Co-authored by Angela Ogang
On 9th February 2016, President Barack Obama signed the Electrify Africa Act after nearly two years of failed attempts to get the bill through both chambers of Congress. The Act will provide a framework for a major public-private partnership between the United States and sub-Saharan African countries, including Kenya, to improve access to affordable and reliable electricity.
Section 101 of the Act declares that the United States will support efforts to promote first-time access to electricity and power services for at least 50 million people in sub-Saharan Africa by 2020, encourage installation of at least an additional 20,000 MW, encourage necessary in-country reforms and promote an all-inclusive energy development strategy that includes the use of oil, natural gas, coal, hydroelectric, wind, solar and geothermal power as well as other sources of energy as required.
Section 102 requires the US Administration to create a multi-year strategy to encourage the efforts of countries in sub-Saharan Africa to implement national power strategies and develop an appropriate mix of power solutions, including renewable energy, to provide access to reliable, affordable, and sustainable power in order to reduce poverty and drive economic growth and job creation.
Section 103 provides that USAID, US Trade and Development Agency, the Overseas Private Investment Corporation (OPIC) and the Millennium Challenge Corporation should prioritize and expedite institutional efforts and assistance for power projects and markets in sub-Saharan Africa.
Section 104 states that in carrying out the strategy described in Section 102, the President of the United States should direct the United States representatives of appropriate international bodies to use the influence of the United States to advocate to such bodies. Efforts should be geared towards increasing efforts to promote investment in the sub-Saharan electricity sector, providing technical assistance to the indigenous regulatory authorities, and utilizing clear, accountable and metric-based targets to measure the effectiveness of such projects.
In terms of transparency, Section 202 requires OPIC, whose continued operation is authorized by Section 203 for the three-year focus of the Act, to publish in digital form measureable development impacts of its investments and the amount, type, location, and duration of each commitment with digital links to relevant reports and displays on an interactive map. In addition, Section 203 requires a bi-partisan board, in that no more than five of eight directors can be from the same political party.
The Act temporarily allows the OPIC to issue local currency guarantees to create more flexibility in areas where local subsidiaries of foreign financial institutions are the only partners that can work with OPIC, and establishes a temporary investment advisory council to assist OPIC in developing energy programs in sub-Saharan Africa.
The Act is said to be the most significant legislation to advance U.S. commercial relations with the continent of Africa, since the initial passage of AGOA 15 years ago. It is expected to provide a durable strategic framework to address the challenges of energy poverty on the continent by leveraging a private sector-led, market-based approach which is essential to the sustainability of this effort over time.
Section 105 of the Act requires the President of the United States to submit to the House Foreign Affairs Committee, the Senate Foreign Relations Committee and post in digital form a report detailing progress towards the Act’s goals within three years of its enactment.