Over one billion dollars debt and financing commitments from U.S. agencies and private investors will be announced for U.S. President Barack Obama’s signature.
The sum is for Africa energy initiative known as Power Africa.
U.S. Agency for International Development (USAID) chief Gayle Smith said that the latest deals were finalised around a U.S.-Africa business forum on the sidelines of the ongoing U.N. meetings in New York.
Smith said that the deals covered funding for regional infrastructure facilities, risk insurance and renewable power projects in Kenya, Nigeria, Senegal, Sierra Leone, South Africa and Tanzania.
Obama inaugurated the initiative in 2013 with an initial investment of 7 billion dollars, which aimed to install 10,000 megawatts of new generation capacity and connect 20 million new customers.
It is also aimed at improving electric reliability across the Sub-Saharan Africa.
The programme hoped to attract private capital into energy projects in a region where regulatory hurdles and lack of risk instruments have often kept Western investors away.
To date, Power Africa has mobilised more than 52 billion dollars in additional commitments, of which 40 billion dollars is from private companies according to USAID, which coordinates the programme.
Power Africa is tracking more than 500 deals, and 40 transaction advisers working across Africa have identified 60,000 megawatts of potential deals, Smith says.
While the initiative has been criticised for its slow start, she said that projects were starting to come online.
“We are starting to see some of these projects go online and actually start the generation.
“We are seeing an uptick in commitments, which is because confidence of the market is building and they’re seeing you can actually get these transactions done,” Smith said.
Smith said that the Electrify Africa Act, which unanimously passed by the House of Representatives and Senate aimed to build on Power Africa
He said that the passage sent “a signal that this is something the U.S. will continue to do” even as the Obama administration winds down.
The legislation is largely symbolic and declares the policy of the U.S. to encourage electrification in Africa and instructs the U.S. Treasury and other agencies to make electrification funding a priority.(Reuters/NAN)