Why the Electrify Africa Act is vital to powering Africa

A woman in West Point, Monrovia, Liberia uses the dim glow of a battery-powered LED flashlight to prepare food for her family. --Travis Lupick

The White House stayed true to form in the establishment of its program to increase access to electricity in Africa, Power Africa. Despite the fact that members in Congress were working on the issue, the Obama Administration developed Power Africa on its own. The launch of the program, made by Obama during his Africa tour last summer, is one of the most significant initiatives made by the administration on the continent.

Congress, led by House Foreign Affairs Committee Chairman Rep Ed Royce (R-CA) and Rep Eliot Engel (D-NY), refuse to be sidelined. The House of Representatives passed the  Electrify Africa Act (H.R. 2548) earlier this month. The bill is a sort of supplement to Power Africa. With support from both Democrats and Republicans, Power Africa has the chance of last well beyond Obama’s presidency.

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If a bill manages to make it to the desk of President Obama, the medium to long term viability of Power Africa may be assured, say analysts.

“There was a danger of this being an Obama administration-driven project,” said Erin Collinson, Policy Outreach Associate at the Center for Global Development (CGD), to Humanosphere. “This has now became an example of what bi-partisan support can achieve.”

The issue of electricity is has a far reach and deep impacts in sub-Saharan Africa. Estimates indicate that as much as 70% of the people living in the region do not have access to electricity. The businesses and homes that do receive power experience occasional to frequent periods without power. Such disruptions can force businesses to stop working, costing the economy. Electricity reaches further, impacting health and education.

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To put it in perspective, the average American uses 100 times more energy than the average Nigerian. The refrigerator, common in American homes, is alone responsible for more energy consumption that the average person in six countries targeted by Power Africa.

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Todd Moss/CGD

Congressional leadership is what Collinson considers to be a ‘key ingredient’ in the success of Power Africa. It is in many ways similar to the President’s Emergency Plan for AIDS Relief (PEPFAR), a program started by the George W Bush administration. A decade later, PEPFAR continues to provide crucial support for AIDS work around the world. It’s longevity can be attributed to the fact that PEPFAR has major supporters on both sides of the aisle.

The Electrify Africa Act sets out to bring first-time electricity to 50 million people in Africa, by 2020. That is only about 8% of the roughly 600 million people who do not have access to electricity.  Still, it is an ambitious target for the US to reach, says Ben Leo, Director of Rethinking US Development Policy at CGD.

What makes the bill even more attractive is the fact that it comes at no cost to the federal budget. A scoring of the bill published by the Congressional Budget Office in March showed that the plan can actually lead to a small deficit reduction. The announcement helped to boost support for the bill, especially among Republicans who increased their support as co-sponsors for the bill by nearly two times in March.

“From a politicians perspective you have a package that matters,” said Leo to Humanosphere. “We can do something about this and not have it be a massive drain on the American ficus.”

The reason for the savings is mostly due to provisions regarding the Overseas Private Investment Corporation (OPIC). The international investment agency will be the leader in financing the work carried out by Power Africa. Direct loans, loan guarantees, and insurance set out by OPIC all help to support American investments in Africa. The Electrify Africa Act includes an important provision that funds OPIC for three years.

At present, OPIC relies on continuing resolutions to get funding each year. Since the money made on the investments is returned to the US Treasury, such disruptions can impact longer term work. The Congressional Budget Office estimates that the three-year horizon for OPIC will help secure the flow of money back into the US government. The savings will amount to $86 million over five years. It won’t make much of a dent in reducing the federal deficit, but the bill will not add to it.

“With the bill, OPIC must provide information on all of their investments. That is different from how they operate now,” explained Leo. “It might not be super sexy, but this is moving the ball forward.”

It is now up to the Senate to pass its own version of the Electrify Africa Act. Senators Bob Corker (R-TN) and Robert Menendez (D-NJ) have assumed leadership roles in the development of the bill. Leo expects that the Senate version will ‘go a bit further’ than the House counterpart. Negotiations will follow to get a bill on Obama’s desk. However, the timing is challenging given that mid-term elections are happening in the fall, proceeded by the August recess.

A lot has to be done, and quickly, to get a finished bill. The Africa heads of state summit hosted by the White House in early August may provide the impetus to have a finished bill that can be shared with the visiting leaders. Despite concerns about how long it will take, both Leo and Collinson do think that there will eventually be a congressional bill that provides long term support to Power Africa.

“I’m optimistic that this legislation will make it through both sides of Congress, make it to the President’s desk, and will have impact on the staying power of the initiative and its ability to improve the tools that are being used to implement Power Africa,” said Leo.

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Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.