WASHINGTON – Over 600 million people in sub-Saharan Africa who presently lack electricity access will be getting a sizable investment from Sweden. Last June, President Obama commenced Power Africa, an ambitious initiative to double sub-Saharan Africa’s access to electricity. At the U.S.-Africa summit in Washington D.C., the Swedish government announced its commitment of $1 billion to advance the Power Africa initiative.
“I am proud to announce Sweden’s participation in President Obama’s Power Africa Initiative. Our participation is a clear sign of the solid partnership between Sweden and the U.S. in the field of development cooperation. Power Africa marks a new age in the use of innovative financing solutions in development cooperation,” said Swedish finance minister Anders Borg.
The $1 billion Swedish investment complements the U.S.’s $7 billion contribution to developing Africa’s energy sector.
At the Corporate Council on Africa’s Business Forum’s Power Africa Luncheon, Borg said, “If we take a really long term perspective, then we will have an Africa with 2.2 billion people” by 2050. He added that, “In Africa we have two new Chinas coming in the next 30 to 40 years.” The finance minister also explained that the Swedish investment includes measures like credit guarantees to assist allaying the risks to African energy’s private sector investors.
The entire continent of Africa’s total power generation capacity is nearly equivalent to that of a moderate-sized country like South Korea. More than 70 percent of Africa still lacks a dependable supply of electricity, which comes at a cost to the continent’s GDPs.
“By focusing on the energy sector, more people and areas will gain access to electricity, which will be a strong force to economic and social development to the benefit of poor people,” said Borg.
The U.S. Agency for International Development (USAID) remarked that Sweden’s commitment will help “unlock additional private sector investment that is so critical for transforming the energy sector in Africa” and provide energy to very remote areas that “cannot rely on a national electric grid for their energy access needs.”
Power Africa focuses on boosting energy security, increasing economic growth and cutting poverty by investing in wind, solar, oil, gas, hydropower and geothermal resources. Every dollar invested in Power Africa has already drawn in $2 in private sector investment contributions.
The initiative operates in six countries as of now, but will expand as more investments and commitments join. Announced at the U.S.-Africa summit, the new $12 billion of investments from sources like Sweden, the World Bank and businesses is a boon to Power Africa’s progress, bringing its funding total up to $26 billion.
The new commitments were a key point of the three-day summit that gathered nearly 50 African heads of states in Washington.
Led by the private sector, Power Africa last year laid down its impressive initial goal by seeking the addition of more than 10,000 megawatts of cleaner, newer electricity generation capacity and boosting electricity access by a minimum of 20 million household and business connections. With the new financial commitments, President Obama has raised the bar from providing power to 20 million to 60 million businesses and homes.
– Annie Jung