Environmental concerns cloud path of African power plans

18 October 2013

Business Day

Within days of each other in June, President Barack Obama and US legislators across the spectrum announced a push to lift Africa´s development by providing electricity to millions without it.

That unanimity has faded a few months later, with action in Congress held up by a dispute over how far to require that power projects are climate friendly.

On a regional tour in June, Mr Obama declared that electricity would be the next major US initiative for the continent as some two-thirds of sub-Saharan Africans lack reliable power.

Mr Obama, in a speech in Cape Town, pledged that the US would commit $7bn over five years to expand "the energy needed to lift people out of poverty".

But the effort in the House of Representatives, which would be longer-term and reach twice as many people as in Mr Obama´s plan, is facing an unclear path.

Industry groups are pressing to ease the "carbon cap" of the Overseas Private Investment Corporation (Opic), the US government institution that provides financial guarantees for the private sector to support development.

The body - which along with the US Export-Import Bank would be at the forefront of African power initiatives - had agreed in response to a lawsuit from environmentalists to reduce its projects´ greenhouse gas emissions by 50% over 15 years compared with 2008 levels.

Nigerian entrepreneur Tony Elumelu has promised $2.5bn for Mr Obama´s Power Africa initiative, which he said would encourage US businesses to step up investment. He envisioned a combination of energy sources, including gas and renewables.

"You need to know where Africa is at this point in time," he said on a visit to Washington urging action by Congress. G eneral Electric, which has led the push to alter the carbon cap, said that renewable energy should play an "important role" in Africa.

"But the reality is that renewables, by definition, have peaks and need to complemented by other forms of power. In that regard, we think that gas, for instance, holds great promise for parts of Africa," said Karan Bhatia, the company´s vice-president and senior counsel for global government affairs and policy.

Mr Obama has vowed to make clean energy a priority in Power Africa amid increasingly dire predictions by scientists who warn the world´s poor will be the worst hit by global warming.

Justin Guay, of the Sierra Club environmental group, said Opic has been at the cutting edge by supporting innovative energy projects such as off-grid, solar-powered homes.

Mr Guay questioned the wisdom of electrifying Africa through costly, large-scale fossil-fuel projects connected by a grid, the original model in the developed world. "It´s hard to believe that the exact same approach works in Africa. They´ve been trying it for decades and it has not worked. I don´t see why doubling down on a failed strategy would produce different results," he said.

Mr Guay said environmental groups would consider a bill that undermines Opic´s carbon cap to be "dead on arrival". "Essentially the proposals we have seen have been to completely eliminate environmental regulations across the board for energy projects in Africa, which is just a completely regressive move," he said.

A congressional aide involved on the bill, called the Electrify Africa Act, predicted a "long road ahead", saying that Democrats were hoping to please environmentalists and Republicans faced pressure from industry.

Staff members nonetheless hope to find compromise language that could come for a vote next year, the aide said.

Advocates said the Electrify Africa Act could provide rare common cause at a time that divisions have literally shut down the US government.

One, the antipoverty campaign supported by Bono, said that the act could help the continent´s development as much as earlier US-led initiatives to fight AIDS and promote trade.

Tom Hart, the campaign´s US director, supported an easing of the climate cap. He cited a study that found that carbon emissions would rise only 1% by offering basic power to all 589-million Africans without it.

Without US action, Africans may increasingly work with China on even dirtier energy such as coal, Mr Hart said.

"We wish it could be done with no more carbon going into the air, but at the end o f the day we believe that this will have a very small impact," he said.

Original article by Shaun Tandon

Category: Energy

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