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Neill_58630 Jun 30

Powering Africa Summit - The Future of U.S. Energy Investments in Africa

Powering Africa Summit - The Future of U.S. Energy Investments in Africa image
Key stakeholders provided insight into how changes in policy can impact the United States’ role in Africa and what this means for the continent.
The relationship between the U.S. and Africa in an energy context has gone from strength to strength, as evidenced by the influence of key protagonists including Power Africa, the U.S. Africa Development Foundation (USADF), the U.S. International Development Finance Corporation (DFC) and the U.S. Trade and Development Agency.

With a new administration to the west of the Atlantic, and the effects of COVID transcending both sides of this partnership; getting the balance between pushing towards universal electrification, and strengthening Africa’s climate change credentials, is dictating the investment landscape in 2021.

Chris Troy, Private Enterprise/Investment Lead, Power Africa, said: “We’re struggling over this balance right now, as to whether investments should be completely channelled towards renewables. You have all the ‘net zero by 2050’ talk, but what does that mean in the context of countries with very little baseload power?”

The argument for championing this “context” on a country-by-country basis is strong; knowing where to capitalise on renewables opportunities and the potential of decentralised innovations, and where to focus more on stabilising the sector so that renewables can play a role further down the line.

Troy adds that the need to support enabling environments will be key regardless of the context. Plans to unlock as much as $5.3 billion in private sector financing requires a focus on loss reductions, grid stabilisation, standardised PPAs and regulation, and stronger environmental and social governance. And also, from the USAFD’s perspective, on encouraging innovation, by being equally innovative through their own capital models, and by targeting traditionally “risky” and rural areas - those that are most in need of power, and primed for off-grid and mini-grid intervention.

Chief Strategy Officer, Kwasi Donkor, explained: “It’s about encouraging a pipeline and leveraging capital in a way to allow energy entrepreneurs to express their innovation in ways that impact livelihoods and communities. We need to use capital in these innovative ways to finance new frontier markets in Africa.”