US International Energy Policy Priorities Related to Africa

Published on 17th May 2022

African countries are important partners in pursuing shared global and regional priorities — from ending the COVID-19 pandemic and building back to a more inclusive global economy, to meeting the climate challenge and building resilience.  Many African countries are creating opportunities in clean energy, advancing democracy, promoting respect for human rights, and working toward lasting peace and security.   

Moreover, our African partners have continued to show their strength and resilience amid rising global fuel and food prices as a result of Russia’s war against Ukraine. 

Today I’d like to share with you some of our international energy policy priorities related to Africa, which are integral to our overall support for high standard economic growth and development around the world.   

Generally, these are three: 

  • A just and inclusive clean energy transition, leading to economic growth and prosperity,
  • Building robust, sustainable, and transparent supply chains for critical minerals in support of the clean energy transition, and 
  • Improving the financial and regulatory environment in the sector and promoting transparent and accountable natural resource management.

The goal of these three economic and energy priorities is on strengthening local capacity, supporting job creation, and working with our allies and partners to promote economic growth that is beneficial, sustainable, and inclusive over the long term.  For example, we welcome the Power Africa-led Mega Solar initiative, Southern Africa’s largest solar-generation program in Namibia and Botswana.  The mega solar initiative is an ambitious, long-term effort to procure two to five gigawatts of renewable energy – which is enough to power millions of homes and generate thousands of jobs, both directly and indirectly.  it will also prevent an estimated 3.5 million tons of greenhouse gas emissions annually.

In supporting projects like the mega solar initiative, we start from the premise that economic growth that benefits the few, we believe, will not be sustained. Health policy and education policy that excludes women or minority populations will not help the economy grow and prosper. And energy policy that warms our planet cannot continue.   

Through initiatives such as Prosper Africa, the U.S. government connects U.S. and African businesses in ways that benefit both. For example, in Angola, a U.S. developer Sun Africa recently broke ground on a $2.1 billion solar project, and an American consortium led by Quanten LLC will break ground on a $3.5 billion refinery that will produce 100,000 barrels of refined fuel products per day and will be one of only two refineries on the continent to produce fuels to the Euro 5 emissions standard.

In Senegal, a U.S. small business, Weldy Lamont, secured a $100 million grid-extension and rural electrification contract. And our development finance corporation has also supported renewable energy projects for utility scale wind, solar, and biomass in Kenya, Cote D’Ivoire, the Central African Republic, and Senegal.

Now, we recognize that economic growth depends on increased access to affordable and reliable energy — particularly in rural areas, including in and around mining communities.   

That’s why supporting energy security and access are two of the pillars of our energy policy. The third pillar, decarbonization, is the most challenging, tied to the future of our planet, and increasingly relevant to the mining interests gathered here.   

Over this decisive decade for our planet, the nations gathered at COP26 in Glasgow agreed that we must move to low- or no-emissions energy in order to avoid the worst effects of climate change. We see those effects in extreme weather, encroachment of the desert, rising sea levels and devastating floods — like the tragic flooding that occurred in Kwazulu-Natal in April.  

But we also know that moving to a clean energy transition will not happen overnight.  In some cases where carbon neutral options are unavailable, engagement on natural gas project, abated to the fullest degree possible, may be necessary to advance energy security goals, especially in Africa where energy access remains a huge challenge.

Our focus, however, will always be on leveraging the full suite of technical assistance, project finance, and diplomatic tools to deploy clean energy solutions. And many of these solutions will require a range of critical minerals and metals in rapidly increasing quantities.  

By way of example: 

  • An electric vehicle requires six times the mineral inputs of a combustion engine car.
  • Minerals like cobalt and lithium, nickel, and rare earths are currently essential to building wind turbines, photovoltaic solar plants, battery storage, and more.  

Now, the pandemic has taught all of us that concentration of supply chains, whether for medical equipment, critical minerals or otherwise, creates significant vulnerabilities that require international and domestic approaches. Last year, President Biden signed an Executive Order on America’s supply chains to strengthen the resilience of U.S. supply chains, including the critical minerals sector, and on March 31, he announced the authorization of the use of the Defense Production Act to secure U.S. production of critical materials to bolster our clean energy economy.   

In addition, our bipartisan infrastructure law funding is helping spur domestic capacity and innovation in minerals processing and recycling.   

But as we recognize the risks of concentrated control over supply chains by any one country, we also know the United States cannot solve our supply chain vulnerabilities alone.  

We have committed to expanding extraction and processing of minerals at home, while adhering to the highest economic, social, and governance standards. Now we can build similar efforts and partnerships with you.   

Here in Africa, the way we propose to do it is by creating a race to the top in terms of environmental, social, and governance. We will not compete in a race to the bottom. We believe that elevating standards will level the playing field for companies that adhere to high goals, provide opportunities for innovation toward new mining and processing approaches that reduce environmental impacts, and lower the environmental costs of mining and processing.   

