State Department To Invest $10 million to Extend the U.S.-Africa Clean Energy Finance Initiative
Secretary of State John Kerry has announced that the U.S. Department of State plans to commit an additional $10 million for the U.S.-Africa Clean Energy Finance initiative (U.S.-ACEF), which is aimed at helping Africans transition away from traditional sources of energy that contribute to the global challenge of climate change.
Two out of three sub-Saharan Africans — nearly 600 million people — lack access to electricity. That forces them to spend significant income on costly and unhealthy forms of energy, such as diesel to run factory generators and wood for smoky indoor fires for cooking.
Secretary Kerry announced the additional investment in U.S.-ACEF on August 5 at a U.S.-Africa Business Summit, hosted by the U.S. Department of Commerce and Bloomberg Philanthropies. It raised the total State Department support for the program to $30 million.
The Business Summit coincided with the U.S.-Africa Leaders Summit, which brought nearly 50 African heads of state to Washington for a range of discussions focused on the Continent, its issues, and ways for the United States to partner with the nations.
The Business Summit also included announcements of the latest U.S.-ACEF projects –micro-lending for solar energy and access to fresh water through the Participatory Microfinance Group for Africa program, as well as a small hydroelectric project that will power Shyira Hospital in Rwanda’s northern province.
U.S.-ACEF launched two years ago as an innovative partnership between the State Department, the Overseas Private Investment Corporation (OPIC), and the U.S. Trade and Development Agency (USTDA) to provide early-stage development support for clean energy investment in sub-Saharan Africa.
The initiative brings together USTDA’s project planning expertise with OPIC’s financing and risk mitigation skills to encourage private sector investment and increase support for U.S. businesses and exports in sub-Saharan Africa’s clean energy sector. U.S.-ACEF support ensures that technically and financially sound projects are implemented, rather than falling short because of insufficient project preparation.
U.S.-ACEF has seen high demand, receiving more than 400 project applications since its launch. While originally projected to last five years, the initial $20 million investment is expected to be fully deployed by the end of 2014.
Collectively, these projects are on track to unlock hundreds of millions of private investment dollars that would not otherwise flow. A small amount of support at the project preparation stage can leverage significantly larger investments. For example, $400,000 in U.S.-ACEF support enabled $19.4 million in private financing for Gigawatt Global’s 8.5 megawatt, grid-connected, solar power plant in Rwanda.
U.S.-ACEF projects have the potential to result in hundreds of megawatts in additional power generation capacity across Africa.
For more details about U.S.-ACEF, contact Ashley Allen at AllenA4@state.gov.