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To help amplify the successful implementation of the Electrify Africa Act through the USAID-led Power Africa initiative, SID-Washington is hosting a program on Capitol Hill with leaders engaged in this initiative. According to the June USAID Report, Power Africa has helped the private sector to invest $14 billion of its own money in 69 power projects in sub-Saharan Africa at a low cost to U.S. taxpayers. Through a keynote address by House Foreign Affairs Committee Chair Ed Royce (R-CA) and a panel of leaders from different sectors, we will look at the early success of this initiative and discuss future implementation planning as well as challenges and opportunities for businesses and investors going forward.
Welcome and Introduction: Mark Johnson, SID-Washington Board Member and COO, International Development Services, Tetra Tech
Opening Keynote: Rep. Ed Royce (R-CA), Chairman, House Foreign Affairs Committee
Panel Moderator: Nilmini Rubin, Vice President of International Development, Tetra Tech
Make sure to read NRECA's blog post "Why Rural America Cares About Electrifying Africa" written in follow-up of this event!
*This event is open to SID-Washington Institutional Members only.*
**Please note: The event will NOT be held at the SID-Washington office. It will be held at the Rayburn House Office Building Room 2200.**
Byron Radcliffe, Chairman of SID-Washington, started off the event with the opening remarks, thanking SID-Washington for hosting the event, and the panelists for participating. He then introduced Mark Johnson the COO of International Development Services, Tetra Tech.
Mark Johnson, Tetra Tech, began the panel by welcoming the audience, and raised general points about the history and accomplishments of the USAID-led Power Africa initiative. He stressed the program’s goal of spurring energy access across the entire continent, and raised some benefits on the domestic front, including its low cost to US taxpayers. After this overview, Mr. Johnson handed the floor to panel moderator, Nilmini Rubin.
Nilmini Rubin, Vice President of Tetra Tech, introduced the first panelist in more detail – Mr. Andrew Herscowitz, the USAID Power Africa Coordinator.
After Ms. Rubin’s introduction, Andrew Herscowitz, USAID, thanked SID-Washington for organizing the types of events where both supporters and critics of the Power Africa initiative could convene to discuss the program’s successes and its implications in the region. Mr. Herscowitz then spoke about the current administration’s approach towards Power Africa. He mentioned landmark bills such as the Electrify Africa Act, which helped lead to new energy initiatives such as Power Africa. Additionally, Mr. Herscowitz noted how several senior officials such as Secretary Rex Tillerson and USAID Administrator Mark Green commended the Power Africa as a good blueprint for foreign assistance. Additionally, Mr. Herscowitz stressed how USAID could encourage private investment through this initiative, which in turn could stimulate domestic investment as well.
Mr. Herscowitz also elaborated on other strengths of Power Africa, including the low-burden taxpayer model. Instead of increasing public taxpayer dollars, the initiative encourages private partners to commit to these projects through financial support. Additionally, Mr. Herscowitz noted that approximately 75% of Power Africa projects use renewable energy, which indicates the administration’s desire to create a sustainable energy environment in African states. Finally, Mr. Herscowitz commented on one of the greatest aspects of this initiative which is the potential to increase US exports and domestic jobs. He mentioned that creating jobs in the U.S. is a priority for the administration, and international development programs such as Power Africa would support this commitment.
After Mr. Herscowitz’s overview, Nilmini Rubin introduced the keynote speaker, Rep. Ed Royce, the Chairman of the House Foreign Affairs Committee. Ms. Rubin noted several of Representative Royce’s accomplishments, including his work in creating market-driven measures to drive people out of poverty around the world.
Rep. Ed Royce (R-CA), Chairman of the House Foreign Affairs Committee, gave an overview of the Electrify Africa Act – the landmark legislation that would eventually pave the way for the Power Africa initiative. Mr. Royce elaborated on the difficulties for private partners to invest in Africa’s energy market, as occasional power outages across the region translated to a risky investment opportunity for private businesses. Thus, Mr. Royce and his team led an initiative that would focus on how to build a system to guarantee reliable electricity to the continent.
Chairman Royce also stressed how the lack of electrification in Africa is a serious social and health-related issue. He noted that reading in dimly-lit rooms with kerosene lamps, for example, is detrimental to the health and education of children in this region, as this could lead to poor eyesight and pulmonary issues.
Finally, Chairman Royce explained the political maneuvering that occurred to successfully implement legislation for a reliable and sustainable energy environment for Africa. Through convincing various members in Congress the urgency of increasing energy access in Africa, the effort proved to be a worthy challenge. In closing, Chairman Royce stressed that a well-rounded and balanced legislation is key to success. Additionally, he noted to keep in mind the best use of development dollars while bringing in private investment and leveraging adequate support from taxpayers.
After Chairman Royce’s keynote speech, Ms. Rubin started the panel discussion with the first question posed directly to Mr. Herscowitz. She asked the Power Africa Coordinator some of his most memorable and proudest moments in the field.
Mr. Herscowitz recounted his experiences during the height of the Ebola crisis, while most public and private hospitals were in a state of emergency. Because of this, Mr. Herscowitz and the Power Africa team coordinated with private partners to get generators in major treatment units across West Africa, which proved to be a success. He mentioned this as his proudest moment as the Coordinator because he was able to witness the strength of the Initiative’s network and notice how well the various stakeholders were able to coordinate with one another to achieve its mission.
