Barack Obama’s Power Africa initiative makes slow progress

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When Barack Obama unveiled a $7bn plan to double access to electricity across sub-Saharan Africa it was hailed as game-changing step that could transform millions of lives.

Crumbling, mismanaged energy systems have long been an oppressive brake on economic growth in the region’s 49 countries, which have less grid-connected electricity than South Korea and about 600m power-starved people.

However, three years after Mr Obama promised to bring “light where currently there is darkness” and “clean energy to protect our planet”, progress on the ground is proving painfully slow.

The Power Africa programme, which the president launched in 2013, is supposed to add 30,000 megawatts of electricity by 2030, equal to nearly a third of sub-Saharan Africa’s existing generating capacity.

But only 374MW from six sizeable power projects is up and running so far, according to data provided to the Financial Times by the US Agency for International Development, co-ordinator of the multiple government agencies and companies involved in Power Africa.

Other large power schemes are due to come online soon and the programme is backing several ventures providing smaller household solar panel systems to more than 450,000 customers.

But the rate and nature of progress is raising pressure on an initiative that follows a spate of other well-intentioned efforts to transform a continent blighted by some of the world’s most intractable development problems.

Concerns about Power Africa’s progress have started to surface in some of the companies involved in the initiative, including General Electric, the US conglomerate.

Power Africa is a “well-intentioned effort with a lot of smart people,” John Rice, GE’s vice-chairman, told a conference in Rwanda in May.

“But if you look today at the number of megawatts that are actually on the grid directly related to the Power Africa initiative, it is very little,” he said.

GE was an early backer of the programme, which has garnered more than $31bn in private sector commitments.

But Mr Rice said it had taken 16 months to get Ghana’s parliament to approve an agreement for an emergency power scheme.

“I don’t know how long it would take if it wasn’t an emergency,” he said.

Chart: Electricity gap

Defenders of the initiative urge patience for a programme intended to do more than simply act as another type of foreign aid venture building new projects from scratch.

USAID says the total pipeline of projects that have either reached financial close or will do so shortly accounts for more than 5,600MW of capacity.

Power Africa has deployed a team of experts acting as “transaction advisers” to work with companies and governments to accelerate work on often complex power schemes that many countries have never attempted before.

Gayle Smith, USAID’s administrator, says the idea is to create an energy market in Africa that can “run on its own”.

“I would say on that metric we’re doing very well,” she told the FT. “I don’t think there was any expectation that we were going to in some way instantly close a lot of deals and build energy production facilities on the cheap or quickly.”

Some of the new Power Africa electricity is from renewable energy projects, such as a $24m utility scale solar plant in Rwanda that officials say is the first of its kind in East Africa. But more than half is from fossil-fuelled power plants, including one in Senegal using heavily polluting fuel oil.

Development experts, however, say it would be hypocritical for wealthy western countries still dependent on fossil fuels to criticise this move.

“Energy shortages are so tremendous in Africa that countries are desperate for whatever power sources they can get,” says Todd Moss, a former state department official who is chief operating officer at the Center for Global Development, a think-tank.

African power schemes can typically take five to 10 years from inception to completion, experts say.

Chart: Electricity gap

Some analysts say Power Africa should put greater focus on the rapidly expanding off-grid solar panel businesses, which can put electricity in people’s homes much faster.

“I think they [Power Africa] are just way, way behind the curve,” says Kevin Watkins, executive director of the Overseas Development Institute, a UK think-tank.

But other renewable energy developers say the slow progress of the initiative is to be expected.

“Things take longer in Africa,” says Eddie O’Connor, whose Mainstream Renewable Power company has been operating in Africa since 2009.

Lack of government experience is one problem, and so is corruption, he says. Mainstream was once asked to pay for a political leader’s new Humvee when it was seeking approval to use land for a new wind farm. Mainstream refused the request.

Still, other energy businesses operating in Africa say the US programme has already achieved a lot by boosting the number of companies investing in the continent.

“The legacy of Power Africa is going to be the massively favourable investor sentiment it has created, ” says Reda El Chaar, executive chairman of Dubai-based Access Power renewable energy company. “Having the president of the US saying Africa is a place where we want to invest is a huge, huge vote of confidence.”

 

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