    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                          ELECTRIFY AFRICA ACT OF 2013

    =======================================================================

                                     MARKUP

                                   BEFORE THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                   H.R. 2548

                                   __________

                               FEBRUARY 27, 2014

                                   __________

                               Serial No. 113-117

                                   __________

            Printed for the use of the Committee on Foreign Affairs

    Available via the World Wide Web: http://www.foreignaffairs.house.gov/
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                          COMMITTEE ON FOREIGN AFFAIRS

                     EDWARD R. ROYCE, California, Chairman
    CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
    ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American
    DANA ROHRABACHER, California             Samoa
    STEVE CHABOT, Ohio                   BRAD SHERMAN, California
    JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
    MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
    TED POE, Texas                       GERALD E. CONNOLLY, Virginia
    MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
    TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
    JEFF DUNCAN, South Carolina          KAREN BASS, California
    ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
    MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
    TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
    PAUL COOK, California                JUAN VARGAS, California
    GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
    RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III,
    SCOTT PERRY, Pennsylvania                Massachusetts
    STEVE STOCKMAN, Texas                AMI BERA, California
    RON DeSANTIS, Florida       ALAN S. LOWENTHAL, California
    TREY RADEL, Florida--resigned 1/27/  GRACE MENG, New York
        14 deg.                          LOIS FRANKEL, Florida
    DOUG COLLINS, Georgia                TULSI GABBARD, Hawaii
    MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
    TED S. YOHO, Florida
    LUKE MESSER, Indiana

         Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

                   Jason Steinbaum, Democratic Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   MARKUP OF

    H.R. 2548, To establish a comprehensive United States Government
      policy to assist countries in sub-Saharan Africa to develop an
      appropriate mix of powersolutions for more broadly distributed
      electricity access in order to support poverty alleviation and
      drive economic growth, and for other purposes..................     2
      Amendment in the nature of a substitute to H.R. 2548 offered by
        the Honorable Edward R. Royce, a Representative in Congress
        from the State of California, and chairman, Committee on
        Foreign Affairs, and the Honorable Eliot L. Engel, a
        Representative in Congress from the State of New York........    19
          Amendment to the amendment in the nature of a substitute to
            H.R. 2548 offered by the Honorable Mark Meadows, a
            Representative in Congress from the State of North
            Carolina.................................................    50

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE RECORD
                                    APPENDIX

    Markup notice....................................................    56
    Markup minutes...................................................    57
    Markup summary...................................................    59

