Obama calls for $7 billion Power Africa initiative

At a speech in Cape Town, South Africa, President Barack Obama laid out his plan for boosting aid to Africa by promoting the electrification of countries in the continent.

The plan seeks to develop up to 10 GW of electric power capacity — or 20 million households — in Africa. The plan specifically names Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.

Power Africa will support hydropower, wind, solar and geothermal energy projects both on and off the grid as well as a build-out of power transmission infrastructure.

Much of the support provided by the U.S. government will be in the form of export credits and insurance. Entities involved include the U.S. Agency for International Development (USAID), the Overseas Private Investment Corp. (OPIC), the U.S. Export-Import Bank, the Millennium Challenge Corp., the U.S. Trade and Development Agency (USTDA) and the U.S. African Development Foundation.

Private sector commitments are: 

·      General Electric (GE) will help bring 5 GW of capacity online in Tanzania and Ghana

·      Heirs Holdings will invest and finance $2.5 billion for 2 GW of energy development

·      Symbion Power will catalyze $1.8 billion in investments for 1.5 GW of energy projects

·      Aldwych International will develop 400 MW of wind power in Kenya and Tanzania — the first large-scale wind energy projects in each of these countries, for an investment of  $1.1 billion

·      Harith General Partners commits $70 million for wind energy in Kenya and $500 million across Africa via a new fund.

·      Husk Power Systems will install 200 decentralized biomass-based mini power plants in Tanzania, providing affordable lighting for 60,000 households

·      African Finance Corp. will invest $250 million in Ghana, Kenya and Nigeria, catalyzing $1 billion in investment.

If the plan achieves its goals, it could double the number of people who have access to electric power in the next five years.

Over the next five years, it would double the people who have access to energy.

According to the African Union, Africa has 15 percent of the world's population, but uses only 3 percent of the world's energy.

According to the International Energy Agency, it could cost as much as $300 billion by 2030 to bring Africa to complete electrification.

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