OPIC to play key role in President Obama’s Power Africa initiative
OPIC, which has a long history of supporting projects in Sub-Saharan Africa, will now play a key role in a new U.S. initiative to double access to electricity in Sub-Saharan Africa. The region has in recent years seen strong economic growth and an expanding consumer class, but limited power remains a major problem, with more than two-thirds of the population lacking regular access to electricity. These severe shortages limit overall quality of life as well as business and agricultural activity.
The new Power Africa initiative is designed to help several African countries work with private sector investors to develop extensive energy resources, from oil and gas to geothermal, hydro, wind and solar, in a responsible manner. It will also help build out power generation and transmission infrastructure and expand the reach of mini-grid and off-grid power generation to serve the large rural population that is especially hard hit by energy shortages.
OPIC has agreed to support the initiative in three key ways. The agency will
- commit up to $1.5 billion in financing and insurance to energy projects in Sub-Saharan Africa.
- work with the U.S. Trade and Development Agency to provide $20 million project preparation, feasibility and technical assistance grants. These grants will be provided through the U.S.–Africa Clean Energy Finance Initiative (US-ACEF) and supported by the new U.S. – Africa Clean Energy Development and Finance Center (CEDFC) in Johannesburg, South Africa.
- co-host an African energy and infrastructure investment conference with the U.S. Agency for International Development (USAID) in 2014 to help highlight the opportunities of investing in Africa’s electricity sector and the tools available from different U.S. Government agencies to support these investments.
The initiative will focus initially on Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania, all countries where OPIC has supported projects. The agency has supported a range of energy projects on the continent from the expansion of a geothermal power plant in Kenya to the construction of a “tri-fuel” power plant in Togo.