                          ELECTRIFY AFRICA ACT OF 2013

                                  ----------

                          THURSDAY, FEBRUARY 27, 2014

                           House of Representatives,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The committee met, pursuant to notice, at 10:06 a.m., in
    room 2172 Rayburn House Office Building, Hon. Edward Royce
    (chairman of the committee) presiding.
        Chairman Royce. The committee will come to order. I will
    ask members to take their seats. And pursuant to notice, we
    need today to mark up H.R. 2548, the Electrify Africa Act. And
    without objection, all members may have 5 legislative days to
    submit statements for the record or any extraneous materials
    for today's bill. So I will now call up H.R. 2548. Without
    objection, the bill is considered read.
        The Royce-Engel amendment in the nature of a substitute
    that was provided to your offices Tuesday morning is considered
    base text for purposes of the markup and is open for amendment
    at any point. And after my brief remarks, I will recognize the
    ranking member, Mr. Engel from New York, and then any other
    members seeking recognition to speak on today's bill.
        [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Royce. Ladies and gentlemen, when we flip a light
    switch in this country, we power up a computer or swipe a
    credit card, we take for granted that the electricity that we
    are going to need to do that function is going to be there. But
    imagine for a moment if our shops or our schools or our
    hospitals and our homes had absolutely no electricity, what
    would happen if you flipped that switch and nothing happened?
    Even the most industrious manufacturer would be very hard
    pressed to stay in business. The most dedicated surgeon would
    be powerless in a hospital to save lives. And unfortunately,
    this is the reality throughout most of sub-Saharan Africa.
    Seventy percent of Africans lack access to dependable
    electricity.
        The Electrify Africa Act is a response to this massive
    power shortage. It offers a market-based, strategic framework
    to bring affordable energy that is reliable to the 600 million
    people in sub-Saharan Africa who currently have none. Why do we
    care? We care because jobs are at stake, also human lives are
    at stake.
        Now over all of Africa, the population is now about one
    billion. We have one billion consumers. The African continent
    has great economic potential. Last year, a bipartisan committee
    of a delegation here traveled to three countries, to Ghana, to
    Liberia, and Nigeria to see how these countries could make
    better use of the African Growth and Opportunity Act. I can
    tell you I and Greg Meeks have traveled in the past to these
    countries to see what could be done to create more economic
    growth. And we passed landmark legislation a decade ago in
    order to try to increase trade, increase opportunity, remove
    the barriers for exports from these countries to the U.S. But
    in all three of these countries, the production of goods for
    export was rendered nearly impossible by a lack of affordable
    energy, even where other countries in the region were doing
    well and where conditions were ripe for manufacturing, the
    problem is that the cost of running a plant on a diesel
    generator is simply prohibitive, not to mention the absence of
    electronic devices and Internet access now so critical to
    businesses and now very critical to education.
        This lack of electricity even has a direct impact on our
    nation's spending. For example, the U.S. Embassy in Liberia
    spends--how much do you think they spend on their diesel
    generator there? $10,000 a day. That is why it is so
    impractical to think that small businesses are going to be set
    up to run and then have to rely on diesel generators. There is
    no usable grid in Liberia right now.
        When I chaired the Africa Subcommittee, I saw first hand
    how a lack of electricity stifles development. Women spend long
    days searching for wood or searching for charcoal to provide
    heat for their families. Children study with light from highly
    flammable kerosene lamps and health risks are very high as a
    result. Cold storage of vaccines is almost impossible in this
    kind of a situation. Families resort to using inefficient and
    highly polluting sources of fuel and you can imagine what
    happens when the toxic fumes from those fuels waft through
    their homes. As a matter of fact, that causes more deaths in
    the region than HIV/AIDS and malaria combined.
        Many of this committee have spent years working to help
    transition African countries away from assistance into economic
    growth. The Electrify Africa Act mandates a clear and
    comprehensive U.S. policy so that the private sector can
    proceed with the certainty it needs to generate electricity in
    Africa at no cost, by the way, to the U.S. taxpayer.
        We need to be engaged. Where the United States has left a
    void for economic investment in Africa, China of course, steps
    in. China has directed $2 billion toward energy projects on the
