Senator Coons calls for sustained U.S. commitment to addressing energy poverty in Africa
WASHINGTON – Chairing a hearing of the Senate Foreign Relations Subcommittee on African Affairs on Thursday, U.S. Senator Chris Coons (D-Del.) called for a sustained U.S. commitment to Power Africa, the President’s energy poverty initiative, including through legislation to authorize the initiative and ensure its long-term success.
Power Africa was launched in June 2013 to address the ongoing challenge of energy poverty in Sub-Saharan Africa. The initiative seeks to double the number of Sub-Saharan Africans with access to electricity over the next six years. Legislation authorizing Power Africa was approved by the House Foreign Affairs Committee last month, and Thursday’s hearing sought to inform consideration of a similar bill in the Senate.
“Sustaining this [initiative] beyond one administration is a broadly shared goal and could have long term positive impacts for rural electrification, for the development and deployment of renewables, and for addressing legitimate environmental concerns,” Chairman Coons said.
He continued, “The United States has taken bold steps forward in creating the Power Africa Initiative and I look forward to working closely with the Administration to ensure it is sustained, strengthened, and successful in the future.”
Witnesses testifying before the panel reiterated the importance of Congressional authorization for Power Africa to provide the 12 U.S. government implementing agencies with the authorities they need to ensure long-term objectives are met and progress is sustained.
“[Long-term authorization] is absolutely necessary for an agency like OPIC, which has a unique mandate to support the private sector,” OPIC Executive Vice President Mimi Alemayehou said. “You can imagine, since we work with the private sector, they insist on predictability and knowing that we’ll be around to support them in these projects – and on infrastructure projects in particular, these are very long-term projects.”
Earl Gast, USAID Assistant Administrator for Africa detailed the benchmarks that have been met since the initiative was launched last year. “We have helped close deals that will generate 2,486 MW of electricity – 25 percent of Power Africa’s 10,000 MW goal – and we are in the planning stages of projects that will add 5,579 MW more,” Gast said. “And for every dollar that the U.S. Government has committed, the private sector has committed two – over $14 billion thus far.”
“As the global leader, when the U.S. government pays attention to an issue, the world pays attention too,” said Tony O. Elumelu, Chairman of Heirs Holdings, an African investment company based in Nigeria. “The U.S. government’s elevation of this issue, and coordinated approach to tackling it, has galvanized the private sector in the U.S. and other countries, to examine the African power sector as an opportunity for viable investments.”
Seventy percent of Sub-Saharan Africans – and 85 percent of those living rural areas – are currently living without access to electricity. Pervasive energy poverty undermines economic growth and development goals in health, education, and institution-building and has been cited by businesses as one of the most significant impediments to business growth on the continent.
Power Africa seeks to produce at least 10,000 megawatts of more efficient, cost effective, and sustainable electricity generation capacity on the continent over the next six years. By 2020, the initiative aims to increase electricity access for at least 20 million new households and commercial entities, enhance the energy resource management capabilities of partner countries, and increase regional cross-border energy trade.
Senator Coons’ full opening statement is below:
– As Prepared for Delivery on March 27, 2014 –
Today, the Africa Subcommittee will consider Power Africa, an ambitious Presidential initiative designed to double access to electrical power in sub-Saharan Africa in the next six years by producing at least 10,000 megawatts of more efficient, cost effective, sustainable electricity generation capacity on the continent. By 2020, it aims to increase electricity access for at least 20 million new households and commercial entities with on-grid, mini-grid, and off-grid solutions; enhance energy resource management capabilities of partner countries; and increase regional cross-border energy trade. These are goals I strongly support, and I look forward to discussing the scope, scale, and implementation of the initiative as well as prospects for its future.
First, I would like to recognize Senator Flake and other subcommittee members for their deep interest in this critically important issue. I would also like to welcome our witnesses: Earl Gast, Assistant Administrator for Africa at USAID; Mimi Alemayehou Executive Vice President of the Overseas Private Investment Corporation (OPIC); Rick Angiuoni, Africa Director for the Export-Import Bank (Ex-Im); Tony Elumelu, Chairman of Heirs Holdings and Founder of the Tony Elumelu Foundation; Paul Hinks, CEO of Symbion Power; Del Renigar, Senior Council for Global Government Affairs Policy for General Electric; and Tom Hart, U.S. Executive Director of the ONE Campaign. I look forward to hearing your insights and thank you for being here.
