Barack and Michelle Obama. Picture: REUTERS/YURI GRIPAS
Barack and Michelle Obama. Picture: REUTERS/YURI GRIPAS

US PRESIDENT Barack Obama’s signature initiative for Africa — a $9.7bn plan to double electricity access in the world’s poorest continent — has fallen short of its goals, so far producing less than 5% of the new power generation it promised.

Obama announced Power Africa three years ago with an ambitious goal: to add 10,000MW of power and supply electricity to 20-million households within five years.

As the president addressed the US-Africa Business Forum in New York on Wednesday, the project has yielded less than 400MW of new power after running into political and economic difficulties.

"If you look today at the number of megawatts that are actually on the grid directly related to the Power Africa initiative, it is very little," John Rice, vice-chairman of General Electric, said in May at the World Economic Forum in Kigali, Rwanda.

Power Africa, he said, "was a well-intentioned effort, with a lot of smart people, a lot of willing participants, financial institutions and yet, for some reason, it could not come together".

The programme’s shortfalls mean that when Obama leaves office, the nation’s first black president and the son of a Kenyan farmer will not be able to claim a legacy-defining endeavour in Africa.

By comparison, President George W Bush’s signature initiative in Africa — the President’s Emergency Plan for AIDS Relief (Pepfar) — provided drugs to fight HIV/AIDS to more than 2-million people by the time he left office.

General Electric declined to make Rice available for an interview.

Power Africa’s leaders say they are redoubling efforts to accelerate progress.

US agencies announced $1bn in loans and financing on Wednesday for projects in SA, Ghana, Kenya and elsewhere.

Obama administration officials say Power Africa was never expected to change the continent’s energy landscape overnight. The goal was to persuade the private sector to tackle Africa’s shortages, not simply provide a government handout, says Andrew Herscowitz, Power Africa co-ordinator at the US Agency for International Development (USAID).

Results will take years, he says. "You can’t just wave a magic wand and have all the infrastructure appear — it takes time to build things.

"A huge project doesn’t get built overnight. Not in the US, not in Europe, not in China, not anywhere,’’ he says.

Power Africa is backing projects across the continent, Herscowitz says, showing that the private sector is responding to US efforts.

A burgeoning market for solar panels is cropping up in places such as Rwanda and Sierra Leone, and companies have committed more than $40bn to dozens of Power Africa projects, he says.

USAID estimates the initiative will ultimately provide electricity to 60-million households in more than 20 countries.

"Three years after launching Power Africa we’re seeing real progress," Obama said on Wednesday, citing solar power and natural gas projects in Nigeria and "off-grid" power generation elsewhere in Africa. "We’re on our way, and by 2030 I believe we can bring electricity to more than 60-million African homes and businesses."

But many of the successful projects claimed by Power Africa were under way long before the initiative began, and much of the progress touted on paper has yet to materialise in actual electricity.

That is evident on a visit to the main electronics market in Lagos, Nigeria, where shouting street vendors compete with hundreds of roaring generators that spring to life daily during power outages that last hours.

Even in the nation boasting Africa’s most potent economy, electricity is fleeting, and far too sporadic to keep this sprawling market up and running.

"There was power supply this morning, but hardly did it last for one hour before it went off,’’ says Olajide Opemipo, a logistics manager who works in the market.

Sub-Saharan Africa has the world’s largest concentration of people without power. More than 620-million people in the region lack a reliable supply of electricity, according to the International Energy Agency.

Power Africa enjoys some congressional support, suggesting it could survive Obama’s presidency. Representative Ed Royce, the Republican chairman of the House foreign affairs committee, says the aim is for the private sector to continue to invest after Obama leaves office.

He sponsored legislation, signed by Obama in February, that encourages future administrations to continue investing in Africa’s power sector. "All of us understand that dealing in Africa in terms of development work is a long process. ’’

Obama pledged to provide "light where currently there is darkness’’ and double access to power across sub-Saharan Africa when he introduced Power Africa in 2013.

The initial five-year timeline for the programme was later extended to 15 years, and the goal for increasing electricity access expanded to 60-million households by 2030, the target Obama cited on Wednesday, up from 20-million. The initial $7bn commitment has risen to almost $10bn.

"An undertaking of this magnitude will not be quick,’’ he said last year in Addis Ababa. "It will take many years.’’

Power Africa officials say they are on track to meet their target of adding 30,000MW of power by 2030. The initiative has closed deals to add 4,600MW to the grid, although plants producing less than 400MW have been built so far. In Nigeria, a US-backed effort to privatise power plants would add about 2,500MW to the grid. But the expected gains have not materialised and the country’s power generation has fallen to a decade low of about 3,000MW in 2016.

"The situation is not getting better and we are not seeing results," Opemipo says when asked about Power Africa.

"If I were to rate them, I would give them zero because I don’t know when the initiative started and what they have contributed so far."

Policy decisions and political dysfunction on both sides of the Atlantic Ocean have hampered the effort.

In the US, congressional gridlock over the Export-Import Bank has handicapped progress. The bank, which lost its charter for several months in 2015, was slated to provide $5bn in financing out of the initial $7bn US commitment.

It has only provided $131.5m so far, and has not approved any additional financing since July 2015. An aide at the bank says Senate Republicans’ refusal to fill vacancies on its board has left financing for several Power Africa projects stuck in limbo. Without a quorum, the bank cannot approve deals worth more than $10m.

In Nigeria, a change in political leadership, currency controls and an economic recession sparked by falling oil prices have spooked investors.

Transnational Corporation of Nigeria, an affiliate of one of Power Africa’s largest partners, in August suspended plans to build a $1bn power plant, citing a surge in militant attacks on oil pipelines. Another project, the Azura-Edo Independent Power Plant, was delayed for months due to regulatory obstacles. The 450MW plant is now moving forward, in part due to legal assistance from US advisers, Herscowitz says.

"The regulatory environment is quite rigid,’’ says James Nicholas, co-founder of Global Business Resources USA, which plans to build two solar plants in Nigeria.

"It’s bureaucratic," he says.

Power Africa’s delivery of results in Nigeria and elsewhere could determine whether the next US president continues to invest in the continent’s power sector.

Obama has not devoted much of his public time to Power Africa, and the project lacks a high-level champion in the White House, says Todd Moss, a senior fellow at the Centre for Global Development, a Washington research group.

"I worry that the sustainability of the initiative is at risk when a new administration comes in and they have their own priorities," says Moss, a former assistant secretary of state in the Bureau of African Affairs.

Royce says investors see promise in a region in which many consumers spend billions of dollars on expensive and dirty diesel generators.

Power Africa counts Goldman Sachs, Alphabet and Citigroup among its corporate partners.

Recognising the challenges and delays that come with constructing fully fledged power plants in the continent, Power Africa is shifting its focus to faster, off-the-grid energy projects such as solar panels, Herscowitz says.

Solar companies in Tanzania, Kenya and Rwanda serving thousands of customers have been funded by the programme, he says.

"It’s challenging,’’ Herscowitz says.

"If it weren’t challenging, you would not need Power Africa."

Bloomberg