2 June 2014

Africa: Private Capital Fuels Power Production - U.S. Energy Secretary Moniz

interview

Washington, DC — This week the governments of the United States and Ethiopia are co-hosting a high-level meeting of African energy ministers, civil society and development organizations, researchers and some 30 U.S. companies in the petroleum and energy sector. The June 3-4 meeting in Addis Ababa will showcase African and U.S. energy policies and discuss best practices, including the acceleration of energy efficient technologies, as well as assessing progress on President Barack Obama's Power Africa initiative. In his Washington DC office, before leaving for a stop in Algeria en route to Ethiopia, U.S. Secretary of Energy Dr. Ernest Moniz talked to AllAfrica's Olubunmi Oloruntoba. Excerpts from the conversation:

The theme of the energy ministerial is 'Catalyzing Sustainable Energy Growth in Africa'. The 'Electrify Africa' legislation sponsored by Republican Representative Ed Royce, with 117 bipartisan cosponsors, calls for a comprehensive U.S. policy to promote more access to electricity across Africa. It passed the U.S. House of Representatives on 8 May and now goes to the Senate for consideration. What can you tell us about it?

The good news is a recognition both in the administration and the Congress that Africa needs a very strong focus on developing its electricity infrastructure - for delivery of what you might call base load power, but also to have distributed power, especially in more rural parts of Africa. I think we're all on the same page that this is a real need.

It will be important, also, for the world, in terms of how we address things like global warming challenges, because this will enable a lot more clean energy in Africa, and it will enable economic development that is good for everybody. We see both need and an opportunity for U.S. and African business.

Do you expect it to pass before the White House summit with African leaders in August?

We in the administration don't put big bets on the timing of Congressional action! Obviously, it would be great. All the support we could get in a timely way would be good, but the energy meeting in Addis is preparatory to the meetings here in Washington D.C. in August.

What kind of energy production are you promoting? Infrastructure to extend the power grid? Oil and gas? Renewables like solar and hydropower? What's the mix?

It's all of the above. Here in the United States, President Obama keeps emphasizing that we are pursuing an 'all of the above' strategy. So when we go to the ministerial, certainly part of it will be infrastructure. Part of it will be renewables – solar, hydro, geothermal in various parts of the continent. Also, of course, we recognize that in parts of Africa there's increasing potential for hydrocarbon production – and part of it is our companies, our government, our financial institutions helping those countries to develop their hydrocarbon resources in a sustainable way. That helps build their economies and helps support the global supply of hydrocarbons.

Here in the United States, we had a major boom in both natural gas and oil production. In our case, the big increases have come largely from what's called unconventional production – shale gas and shale oil, for example. One of the very important emphases that we as the administration place is producing that oil and gas with a reduced environmental footprint. That's one part of sustainability: making sure that the environmental footprint is minimized.

That's experience that we have. That's one of the things that we can help bring to Africa – making sure that the production there has as little environmental impact as possible, while having as much economic impact as possible to help develop the economies.

How does President Obama's Power Africa initiative fit into the ministerial meeting?

Power Africa, first of all, is the high priority of the president. As you know, he announced it last year on his trip to Africa. It starts out with six countries – three in the west and three in the east [Nigeria, Ghana, Liberia, Tanzania, Uganda. Ethiopia]. Clearly, we work with other countries besides those six, and in [Addis] there will be many more countries than those six involved.

We will be talking about the need to bring electricity to sub-Saharan Africa in large-scale. Power Africa is a catalyst for that. We're going to need more resources than governments can bring to bear. The international energy agency estimates that there will be a need for $300 billion of investment in sub-Saharan Africa and energy infrastructure over the next 15 years.

So a big focus of the ministerial meeting be what it will take to mobilize a lot of private capital to invest in the energy infrastructure of Africa. How can U.S. institutions work with African countries to leverage private capital to come in?

There will be an accompanying expo with 30 U.S. companies and a comparable number of African energy companies. To have governments and the private sector – private capital – work together to amplify the resources that we have would make a huge impact on electrification in Africa over the next decade.

What other goals do you have for the ministerial meeting?

There are many other features of the ministerial that are worth mentioning. One is a very important focus on rural development and distributive power, which can include solar and other technologies.

A very big attraction of solar is that it can be modular. Even a small amount of electricity can make a huge difference in the lives of rural families, providing lighting, providing easier conditions for children to study and do other things.

And we should integrate that with efficiency. For example, take lighting; using new technologies like LED lighting, which is taking off dramatically through cost-reduction, by requiring only one sixth of the power of a traditional light bulb. You can get a lot more use of electricity or decrease the amount that you need, which saves in a rural environment as well as the urban environment.

The second major issue is true everywhere in the world, but in the ministerial we will have a special focus on human capacity building, and in particular a focus on women. In my previous life, when I was at MIT [the Massachusetts Institute of Technology], I worked with the Department of Energy to start a 'women in clean energy' activity. At our first meeting the energy minister from South Africa, a woman, came to give a keynote speech.

Leadership Africa USA tells us that African energy ministers are asking whether this meeting in Ethiopia will be a 'one-off' or whether it will be part of a continuing process.

Clearly, we need to not just visit Addis and find it a pleasant for a few days. We need to have follow through. That's where a couple of points come in. One is that the ministerial in Addis will feed into the summit of African leaders in terms of specific proposals going forward. Secondly, this focus on getting the financial institutions working with private companies – U.S. and African – is where we expect to have lots of follow through in the years going forward

What will you count as success from the ministerial meeting?

I think the summit will succeed if it makes these links, company to company, U.S. and Africa, and companies to our financial institutions.

We expect, again, roughly 30 US companies to be at the expo taking part in various panels and, probably more important, making contacts between African and U.S. companies. That's where the big infrastructure building is coming from.

Our job is to facilitate it, which is why I really want to emphasize that we are going [to Addis] with five of our major government institutions that help support private sector activity, like the Export/ Import Bank, the U.S. Trade and Development Agency, the Overseas Private Investment Corporation, the Millennium Challenge, the Agency for International Development (USAID). All of these play roles in advancing specific projects in a variety of ways. Some are grants. Some are loan guarantees or risk management activities that can help the financing of specific projects all across Africa. That, really, in the end, is the long-term success story – kicking off those private sector activities.

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