These witnesses have been selected because of their leadership implementing and supporting the initiative either on behalf of the U.S. government, the private sector, or NGOs. There are also critically important perspectives on a range of related issues, especially the environmental and social impacts associated with energy development. For this reason, I would like to enter into the record statements by the Sierra Club, as well as Oxfam and other organizations, and thank them for their commitment and leadership. I would also like to enter into the record statements by the U.S. African Development Foundation and the Millennium Challenge Corporation, which plays an important role financing power projects through its country compacts focused on infrastructure, as well as promoting institutional and regulatory reforms in the energy sector.
Last year, President Obama committed to expanding energy access across Africa with the collaborative efforts of 12 U.S. government agencies. We have committed almost $8 billion of U.S. government resources to support Power Africa over the next five years, including $1 billion in MCC energy-focused compacts, $1.5 billion in OPIC loans, and $5 billion in Ex-Im loans, coupled with a $285 million investment by USAID. These investments have been leveraged by a robust commitment by the private sector of $14 billion toward large-scale energy projects in the six Power Africa focus countries, Kenya, Tanzania, Ghana, Liberia, Nigeria, and Ethiopia.
Power Africa catalyzes the vast opportunities for the private sector and mobilizes private resources to help solve the endemic problem of energy poverty across Africa. The initiative has garnered the support of several large investors, as well multinational institutions such as the African Development Bank and World Bank, which serve as critical Power Africa partners. By helping to shepherd through power sector deals with regionally-based transaction advisors and a very capable coordinator based in Nairobi, Power Africa also aims to help improve the business climate in order to attract further private sector investment in the energy sector, creating new opportunities for U.S. businesses and promoting lasting regulatory reforms.
Perhaps most importantly, Power Africa aims to address a critical humanitarian need stemming from endemic energy poverty across Africa. Seventy percent of the population of sub-Saharan Africa does not currently have access to electricity, and that number increases to 85% in rural areas. When compared with other regions of the world, Sub-Saharan Africa has just a small fraction of the electrification rate of other regions.
Businesses have cited the lack of reliable energy access as the most significant impediment to doing business in Africa. Thirty percent of health facilities do not have electricity. Ninety million children across the continent attend school without access to power. And without electricity at home, the toxic fumes from kerosene and other cooking fuels leads to approximately 3 million deaths per year globally. That’s more than HIV/AIDS and malaria combined.
I want to make sure this initiative has bipartisan support and can be sustained over the long term in order to meet Africa’s critical energy needs and accelerate U.S. private sector engagement. It is therefore important to consider areas where the initiative can be strengthened and improved, including through its expansion and more robust budgetary support. One issue to consider is whether the number of focus countries may be increased in order to more effectively promote access to power and encourage greater energy sector reform. This hearing will also consider how to sharpen the focus of Power Africa on distributed energy, renewables, and off-grid or mini-grid solutions, to ensure we protect the environment and address access issues.
As we consider the future of Power Africa, it is clear that Congress has a critically important role. This Committee will soon consider legislation to authorize the initiative and address many of these unresolved issues, and I am pleased that today’s hearing will help to inform our future consideration of that bill. Finally, I am encouraged by the increased tempo of the Administration’s engagement in power issues, as highlighted by Secretary Pritzker’s upcoming trade mission to West Africa, convening of the U.S.-Africa Energy Ministerial in Addis in June, and the U.S.-Africa Heads of State Summit in Washington in August, where energy will be discussed among other issues. The United States has taken bold steps forward in creating the Power Africa Initiative and I look forward to working closely with the Administration to ensure it is sustained, strengthened and successful in the future.
owners in Wilmington and nationally. She urged the senators to look for ways to establish mutually beneficial trade partnerships with Latin American countries and to make government contracts more accessible to small businesses. She also called for action to help unfreeze the credit pipeline and remove red tape for entrepreneurs seeking to start or expand their businesses.