The government of Sweden has accepted an invitation from U.S. President Barack Obama to join Power Africa, an initiative to double access to energy in sub-Saharan Africa. Sweden will commit an additional $1 billion to complement the U.S. government’s $7 billion investment in Africa’s energy sector, according to Anders Borg, Swedish minister of finance.
“If we take a really long term perspective … then we will have an Africa with 2.2 billion people” by 2050, Borg said at the Corporate Council on Africa’s Business Forum’s Power Africa Luncheon on Monday.
The minister added that if access to consistent power can help those people achieve middle-income status in that time, that means “in Africa we have two new Chinas coming in the next 30 to 40 years.”
Sweden’s commitment will include credit guarantees and other measures to help mitigate the risks to private sector investors in African energy, Borg said.
Power Africa currently operates in six countries — Tanzania, Liberia, Ethiopia, Ghana, Nigeria and Kenya — but the initiative is likely to expand well beyond that, according to some of its leaders. Andy Herscowitz, Power Africa coordinator, noted that his team is currently hiring “regional transaction advisers” to help the initiative address cross-border power projects.
Elizabeth Littlefield, president and CEO of the Overseas Private Investment Corp., suggested that the only reason Power Africa is currently limited to six countries is a lack of resources, urging that it expand to include all 54 African nations.
For that to happen, Power Africa will need to attain lasting power to live beyond the current administration. Two bills — the Electrify Africa Act in the House and Energize Africa in the Senate — could help to ensure Power Africa’s longevity and contribute to a more robust staffing commitment by the U.S. government, Littlefield said.
‘Speed’
Private sector representatives at the event asserted that the most important thing for Power Africa to address is how fast it can get things done.
"It’s all about speed," pointed out Joseph Brandt, president and CEO of CountourGlobal, adding that Power Africa's leaders should focus on the time it takes to "put capacity on the ground" and ask themselves: “How do we speed things up?"
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One answer is standardization. When countries standardize power purchasing agreements and determine that those agreements are not just models, but the actual documents that will structure deals, "then you have a way to accelerate," Brandt said.
Paul Hinks, chairman of the Corporate Council on Africa and CEO of Symbion Power expressed a similar sentiment: "Every agency involved in Power Africa must ask themselves if their own processes match.”
The interagency team today released the first-ever Power Africa annual report for 2014, which notes that the initiative has already reached 25 percent of its overall megawatt goals and the $7 billion public investment has so far leveraged $18 billion in private capital.
Herscowitz was careful, though, to manage expectations.
"That sounds like a great number, but we had the luxury of working on deals that have been in the works for six or seven years," he said, adding that there is "no low-hanging fruit anymore."
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