Ms. Rubin followed up by asking the following question: What agencies are involved in the Power Africa initiative and how do they work together. In addition, what are some ways these agencies can improve the way they collaborate with one another?
Mr. Herscowitz noted that various stakeholders such as USAID, the State Department, OPEC, and USTDA are heavily involved in the process of establishing various policies and ties with private and public individuals. He also mentioned that local governments in Africa should focus on domestic issues such as social security, defense, and healthcare, while programs like Power Africa can implement the financial infrastructure necessary for a healthy and sustainable energy environment in the region.
Finally, Ms. Rubin asked a question regarding involvement – how could professionals in both the public and private sector contribute to the work that Power Africa has been doing?
To this question, Mr. Herscowitz noted that the Initiative could collaborate with partners beyond a purely financial relationship. For instance, he noted that the initiative could gain more support from organizations that handle legal and communications work.
Ms. Rubin thanked Mr. Herscowitz for his thorough explanation of the initiative. She then turned over the stage to Dan Waddle, the Vice President of the National Rural Electric Cooperative Association (NRECA).
Dan Waddle, began by explained the NRECA’s general business structure in the US and how this model has succeeded in Africa. The basis of this model is intended to extend electrification programs through grant financing in various regions across the US. The NRECA has over 1000 electric cooperatives and serves about 3 million Americans in the US.
As for their work in Africa, Mr. Waddle commented on the lack of success in its early years. He commented that there were some institutional and legal mechanisms that were not in place when they attempted to start new projects in certain regions of Africa. The biggest hurdle, Mr. Waddle said, was the lack of education and skill-building services available for local populations, which is why he had emphasized the importance of building human capacity to sustain the various infrastructure projects that the NRECA would like to support.
Ms. Rubin followed up by asking why it takes time for various sectors to successfully execute these electrification programs in Africa.
Mr. Waddle responded by noting the extremely meticulous procurement guidelines that various government programs must follow. The process of getting materials and infrastructure to ports and remote areas takes a long time, he said. Though this process may be lengthy, Mr. Waddle did note that procurement guidelines are part of a crucial step in ensuring fair and long-lasting infrastructure projects.
Ms. Rubin thanked Mr. Waddle for his insights, and then introduced the next panelist.
Justin DeAngelis, Denham Capital Management, is the Managing Director of a private equity firm in charge of making investments in the energy industry around the world. The firm collaborated with Power Africa to invest in low-cost power projects. Mr. DeAngelis noted that besides capital, Africa and many other emerging markets are missing the ability to put together complex infrastructure projects. To solve such deep-rooted issues, Mr. DeAngelis stressed Denham Capital’s commitments in the African continent, and to establish firm ties with the energy industry in the region for a sustainable and efficient energy future.
In addition, Mr. DeAngelis responded to some of the criticisms of the Electrify Africa Act, a measure that preceded the Power Africa initiative. Some critics have commented on why the government had to be involved in rural electrification in Africa and not leave it to the private sector to manage these projects.
To this critique, Mr. DeAngelis responded by emphasizing how Power Africa has enabled private partners to overcome some coordination challenges. It allowed for human and financial capital to be integrated as fast as possible, which is why public-private partnerships like the Power Africa Initiative have been proven to be so successful.
Finally, Ms. Rubin introduced Mr. Kartik Jayaram, the final panelist of the event.
Kartik Jayaram, Senior Partner, McKinsey & Company, Nairobi, elaborated on his role in the Power Africa Steering Committee – a panel comprised of CEOs and other executives of major companies in Kenya whose aim was to discuss how to finance electrification projects in the region. The Committee came up with ten potential solutions to approach the financial barriers facing the country. Mr. Jayaram called this committee of CEOs as the “brain trust for the government on energy” – highlighting how public-private partnerships are a key to Africa’s energy future.
Ms. Rubin asked Mr. Jayaram on the nature of China’s engagement with Africa and how this approach differs from the United States’ business model.
Mr. Jayaram mentioned a publication that McKinsey & Co. drafted about the differences in Chinese and American investment structures in Africa. He noted that the model which China has followed is heavily infrastructure-led and driven by debt. The debt-fueled model, he argued, is not sustainable for African countries because many are already in default. In addition, the report showed that most of the infrastructure projects were private-sector heavy. In contrast, Mr. Jayaram believes Power Africa is a unique model for electrification because it is a public-private partnership – a specific arrangement that is much more sustainable and convenient, as many American business models follow this structure already.
Finally, Ms. Rubin asked Mr. Jayaram to elaborate on America’s national security interests in the Middle East and North Africa, and why Chinese interests in the region could challenge them.
Mr. Jayaram reiterated that Power Africa and its various sister projects are crucial for US national security interests as it would spur employment in both domestic and international spheres. Moreover, he emphasized that taking American business interests to Africa and cultivating a healthy business environment will be beneficial for future bilateral relations.
Ms. Rubin thanked all the panelists and speakers, and began the Q&A portion of the event.
For the photos from this event, please click here.