In June 2013, US President Barack Obama launched Power Africa with the ambitious goal of doubling access to electricity in sub-Saharan Africa. Three years later, Power Africa is already delivering results.

Power Africa’s 2016 Annual Report highlights the progress made in the Presidential Initiative’s third year, including lessons learned and a roadmap plan for continued progress. The report showcases achievements to date and progress made toward the goals set by President Obama.

Power Africa is a U.S. Government-led initiative, coordinated by the U.S. Agency for International Development (USAID), that comprises 12 U.S. Government agencies, and a diverse coalition of more than 130 public and private sector partners, including bilateral and multilateral partners, as well as international organizations, civil society organizations, and private sector companies. In its first three years, Power Africa has built the foundation of an innovative development model that focuses on supporting “first-of-their-kind” transactions that create pathways for future transactions to move forward. Power Africa also prioritizes unlocking and accelerating transactions by removing barriers and building a more investment-friendly enabling environment. Through this model, Power Africa is leading a major international effort to develop new power generation capacity and connect millions of households and businesses to on-grid and off-grid power across sub-Saharan Africa.

The Power Africa Roadmap, released in January 2016, lays out our strategy for doubling access to power across sub-Saharan Africa by adding 60 million new electricity connections, as well as increasing installed generation capacity by 30,000 MW by 2030. The Roadmap outlines Power Africa’s three strategic pillars: Generation, Connections, and Unlocking Energy Sector Potential. These three pillars help our partners to accelerate energy transactions by working with African governments to create the policy, legal, and regulatory frameworks needed to attract private sector investment in the energy sector. Alongside the Roadmap, Power Africa also launched the Power Africa Tracking Tool (PATT), an online and mobile application that allows users to easily track power sector development and transactions across the continent. Through the PATT, much of this transaction data is being made publicly available for the first time, increasing transparency and better informing investors on opportunities.

In February 2016, the Electrify Africa Act of 2015 passed by unanimous consent in both chambers, a testament to the bipartisan and bicameral leadership in Congress in advancing solutions to pressing development issues. The legislation states that it is the policy of the United States to promote first-time access to power for at least 50 million people and to encourage the installation of at least 20,000 additional MW of electrical power in sub- Saharan Africa by 2020. On February 8, 2016, President Obama signed the Electrify Africa Act of 2015 (S.2152) into law, institutionalizing the work of Power Africa through legislation and signaling to the global community that expanding electricity access in sub-Saharan Africa is a longterm foreign policy priority of the U.S. Government.

The Electrify Africa Act, whose goals are broadly consistent with Power Africa, validates the work and approach that Power Africa has already undertaken to address energy poverty, and ensures that the transformative progress we are making will continue beyond this Administration. In August 2016, Power Africa released the Electrify Africa Act Report, which complements the Power Africa Roadmap and entails a comprehensive multiyear strategy for how the United States intends to achieve the goals of addressing sub-Saharan Africa’s energy crisis in areas such as increasing and improving power generation, transmission, and distribution; increasing first-time access to electricity; reforming policy, regulatory, and power sector governance; and increasing affordability and non-discriminatory access to power.

After three years of operation, Power Africa has helped facilitate the financial close of private sector power transactions that are expected to generate over 4,600 MW. Power Africa is currently tracking approximately 60,000 MW of generation projects across the continent, which we recognize is just a subset of all generation projects proposed or underway. Based on the realities of capital projects, our experience in sub-Saharan Africa, and the best available information we have today, we expect that between 18,000 – 21,000 MW of the 60,000 MW we are tracking will reach financial close and are expected to be online by 2030. In the past year, Power Africa grew the number of its field-based transaction advisors in sub- Saharan Africa to over 40 experts who are helping the private sector and governments prioritize, coordinate, and expedite the steps necessary for the implementation of these power projects. Our transaction advisors are also working with our partners to help us identify new viable projects to fill the gap of 9,000 – 12,000 MW to reach our 30,000 MW goal.

This year, the U.S. Government Agencies participating in Power Africa continued to grow their respective African energy portfolios. The Millennium Challenge Corporation (MCC) now has five ongoing power-focused compacts or threshold programs in sub-Saharan Africa in Malawi, Benin, Ghana, Sierra Leone, and Liberia (with Sierra Leone, Benin, and Liberia, totaling an investment of $680 million, added within the past year). The Overseas Private Investment Corporation (OPIC), the U.S. Government’s finance institution, has committed more than $1.7 billion in debt financing and insurance in support of 19 Power Africa projects, already exceeding an original $1.5 billion commitment. These OPIC commitments have mobilized more than $3 billion in additional investment to support Power Africa projects in sub-Saharan Africa. These projects are expected to create almost 1,500 MW of new generation capacity.

