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Could stalled Power Africa initiative dampen Obama visit to Africa?

President Obama's $7 billion plan to expand electricity access in Africa is largely on hold until Congress renews the Export-Import Bank charter.

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Ben Curtis/AP
Workers finish installing a large billboard showing Kenya's President Uhuru Kenyatta (l.) and President Obama (r.) in downtown Nairobi, Kenya on Thursday. In his first trip to Kenya since he was a US senator in 2006, Obama is scheduled to arrive in Kenya on Friday, the first stop on his two-nation African tour in which he will also visit Ethiopia.

President Obama's trip to Kenya and Ethiopia may be colored by a disappointing tinge: his $7 billion plan to expand electricity across the continent appears to be in jeopardy.

Some $5 billion of what Mr. Obama had set aside for his Power Africa initiative fell under the auspices of the currently-defunct Export-Import Bank.

On June 30 Congress declined to reauthorized Export-Import Bank, the United States' official export credit agency. Now the bank which guarantees loans to foreign companies buying US-made products cannot approve transactions related to Power Africa.

The bank was able to approve just $132 million before the agency's charter expired. And an additional $9 billion in aid promised by private entities will most likely be unaffected by the political disputes over the Export-Import Bank in the United States. 

Obama warned Wednesday that American businesses are suffering while the Export-Import Bank lapses. "Orders are on hold, business is in danger, potential expansions will stall, fewer employees will be hired if we do not get this done," he said.

Besides American businesses, his major initiative to help Sub-Saharan Africa double access to electricity is also in jeopardy.

Obama announced the Power Africa program two years ago with its emphasizing that the program would help developing nations in Africa implement clean energy projects. As The Christian Science Monitor Jared Gilmour explained last August:

If successful, Africa could serve as an example of how developing populations can boost quality of life without relying on the carbon-heavy coal that fueled growth in the industrialized world. Many parts of rural Africa are naturally well-equipped for a power grid that is more decentralized and renewable-based than Europe’s or North America’s.

If, on the other hand, African nations and other emerging economies follow their predecessors into fossil fuel-based economies, there would be little hope of reining in the runaway global emissions of heat-trapping gases that cause climate change.

Vera Songwe, the West and Central Africa regional director for the World Bank Group's International Finance Corp., says Obama's program is not going to fund all the continent’s energy needs, but will encourage the US private sectors to take that challenge. “Many of these U.S. companies are a bit shy about coming onto the continent,” she told the Associated Press. “With Power Africa, there is a concerted effort by all the US agencies to try to accompany US businesses into Africa.”

Chronic power shortages and rolling blackouts affect hundreds of millions of Sub-Saharan Africans. Obama’s objective is to expand access to power to 20 million households and businesses through new power plants.

This report includes material from the Associated Press.

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