    continent. If the United States wishes to tap into this
    potential consumer base, we must act now. So another point I
    would make for the members.
        And I want to thank Ranking Member Eliot Engel and Africa
    Subcommittee Chair Chris Smith and Ranking Member Karen Bass,
    in particular, for helping craft this bill which comes at a
    crucial moment in time. And I want to also recognize the wide
    range of support for the bill from the 35 African Ambassadors
    who have sent letters of support to us here on Capitol Hill to
    the private sector groups like Chamber of Commerce and the
    Corporate Council of Africa and advocacy groups like the ONE
    Campaign and I would just like to ask those members of the ONE
    Campaign who are with us, if they would just stand for a moment
    to be recognized as well. Thank you very much for your
    engagement on this issue and the assistance in trying to
    electrify Africa.
        And at the end of the day, I know the committee wants to
    see communities in sub-Saharan Africa flourish. This bill sets
    out a comprehensive, sustainable, market-based plan to bring
    hundreds of millions of Africans into the global economy. And I
    will now turn to our ranking member, Mr. Eliot Engel of New
    York for his opening statement.
        Mr. Engel. Mr. Chairman, thank you for holding this markup
    of the Electrify Africa Act. I am very pleased and honored to
    be the lead Democratic cosponsor of this bipartisan legislation
    which addresses a critically important issue and let me say,
    did you ever see so many good looking, young people who stood
    up. I want to thank them for everything they are doing as well.
    It really makes me feel good when there are young people who
    are so involved. We have great hope for this country and for
    the future of the planet with young people being so heavily
    involved.
        Mr. Chairman, sub-Saharan Africa is one of the most energy-
    deficient regions of the world with nearly 70 percent of the
    population which is more than half a billion people lacking
    access to electricity. In some countries that figure is even
    higher. In DRC, 85 percent of the population has no power;
    Kenya, 82 percent; Uganda, 92 percent. And those are really
    staggering statistics. The lack of reliable electricity has
    many negative consequences. In desperation, people burn
    anything they can find for heat and cooking: Wood, plastic,
    trash, and other toxic materials. These dirtier fuels cause
    greater harm to people's health and to the environment. Rural
    populations living off the grid require kerosene and cooking
    fuel to be transported from larger cities, making essential
    commodities cost more for those who are already struggling to
    survive.
        Many businesses have had a hard time succeeding because
    they are forced to pour expensive diesel fuel into generators
    day and night or deal with constant power outages from
    unreliable electrical grids. Hospitals cannot provide adequate
    services because they are unable to provide consistent cold
    storage, light or power for life-saving devices and the list
    goes on and on.
        This bill begins to tackle these challenges in a
    comprehensive way. It directs the Executive Branch to develop a
    strategy to increase electrification in Africa and to employ
    U.S. assistance programs to help accomplish that goal. This
    long-term strategy will focus not only on building more power
    plants, but also on increasing African Government
    accountability and transparency improving regulatory
    environments and increasing access to electricity in rural and
    poor communities through small, renewal energy projects.
        Only by addressing all of these challenges together will
    people in Africa finally have access to electricity that will
    allow them to grow their economies and ultimately reduce their
    reliance on foreign aid.
        Mr. Chairman, I know that you know sub-Saharan Africa is
    filled with dynamic individuals trying to make their countries
    better and I believe this bill supports their entrepreneurial
    spirit.
        Mr. Chairman, our staffs have worked together in a
    bipartisan fashion which I am pleased to say has been the way
    we have run this committee. It has been a pleasure. We drafted
    this bill and refined it with a substitute now before us and we
    did it together. So Mr. Chairman, I appreciate your deep
    commitment to the people of sub-Saharan Africa and I look
    forward to working with you to move this bill forward. I yield
    back.
        Chairman Royce. Thank you, Mr. Engel, very much. And thank
    you for your assistance also in drafting the legislation. We
    will go now to any members seeking to speak. We will go first
    to Mr. Chris Smith of New Jersey.
        Mr. Smith. Thank you very much, Mr. Chairman. Thank you,
    and Eliot Engel, for crafting this excellent bill, the
    Electrify Africa Act. Congress' interest in Africa is not only
    long standing and robust, but it is often varied. At times the
    focus is on peace and development, the mitigation of war.
    Sometimes it is more of an interest on trade. Others obviously,
