New UK – USA partnership to help power up African homes and businesses

Sierra Leone Telegraph: 8 December 2015

MALIA landmark partnership between the UK and US will help millions of people across Africa get access to clean energy, UK International Development Minister Nick Hurd and Associate Administrator of USAID Eric Postel have announced.

The new partnership between the UK’s Energy Africa campaign and the US’s Power Africa initiative will leverage much-needed private investment, develop networks to share power across borders and harness geothermal resources to boost access to electricity across the continent.

The Energy Africa campaign aims to accelerate universal energy access in sub-Saharan Africa by boosting the household solar market.

It will do this by removing policy and regulatory barriers to market expansion, and better co-ordinating donor support to the sector as a whole.

Six African countries have already signed up to the campaign: Ghana, Malawi, Rwanda, Nigeria, Sierra Leone and Somalia. Discussions are progressing with eight more countries.

Power Africa is a US-led initiative which aims to add at least 30,000 megawatts of new, cleaner electrical power capacity and 60 million electrical connections across sub-Saharan Africa by unlocking their substantial wind, solar hydropower, natural gas and geothermal resources.

Minister_Hurd_and_Ghanas_Honourable_Minister_of_Power_Dr_Kwabena_Donkor_-_GovUKUK International Development Minister Nick Hurd said: “It is shocking that 600 million Africans still live without power at home. This is not just holding back individuals; it is holding back an entire continent. (Photo: Minister Hurd and Ghana’s Honourable Minister of Power Dr Kwabena Donkor.)

“No one can tackle Africa’s energy challenge alone. We will only make progress if we work together. That is why this new partnership is so important. The US has led the way over the past few years with its Power Africa campaign. Together with our Energy Africa campaign we can boost access to reliable, clean and affordable household energy, helping millions of people to lift themselves out of poverty.”

USAID Associate Administrator Eric PostelUSAID Associate Administrator Eric Postel said: “The United States Government is thrilled to work closely with DFID on the Energy Africa campaign, to accelerate the household solar market.

“In partnership with DFID, development agencies, African governments, the private sector, and civil society, we can help accelerate Africa’s energy path toward economic and environmental sustainability and ensure access to affordable, reliable, sustainable, and modern energy for all.”

A Memorandum of Understanding (MoU) between the two countries was signed at the United Nations Economic Commission for Africa (UNECA) and New Climate Economy event “Climate change in Africa: Financing low-carbon pathways for Development” at the COP21 UN climate change conference in Paris.

The new deal will harness the skills, expertise and investment power of the private sector to help improve energy access, boost economic growth and reduce poverty.

The UK and US will work with African governments, donors and private sector organisations to deliver Global Goal 7 in Africa: ensuring access to affordable, reliable, sustainable and modern energy for all.

The MoU commits Energy Africa and Power Africa to work together in the following areas:

Boosting investment in clean energy through joint projects

Expanding off-grid energy

Developing networks to share power across borders

Helping more women participate in the energy sector in Africa

Developing regional geothermal energy

Strengthening donor coordination across the sector

Dr  Kandeh Kumkella -AAI 2013Two months ago, Sierra Leone’s presidential hopeful – Dr. Kandeh Yumkella (Photo) made an optimistic assessment of Africa’s energy needs and the challenges ahead in meeting the continent’s vision of energy for all by 2030. This is what he told the Sierra Leone Telegraph.

“Africa needs over $40 billion annually to expand energy production capacity. We have a total of about 2 Gigawatts of power in sub-Sahara Africa and we need to raise that to about 6-8 Gigawatts in order to begin to achieve universal access to energy by 2030.

“In order to achieve this, we need as I said earlier we need $40 billion investment annually. Fortunately the new president of the African Development Bank (ADB) has also adopted energy as his number one priority, and he was very clear about this.

“So you can see that my vision was correct ten years ago. This is what I have been lobbying the world about. The new president of the ADB has said that without energy, nothing will work in Africa.

“The G20 has picked this up and they’ve asked me to put this agenda together and they will look at it when the heads of state meet in November. So we are hoping that big finance will come forward. Already the European Union has committed $2.5 billion for the next seven years.

“This EU funding will leverage an additional $10 billion. So it’s not a bad start, but it’s not enough. And so we are hopeful, because China is the next Chair of the G20 and they will also take the agenda forward.

“Obama has got the Power Africa, which is pledging about $32 billion. So there is a lot of work to be done to get to the $40 billion target that Africa needs to achieve universal access to energy. These pledges will be the seed corn that will lever the additional funding.

“But what we need to know is that investment will not come, if we Africans do not put strong governance structures in place. Eighty percent of the energy utility companies in sub-Sahara Africa are bankrupt.

“And you can’t have any investor coming here to invest in independent power production if the power utility company cannot collect utility bills. You cannot ask investors to invest if the energy sector is not governed properly, and if the laws are not there to protect their investment.

“So asking people to give money is one thing; having a conducive policy environment and the transparency and sector governance to give confidence to a private investor who wants to come to Sierra Leone for example, to build a new hydro-electricity dam that will generate about 3 Megawatts of electricity to power the country, will need to have the utility bills collected for over thirty years in order to recoup their investment.

“You must have strong sector governance structures with transparency in place to attract that level of investment, without which it’s not going to work.”

kandeh speaking with Telegraph editor1Abdul Rashid Thomas asked Yumkella: Given such a huge challenge for the African governments, what prospect is there for accountability, transparency, and good governance to be put in place in order to lever that level of investment in Africa’s energy resources – you are talking about $40 billion, and the change that has to take place is going to be quite huge?

“I remain hopeful. I am an eternal optimist who believes that our governments understand that whether it is energy, agriculture, the health sector or education, you need clear and transparent public policy; you need clear and transparent sector governance structures; you need strong and credible institutions to manage those sectors, ” said Yumkella.

Kandeh also said that: “If corruption has consumed those institutions, people will not invest. So what are we going to do? In the energy sector in most African countries, there is too much corruption and that needs to change, otherwise investors will go to Asia where they will get a good and safe return for their money.

“So we need to have clear energy policy, good investment protection laws that is strongly administered and policed; you need good power purchase agreements that will guarantee their return in investment, and consumers have to know that if you want reliable electricity you have got to pay.

“It is not an easy public policy for most African governments who believe that because people are poor so energy should be cheap. But the investor has to recoup their investment. So how you achieve that balance between affordability and commercial viability is the challenge for Africa.”

Yesterday, Britain and USA signed a landmark agreement that could lever the investment Africa needs, Will they succeed?

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