African governments have been urged to act decisively in the implementation of the electricity projects under the comprehensive US-financed “Power Africa Initiative”, launched yesterday by US President Barack Obama.
Wrapping up his three-nation African tour in Dar es Salaam President Obama urged beneficiaries of the initiative to avoid unnecessary delays and red tapes in the implementation of the projects.
Before coming to Tanzania,President Obama visited Senegal, South Africa—his second trip to the continent, increasingly eyed as “a strategic location” for global economic and investments.
The envisaged USD 7 billion Power Africa project is expected to benefit six African countries — Ethiopia, Ghana, Kenya, Tanzania, Liberia, and Nigeria, but Obama made it clear at the land-mark launching yesterday that Tanzania would be the first US priority.
“We have decided to make Tanzania our first priority in this project because we are impressed with the spirit of dedication, devotion, commitment being demonstrated by President Jakaya Kikwete in improving the energy sector — to ensure consistent power supply to every household countrywide,” said president Obama, as he officially launched the initiative at Symbion’s Ubungo plant complex.
The US support would go beyond the government allocations, according to Obama, saying apart USD 7 billion that will come from the US government, American private sector would also deliver an additional USD 9 billion into the Power Africa drive.
He, however, insisted that decision-making processes, on the part of African countries expected to benefit from the plan, must be quick and timely, calling for fast-tracking implementation of the projects to enable millions of Africans to access electricity.
The US president described delays and slow-decision making as critical impediments to progressive development and anticipated growth in Africa, urging the beneficiaries to “clear all obstacles” to implementation of the power projects.
With the latest funding pledges under the “Power Africa initiative”, the American government has committed to double the number of Africans who, currently, have access to electricity in both urban and rural settings.
“We want to make sure electricity reaches down to the grassroots…and our expectation is that about 20 million African people would benefit from this project,” noted Obama.
Speaking to reporters after the US president left Symbion’s plant compound, Minister for Energy and Minerals, Sospeter Muhongo said it was difficult, at the moment, to specify areas where Power African project’s money would be channeled, but noted “obviously, they will be directed to two areas—either to Tanesco or Rural Energy Agency (REA)…but specific details about the allocation will be known later.”
The Power Africa initiative, according to the minister, would double the country’s electricity production to around 2780 MW by 2015, from the current capacity of 1438.24 MW. “But before that, we had our target already to reach 3000 MW production capacity. With the latest funding pledges by the US we will now go over and above our targets,” said Muhongo.
For his part, Paul Hinks, Chief Executive Officer of Symbion, one of the strategic partners supporting implementation of power projects in Tanzania and many other African countries, said “Power Africa is a US government initiative that is designed to address the poor state of the electricity sectors in many African countries.
It is a partnership between the US government, the private sector and local governments and will start in a number of countries that are already making the sector reforms that are needed to encourage private investment, including Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania. “
Symbion has pledged a total investment of USD 1.8 billion and aims to be at the forefront of Power Africa by delivering more generation capacity and increased connectivity through transmission in all the Power Africa countries.
“We are already on the ground in Tanzania and Nigeria and by the end of 2013 we will have over 1,200 Megawatts of capacity in Africa. We will open offices and seek to invest in Kenya, Ethiopia and Ghana. Symbion is also looking into regional investments for privately held transmission interconnections,” said Symbion CEO.
Meanwhile the Standard Chartered has committed to financing more than US$2 billion in energy projects under the Power Africa Initiative.
According to a press statement availed to The Guardian yesterday by Standard Chartered the partnership represents a coordinated cross-border effort to build the regulatory, economic and policy foundation in order to double access to power in Sub-Saharan Africa.
Standard Chartered is committing US$2 billion of new financing, more than 20 percent of the initial private sector contribution to Power Africa, alongside the US Government’s provision of USD7 billion of financial support.
In another development African business leader Tony Elumelu is committing USD2.5 billion to the power sector in Africa.
The investment is being made through his pan-African proprietary investment company Heirs Holdings – the single largest investor included in the White House statement announcing the Power Africa initiative.
Earlier this year, Elumelu’s holding company, through its investee company, Transnational Corporation of Nigeria (Transcorp), purchased the Ughelli power plant, one of Nigeria’s largest power assets, which it plans to restore to its full generating capacity of 1000 megawatts.