House Passes Electrify Africa Act


Last week, the U.S. House of Representatives passed the Electrify Africa Act of 2014, approving a plan to bring power to over 50 million Africans and further open the door for U.S. investors in the continent's development and growth.

The Electrify Africa Act, which mirrors many aspects of the Power Africa initiative unveiled last year by President Obama, aims to make government-backed credit more accessible to the private sector in order to deliver access to energy for more than 50 million people in sub-Saharan Africa.  This important development could help interested investors access a $300 billion energy market in sub-Saharan Africa and tap into the demand for an additional 20,000 megawatts in the region.

The bill passed by a vote of 297-117 and was sponsored by the chairmen and ranking members of the Foreign Affairs Committee and its Africa Subcommittee.  Its passage confirms the existence of a broad, bi-partisan consensus in favor of supporting U.S. direct investment in Africa’s energy sector.

The bill now heads to the U.S. Senate. If enacted, the Electrify Africa Act will declare that it is the policy of the United States to encourage access to electricity in sub-Saharan Africa.  It will also require that the administration create a comprehensive strategy to help increase electricity in sub-Saharan Africa.

More importantly, the Electrify Africa Act would change how certain U.S. agencies are operating in Africa:

  • USAID: Direct the U.S. Agency for International Development (USAID) to prioritize existing tools like loan guarantees, partnerships and grants to increase electricity in sub-Saharan Africa while also encouraging USAID to develop national, regional and local electricity policy plans.
  • Treasury: Instruct the U.S. Department of Treasury to direct its Director at the World Bank and African Development Bank to increase electricity investments in Sub-Saharan Africa and to coordinate with the private sector.
  • OPIC: Direct the Overseas Private Investment Corporation (OPIC) to prioritize electricity projects and expedite review and approval of loans, guarantees and insurance by investors in sub-Saharan Africa. Instruct OPIC to increase loans, guarantees, insurance programs and commitments in sub-Saharan Africa, including the creation of an advisory council to assist its board.
  • USTR: Direct the U.S. Trade and Development Agency to promote US private sector participation in energy sector development and to seek opportunities to fund project preparation activities including power generation.

Easier access to credit means a likely increase in the number of privatized power projects within sub-Saharan Africa as the U.S. government works with partner countries to open energy markets.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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