In 2013, President Obama unveiled the Power Africa initiative aimed at doubling the number of people in Sub-Saharan Africa who have access to electricity. OPIC is playing a key role in this initiative and has committed to provide $1.5 billion of financing and insurance to develop energy projects throughout Sub-Saharan Africa over the next five years.
The need for more electricity is great in Sub-Saharan Africa, where almost 600 million people – about 70 percent of the population -- cannot turn on a light switch or otherwise access the power that is taken for granted throughout much of the rest of the world. That’s the equivalent to the entire population of 33 countries in and around Western Europe living in the dark.
Sub-Saharan Africa has seen significant economic progress in recent years with growth rates in many countries that are among the highest in the world. But severe energy shortages limit growth prospects and impact every aspect of life from food production to access to healthcare and education and overall business activity.
The Power Africa initiative will help attract private investment to develop more of Africa’s extensive energy resources including oil and gas, geothermal, hydro, wind, solar and biomass, while also building out power generation and transmission infrastructure.
Power Africa will harness and catalyze private investment new electricity projects. OPIC, which has a long history of working in Africa and supporting large infrastructure projects throughout the developing world will support the initiative by providing financing and political risk insurance to power projects.
Our approach is broad.
OPIC can support power projects in all countries in Sub-Saharan Africa and we are able to support projects that run both on traditional fuel and renewable resources. The Agency is also interested in supporting both on-grid and off-grid power projects. This is important because so much of Africa’s rural population lives off the grid.
We develop solutions for moving projects forward.
One such example is the Bankable PPA, a document OPIC developed together with other U.S. Agencies involved in Power Africa, which outlines the 10 essential elements for a power purchase agreement, the contract between a power producer and offtaker that is crucial before construction can proceed on a major power plant.
We innovate tools, products and processes to accommodate investors.
In addition to our core finance and political risk insurance products, OPIC also seeks to develop new partnerships and processes to support investors.