    and all of us, I think, play a role in all of this. We believe
    education is the key to Africa's future success. And of course,
    humanitarian issues and combating of things like malaria, HIV/
    AIDS and TB are very, very high on the agenda. But you know,
    all of this and all of the progress is held back by the lack of
    electricity. And this legislation isn't a grant. It is not a
    brand new set of foreign aid initiatives. It calls for very
    serious cooperation and a strategy to electrify Africa, to use
    many of the advances we have made over the last several years
    with regards to electricity, best practices, of course, doing
    it in an environmentally sane and safe way letting us share
    that with Africa. Let us do it as partners. This legislation is
    an idea whose time has come and I thank the chairman for
    sponsoring it.
        Chairman Royce. Thank you, Mr. Smith. We now go to Karen
    Bass of California.
        Ms. Bass. Thank you, Chairman Royce and Ranking Member
    Engel for your hard work on this and I would like to associate
    myself with the comments of the ranking member Engel in terms
    of congratulating the chair on how the committee is run and the
    bipartisan way in which we have done legislation.
        With greater access to electricity, Africa has the capacity
    to grow its economies, facilitating greater volumes of intra-
    regional, trans-continental, and international trade. Greater
    access to electricity also enables countries to expand human
    capacity and address the critical challenges of under
    employment. Access to additional power will also help both
    individual countries and geographic regions address
    infrastructure challenges, all of which contribute to
    increasing the capacity of African nations and the continent as
    a whole.
        Greater access to electricity improves the quality of life
    for not only urban, but rural communities. In the absence of
    electricity, the ability to work, to run a household, or to do
    homework after dark is truly a challenging feat, especially in
    rural areas. Many of you may have heard the inspiring story of
    the young Kenyan engineering student, Mr. Evans Wadongo, one of
    CNN's top heroes of 2010, who at the age of 19 literally
    transformed the lives of people in his village by developing a
    solar lamp. Ask why he spent so much time and money attempting
    to produce the lamp, Mr. Wadongo said he did so to improve the
    lives of people like himself and to ensure that no other
    student had to go through what he had to go through just to
    study.
        Mr. Wadongo's eyesight is permanently damaged due to
    prolonged use of kerosene lamps and the irritation of his eyes
    from kerosene fumes. Reportedly, Mr. Wadongo hopes to produce
    some 100,000 solar lamps by 2015. His story underscores the
    importance of balanced access to electrical power and the need
    to ensure that power is not simply directed to the economic
    sectors, but also to the rural and low-income communities where
    many bright students like Mr. Wadongo live.
        I think for all of us, it is very hard to imagine what it
    would be like to go through a day without electricity. I often
    think of the health challenges that this presents and the
    number of women on the continent who have to deliver children
    in the dark.
        In closing, I want to acknowledge the concerns raised by a
    number of organizations and express my appreciation to your
    staff, Mr. Chairman, for meeting with all of the advocacy
    groups and taking their concerns into consideration. I
    understand that their concerns are that renewables be included,
    that access to electricity be for the general population, and
    that we make sure that governance of the infrastructure is
    transparent. I yield back the balance of my time.
        Chairman Royce. Thank you, Congresswoman Bass. We will now
    go to Congressman Duncan of South Carolina.
        Mr. Duncan. I want to thank the chairman. You know, this is
    an interesting bill to me, being a pro-energy guy and thinking
    about improving the quality of lives for folks all around the
    globe, specifically in Africa today, but we can incorporate
    most third world countries and how do we improve the lives of
    folks that are using charcoal to cook with or wood or coal to
    heat their homes. Electricity does that.
        Electricity provides a way to keep food from spoiling for a
    long time. Electricity provides an ability for third world
    parents to educate their children and help them read after the
    sun goes down. It provides the air quality improvement. If you
    are cooking and heating with combustible products like coal or
    charcoal or wood, air quality is not as good.
        So I am supportive of this effort. But I want to mention to
    the committee one thing that I would hope the administration in
    embracing this bill would consider and that is small, modular
    reactors which is a new technology, but new to this day, but
    not new to the nuclear industry. It has been around a long
    time. Small modular reactors can power small cities, large
    neighborhoods, and in this case in Africa, small villages with
