Report: How Biden can 'go big' on Power Africa

Power Africa was launched during former U.S. President Barack Obama’s administration with the aim of increasing access to electricity across the African continent through projects creating new connections and increasing generation capacity. The interagency initiative has continued to operate since — though some experts and former officials say it’s time for a bit of a reboot.

A new paper released this week outlines steps President Joe Biden’s administration can take to improve the initiative based at the U.S. Agency for International Development. They range from the relatively straightforward — for example, boosting the budget to $300 million annually and reappointing a National Security Council lead to co-chair the Power Africa working group — to the more complex, such as setting new goals around power reliability and costs.

The reliability and cost of electricity are among the most persistent power-related challenges that people on the continent report, Katie Auth said, policy director at the Energy for Growth Hub, during a launch event on Wednesday for the new report “Going Big on Power Africa: Fortifying the Initiative for Today’s Urgent Challenges.”

Power Africa’s development impact will remain small if those issues aren’t addressed, she added.

Since 2013, Power Africa has closed 124 transactions, which account for more than 11,000 additional megawatts. It is often touted as a success story for how an interagency process can be set up to effectively harness a variety of U.S. government agencies’ resources and skills toward a single goal.

Power Africa has focused on individual transactions and seeing them through the process from development to investment. However, those deals are often not competitively procured, so Power Africa should now help countries design a competitive and transparent process for planning and procuring power projects, Auth said, who previously served as the acting deputy coordinator at Power Africa.

The United States can also work better with American companies and industries in the sector, helping identify those with a comparative advantage and then reducing risks and assisting them in accessing new markets, said Nilmini Rubin, senior associate at the Center for Strategic and International Studies, which organized the event. That means thinking beyond just companies in the energy sector and including companies in the information and communications technology industry, Rubin said.

One of the report’s recommendations concerns an ongoing debate in the development community: whether aid should fund fossil fuel-related projects. The report tries to strike a balance, urging the U.S. and other wealthy nations to end public financing for coal and oil but to maintain some financing for natural gas in “energy-poor, low-emission economies.”

Auth said Power Africa should focus on helping countries transition to “prosperous low carbon economies” but added that it would look different for each country based on their specific resources and economic priorities.

“Talking about which tools the U.S. takes off the table before we talk about how to massively scale up energy transitions is misguided,” she said. While renewable energy and off-grid or mini-grid solutions may work well for some, particularly rural households, countries also need to support industry and large-scale economic activity needs. By supporting countries with the right energy mix as they transition, the U.S. will benefit diplomatically and ultimately have a greater impact, she said.

Implementing such a nuanced approach will be challenging, and the Biden administration will need to issue clear policy guidance and develop a simple and straightforward process, Auth said.

While there hasn’t been a clear signal about the administration’s position on Power Africa, experts have said it could play a role in its broader climate ambitions.

In working toward increasing people or households with access to electricity, Power Africa has focused on home solar systems and mini-grids, in part because a lot of the innovations and companies working in those fields are American.

Moving forward, Power Africa should steer innovation to emerging markets and use the U.S. government’s research and development work to support technology and manufacturing of products that can be sold globally, said Kate Steel, chief operating officer and co-founder at Nithio — a start-up focused on financing energy access in Africa. She also previously worked at Power Africa.

One thing the new administration could do is look at U.S. government-supported research and development efforts that may have been passed over for domestic use to see if they could have global applications, she said.

Some of the barriers Power Africa faces now are not related to the private sector, which it was designed to help mobilize, but rather public needs. So as it moves forward, the initiative needs to think about how it can better help public utilities improve and how it can use technical assistance to help governments create suitable regulatory environments to allow for more certainty and create more bankable projects, the experts said.

One way to help better manage the initiative is to bring back the NSC’s role in co-chairing the Power Africa working group, a role which existed during the Obama administration. Doing so will help manage interagency differences and help tie Power Africa decisions to larger policy priorities, Auth said.