Inside Africa blog

Legal developments around Africa

Electrifying Africa: A U.S. initiative for Africa

Amy Sandys
January 13, 2016

Posted in Power Southern Africa Blog post

The power shortages and consequent economic difficulties faced by sub-Saharan Africa may slowly begin to improve after the U.S. Senate gave its nod to the long awaited Electrify Africa Bill in December 2015.

The Electrify Africa Bill establishes a key U.S. policy to promote first-time access to affordable and reliable electricity for at least 50 million people in sub-Saharan Africa and encourage the installation of at least 20,000 additional megawatts of power to the grid in that region by 2020, using a broad mix of power solutions such as coal, wind and solar power.  In order to reach this goal, the Bill encourages partnerships between the U.S., sub-Saharan African countries, international organisations, African regional economic communities, cooperatives and the private sector.

The Bill requires the U.S. President to craft a multiyear strategy to facilitate this policy and urges the U.S. Agency for International Development, the Trade and Development Agency, the Overseas Private Investment Corporation (OPIC) and the Millennium Challenge Corporation to focus their assistance on power projects in sub-Saharan Africa.  In addition, the Bill temporarily authorises OPIC to issue local currency guarantees to African subsidiaries of foreign financial institutions to facilitate lending for power projects in sub-Saharan Africa by eligible investors.

The International Energy Agency has indicated that more than 620 million people in sub-Saharan Africa live without electricity - this not only affects human well-being but also significantly hampers economic development in the region as most businesses simply cannot sustain productivity without a reliable supply of power.  The Bill (which also formalises a number of Obama’s Power Africa initiatives) provides the platform, and could garner the financial support required, to tackle energy shortages in sub-Saharan Africa and fuel growth in education, employment and ultimately economic development as a whole.

There are still a few hurdles for the Bill to clear in order for it to become law – the Bill must be passed by the U.S. House of Representatives and thereafter signed by the U.S. President to be enacted.  If the Bill becomes law, its success will be determined by the effectiveness of the administration and management of the programs to be created by the U.S. in line with the U.S. President’s strategy.  If the U.S. gets this right, it could be a game-changer for sub-Saharan Africa. 

About

Africa is as dynamic a market as it is diverse. We understand that changes impacting your business can arise rapidly and vary significantly across the continent.

Our understanding of Africa’s markets stems from extensive experience on the ground. Through our Inside Africa blog, we aim to apply this insight to provide you with timely commentary on the latest developments across Africa, as well as insight into the many nations that make up this vast continent.

Read more
Blog Network

Topics

Archives