To this end, the Department of State is ramping up foreign policy efforts with likeminded partners around the world to secure clean-energy supply chains, from mining, to processing, to recycling. These efforts include working with governments through diplomatic engagement and technical assistance, and engaging with the private sector and multilateral organizations.  

An example of deployment of technologies in this race to the top is last month’s announcement by USAID’s Power Africa for a new public and private sector alliance that will electrify an additional 10,000 healthcare facilities in Sub-Saharan Africa over the next eight to ten years. The healthcare electrification and telecommunication alliance will enhance health services and assist in COVID-19 response efforts by providing reliable, renewable, and affordable electricity in healthcare facilities across Sub-Saharan Africa.  

Electrifying and digitally connecting health facilities with a mobile network connection will strengthen vaccine cold chains, reduce health supply wastage, shore up digital health infrastructure to improve service access and delivery, facilitate information sharing, and support electronic medical records. This will build on Power Africa projects completed through its off-grid program that are already providing clean and reliable electricity to 227 health facilities serving over 2 million people on the African continent.

But strengthening the mining sector in African countries goes beyond development of natural resources. The diversity of supply required to build robust, sustainable, and transparent supply chains will open the gates to midstream processing, digitalization, new processes, and technologies. To be successful, a clean energy partnership between the U.S. and Africa must include promoting refining, processing, and other domestic industries that will bring good paying jobs. This will help Africa to boost both its economic and prosperity and environmental safety. 

We share best practices under our Energy Resource Governance Initiative, or ERGI, through technical cooperation with key partners. This initiative, founded by the United States, Canada, Australia, Peru, and Botswana, seeks to build reliable, responsible supply chains for clean energy minerals and metals. In addition, the implementation of best practices minimizes the environmental and social impacts of mining – precisely the sort of race to the top we are encouraging when it comes to standards.  

In the Democratic Republic of the Congo, Zambia, Kenya, and Uganda, ERGI’s efforts to boost mining capacity and improve regulatory standards complement Power Africa’s focus to accelerate a carbon-free future, and to deploy renewable energy technologies that require resilient critical mineral supply chains.

In March, I signed a Memorandum of Understanding with the Democratic Republic of the Congo’s Minister of Mines to formalize the State Department and Ministry’s mutual recognition of the importance of strong mining sector governance. Under this MoU, we are cooperating with the ministry of mines to build capacity on licensing and contract negotiations, and to strengthen regulatory oversight and sector data management to attract qualified investment. 

Ultimately, we would also hope to build a circular economy for critical minerals through reuse and recycling. Once large numbers of electric vehicle batteries reach the end of their effective working lives and come off the road, there will be enough material to recycle to affect the supply chain in a significant way.

In the context of the clean energy transition, our efforts will require tremendous investment around the world, in sectors like mining, and also in new technologies that will be needed to abate greenhouse gases. The IEA [International Energy Agency] estimates that investment need at four trillion dollars. This is where the private sector comes in. 

We strongly believe that government must work with the private sector to spur and support economic growth and prosperity through high-quality investment. Government must provide the appropriate commercial enabling environment, including government financial support, but bringing these efforts to scale depends on sound business analysis and risk calculations from the private sector. In short, governments and the private sector both roles to play, and appropriate support for the private sector is critical for our shared success.

In this effort, the U.S. government and U.S. companies can play a role in the creation of an investment climate that adheres to high standards for the environment, transparency, sustainability, and governance.   

Successful business relationships, whether private or public, need predictable regulatory and legal environments. Governments will need to enable investments through reforms, and companies will need to manage and pursue business plans that drive the energy transition while still taking on reasonable levels of risk themselves.  

The countries that embrace reform and improved governance will outperform their peers in attracting foreign investment and developing a more robust, diversified, and therefore secure mining and energy sector.    

Angola, for example, continues to make real progress reforming its mining and oil sectors to show international companies that it is open for business as it stands up a new independent regulator to inspect mining activities, and plans to privatize more than 200 public companies including state-owned oil company Sonangol, the state-owned airline, and the national diamond company Endiama.

And Senegal’s leadership and initiative helped it secure its second Millennium Challenge Corporation compact with the United States, valued at nearly $600 million, to address the high cost of electricity. Ensuring consistent and affordable access to energy in places like Senegal will allow business to grow, catalyze private sector investment, and increase productivity and employment. 

So, there’s lots to do. And we are just getting started. 

I look forward to seeing the fruits of our joint efforts – clean energy, good jobs, economic growth, and improved lives. And to get there, our officers serving at our embassies are ready to engage with your governments and companies, and to introducing our U.S. companies and investors to you. 

By Jose W. Fernandez

Under Secretary for Economic Growth, Energy, and the Environment


This article has been read 283 times
COMMENTS