U.S.-Africa summit garners over $17 billion in investment pledges
08/05/2014 | 07:20pm US/Eastern
African leaders on Tuesday called for a
deeper economic relationship with the United States, hailing investment pledges
totalling more than $17 billion (£13.47 billion) at a Washington summit as a
fresh step in the right direction.
U.S. and African companies and the World Bank pledged new investment
in construction, energy and information technology projects in Africa at
the U.S.-Africa Business Forum, including several joint ventures
between U.S. and African partners.
"The United States is determined to be a partner in
Africa's success," President Barack Obama said in a speech at the forum.
"A good partner, an equal partner, and a partner for the long term."
The U.S. president also urged African officials to create conditions to support foreign investment and growth.
"Capital is one thing, development programs and
projects are one thing, but rule of law, regulatory reforms, good
governance, those things matter even more," he said.
African leaders said they were optimistic of becoming
full partners in a relationship worth an estimated $85 billion a year in
trade flows, as U.S. business leaders eyed opportunities in the region,
home to six of the world's 10 fastest-growing economies - even if they
might be late to the party.
"We gave it to the Europeans first and to the Chinese
later, but today it's wide open for us," said the chief executive of
General Electric Co, Jeff Immelt, who on Monday announced $2 billion to
boost infrastructure, worker skills and access to energy.
Tanzanian President Jakaya Kikwete said Africa wanted
to move away from a relationship of "aid donor and aid recipient" to one
of investment and trade.
Kikwete told the forum that with Obama and senior
officials encouraging the business community "to take Africa seriously, I
think this time we will make it."
More than 90 U.S. companies participated in the forum,
part of a three-day summit which has brought almost 50 African leaders
to the U.S. capital, including Chevron Corp
Many already have a foothold in the region, which is
expected to have a larger work force than China or India by 2040 and
boasts the world's fastest-growing middle class, supporting demand for
consumable goods.
The Coca-Cola Co
===================
Dangote signed an agreement to jointly invest $5
billion in energy projects in sub-Saharan Africa with Blackstone Group
funds, also calling for the U.S. Export-Import Bank to remain open to
support African companies buying U.S. goods.
The World Bank, which committed $5 billion to support
electricity generation, estimates that one in three Africans, or 600
million people, lack access to electricity despite rapid economic growth
expected to top 5 percent in 2015 and 2016.
Obama took part in a discussion with corporate chief
executives and government leaders at the event, also attended by U.S.
Commerce Secretary Penny Pritzker as well as former President Bill
Clinton and former New York Mayor Michael Bloomberg.
"These deals and investments demonstrate that the time
is ripe to work together as partners, in a spirit of mutual
understanding and respect - to raise living standards in all of our
nations and to address the challenges that impede our ability to develop
closer economic bonds," Pritzker said.
African telecoms billionaire Mo Ibrahim encouraged U.S.
businesses to invest in Africa and make money, but also said they
should "pay their taxes."
(Additional reporting by Jeff Mason, Elvina Nawaguna,
Mark Felsenthal and Roberta Rampton; Editing by G Crosse, David Gregorio
and Leslie Adlert)
By Krista Hughes and Lesley Wroughton
===================
The White House
Office of the Press Secretary
For Immediate Release
August 05, 2014
FACT SHEET: Powering Africa: Increasing Access to Power in Sub-Saharan Africa
On June 30, 2013, President Obama launched Power Africa, an
innovative private sector-led initiative aimed at doubling electricity
access in sub-Saharan Africa, where more than 600 million people
currently lack access to electricity. Power Africa set an ambitious
initial goal of adding more than 10,000 megawatts (MW) of new, cleaner
electricity generation capacity and increasing electricity access by at
least 20 million household and business connections.
Today, the President announced a renewed commitment to this
initiative, and pledged a new level of $300 million in assistance per
year to expand the reach of Power Africa across the continent in pursuit
of a new, aggregate goal of 30,000 MW of additional capacity to Africa
and increasing electricity access by at least 60 million household and
business connections. The President also announced $6 billion in new
private sector commitments, bringing the total private sector
commitments under Power Africa to date to more than $20 billion. This
includes additional commitments under Beyond the Grid, a new
sub-initiative, announced at the June 2014 U.S-Africa Energy
Ministerial, for fostering private investment in off-grid and
small-scale energy solutions that seek to expand access to remote areas
across sub-Saharan Africa.
Power Africa: Progress to Date
The U.S. Embassy teams have worked closely with their host
governments and private sector partners to facilitate the financial
closure of transactions that are expected to generate almost 2,800
megawatts (MW) of electricity, and Power Africa is actively supporting
transactions expected to generate an additional 5,000 MW. Once
completed, these transactions will represent 78 percent of Power
Africa’s initial 10,000 MW goal.
Twelve U.S. government agencies, whose combined capabilities form the
backbone of Power Africa, are working closely with African governments
to prioritize and address key legal, regulatory and policy constraints
to investment, and to implement measures that will sustain growth and
enable successful governance of a growing power sector throughout
sub-Saharan Africa.
Growing Private Sector Commitments in Support of Power Africa
Private sector commitments to date are on track to meet Power
Africa’s initial 10,000 MW goal and leading the path towards achieving
the goal of doubling access to electricity in sub-Saharan Africa through
private sector-led investments.
Notable transactions undertaken in the first year of the initiative
include the ongoing negotiation of Corbetti Geothermal, the first phase
of a potential 1,000 MW geothermal generation project and Ethiopia’s
first independent power project; advancing nearly 500 MW of wind
projects in Kenya; financial support for a 10 MW mini-hydro and a 5 MW
solar project in Tanzania; and supporting power sector-wide
privatization efforts in Nigeria. Additional efforts include the U.S.
