Holiday Lights Shine Bright

by Andrew Herscowitz, Power Africa Coordinator

As we enter the holiday season and the Obama Administration and the 114th Congress come to a close, we all should celebrate and be thankful for the accomplishments of Power Africa and the Electrify Africa Act of 2015. We are getting ready to welcome a new Congress and a new Presidential Administration, and there is much still to do.

But we are on a roll, producing impressive numbers and great stories. We wanted to share a few highlights of which everyone should feel proud:

A Mobisol employee in Rwanda demonstrates the company’s solar-powered electricity system.

5,559 MW of U.S. government- and partner-supported power projects have reached financial close since Power Africa’s launch — more than 50% of our original 10,000 MW goal.

  • Natural Gas — 3,841 MW
  • Hydro — 786 MW
  • Solar — 548 MW
  • Wind — 376 MW
  • Biomass — 8 MW

Nearly 2,000 MW (of all power types) are online and generating power.

  • More than 15 million more people have gained access to electricity since 2013 thanks to the efforts of Power Africa, which does not even include the new connections that our partner countries have added (See Kenya below).
  • Power Africa’s original $7 billion commitment has mobilized $54 billion in financing commitments from more than 130 public and private partners, more than half of which are U.S. companies.

Of all the lights this holiday season, some of the brightest will be in Liberia, where the Mt. Coffee hydro project will come online thanks to Power Africa’s efforts through the Millennium Challenge Corporation (MCC) and other Power Africa partners such as Norway, the European Union, and the World Bank. Mt. Coffee will power thousands of new customers, rekindling economic development, and promoting greater socio-political stability in a country that was destroyed by war and that recently suffered setbacks because of the Ebola outbreak.

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Photo compliments of the Mount Coffee Hydropower Project Implementation Unit (PIU)

Power Africa would not be where it is today without so many people in this Administration and this Congress, who have worked tirelessly towards doubling access to electricity. We have enjoyed this bipartisan support for many reasons, but mostly because Power Africa’s model makes sense — partnership, private sector leverage, advisors on the ground, a broad toolbox, and seamless collaboration.

The end of the year is a time for reflection and Power Africa has learned a lot since its launch in 2013. Power Africa’s private sector focus contributes to economic growth in Africa and advances U.S., African, and international commercial interests and security. We have mobilized more than $40 billion in private capital, and created new jobs and business opportunities for U.S. companies, while bringing light and power to millions. The population of sub-Saharan Africa is expected to double by 2050, with most people under the age of 35. By securing reliable electricity access, African governments are able to generate employment in agriculture, manufacturing, and value-added services, which has been proven to curb migration and the growth of violent extremism and illicit activities. Extending power to these millions of people improves their quality of life, education and economic opportunities, which improves stability and lowers migration.

Our interagency “one-stop shops” in Washington and Pretoria, as well as at U.S. embassies across sub-Saharan Africa, allow businesses to knock on just one door to access the tools of 12 U.S. government agencies and Power Africa’s other partners. As a result, businesses are quickly cutting through red tape and bureaucracy and “unsticking” deals.

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Power Africa now is tracking over 600 deals internally (some still being screened) and about 300 deals that anyone can view on Power Africa’s mobile app (click here to download the PATT app), making it clear that our Roadmap to 30,000 MW and 60 million connections by 2030 (click here to view the Roadmap) is not just ambitious, but achievable.

The U.S. has created international momentum to solve Africa’s 600 million person energy access deficit. Power Africa has set the stage for other energy initiatives and collaborates closely to ensure that all of our partners are working together. The U.S. has brought together more than a dozen multilateral and bilateral partners, including Canada, the European Union, France, Japan, Sweden, Norway, the United Kingdom, the World Bank Group, the African Development Bank, the African Union, the International Renewable Energy Agency, and the United Nations, to help achieve our collective goals. Our partnerships work because we put our partners out in front — letting them shine and working with them to do more of what they do best: advancing deals that get power to those who don’t have it. One great example is the World Bank Group’s Scaling Solar initiative that is bringing $.06/kWh solar to Zambia with modest support from the U.S. Agency for International Development (USAID).

We have created new jobs in the U.S., Africa, and throughout the world, and we are opening new markets as our African partners push “first-of-their-kind” deals across the finish line — deals that create pathways for more power projects that will not require government support. Companies like Itron in Washington State have sold hundreds of thousands of dollars of smart meters in Nigeria thanks to a reverse trade mission that the U.S. Trade & Development Agency and the U.S. Department of Commerce organized.

Power Africa has led the drafting of three books that help demystify the power sector for government officials and companies alike and that sit on Ministry shelves across the continent:

Understanding Power Purchase Agreements: http://cldp.doc.gov/programs/cldp-in-action/details/1378

Understanding Power Project Finance: http://cldp.doc.gov/programs/cldp-in-action/details/1603

and now we are launching Understanding Natural Gas and LNG Options, which provides African governments with options for jump-starting their own gas generation with potential LNG imports from the world market or from their own domestic gas resources.

These books help African governments negotiate fair and sustainable power deals that will last generations.

