U.S. aims to double power access in Africa

As China becomes Africa's leading trade partner, the U.S. is making an investment of its own.
Written by Tyler Falk, Contributor

Africa has some of the fastest growing economies in the world. But with two-thirds of the population without electricity, the lack of access to electricity is a barrier for businesses and it hampers growth. Just last May Kenya experienced a nationwide blackout. As one Kenyan industrial leader put it: "Blackouts are crippling industry, they are the bane of the manufacturing sector."

Recognizing this challenge, U.S. President Barack Obama announced the Power Africa initiative aimed at doubling access to power throughout sub-Saharan Africa.

The $7 billion initiative will add more than 10,000 megawatts of electricity generation capacity to help power the equivalent of 20 million homes. The initial phase of the program will partner with Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania to expand electricity access. "These countries have set ambitious goals in electric power generation and are making the utility and energy sector reforms to pave the way for investment and growth," the White House said. The money will be made available in various forms, from technical assistance grants to financing to grants that will spur innovation in off-grid technology.

In addition to government support, the initiative has also obtained $9 billion in commitments from the private sector to fund energy projects. General Electric plans to bring online 5,000 megawatts of new energy in Tanzania and Ghana. Others include Heirs Holdings which plans to invest $2.5 billion to add 2,000 megawatts and Symbion Power which is investing $1.8 billion for 1,500 megawatts (more here).

It seems like the U.S. is trying to play catchup. As CNN notes, China has been investing heavily throughout the continent, passing the United States as Africa's largest trading partner.

But, as Tim Fernholz at Quartz says, the U.S. is taking a strategy that it hopes will differentiate itself from China by working with governments instead of taking on large-scale projects alone. "That strategy is slower going and might lack the big results, both in power generation and propaganda, that come with opening a huge power plant," Fernholz said. "Some aid experts, however, say it is more sustainable."

According to the White House, it will require $300 billion in investments for sub-Saharan Africa to achieve universal access to electricity by 2030.

Photo: Flickr/warrenski

This post was originally published on Smartplanet.com

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