More than $1 billion in debt and financing commitments from U.S. agencies and private investors is set to be announced on Wednesday for U.S. President Barack Obama’s signature Africa energy initiative, Power Africa, a top USAID official said.
The latest deals were finalized around a U.S.-Africa business forum on the sidelines of annual U.N. meetings in New York this week, USAID chief Gayle Smith said in an interview with Reuters.
Obama launched the initiative in 2013 with an initial investment of $7 billion, which aims to install 10,000 megawatts of new generation capacity, connect 20 million new customers, and improve electric reliability across the Sub-Saharan Africa.
The program hoped to attract private capital into energy projects in a region where regulatory hurdles and lack of risk instruments have often kept Western investors away.
Smith said the deals covered funding for regional infrastructure facilities, risk insurance and renewable power projects in Kenya, Nigeria, Senegal, Sierra Leone, South Africa and Tanzania.
To date, Power Africa has mobilized more than $52 billion in additional commitments, of which $40 billion is from private companies, according to the United States Agency for International Development (USAID), which coordinates the program.
Power Africa is tracking more than 500 deals, and 40 transaction advisers working across Africa have identified 60,000 megawatts of potential deals, Smith said.
While the initiative has been criticized for its slow start, she said projects were starting to come online.
“We’re starting to see some of these projects go online and actually start the generation,” Smith said.
“We’re seeing an uptick in commitments, which is because confidence of the market is building and they’re seeing you can actually get these transactions done.”
Smith said the passing this year of the Electrify Africa Act, which unanimously passed the House of Representatives and Senate, and aims to build on Power Africa, sent a “a signal that this is something the United States will continue to do” even as the Obama administration winds down.
The legislation is largely symbolic and declares it the policy of the United States to encourage electrification in Africa and instructs the U.S. Treasury and other agencies to make electrification funding a priority.
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