Tony Elumelu presents case for Power Africa before US Senate - Page 4 of 4 - Capital Business
Connect with us

Hi, what are you looking for?

Enterprise

Tony Elumelu presents case for Power Africa before US Senate

Some stakeholders resist any use of natural gas over concerns about the climate change impact. The Heirs group of companies cares strongly about protecting the environment for future generations, but we also recognize the importance of addressing the urgent needs of this generation. As I explained earlier, energy poverty is a pressing concern which impacts many social development indicators.

To further put this in context, the average annual carbon emissions in sub‐Saharan African countries is .8 metric tons per capita. The average for the European Union is over 7 metric tons per capita, and in the United States, average annual emissions are as high as 17 metric tons per capita. Every day millions of barrels of oil and gas leave the continent to be used by more developed countries to satisfy their own energy needs. Africans now want to harness these same resources to meet our own urgent development needs.

We must not look at this situation in stark black and white terms, but recognize that we are all stakeholders in developing the continent in a sustainable way. We can do this by encouraging energy efficiencies and clean technologies and by working with each nation to develop a national plan for the harnessing and preservation of its natural resources.

Conclusion and Recommendations

Introduce and pass the Electrify Africa Act: Passage before the end of this Congress is critical because it would be historic, and codify the expansion of access to electricity in Africa as a U.S. government development and foreign policy priority and ensure continuity for the next president and Congress. Like the Africa Growth and Opportunities Act (AGOA), Power Africa, augmented by Electrify Africa Act, has the ability to help lay the foundations for a new US‐Africa relationship: one based on partnership for mutual economic benefit, which simultaneously delivers development gains through capacity‐building, technology and knowledge transfer, and regulatory reform.

Take long‐term approach to development policymaking in Africa, particularly in the power sector: It is all about de‐risking the sector and supporting those partnering for a collective benefit. Not only do investors need the predictability and assurance of a continuity of policy and flow of financing, but it takes a long time to put the infrastructure in place to realize their return on investments.

Look at development differently: Multilateral and bilateral development agencies, like the African Development Bank, also need to consider prioritizing the provision of funds to create sovereign guarantees, bond securitization, and other ways of de‐risking the sector with the clear objective of facilitating private investment in power. Funds could be pooled and reprogrammed for this purpose. Similarly, development finance institutions need to be unleashed to provide support to sustainable and responsible investment in the power sector.

Incentivize policy reforms and energy efficiencies through programmatic support to governments and institutions: There is no amount of capital investment or entrepreneurial zeal that will provide affordable and sustainable access to electricity for Africa’s 1.5 billion people without the full buy‐in and energetic support of African governments. With the best of intentions, for more than 30 years, the various Nigerian military and civilian governments could not come close to meeting the energy needs of their citizens. However, when the current government worked in collaboration with the private sector to develop a sensible privatization plan and schedule, the private sector stepped up to the plate. The government also incentivized the long term‐investment required for the power sector by instituting the multi‐year tariff order to ensure that investors in the power sector earn an attractive rate of return on their investment.

Make strategic investments in catalytic and transformative sectors by taking a supply chain approach to your development policy: Heirs did not start out intending to go into power, our goal was to break into the oil and gas sector as a domestic producer. However, with a lot of gas reserves within our assets and recognizing the needs in our country for electricity, we proceeded to invest in converting that gas to electricity. We are also looking down the supply chain and exploring opportunities for power distribution to tackle power from raw material to end consumption. Basically, we plan to go from our oil & gas block to serving our neighborhood blocks.

Advertisement. Scroll to continue reading.

Make engagement with the African private sector a Congressional priority in oversight and new policymaking: Public‐private partnerships are critical to developing the African continent, particularly in the power sector. It is important to recognize the revolution that has taken place in the African private sector and that we’ve stepped up to the development plate.

Conclusion

We call our company Heirs Holdings because we are committed to enhancing the lives of Africans today, but driven to create transformative change for future generations.

Despite all of these hardships the continent is home to 7 of the 10 fastest growing economies in the world. According to UNCTAD’s 2013 Global Investment Report, at an average of 9.3%, Africa offers the highest rate of return on investment of any region in the world and 26 African countries have committed to support the goal of providing universal energy access by 2030.7

Imagine the potential that could be unleashed if we get electricity right. Imagine the GDP growth, the education, and job opportunities for our youth and the families lifted out of poverty. Imagine Africa’s future.

Thank you again for your kind invitation to participate in this important hearing, and I look forward to answering your questions.

 

Pages: 1 2 3 4

Advertisement

More on Capital Business