    a very stable 24/7 baseload power supply to meet the needs of
    the electrical components there.
        And if you think about--and I think about the African
    villages, but also the manufacturing processes that could come
    in to provide incomes and stability, I think about the moms and
    dads having fresh food in their refrigerators and cooking over
    electric stoves and that sort of thing. So there are a lot of
    things to think about when we think about electricity in third
    world countries and transmission lines and security and other
    things, especially with regard to small modular reactors that I
    know others that may not like nuclear power will raise the
    concern about proliferation of nuclear materials, but there are
    ways that can be used in that area.
        So I would hope that the administration would look at small
    modular reactors as a viable source and it is not all just
    hydro power. There are other ways that we can meet the needs. I
    think this is the right thing to try to support electrifying
    Africa and all of the third world to bring them up in their
    standard of liver and quality of life. And with that, Mr.
    Chairman, I yield back.
        Chairman Royce. Thank you. We go now to Mr. Meeks of New
    York.
        Mr. Meeks. Thank you, Mr. Chairman. First, I want to join
    Mr. Engel and Ms. Bass in congratulating you. This is not new
    for you. You have been working to make sure that Africa
    receives the kind of investments and infrastructure from the
    time that you were the chair of the Subcommittee on Africa and
    you have conducted yourself here in a manner to make sure that
    that has become a reality. And so I want to thank you for your
    hard work and your diligence on this particular bill.
        I want to thank Ranking Member Engel who has consistently
    and constantly been working very hard to work in a bipartisan
    manner, making sure that his contributions to you and the way
    he listens and talks to members on our side of the rise on this
    committee. That makes this happen and that makes these things
    work. So I want to thank Mr. Engel and Mr. Smith, who is always
    on humanitarian causes and works hard in doing what he has to
    do. And in regards to this bill, I want to thank you, because
    it is a joint effort.
        And of course, my friend and colleague, Karen Bass, who I
    think of two things. Number one, I also think of my good friend
    who is looking down from heaven, Donald Payne, who had worked
    so hard and so tremendously for a long period of time on
    working on Africa and trying to see this happen and then the
    baton being passed to Karen Bass, who in her vision, says that
    we are going to work and she was going to work just as hard as
    Donald did. And every time I look up, there is something in my
    hand about Africa that Karen is producing to make sure that
    Africa is on the thoughts and the minds and the hearts of
    everybody. So I want to thank you.
        And of course, I want to thank Mr. Bono and the ONE
    Campaign who decided to utilize his celebrity to make sure it
    becomes on the lips of a lot of individuals. Sometimes if you
    don't have a celebrity, what is going on in other parts of the
    world no one knows about. But the ONE Campaign and Mr. Bono
    decided that they were going to stay focused on this and bring
    the attention to the world. And that then also gives us the
    motivation on the committee to make sure that we get something
    and we do something right. And I think that is what we are
    doing here today. So I want to thank them.
        I am so excited to see that the committee takes this
    proactive action to increase U.S. engagement and investment in
    Africa. You know, years ago when one would discuss Africa often
    we only heard it characterized as the poorest continent on the
    planet. That is no longer the case. More often you hear about
    flourishing economic progress today. Six out of the top ten
    fastest growing economies in the world are in sub-Saharan
    Africa. Over the past decade it has been a six-fold increase in
    U.S. and foreign direct investment in sub-Saharan Africa to
    $39.5 billion.
        On June 30, 2013, in a speech in Capetown, South Africa,
    President Barack Obama remarked, ``There is a historic shift
    taking place from poverty to growing, massive middle class.''
    Africa has a great story to tell, but more needs to be done for
    Africa to reach its full potential. Investments and key
    infrastructure such as reliable energy are vital to continuing
    African growth and development.
        President Obama's Power Africa initiative capitalizes on
    the progress by leveraging international support, the private
    sector, and regional cooperation to dramatically increase
    electricity across Africa. The Electrify Africa Act will
    solidify ambitious goals for low cost, clean energy on the
    continent, including 20,000 megawatts of electrical power by
    2020.
        I have hosted various seminars and trade events to
    encourage trade and investment in Africa. The Electrify Africa
    Act of 2014 will bring the kind of confidence to investors that
    Africa has the capacity to support long-term economic growth
