What Does The Trump Administration Mean For Power Africa?

By Staff Published: January 5, 2017, 6:29 pm
Trump Administration Mean For Power AfricaUS President Barack Obama at Christmas tree lighting, Dec. 1, 2016. Photo: Nicholas Kam/AFP

The Trump campaign made no mention of Power Africa in any campaign materials. The sole data point seems to be a 3-year-old tweet complaining that money going to Africa will be stolen, but one tweet from before the campaign doesn’t tell us much about future policy.

The nomination of Rex Tillerson as Secretary of State is potentially positive for Power Africa. The former ExxonMobil CEO knows the role of energy in promoting prosperity and should see efforts like Power Africa as both important and useful to promoting U.S. interests. Nevertheless, speculation is rife that the new administration will cancel the initiative out of budgetary concerns which are probably misplaced.

From Forbes. Column by Todd Moss, scholar in energy studies at Rice University’s Baker Institute in Houston and senior fellow at the Center for Global Development in Washington, D.C.

Power Africa, President Obama’s signature African electrification push, is in limbo. The initiative was launched in June 2013, but—consistent with the nature of large-scale long-term infrastructure investments—is really just getting started. Until we see key appointments (e.g., OPIC president, USAID administrator, Assistant Secretary of State for African Affairs) we probably won’t know what’s in store for Power Africa under a Trump administration.

If the new White House team looks at the details of Power Africa, however, there are plenty of reasons it should appeal to Republicans focused on getting results and cutting waste. Here are five I see as crucial.

1. Power Africa is about leveraging private investment.

The initiative has never been about handing over money to foreign governments or even paying for foreign projects with U.S. tax dollars. It was always designed to use public policy tools, like OPIC risk guarantees, to catalyze private capital to help build power plants, expand grids, and deploy other energy systems. The private investment tally is $40 billion so far and counting.

2. Power Africa saves America money.

The initial $7 billion public sector pledge (the figure referenced in Trump’s 2013 tweet) was nearly entirely comprised of anticipated loans to U.S. companies and investors, mainly export credits from ExIm and project finance from OPIC. The modest grant elements are mostly for U.S. transaction advisors and other technical assistance to shepherd private power projects to completion. That’s why the non-partisan Congressional Budget Office scored the supporting legislation as earning a positive return for taxpayers of $86 million over five years.

3. Power Africa creates American jobs.

In a narrow sense, Power Africa boosts American jobs by creating opportunities for U.S. companies. Both ExIm and OPIC are explicitly barred from activities that harm American jobs. Power Africa has not shied away from large-scale natural gas plants, where U.S. firms have the best technology. (The Obama administration did bar public support for coal plants, which will likely be reversed by the new White House.) But even more importantly …

Read more at Forbes.

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