June 30 (Bloomberg) -- President Barack Obama plans to announce an initiative to enhance access to electricity across Africa by tapping the continent’s vast energy resources and attracting international investment.
U.S. administration officials said the $7 billion venture, dubbed Power Africa, will complement an additional $9 billion in private funds to double access to power in sub-Saharan Africa, where more than two-thirds of the population is without electricity, according to the White House. Obama will unveil the program today in a speech at the University of Cape Town.
“We’re looking to provide support and partnership so the lights can turn on and stay on,” said Gayle Smith, National Security Council senior director for development and democracy.
Obama arrived in Cape Town this morning on the second leg of a trip to Africa where he’s been promoting trade and investment, pledging sustained U.S. engagement and underscoring the importance of democratic values to economic growth.
The failing health of Nelson Mandela has weighed heavily on the trip and Obama has spent time, especially in the South African icon’s home country, invoking his legacy as a model for the continent’s leaders to earn international respect and credibility. Obama will echo that theme today on the heels of visits to landmarks in Mandela’s life and the anti-apartheid movement.
Ahead of the speech, which advisers have described as the signature address of the trip, Obama visited Robben Island, where Mandela spent 18 of his 27 years in prison for opposing white-minority rule. Together as a family, the Obamas toured sites on the Island, including Mandela’s prison cell, the B-section courtyard where Mandela organized with other inmates and the lime quarry where 34 African National Congress leaders, including Mandela, worked.
“The world is grateful for the heroes of Robben Island, who remind us that no shackles or cells can match the strength of the human spirit,” Obama wrote in a guest book, walking silently back into the prison with first lady Michelle Obama afterwards.
The president will deliver his remarks this evening in the same hall where Robert F. Kennedy gave his “Ripple of Hope” speech in 1966, shortly after Mandela was imprisoned. Obama also plans to visit a community center that focuses on HIV/AIDS prevention with Archbishop Desmond Tutu, who greeted Mandela the day he was released from prison in 1990.
‘The Right Things’
“The types of countries that are part of Power Africa, for instance, are the ones who are doing the right things on governance,” said deputy National Security Council director Ben Rhodes. “If we’re going to get investment from international development banks, from private-sector partners, they need to have the predictability that comes with the rule of law and governance.”
The venture will begin in six countries -- Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania -- to add more than 10,000 megawatts of cleaner, more efficient electricity generation capacity and will expand electricity access to at least 20 million new households and commercial entities, according to the White House.
General Electric Co. is among the companies that have contributed to the $9 billion in private-sector funding for the program’s first phase and has committed to help bring 5,000 megawatts of new energy to Tanzania and Ghana.
Smith declined to put a price tag on the total effort and didn’t specify how much of the $7 billion in government resources Congress would need to appropriate for the initial 5-year phase. She said the sum isn’t all straight assistance and includes money from the U.S. Agency for International Development, the Overseas Private Investment Corporation, the Export-Import Bank and other agencies.
“The program is welcome support to the continent where energy access and energy poverty remain significant concerns,” said Taryn Wilkins, an analyst at Bloomberg New Energy Finance in Cape Town. “Key to the success of the implementation of the program is the support of local governments and policy regulation. To date this has been fragmented and inconsistent and resulted in slower development of energy infrastructure programs.”
Today’s announcement comes amid criticism that Obama’s engagement with sub-Saharan Africa has lagged behind that of his predecessors Bill Clinton and George W. Bush, creating an opening for countries like China to tap the region’s resources.
Bush, who took U.S. spending on Africa to new levels, made a six-country visit in 2008 and a three-country stop in 2011 after he left the White House. His Africa legacy includes PEPFAR, a $15 billion commitment to prevent and treat AIDS infections, credited with saving or extending millions of lives on the continent.
Clinton signed the African Growth and Opportunity Act, a trade agreement with countries in sub-Saharan Africa.
Obama was largely occupied in his first term with the U.S. financial crisis, wars in Iraq and Afghanistan and a foreign policy pivot toward Asia.
A year ago, he issued a policy directive on sub-Saharan Africa calling for expanded economic growth and pressing for stronger democratic institutions.
Tomorrow Obama will travel to Tanzania for the last stop of his tour and to the country’s fast-growing metropolis of Dar es Salaam to convene a roundtable of company executives and promote investments in electrification projects.
Obama may meet his Republican predecessor while in Dar es Salaam, who will be there at the same time for a summit to empower Africa’s first ladies sponsored by the George W. Bush Institute. Michelle Obama will join Laura Bush at the event. “There may be something,” Rhodes told reporters traveling aboard Air Force One today.
American companies see a growing economic opportunity in Africa. U.S. merchandise exports to the 49-country region were $21 billion in 2011, up 23 percent from 2010, according to the Office of the U.S. Trade Representative. Imports from sub-Saharan Africa were worth $74 billion in 2011, up 14 percent from 2010. Most of that, about $60 billion, was crude oil.
Africa has 15 percent of the world’s population yet it accounts for only 3 percent of energy consumption, according to a 2011 report by the African Union and other continental organizations that studied power markets demand over the next three decades.
During a press conference yesterday with South African President Jacob Zuma, Obama said that while the U.S. doesn’t need Africa’s energy because of its own advancements in clean energy production, its interest is in expanding the continent’s role in the global marketplace.
“Our primary interest when it comes to working with Africa on energy issues has to do with how do we power Africa so that it can be an effective market creating jobs and opportunity in Africa,” Obama said in Pretoria.
While he was in Johannesburg, Obama spoke by phone with Mandela’s wife Graca Machel and met for 25 minutes with two of Mandela’s daughters and several grandchildren at the Nelson Mandela Centre of Memory in Johannesburg.
Out of deference to Mandela’s family, Obama didn’t visit the 94-year-old leader, who is in critical condition.
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