    and is a stable partner for private corporations, NGOs,
    international organizations, and entrepreneurs. Through this
    bill, more effective investments in the electricity sector will
    further enhance Africa's trade capacity. And it will give
    children the ability to learn; hospitals, the opportunity to
    heal; families, the opportunity to come together; create jobs
    and opportunities for those who had none.
        I look forward to working with my colleagues on this
    committee to ensure Africa's future continues to be as bright
    as the sun. Thank you, and I yield back.
        Chairman Royce. Thank you very much. We go now to Mr. Mo
    Brooks of Alabama.
        Mr. Brooks. Mr. Chairman and members of the committee, I
    very much appreciate the altruistic motivations that I have
    heard in support of this legislation, but quite frankly I don't
    believe America's financial condition is such that it supports
    spending this money that we don't have on these projects. The
    realities of America's financial condition, quite frankly, are
    rather dire. Over the past 5 years we have averaged trillion-
    dollar deficits every single year. That has been our average.
    To put that in a different perspective, I would ask the members
    and the audience to think in terms of their personal finances.
    How long could each of us stay out of bankruptcy if year after
    year after year for 5 consecutive years, 30 percent of our
    operational costs, what we spent to live on, was borrowed
    money? Yet that is the financial condition of the United States
    of America over the past 5 years.
        We have economic history that we can look at that tells us
    what the dire consequences are going to be if we continue on
    this path. You can look at Detroit and Stockton, major cities
    in the United States of America. They are in bankruptcy because
    of this tendency to spend money that you don't have which
    politicians are also apt to do. Now in Detroit, they are
    bailing in bankruptcy whether retirees of the City of Detroit
    are going to receive the pensions that they earned during their
    lifetimes and that they now need during their elderly years.
        We can look at Spain and Greece, again, a couple of
    governments who have not had financial constraint and who have
    been spending money that they do not have. Their unemployment
    rate right now exceeds 25 percent in both of those nations. Now
    think about that for a moment. Those are unemployment rates
    because of financial irresponsibility that are worse than at
    any point in time during America's Great Depression of the
    1930s.
        You can look at Argentina and Venezuela if you want more
    examples of the consequences of the path that we are on, where
    in 1 month their currency was devalued anywhere from 17, 18
    percent on the low side to roughly 50 percent on the high side
    in 1 month. Of course, you are going to have economic adverse
    consequences from that or you can look at Puerto Rico, a part
    of the United States, which just 2 weeks ago Fitch downgraded
    their sovereign debt to junk bond status.
        Puerto Rico is going to be suffering for years, if not
    decades, because of the financial irresponsibility of their
    leadership or they didn't properly prioritize and where they
    didn't say no to good things, not because they don't want to do
    those good things, but because they don't have the money with
    which to do those good things.
        Let us be clear then. Every penny that is spent by America
    on building power plants and power lines in Africa is borrowed.
    It is money we do not have and money we do not have the ability
    to pay back. That having been said, there is some issue about
    whether this bill is going to cost American taxpayers money. I
    would direct everyone to Section 6 of the bill which is page 11
    where we are going to be guaranteeing loans: ``USAID should
    identify and prioritize loan guarantees to local sub-Saharan
    African financial institutions.'' That is money that the United
    States of America is on the hook for.
        If you go to the very next paragraph, it is talking about
    partnerships and grants, again, taxpayer money that would have
    to be spent. If you want to look at Section 8 on page 13, the
    Overseas Private Investment Corporation, which by the way we
    appropriated $55 million for in FY 2012 and the President is
    asking for $72 million in 2014 in his budget proposal. That
    also is going to be assisting with investments that in turn
    cost money ultimately that may be American taxpayer money.
        Before I go any further, let me emphasize, USAID does not
    come cheap. We are talking $17 billion FY 2014, $17 billion.
    That is how much that is costing American taxpayers. Or if you
    want to go to Section 9, Director of Trade and Development,
    page 17 again, this one is talking about, if you will bear with
    me while I get to that page, ``the Director of Trade and
    Development Agency should promote United States private sector
    participation in energy sector development.'' That is
    administration. That is going to cost money for us to do that.
