Late-breaking U.S. Legislation Will Boost Africa Power Projects
Overseas Private Investment Corp. announced $400 million in financing for the 100 MW Redstone Solar Thermal Power Plant in South Africa (far right, rendering). The project is being developed by US, Saudi Arabia and South Africa investors under a program to generate at least 3,725 MW of renewable power in that country by 2030.
Photo courtesy Mary Grikas
Several energy projects in sub Saharan Africa, either under way or proposed by governments or private sector companies, are set to benefit from US Senate passage last month of the Electricity Africa Act of 2015.
The legislation focuses on ways the U.S. Agency for International Development, the Trade and Development Agency, Overseas Private Investment Corp. and the Millennium Challenge Corp. can boost their role in the generation and supply of new, clean electricity in the region. The projects include those under President Obama’s Power Africa Initiative that targets generation of 30 gigawatts of additional electricity tby 2030.
The legislation is set to simplify how project developers access financing and insurance from OPIC, which has already committed up to $1.5 billion for the Power Africa Initiative. OPIC can now issue local currency guarantees to African subsidiaries of foreign financial institutions to facilitate eligible investor lending .
Foreign firms, partnerships and energy sector groups that are majority owned by US citizens, corporations or partnerships and are developing power projects of not more than $50 million are eligible for OPIC loans under the new legislation.
Other US agencies involved in sub Saharan energy sector, especially through the Power Africa Initiative, are the Export-Import Bank, the Trade and Development Agency, African Development Foundation, Army Corps of Engineers, and several caninet agencies.
At least 39 private sector power developers, 14 of them from Africa, are participating in the initiative. By early 2015, those companies had announced on-grid, mini-grid and off-grid energy projects with a total capacity of 14,000 MW.
In South Africa, OPIC has announced $400 million financing for the 100 MW Redstone Solar Thermal Power Plant being developed by US, Saudi and South Africa investors. The project is being developed under South Africa’s Renewable Energy Independent Power Producer Procurement Program that seeks to generate at least 3,725 MW from renewable sources by 2030.
Other investments are under way through the Power Africa Initiative in Benin, Ghana, and Malawi. Lenders committing energy development financing also include the World Bank, the African Development Bank, EU and Norwegian Agency for Development Cooperation.
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