The U.S. Department of Energy Tuesday announced a new framework for investment — “Beyond the Grid” — a partnership with 27 “investors and practitioners” who commit to direct $1 billion towards off-grid and small scale energy projects in sub-Saharan Africa, in support of President Barack Obama’s Power Africa initiative.
The announcement could help assuage some environmentalists’ and pro-poor advocates’ fears that Power Africa investments lean too heavily on conventional and grid-connected energy projects and threaten to increase carbon emissions while neglecting rural communities that are often the most impoverished and underserved.
U.S. Energy Secretary Ernest Moniz announced the new framework Tuesday at the U.S.-Africa Energy Ministerial co-hosted by the governments of Ethiopia and the United States in Addis Ababa. U.S. Agency for International Development Administrator Rajiv Shah, African Development Bank Director Alex Rugamba, U.S. National Security Council Senior Director Gayle Smith and other notable public figures are participating in sessions that span topics related to access to energy for women, governance and natural gas utilization, among others.
“With close to 600 million people without access to modern-day electricity, it is clear that centralized grid access is not a comprehensive solution for these countries in one of the world’s least urban continents. But through solutions including off-grid and small scale energy projects, we can bring electricity to these rural areas,” Secretary Moniz said in a statement.
Overseas Private Investment Corp. President and CEO Elizabeth Littlefield presented Wednesday a set of guidelines for power purchase agreements, intended to make them more “bankable” in the eyes of potential investors. A multi-agency effort to produce those guidelines — whichDevex detailed in March — arrived at a set of “key elements for attracting financing to energy projects,” according to a statement from OPIC.
“Bankable power purchase agreements are key to unlocking private and public sector capital needed to build generation capacity across the continent — which is the goal of Power Africa,” said Littlefield in a statement released ahead of her address at the ministerial.
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Michael Igoe is a global development reporter for Devex. Based in Washington, D.C., he covers U.S. foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider's perspective.