    ``Seek opportunities to fund project preparation activities
    including power generation.'' There is a whole slew of things
    that are going to cost, but the bottom line is this, there is
    no way that anyone can say that this is not going to cost
    American taxpayers money. It is. Money that we don't have.
        You can make the argument that the money is going to be
    spent anyways, and that we ought to spend it on this program
    which is a separate argument. But I would submit in response
    that once you lock this legislation in it is going to be very
    difficult to cut the funding to conform to the financial
    circumstances that we face as a nation. So I admire the
    altruism that is expressed so far. I regret that because of our
    nation's financial condition I cannot support spending American
    taxpayer dollars on power lines and power plants in Africa.
        Chairman Royce. To recognize myself, of course, what this
    bill is about is giving the private sector in the United States
    the certainty it needs to go in and create in Africa products
    that are American-made products that create American jobs over
    the Overseas Private Investment Corporation. And if we go
    through the scoring of the CBO, this, in fact, is a proposal
    that not only does not cost, this is one of the few proposals
    that we are going to pass that actually is scored to bring
    revenues into the Federal coffers here in the United States.
    Why is that so? Because when you give American companies the
    certainty that they can go and invest, they do so. They create
    the synergy of the new jobs and the new economic relationship
    and to put this in context, this is something of a race in
    Africa between the private sector, the U.S. going in and
    investing, and China going in and investing in a very different
    way.
        When the U.S. goes in, we have a certain template that we
    are attempting to sell here, market economy, an open economy,
    not sole sourcing products, but opening up to the international
    market. The rule of law becomes part of this because over AGOA,
    this is part of the thesis of what we do when we engage with
    African states, recognizing the rule of law, recognizing an
    independent court system, and now providing energy,
    uninterrupted energy in order to be able to entice additional
    U.S. investment in the subcontinent.
        So at the end of the day, when we look at the CBO report
    and it shows a return of tens of millions of dollars on these
    projects, I would argue that this is a very wise investment for
    the United States to make. And I know Mr. Sherman seeks
    recognition from California, thank you.
        Mr. Sherman. I want to associate myself with the chairman's
    opening statement and just about everything else that has been
    said there. In response to the gentleman from Alabama, as the
    chairman points out, this bill has no additional cost. We have
    an obligation to spend our foreign development dollars as
    effectively as possible and I am proud to be one of many
    cosponsors of this bill because this bill will help us be more
    efficient.
        It involves using existing loan guarantee authority,
    encouraging the World Bank and the African Development Bank to
    use their dollars to focus on electricity. And as to the
    Overseas Private Investment Corporation, we have had hearings
    in our subcommittee on this. As a technical matter, $72 million
    is appropriated this year or will be under the President's
    request, but that is a bookkeeping entry.
        Over the years, the Overseas Private Investment Corporation
    has returned more money to the Treasury than it has received.
    And I am confident that the guarantee fees that it will charge
    to guarantee debt to finance projects, to electrify Africa will
    again be part of their success in earning a profit for the
    United States Treasury.
        So even if one is not an enthusiastic supporter of foreign
    aid, I happen to be, but not everyone is, this bill represents
    the very efficient use of a small amount of money that would be
    spent anyway to do something that is important for Africa as
    well, illustrated in the comments here and also very important
    for African global trade. I yield back.
        Chairman Royce. Yes, if the gentleman yields back, I would
    point out that what we are actually talking about here is a
    template. For some time now, this country has been moving away
    from aid, the U.S. has been moving away from aid to trade with
    Africa. But to now say that we are going to move away from
    trade and investment in Africa with respect to the OPIC
    template which again is giving U.S. firms the security they
    need to go in, they are paying fees. And I just want the
    members to understand this. The fees that the companies pay to
    go in in order to make these investments is what covers the
    cost. And the structure of that fee system is such that
    according to the Congressional Budget Office, there is a return
    on investment. In other words, there is net revenues flowing in
    going forward to the U.S. Treasury when contrasted with the
    expenditures. It is a net revenue of tens of millions of
