EnergyNet Powering Africa Summit
Remarks by OPIC President and CEO Ray W. Washburne at the EnergyNet Powering Africa Summit
March 1, 2018 | Washington D.C.
Thank you. It’s great to be here today to speak on behalf of the U.S. Government, which has been such a key player in efforts to bring more power to Africa. We recognize that insufficient electricity in Africa presents an urgent crisis for people, families and businesses. And we’ve worked hard to partner with private businesses to build major power plants, and bring off-grid power to the large population of people in Africa who aren’t grid connected.
Together, all the U.S. Government agencies and all of the private businesses that have collaborated on this initiative have accomplished a tremendous amount.
Let me share some numbers. To date the U.S. Power Africa initiative has supported:
- 88 energy projects, which are projected to add more than
- 7,400 megawatts of power, adding
- 11.8 million household and business connections, which have brought electricity to more than
- 58 million people.
And we are well on our way to accomplishing much more. Power Africa is on track to add 30,000 new MW of power, and 60 million connections by 2030.
Power Africa is a collaboration of 12 U.S. Government agencies, and together we’ve helped channel billions of dollars of investment to address Africa’s extreme energy poverty. We’ve significantly increased power generating capacity from Kenya to Ghana, Senegal, Nigeria and South Africa. We’ve introduced the best of American business practices and standards throughout Africa. And we’ve helped American businesses access some of the fastest growing economies on the planet.
This tremendous success is all a testament to the strength of the collaboration both among all the U.S. government agencies that are a part of this initiative, and all the private sector partners we’ve worked with.
I joined OPIC just last fall and since then I’ve been spending a lot of my time traveling around the world and educating people about this small agency that has such an outsized impact in the world. OPIC is the U.S. Government’s development finance institution. We understand that business is critical to advancing development around the world and our model is based on investment rather than aid. OPIC is a small U.S. Government agency that has fewer than 300 employees. But we have a large impact. Our global portfolio that surpasses $23 billion, across 90 countries and more than a quarter of that is invested in Africa.
Six years ago OPIC committed to supporting Power Africa and hit the ground running. We surpassed our initial $1.5 billion commitment ahead of schedule and to date we’ve committed almost $2.4 billion to the initiative. We’ve supported a range of projects from utilty scale plants in Ghana and Senegal to off-grid solar power that is reaching remote communities in Nigeria. Last year, we committed financing and political risk insurance to support construction of a 50 MW power plant in Guinea, one of the poorest countries in Africa, where the economy has stagnated in the wake of the Ebola crisis. In addition to increasing supply, this project is creating a significant number of good paying jobs in a region where the vast majority of the people work in the informal economy.
As a development finance institution, OPIC serves a unique and critical role bridging government and business to develop solutions to major world challenges. Many of these challenges, like insufficient power, demand large investments of time and money. They require the resources of the private sector. OPIC provides loans and guaranties when projects cannot obtain sufficient private sector financing and our presence in these deals helps to mobilize additional private capital. We also provide insurance to help mitigate the political risk inherent in many developing countries and that also helps make private lenders more comfortable with these projects. Last year, for example, OPIC committed $3.8 billion to new projects, but that investment mobilized much more -- $6.8 billion -- to development around the world.
OPIC was established more than 40 years ago, on the understanding that the world’s challenges exceed the resources of the public sector. Today that need for financing to advance development is greater than ever. Indeed, the success of Power Africa in mobilizing so much private investment to build major power plants, and bring off-grid power to very remote communities, illustrates the important role of business and private investors in development.
This is a very exciting time for OPIC. Earlier this month, President Trump released a new budget proposal for 2019 that seeks to strengthen the agency through the creation of a modernized development finance institution with a larger budget and more capabilities. We are thrilled to see this strong endorsement of development finance. With more resources, OPIC can have an even greater impact.
I often say that the investment OPIC supports serves as a stabilizing force in the world. We know that lack of opportunity sows discord and when we invest in development we not only help improve the quality of life for people, we create jobs and business opportunity. The work we’ve supported through Power Africa illustrates how each project delivers multiple benefits. Electricity brings lighting and refrigeration and a level of comfort to individual homes. It also helps farms and factories, schools and hospitals operate on a more regular cycle and this dramatically increases economic opportunity.
But our investment is equally important as a tool for helping businesses gain access to key emerging markets.
OPIC’s development finance model has a long and successful track record. But as the President’s budget states, U.S. development finance tools need to be modernized to remain competitive. The world faces multiple challenges and public sector resources are insufficient to address them. In Africa, the power projects we’ve supported could not have been built without our private sector partners.
Today, many the world’s developed economies have development finance institutions of their own. Over the past 15 years, DFI investments have increased seven times over. Countries from the U.K. to China understand that development finance is a highly efficient – and a highly effective way – to engage in the world and reach some the fastest-growing markets today, which will be the home of more and more of the world’s consumers tomorrow.
So we’re extremely excited that the President’s budget calls for modernizing OPIC and strengthening America’s development finance capability. There’s still a great deal of work to be done to power Africa. I’m eager to strengthen our existing partnerships and forge new ones.