Oil prices saw some extreme…
Oil prices spiked on Monday…
During his three country tour of Senegal, South Africa, and Tanzania, US President Obama has unveiled the Power Africa initiative, in which he has pledged $7 billion of investment over the next five years to increase energy production and access to energy across the sub-Saharan region.
The goal is to double access to electricity across six countries that Obama’s administration has selected for their promotion of good governance; Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.
Africa as a continent and economic region is growing rapidly, and US companies see great potential. The US Trade Representative claims that in 2011 the continent imported $21 billion of merchandise from the US, up 23% on the year before; whilst exports to the US were up 14% to $74 billion, with most of the being oil.
Obama understands that Africa has huge potential to grow, but lacks the financial backing. His new initiative will focus on supplying Africa with the means to support itself, rather than just handing over money to stem the problems for a short while.
Related article: Japan and China Race to Invest in Africa’s Natural Resources
“I’m calling for America to up our game when it comes to Africa. There’s no question Africa’s on the move, but it’s not moving fast enough for the child still languishing in poverty in forgotten townships.”
Africa Power will follow a model that encourages partnerships between the public and private sectors. The US governments $7 billion will be added to $9 billion of private finance, in an attempt to double access to the energy grid in a region where more than two thirds of the populations live without electricity.
General Electric is one of the US companies that contributed to the $9 billion in private investment, and has already agreed to develop 5,000MW of new energy capacity in Tanzania and Ghana.
According to Bloomberg, during the first five year phase one of the initiative’s targets is to add more than 10,000MW of clean, efficient energy generation capacity.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com