Trump won’t Power Africa

American president Donald Trump has ended the US initiative to boost electricity access in Africa, Bloomberg has reported. The US initiative (Power Africa) to increase electricity supply in Africa, has been dismantled by the Trump administration after more than a decade of work, according to people familiar with the matter, the financial intelligence news agency said late last week.Almost all of Power Africa’s programs have been listed for termination and the majority of its staff fired, said Bloomberg sources. Some remaining programs, particularly those with US companies, may be retained under other US agencies, they told Bloomberg.Launched in 2013 by then-US president Barack Obama to support renewable energy projects and expand electricity access, Power Africa operated under the now-shuttered US Agency for International Development (USAID). Even USAID’s website is no more.Earth.Org reporter Martina Igini adds that the flagship foreign aid program was to support renewable energy projects and increase electricity access across Africa, where more than 600 million people – or 43% of the population – still lack reliable access. Igini reports that USAID was the first high-profile target of the new Department of Government Efficiency’s (DOGE) radical cost cutting efforts led by billionaire Elon Musk. Over 90% of the agency’s aid programs around the world have been terminated since Trump took office in January and some 1 600 federal workers have lost their job as a result.Power Africa received just over US$1 billion from the US since its inception in 2013, according to Earth.Org. That finance enabled a cumulative US$29 billion in power project financing. The money supported the development of renewable energy, including geothermal, hydro, wind and solar power, as well as of power generation and transmission across the continent, Igini reports.It also served to expand power access across countries and particularly in sub-Saharan Africa, where nearly half of the population currently lives without electricity. When the program was launched in 2013, 62% of the population lacked access, World Bank data showed.Over 150 power projects adding 15 498 megawatts to power generation in Africa, have reached financial close, enabling electricity access for some 216 million users, according to the Center for Global Development. The projects also created business opportunities for more than 100 US firms, providing deals valued at US$26.4 billion.Africa steps upEarlier major investors called for Africa’s energy transmission and distribution sector to be opened to private capital during the Africa Energy Summit in Dar es Salaam, reports the African Development Bank (AFDB). Addressing African leaders and senior officials from multilateral institutions at the Mission 300 – Africa Electricity Summit at the end of January, Patrick Pouyanné, CEO of TotalEnergies, Hussain Al Nowais, Chairman of UAE energy giant AMEA Power, Aminu Umar-Sadiq, CEO of Nigeria Sovereign Investment Authority (NSIA), and Makhtar Diop, Managing Director of the International Finance Corporation (IFC), expressed consensus: The private sector has a role to play in electricity transmission and distribution in Africa to allow greater investment and extend electricity to millions of Africans currently living without it, according to AFDB. The sector has traditionally been reserved in many African countries for public enterprises, particularly transmission, and distribution.Private sector neededSpeaking in a panel session titled The Role of Private Investment in Africa's Energy Sector, Diop said, “The private sector is not yet as involved as it should be in financing the energy sector in Africa.” He said that, “The primary challenge is to engage it in financing electricity transmission in Africa, which is essential and critical.”"When you build a renewable energy plant, you must then transport that electricity, and that is where the challenge lies," stressed Patrick Pouyanné, lamenting that some energy projects are stalled on the continent due to a lack of transmission infrastructure."It is time for developers to start investing in the distribution network. Production is easy, but how do you evacuate that production? How can it be done with a weak network?" asked AMEA Power Chairman Hussain Al Nowais. He cited Morocco, Egypt, and South Africa as examples of successful energy sector reforms.Present in 20 African countries, AMEA Power produces 600 megawatts on the continent, and its chairman stressed that currency convertibility is crucial to attracting more private investments to develop electricity in Africa.Energy projects also require sovereign guarantees to be developed. “We need to have a guarantee instrument to develop projects. This has been discussed for years, but now it is time to act,” said Pouyanné, stressing that the potential exists to develop renewable energy, such as hydropower and solar, in Africa. “Financing institutions should not be afraid because there are no payment defaults [in energy projects],” he added.The International Finance Corporation (IFC) has established a new US$1 billion fund to invest in private companies working on decentralized renewable energy and off-grid solar solutions in Africa. Under this initiative, US$70 million will be allocated to private renewable investments in Nigeria.Give it gasFor Africa to achieve an energy transition, the gas sector must also be developed. “If you need reliable electricity 24/7, without intermittency, you have to combine it with gas” and, “You need to advocate for this in every international forum. Gas will enable progress, drive Africa's development, and support both economic and social growth," said Pouyanné to African heads of state and government leaders. “Liquefied Petroleum Gas is available in Africa for clean cooking. It is an affordable and clean energy source,” he added.According to Aminu Umar-Sadiq, emphasis must also be placed on mobilizing local capital to fund Africa's energy infrastructure, in addition to the financial guarantees needed by investors. “Capital structure is essential. Equity is critical, but it is also important to attract equity in local currency,” said the Nigerian Sovereign Investment Authority's (NSIA) CEO.Mission 300“Lenders want to take the minimum risks. Another suggestion I make to governments is to establish one-stop shops to provide investors with all the required documentation,” said Al Nowais, citing Togo as an example where AMEA Power completed its project in just 14 months, thanks to reduced administrative bottlenecks.The Africa Energy Summit, Mission 300, brought together around thirty African heads of state and government, as well as investors, foundations, and leaders from bilateral and multilateral financial and development institutions. The goal was to mobilize energy and resources to provide 300 million Africans with access to electricity by 2030, through national compacts implemented by governments, with the support of technical and financial partners, as well as private investments.

Trump won’t Power Africa

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