Analysis: Power Africa plan is off to a dim start
BARACK Obama last year told a cheering crowd in Cape Town that a $7 billion (R77.2bn) plan to “Power Africa” would double electricity output on the world’s poorest continent and bring “light where currently there is darkness”.
A year later, the US president’s flagship project for Africa has already achieved 25 percent of its goal to deliver 10 000 megawatts of electricity and bring light to 20 million households and businesses, according to its annual report.
But the five-year plan has not yet delivered the power.
Power Africa has not measured its progress by counting actual megawatts added to the grid, but promises of additional power made in deals it says it helped negotiate, according to sources inside the project and documents.
Some projects facilitated by Power Africa – a programme operated by the US aid agency USaid – were under way years before the scheme’s inception, others are still in the planning stage. It is unclear how much of the $7bn Obama pledged has actually been spent or if a further $20bn in private sector investment commitments will materialise.
“Saying you’ve met targets on projects that might never happen or taking the credit for projects that have been worked on for years makes me uncomfortable,” a source working on Power Africa said. “It’s misleading.”
Obama’s pledge to double power generation in Africa within five years looked highly ambitious from the start. Per capita electricity output in subSaharan Africa has been flat for three decades, because most promised power plants never get built.
“We’re dealing with megawatts on paper, rather than on the grid,” a second source working on the project said.
“Is that really what Obama promised?”
The first African-American US president, the son of a Kenyan father, Obama has often been criticised for a lukewarm engagement in Africa, consisting more of words than deeds.
The 48 countries of subSaharan Africa, with a com- bined population of 800 million, produce roughly the same amount of power as Spain, a country of just 46 million. This constrains Africa’s growth and keeps hundreds of millions in poverty.
Power Africa co-ordinator Andrew Herscowitz said there had been some confusion about the role of the programme. He said it was always intended to “expedite transactions”, facilitating private investment rather than handing out aid.
Herscowitz said Power Africa was there to help the private sector deliver electricity and it had already negotiated commitments from companies worth $20bn, although he did not know how much of this money had been spent.
“We’re like a pharmacist, where people come to us, we reach out to people and figure out what is needed,” he said. “In some projects we may have a lot of involvement and in some we have very little involvement.” Foreign companies sign billions of dollars of agreements with African governments to build infrastructure every year, although a large number never get built.
In April 2011, the US Millennium Challenge Corporation, a government aid agency involved in Power Africa, signed a $350m deal to “revitalise” Malawi’s power sector.
More than three years on, 1.7 percent of that money has been spent, according to the programme’s website, which gives no detail on progress on the ground. Memorandums of understanding Power Africa signed this year with its six focus countries – Tanzania, Nigeria, Kenya, Ethiopia, Liberia and Ghana – contain less than $100m of financial commitments targeted at specific countries, most of which is for consultants.
US consultancy Tetra Tech won a $64m contract and former British Prime Minister Tony Blair’s Africa Governance Initiative was given a $3m deal. As with many African aid projects, rights groups have criticised Power Africa as mostly being a vehicle to subsidise US companies.
Documents show $5 billion out of the $7bn pledged is for loans for US exports from the government’s Export-Import Bank and Overseas Private Investment Corporation.
“It’s absolutely not true. Power Africa is an opportunity to turn on the lights for millions of Africans by taking investment from all over the world,” Herscowitz said. He rejected suggestions Power Africa merely tapped into existing projects, highlighting a 5 megawatt “NextGen” solar project in Tanzania and a 30 megawatt biomass scheme in Kenya which he said “didn’t exist before Power Africa”.
The NextGen project website, however, says a power purchase agreement for the solar project was signed in January 2013, six months before Power Africa was launched. – Reuters