a few connected individuals.
Legislation issues
The Power Africa initiative is designed to smooth the legal and legislative path for western corporations. Projects certified by Opic, it is believed, will ensure that the people of Africa enjoy the benefits of oil, gas and green energy powered projects.
Andrew Herscowitz, the Power Africa co-ordinator, explains that the involvement at government level has made it easier for projects to get off the ground. He points to a project in Tanzania that almost died. “The standard length of Tanzanian power purchasing agreements was 15 years, short enough to give many investors cold feet. With some pressure from Power Africa and from other donors, the government agreed to extend the term from 15 years to 25 years.”
One, an advocacy group founded by Irish singer Bono, has spoken out against an understaffed Opic and its one size fits all policy, especially when it comes to investment in Africa. The group has expressed concerns that the Electrify Africa legislation, while acknowledging the viability of renewable energy in Africa, is weighted to give large corporations an easier path to new reserves of oil and gas in Africa.
The group points out that the bill highlights green and off the grid projects but just $2-million has been allocated to the latter; and just 0.3% of the overall budget is allocated to preparation and development of renewable energy projects. One would like to see more resources and investment directed towards alternative energy sources. By tapping into green sources of energy – sun, wind, water or heat from the Earth’s core and Africa’s untapped natural gas supplies – power generation could be immediate.
Traditional versus renewables
For now, Opic is concentrating on large traditional projects that require the construction of infrastructure. These are projects that take years and huge investment before any power is generated.
Ben Leo, an analyst at the Centre for Global Development and a former director of African affairs at the White House, has argued for time for the staff running the Power Africa project to find its feet. Some African governments – Tanzania, which is enjoying a boom in natural gas discoveries, and Nigeria, which is heavily dependent on oil, for instance – are not willing to listen to arguments for clean options. “If the Power Africa initiative is going to meet its generation and access targets, then it’ll need to take a flexible approach. That means supporting renewables in some places and non-renewable in other places.”
As the US and its large corporations compete with China for influence in Africa, many NGOs have expressed concerns that gigantic energy corporations have influenced the investment choices made by Opic. Moving away from innovative green technologies will affect rural communities the most, according to Innovation: Africa, an Israeli NGO that is electrifying rural schools and clinics using solar power.
The group said that Power Africa was “a ‘win-win’ – helping to combat energy poverty while providing new investment opportunities for US businesses but small, innovative projects that could bring power to communities off the grid, which is especially important since rural populations are worse off in terms of electricity access, should not be neglected”.
Going geothermal in Ethiopia
The Ethiopian town of Corbetti is the first site to benefit from the US plan to leverage private sector expertise to build power grids across Africa. The Corbetti geothermal project is a partnership between the Ethiopian government and the Icelandic company Reykjavik Geothermal and will be among the largest geothermal projects in the world. Once completed, it should generate 1 000MW of power in a country that generates just 2 000MW through its hydroelectric facilities.
For Ragassa Sekako, who faces a six-hour trek to get clean water from Lake Awassa, the geothermal project holds the promise of clean water on tap in Corbetti. It will mean electrically powered appliances to cook with and light to study by after dark. “This project will benefit the people. We hope they are going to build a road and bring us jobs as well.”
For the people of Corbetti the Power Africa geothermal project would mean an end to a 6 hour trek to clean water. (Image: USAid)
