Across the continent, our team continues to drive deals, engage with governments on power sector reforms, and assist utilities with electricity generation, transmission, and distribution projects.

By Andrew M. Herscowitz

Dear Partners,

Thanks to your support, and the power of our partnership, April was another month of advancements. Just ahead of Earth Day, Power Africa made an additional commitment to renewable energy through a new agreement to support the Climate Investor One fund, which will focus on renewable projects between 25 and 75 megawatts (MW). Plus, Power Africa provided a loan to help finance companies that make solar lighting and energy systems, pushed power purchase agreements in Malawi, and convened off-grid pioneers in Ghana.

Across the continent, our team continues to drive deals, engage with governments on power sector reforms, and assist utilities with electricity generation, transmission, and distribution projects.

Here are some highlights from the past month...

$5 Million Power Africa Support to Climate Investor One (CIO)

Power Africa signed an agreement on April 19 with FMO, the Dutch development bank, to spur investment in renewable energy across sub-Saharan Africa. Through the United States Agency for International Development (USAID), Power Africa committed $5 million to FMO in support of the Climate Investor One Fund (CIO), which finances and helps fast-track wind, solar and hydro power projects in sub-Saharan Africa. CIO will provide early stage financing, construction financing, and refinancing to renewable projects between 25 MW and 75 MW. Already the CIO team has started to identify new deal flow in sub-Saharan Africa. We expect that our contribution will soon leverage over $100 million in contributions from other development partners, who reached out to us immediately after signing the agreement at the Hague. 

$15 Million OPIC Loan to Power Africa Partner SunFunder

The Overseas Private Investment Corporation (OPIC) provided a $15 million loan to support SunFunder’s $50 million “Beyond the Grid Solar Fund.” The facility will provide financing to companies operating in developing countries that manufacture, distribute and install solar lighting and energy systems. This project uses OPIC’s Innovative Financial Intermediaries Program (IFIP), which focuses on smaller investment funds that apply innovative approaches to address specific development challenges.

First Power Africa Engagement in Canada

Following up on our new partnership with Canada, members of the Power Africa team traveled to Ottawa to meet with the Global Affairs department. The Canadians already have started translating the Power Africa Toolbox document so that we can increase our outreach to companies doing business in francophone West Africa. Canada has a High Commission in 16 countries in sub-Saharan Africa, and the Canadians are eager to work with Power Africa’s network of Transaction Advisors. Canada has committed $2.65 billion to global renewable energy and climate programs, and there is a significant portion that still has not been programmed. We look forward to working with the Canadians to see how we may be able to leverage additional resource to support Power Africa.

Millennium Challenge Corporation (MCC) Steps Up Work in Malawi

With support from MCC through Malawi’s Power Sector Reform Project (PSRP), non-binding Power Purchase Agreement (PPA) Term Sheets were signed with five independent power producers. Malawi's Electric Supply Corporation (ESCOM) aims to begin negotiating the actual PPAs at the end of April. A Power Africa-funded transaction advisor will support ESCOM with these negotiations. The Millennium Challenge Account (MCA) has produced organizational structures for the two new utilities to be created as part of the ESCOM unbundling effort, and the amendments to the Electricity Act that will enable the unbundling to move forward will be tabled in front of Parliament in May 2016. MCC's CEO, Dana J. Hyde, will visit Malawi next week for the first groundbreaking to result from the compact, and to meet with the President of Malawi and other high-level officials to discuss ongoing power sector reform.

Potential Power Africa Loan Guarantee for Solar PV in Ghana

The German Development Bank (GIZ) and the Ghanaian Ministry of Power (MOP) have worked to complete the RFP package for this competitive tender for a 20 MW Solar PV project. Eighteen bidders were pre-qualified in February. Bids are due in two months. GIZ and MOP have welcomed the idea of the winning bidder being afforded the opportunity to apply for a USAID Development Credit Authority (DCA) loan guarantee.

Power Africa Off-Grid Challenge Goes to Ghana

In late April, the U.S. African Development Foundation (USADF) brought together Off-Grid Challenge grantees from Liberia, Nigeria, Ghana, and Zambia to share information about technology and approaches and to provide USADF feedback on the Off-Grid Challenge. The Ghanaian news media covered the convening, as well as the Off-Grid Challenge’s “ability to nurture African businesses.” Just this week, USADF launched another round of the Off Grid Challenge in Kenya and Ethiopia.

Addressing Ethiopia’s Off-Grid Targets

Power Africa is working with the Ethiopian Electric Utility (EEU) on its short term off-grid targets for installation of rooftop solar systems on up to 70,000 government apartment buildings that will provide supplemental power to the grid. Although the cumulative energy provided could exceed 1,400MW, each system estimated at 2 KW is classified as an off-grid system under Power Africa’s Beyond the Grid Initiative.

Power Trading in East Africa

The Ethiopia-Kenya-Tanzania (EKT) 200 MW Wheeling Tariff is nearly complete. Power Africa’s U.S. Energy Association/East Africa Utility Partnership (EAUP), through its consultant, presented a report to the Kenya Transmission Company (KETRACO) on the development of the tariff calculation for the EKT transaction. The transaction will involve the sale of 200 MW of electricity by the Ethiopian utility to the Tanzanian utility, with the wheeling of that electricity by KETRACO through the Kenyan transmission system. The final methodology will then be used to calculate the tariff for the EKT transaction and be included with a Transmission Service Agreement.

The Economist Looks at Electricity and Business in Africa

In mid-April, The Economist ran a special section on business in Africa, which included two articles related to electricity. One looked at the lack of electricity supply and its impact on manufacturing, and the other featured Nairobi’s Garden City Mall, “where SUVs wait under solar-panelled shades,” thanks to Power Africa partner CrossBoundary.

For real-time updates on the transactions we’re supporting across sub-Saharan Africa, please download the Power Africa Tracking Tool (PATT) app for your Apple device.

Before I close, I also want to share this great video from Akinwume Adesina, President of the African Development Bank (AfDB), a Power Africa partner. The video looks at the bank's commitment to transforming the continent, and has Africans “exchanging High-Fives.”

I look forward to seeing many of you at events coming up in Mozambique, Rwanda, South Africa, and Zambia over the next few weeks.

Best,

Andy