A few other tidbits of results and successes:

  • Keeping Gas Investments on Track. Power Africa’s support resulted in the financial close of a 450 MW Azura-Edo gas turbine power plant, which is expected to be commissioned in 2018. In addition, Power Africa helped U.S. companies General Electric and Endeavor recently signed a 400 MW PPA for a gas-fired Bridge Power project in Ghana, the first project in Ghana to utilize a Put-Call Option Agreement, which will enable the government to purchase the plant and associated assets in the event of an early termination of the PPA.
  • First Grid-Level Solar Power in East Africa. Gigawatt Global, in partnership with Scatec Solar, and with support from the U.S. Trade & Development Agency (USTDA), installed an 8.5 MW solar array in Rwanda since Power Africa’s launch, providing power to a village of Rwandan genocide survivors and to the grid.
  • 300,000 Off-Grid Connections in Tanzania. In Tanzania, 10 Power Africa off-grid partners alone are working to connect close to 300,000 homes and businesses who have never had access to electricity before.
  • Electricity Access Doubled in Kenya. The country of Kenya, working with Power Africa partners such as the World Bank and the African Development Bank, has more than doubled access to electricity in only a few years. Since 2013, Kenya has connected 2.7 million homes to the grid, raising the access rate from 27 percent to 56 percent.
  • Largest Wind Farm in West Africa. Also, in Senegal, Power Africa is supporting the 150 MW Taiba N’Diaye wind project, the largest wind farm in West Africa.
  • Largest Wind Farm in East Africa. Power Africa is supporting the Lake Turkana Wind Project, which will provide more than 300 MW to Kenya.
  • Connecting 200,000 homes and businesses in Zambia. Power Africa is guaranteeing a loan from Standard Chartered Bank to the Zambia Electricity Supply Corporation to upgrade electricity infrastructure and expand transmission lines that will add an estimated 200,000 new on-grid connections and has already added 15,000 to date.
  • Unlocking $1.5 billion in Solar Investment in Nigeria. Power Africa helped unlock $1.5 billion worth of solar investment in Nigeria with the signing of 14 power purchase agreements authorizing private firms to develop 1,125 MW of new solar power generation capacity in nine Nigerian states.
  • Reducing Theft of Electricity. In Nigeria, Power Africa support has led to increased collections of electricity bills at three distribution companies, sending a strong signal to other distribution companies that commercial operations can be achieved through instituting effective management processes.
  • Leveraging $1.5 billion in Capital for Clean Energy Projects. Since the launch of Power Africa’s U.S.-Africa Clean Energy Finance Initiative (ACEF), the Overseas Private Investment Corporation (OPIC) and USTDA have approved funding for 33 clean energy projects across 10 African countries. That represents nearly $1.5 billion in potential public and private capital and approximately 358 MW in new renewable power capacity.
  • OPIC closing 22 deals worth more than $2.1 billion. OPIC has committed $2.1 billion in financing and insurance to support nine utility-scale power plants, nine off-grid and small-scale renewable projects, and four micro-finance and investment facilities.
  • OPIC deal to lead to 200,000 new connections in Nigeria. OPIC committed $50 million in financing to Lumos to scale up its off-grid solar power service to about 200,000 Nigerian homes and businesses by end of 2016. Lumos was the recipient of early-stage funding through Power Africa, which provided an initial $525,000 to support product testing and data analytics development.
  • MCC invests $1.5 billion in Power Sector. MCC has invested $1.5 billion in the power sector in sub-Saharan Africa in support of Power Africa’s goals, implementing power compacts in Ghana, Malawi, Benin, Liberia and an energy sector threshold program in Sierra Leone.
  • USTDA portfolio increases 300 percent to power potentially 1.7 million homes. USTDA increased its energy portfolio, which offers the opportunity for the sale of U.S. products, in Africa by over 300 percent, supporting projects that could provide electricity to up to 1.7 million homes.
  • Demand from U.S. companies for USTDA Project Preparation Tool Triples under Power Africa. USTDA’s call for clean energy project proposals yielded about 300 submissions in September 2016 — more than triple the number received in an earlier call this year — indicating a strong signal of investor interest. The largest demand came from Nigeria and Kenya, making up a third of proposals, and 38 proposals were for biomass projects.
  • GE and the U.S. African Development Foundation (USADF), along with USAID and GE Africa award 70 grants worth $7 million to local entrepreneurs. Through the Power Africa Off-Grid Energy Challenge, GE and USADF are creating more than 7,000 new connections to renewable energy in remote areas of nine countries. They aim to create more than 40,000 new connections to electricity.
  • Power Africa Legal Assistance Provides 1,500 MW. Since partnering with Power Africa in 2014, the African Development Bank’s African Legal Support Facility has supported nine African governments in the negotiation of power purchase agreements for a total of 1,500 MW of independent power projects.

We have a lot of work ahead of us, but we have momentum. Our network of people is on the ground, our tools are in place, and the pipeline of deals is growing. We’re confident the megawatts and connections will follow.

Thank you everyone for your efforts and support. Andrew Herscowitz

Written by

A U.S. Government-led partnership that seeks to add 30,000 MW and 60 million electricity connections in sub-Saharan Africa by 2030 > https://bit.ly/2yPx3lJ

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