In the past year, the U.S. Trade and Development Agency (USTDA) funded 13 Power Africa activities that are expected to generate over 300 MW of renewable energy and catalyze nearly $800 million in financing upon implementation. The funding of these grants brings USTDA’s total number of grants under Power Africa to 43, leveraging a potential $6.8 billion in financing. These projects will help develop more than 860 MW of new generation, powering an estimated 1.7 million homes and businesses and impacting approximately 8.6 million people.

Under the Power Africa Off-Grid Challenge, a public-private partnership between General Electric (GE), USAID, and the U.S. African Development Foundation (USADF), Power Africa grew its support for African companies and organizations that are providing renewable, off-grid solutions for local communities in sub-Saharan Africa. In 2016, USADF funded an additional 10 grants of up to $100,000 each, bringing the total number of grants to 50, totaling an investment of $5 million to African owned and managed energy companies in nine countries from 2013 to 2016. USADF is currently in the process of funding 21 additional grants and six expansion grants for an additional $2.4 million through FY 2018.

To further improve sub-Saharan Africa’s investment climate, the U.S. Department of Commerce (DOC) Commercial Law Development Program (CLDP), supported by Power Africa and the African Development Bank’s (AfDB) African Legal Support Facility (ALSF) released its second practitioner’s guide, titled “Understanding Power Project Financing.” This reference handbook, along with CLDP’s first publication, “Understanding Power Purchase Agreements,” are the product of consultations with public and private sector stakeholders from Africa, the United States, and Europe. Both books take a detailed and neutral approach to understanding the terms, balancing of interests, and structure of power projects. To date, ALSF has also provided direct support to the development of power projects in over 10 African countries with activities including government advisory services on project agreements, drafting model agreements, and trainings on the development of public-private partnerships.

Over the past year, we have seen great progress in the commercial viability of both household rooftop systems and grid-scale solar power projects in sub-Saharan Africa. For example, in Nigeria, the Nigerian Bulk Trader signed power purchasing agreements (PPA) on 14 Solar independent power projects (IPP) in July 2016.These solar IPPs, totaling 1,125 MW of generation capacity, are expected to attract more than $1.5 billion of combined domestic and foreign direct investment. The signing of these PPAs was an historic moment for utility-scale solar in Africa and for the Power Africa team in Nigeria that provided significant technical and legal advisory support to this effort.

Despite significant progress to-date, challenges to expanding access to energy persist in sub-Saharan Africa. Power Africa partners have faced a host of external obstacles this year, including a deterioration of macroeconomic and political conditions. Falling commodity prices hurt African trade in 2016 and lower economic growth is expected as a result in the short-term. Lower global gas prices have posed financial challenges for countries seeking to take advantage of their own vast gas resources. Unpredictable and depreciated currencies, along with credit agency “downgrades” for investment in certain countries, left many investors sitting on the sidelines, waiting for the currency issues to stabilize before moving forward on particular deals.

While there is no quick fix to solving Africa’s energy challenges, Power Africa is committed to working together with African leaders and a growing coalition of international partners to build a sustainable energy sector and unlock the continent’s vast energy potential. Power Africa, along with its many partners, is on an upward trajectory and continues to build a pipeline of viable projects that, over the coming years, will accelerate electrification of the African continent in order to reduce poverty and promote economic growth.

---

Background

African leaders are articulating their own vision to dramatically increase access to power on the continent. Power Africa is supporting this African-driven vision in practical ways aimed at delivering results. Power Africa’s approach focuses on partnership, driven by the private sector and supported by host country governments and multilateral and bilateral donors.

Large- and small-scale solutions for bringing cleaner, more efficient electricity generation capacity to sub-Saharan Africa are all grounded in a new model of development that drives Power Africa. The core of this model is based on effective partnerships that link public and private sector goals and resources, and connect investors and entrepreneurs to business opportunities in Africa. Structured not from the top down, but laterally, with U.S. agencies, African governments, private sector actors, and other stakeholders serving as partners in the enterprise – Power Africa is delivering results.

Power Africa’s approach considers three related but distinct challenges to bringing that vision to life. power must be available, meaning sufficient megawatts must be generated to meet people’s needs. It must be accessible, so that even those communities that cannot be connected to national grids can still access electricity. And it must meet basic quality considerations, meaning natural resources and megawatts generated are efficiently managed to ensure optimal use.

Over the past three years, we have witnessed an unprecedented groundswell of support from other countries and multilateral actors, who have collectively committed to invest more than $12 billion in energy deals in sub-Saharan Africa in support of Power Africa’s goals. Power Africa’s model is based on effective partnerships, and with 130 partners and mobilized financial commitments firmly in place, Power Africa remains optimistic about maintaining momentum towards President Obama’s goals for increasing access to electricity – and spurring economic growth – in sub-Saharan Africa.

• Power Africa Annual Report: Second Year in Review - July 2015

• Power Africa Annual Report - July 2014