African Development Foundation’s (USADF) Off-Grid Challenge.
Leveraging Strategic Partnerships to Maximize Impact
Over the past year, Power Africa has forged strategic partnerships
with African governments, multilateral institutions, donors, and the
private sector. These partnerships seek to align resources and
capabilities, and coordinate our interventions to maximize our impact
and accelerate private sector investment in renewable energy.
- Although the goals set out by Power Africa are continent wide, the U.S. government signed memoranda of understanding (MOU) with the initial six focus countries, which reflect the strong commitment of African governments to engage in policy and regulatory reform.
- The World Bank Group will support Power Africa by committing $5 billion in new technical and financial support, including loans and guarantees, for energy projects in the six initial Power Africa focus countries. This commitment builds on the World Bank's existing $3.3 billion commitment in the six focus countries and its broader commitment to developing the energy sector in sub-Saharan Africa.
- The African Development Bank (AfDB) already announced its support to advance Power Africa as an anchor partner, with an initial commitment of $3 billion. The AfDB has already approved approximately $670 million in support for energy sector operations in the six initial Power Africa countries, and expects to commit an additional $2 billion in support across sub-Saharan Africa over the coming year.
- President Obama welcomed the announcement that the Government of Sweden has committed $1 billion to advance Power Africa, including support for transmission and distribution upgrades, and the development of energy projects in sub-Saharan Africa.
Power Africa Transaction–based Model at Work
During the U.S.-Africa Business Forum, a number of new Power Africa
transactions and energy sector initiatives were highlighted:
- The U.S. Trade and Development Agency (USTDA) in partnership with the U.S. Department of Energy led the African Leaders’ Visit: Energy to Houston, Texas, where African decision makers met with government and industry leaders who highlighted their experience fostering economic growth through strategic investments energy infrastructure development.
- The Overseas Private Investment Corporation (OPIC) approved up to $250 million in financing to support the development, construction, and operation of a 310 MW wind power project near Lake Turkana, Kenya.
- OPIC also approved up to $50 million in financing for the Azura-Edo power plant, the first independent power producer in Nigeria in 10 years following recent power sector reforms. This project is expected to provide up to 459 MW of much-needed power for Nigeria.
- Under the US-Africa Clean Energy Finance Initiative (ACEF), OPIC is supporting the Participatory Microfinance Group for Africa (“PAMIGA”), a network of 15 rural microfinance institutions to expand micro-lending for solar energy and clean water investments for agricultural and household use.
- Under ACEF, USTDA funded a study for Amahoro Energy to develop a new run-of-the-river hydropower plant and capacity upgrades at five existing plants, to create 11.45 MW of new generation capacity in Rwanda.
- The USADF announced the selection of three awardees through the Liberia Off-Grid Challenge. Each awardee will receive a $100,000 grant for Liberia off-grid projects jointly funded by USADF, GE, and USAID.
- The Department of Commerce led an Energy Trade Mission including 19 U.S. companies to Ghana and Nigeria in May 2014, which resulted in the signing of $175 million in energy sector deals.
- Ex-Im Bank approved a $17 million loan guarantee for BOAD, the West African Development Bank, to support long-term financing for the expansion of the Azito Power project in Cote d’Ivoire which will increase the plant’s installed capacity by 130 MW, from 290 MW to 420 MW, while reducing the carbon intensity per MW.
Beyond the Grid Initiative
Recognizing that Power Africa cannot achieve energy access goals
through the use of large grid extension projects alone, the U.S.
government launched Beyond the Grid, a new Power Africa sub-initiative
focused exclusively on unlocking investment and growth for off-grid and
small-scale energy solutions on the African continent. Beyond the Grid
will partner with more than 35 investors and practitioners that have
committed to invest more than $1 billion into off-grid and small-scale
solutions over the next five years.
Millennium Challenge Corporation Ghana Compact Signing
Secretary Kerry and the President Mahama of Ghana presided over the
signing of a Millennium Challenge Corporation (MCC) Compact through
which MCC will invest up to $498 million over the next five years to
support the turnaround of Ghana’s electricity sector. This compact
represents an example of the catalytic impact of Power Africa
interventions, which help create the enabling environment and stimulate
private investment in order to meet the current and future needs of
households and business while also ensuring inclusive access to power by
its citizens, with up to $4 billion in potential commitments already in
the pipeline.
U.S.-Africa Clean Energy Finance Initiative
Secretary Kerry announced a second round of funding for ACEF, an
innovative partnership launched two years ago among the State
Department, OPIC, and USTDA that provides a small amount of early-stage
funding to catalyze much larger private sector investment in clean
energy projects in Sub-Saharan Africa. To date, ACEF has supported more
than 25 projects that have the potential to create hundreds of
megawatts of new power generation capacity across ten African
countries. The new round of funding will allow this innovative effort
to continue to leverage significant clean energy investment in Africa.
Commercial Law Development Program
The Department of Commerce’s Commercial Law Development Program,
through funding from USAID, is supporting the development of model legal
frameworks, including annotated power purchase agreements, which
accelerate the negotiation of renewable energy projects.
Clean Energy Solutions Center
The Department of Energy supported Clean Energy Solutions Center is
connecting policymakers in Africa with a global clean energy experts
through a web-based platform which aims to help African governments
design and adopt policies and programs that support the deployment of
clean energy technologies.
Focus on Regional Initiatives to Support Power Trade and Geothermal Development
Through USAID, Power Africa is deploying Regional Transaction
Advisors to address issues that cross national borders, including the
development of regional power pools and advancing development of East
Africa’s 15,000 MW in geothermal potential.
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