Obama’s ‘Power Africa’ Initiative Showing Results, Draws Criticism

Obama’s ‘Power Africa’ Initiative Showing Results, Draws Criticism

Grand Renaissance Dam Photo: Wikipedia
Grand Renaissance Dam Photo: Wikipedia

To date, our private sector Founding Partners have pledged to develop nearly 10 GW of critical generation projects in the five of the Power Africa focus countries, resulting in over $14.7 billion in investment in these countries’ power sectors,” notes the Power Africa website update.

First Transaction

The first official transaction came in September, when it was announced Power Africa will provide transactional and technical advice to the Government of Ethiopia and the Ethiopian Electric Power Corporation, which entered into a project agreement with Reykjavik Geothermal to establish the Corbetti Geothermal Power Plant – the first independent power project in Ethiopia’s history.

“Power Africa brings significant resources and high-level support to the geothermal efforts in Africa, and we are working to encourage the US geothermal industry to engage in their development.” Karl Gawell, Executive Director, Geothermal Energy Association told AFKInsider. “We recently formed an East African Geothermal Partnership with USAID and the US Energy Association, and it will be a vehicle for channeling US and industry assistance.”

In November, Power Africa supported the initial phase of privatizing the Power Holding Company of Nigeria and is backing efforts to improve operations and maintenance, as well as obtain additional investment for a 2,000 megawatt increase of power generation by 2018.

Power Africa closed on agreements with the Government of Kenya and Aeolus Kenya Ltd. for construction of the 60 megawatt Kinangop Wind Park and is also supporting implementation of a grid management program for integration of renewable energy into Kenya’s grid.

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Another recent Power Africa project included approving a loan guarantee for the Kiwira River Hydro Project in Tanzania, which will allow the project to facilitate local commercial finance. Tanzania is the focus of Power Africa’s “Big Results Now!” program, “which is establishing new delivery units within government ministries.”

And the winners of the first round of the GE Africa – USADF Power Africa Off-Grid Energy Challenge were announced in November, resulting in $100,000 grants each to six African-led private companies and organizations in Kenya and Nigeria, including Solar World, Afrisol Energy and Mibawa in Kenya, and Green Village Electricity Projects, Trans Africa Gas and Electric, and Afe Babalola University in Nigeria. The second round is underway.

Other notable renewable projects in the works include: NextGen Solar is developing several solar power plants, including 70 megawatts in Tanzania, 50 megawatts in Kenya, 35 megawatts  in Ethiopia, 30 megawatts in Ghana and 15 megawatts in Nigeria, representing total investment of $600 million; Nigeria Solar Capital Partners, a joint venture with US-based Industry Capital, is proposing to develop and operate up to 500 megawatts of  utility-scale solar facilities in Nigeria by 2020; Hecate Energy is completing a 50 megawatt PV solar project in Tanzania; Harith General Partners is investing $70 million in the 300 megawatt Lake Turkana Wind Power project in Kenya; and, Aldwych International is investing is developing 400 megawatts of wind power in Kenya and Tanzania.

Oil and Gas Development?

Power Africa’s fine print also includes separate deals with Uganda and Mozambique for “responsible” oil and gas development through their involvement in the  Governance and Capacity Initiative (EGCI), a US Department of State-led interagency effort to provide technical and capacity building assistance to help these countries establish the capacity to manage their oil and gas sector resources responsibly.

“The commitment of $7 billion to Africa’s power infrastructure will obviously have an impact, but this amount is not solely allocated toward renewable energy capacity building,” Gareth Blanckenberg, Industry Analyst for Energy & Power at Frost & Sullivan Africa told AFKInsider.

“It sounds consistent with the Obama administration’s domestic ‘all of the above’ energy initiatives,” Tyson Slocum, Director of Washington, D.C.-based Public Citizen’s Energy Program told AFKInsider. “Since 2009, the Obama administration has had a very active [oil and gas] fracking program out of the State Department that works in Europe, South America and Asia.”

Uganda and Mozambique have “world class hydrocarbon resource potential and expect to receive sizable, near-term financial windfalls from the development of their oil and gas resources,” according to the US State Department’s Governance and Capacity Initiative website, which notes to program is to “ensure sound and transparent energy sector governance for the benefit of national economic development.” The program also “supports a broad range of U.S. foreign policy objectives and is tightly coordinated with our overall bilateral energy relationships.”

Part of the problem critics have with this part of the Power Africa program is that it seems to play on Washington’s fear of China, which is pouring billions of dollars into the continent – particularly for oil development. 

The White House Power Africa Fact Sheet mentions “recent discoveries of oil and gas” and “use of natural resources” six times as playing a “critical role” in “near-term global energy security.”  Indeed, new oil and gas finds offshore of Mozambique have drawn international attention. According to a United Nations report released January 28, foreign direct investment to areas outside of North Africa rose from $39 billion in 2012 to $42 billion in 2013, with $7 billion going to Mozambique alone.