The plan, called Power Africa, will include a $7 billion pledge from the U.S., financed primarily by $5 billion in funds from the Export-Import Bank and $1.5 billion by the Overseas Private Investment Corporation. The program is also funded by $9 billion from private entities, with General Electric among the top contributors. Power Africa aims to add more than 10,000 megawatts of “cleaner, more efficient” power to a region in which two-thirds of residents lack access to electricity and expand energy access to 20 million new African households and commercial buildings.
So far, it’s unclear where exactly the power will come from — how much of it will be from renewable sources and how much from oil, natural gas and coal. Though costly, fossil fuels dominate the energy mix in Africa — in South Africa, where Obama announced the project, 93 percent of electricity comes from coal, though the country is showing rapid growth in renewable energy. The White House press release states Power Africa will build off of “new discoveries of vast reserves of oil and gas, and the potential to develop clean geothermal, hydro, wind and solar energy” in Africa. It also claims the project will “help countries develop newly-discovered resources responsibly, build out power generation and transmission, and expand the reach of mini-grid and off-grid solutions.”
Some of the funding will go specifically towards renewable energy — OPIC and the U.S. Trade and Development Agency pledged up to $20 million in grants to develop renewable energy projects, and OPIC has a cap on carbon emissions from the projects it funds, which means its additional $1.5 billion might be limited to relatively lower-emissions projects. And, though vague on specifics, Obama did mention renewable energy when announcing the project Sunday:
In partnership with African nations, we’re going to develop new sources of energy. We’ll reach more households not just in cities, but in villages and on farms. We’ll expand access for those who live currently off the power grid. And we’ll support clean energy to protect our planet and combat climate change.
Last week during his climate change address, the president spoke of the importance of putting developing nations on paths toward sustainable growth, and said that “by developing and disseminating clean technology and sharing our know-how, we can help developing nations leap-frog dirty energy technologies and reduce dangerous emissions.” Already, Africa has been hit hard by the effects of climate change, including drought and spikes in food prices. Climate change has emerged as a security threat to Sub-Saharan Africa, as water and food shortages and destruction to property and infrastructure have the potential to heighten tensions in the region.
Africa has long struggled to provide reliable power to its population of more than 1 billion — as of 2011, the installed generation capacity of Sub-Saharan Africa was just 68 gigawatts, which is about the same as Spain’s. The country suffers from frequent blackouts and interruptions in electricity service, leading many residents to rely on expensive generators. And around 70 percent of Africans aren’t connected to the power grid at all, relying instead on resources from aid programs like the World Bank’s Lighting Africa, which distributes rechargeable LED lights throughout towns and villages in Africa. But the U.S. isn’t the only country to take notice — China also recently invested several billion dollars in electricity development programs in Africa.