    dollars.
        So with that said, let me recognize who is next in the
    queue and that is Mr. Gerry Connolly of Virginia.
        Mr. Connolly. I thank the chairman, and I associate myself
    with his remarks. I also thank our colleague from Alabama, Mr.
    Brooks, for giving voice to the alternative view of the United
    States' role in the world. What he basically said was the goals
    contained in the markup today and the legislation today an the
    markup are altruistic and worthy in that regard, but we can't
    afford them.
        This zero sum gain view of the United States' role in the
    world, I would argue, is very dangerous. It is a false choice
    to tell the American people we cannot continue to afford to be
    engaged in the world. And even when things are financed, self-
    financed, we still can't afford them in that point of view. In
    fact, we need to retreat.
        I find it ironic that electrification in Africa, for
    example, is referred to as an altruistic endeavor. Indeed, Mr.
    Brooks' own home state of Alabama was a prime beneficiary of
    rural electrification during the New Deal. And I am sure his
    constituents are grateful that a different administration at a
    time of far greater economic stress than today, made that
    investment in his citizens, in his state, in his economy. And
    the return on that investment has been profound.
        When we talk a zero sum gain about the United States
    retreating from the world, we give up on the idea that an
    investment can have a return on it. When the United States
    makes an investment in other people, in other places, it is not
    only altruism, I would say to my colleague, it is also
    enlightened self-interest because the return in terms of
    economic activity, in terms of trade, in terms of investment
    both ways, is going to be considerable. It is a minor
    investment relative to the return we are going to see in 20 or
    30 years' time. It is not just altruism. It is also enlightened
    self-interest.
        And in fact, I would argue it is about our own future and
    our children's future because as the chairman indicated, if we
    don't do it, there are others more than willing to make those
    investments because they do see the return, the Chinese chief
    among them. And I don't want to be the person who has to answer
    the next generation why is the Africa-Chinese trade the
    dominant trade in that part of the world and we don't even have
    a slice of it? And the answer is because somebody, somewhere 20
    years before said because we can't afford it. It is a false
    choice and I hope this committee will reject that choice,
    although I commend my colleague for making it quite clear what
    that choice is. With that, I yield back, Mr. Chairman.
        Chairman Royce. We now go to Mr. Ted Yoho of Florida.
        Mr. Yoho. Thank you, Mr. Chairman, and my sentiments were
    similar to Mr. Brooks in the beginning, but as I studied this,
    when you see OPIC, OPIC has a self-sustaining basis at no net
    cost to the American taxpayers. It is generated net profits of
    $272 million on Fiscal Year 2012 which has helped reduce the
    Federal budget deficit for the 35th consecutive year in a row.
        And today, OPIC has supported nearly 200 billion of
    investment in more than 4,000 projects around the world and it
    has generated $75 billion in U.S. exports and supported more
    than 277,000 American jobs. And I have been looking for a way
    and I know this committee has and I do commend you for the
    leadership you have had and the bipartisan support we have had
    on this committee of a way to have a paradigm shift in our
    foreign aid. And if this is a way that we can invest and not
    give aid to corrupt governments, but invest and it generates
    money to the American taxpayers, I am in support of it. And I
    yield back. Thank you.
        Chairman Royce. Do any other members seek--oh, yes. Mr.
    Cicilline. Sorry, sir.
        Mr. Cicilline. Thank you, Mr. Chairman. I, too, would like
    to begin by recognizing and thanking you and Ranking Member
    Engel for the bipartisan way in which you have approached this
    important issue and for continuing to educate members of this
    committee and the general public on the importance of
    supporting the energy sector in Africa.
        I would also like to acknowledge the contributions of our
    subcommittee chair, Congressman Smith, and the passionate and
    determined and relentless advocacy and leadership of our
    Ranking Member Karen Bass who has been such a strong advocate,
    not only for this piece of legislation but for so many issues
    important to Africa.
        In sub-Saharan Africa, almost 600 million people do not
    have access to electricity. This, of course, presents
    challenges not only to quality of life, but also health,
    educational opportunities, and safety. In particular, women and
    girls are at greater risk of physical violence without street
    lamps and phones. And many children are not able to attend
    school because they are needed to complete tasks at home and
    those who are lucky enough to go to school, often can't study
    in the evenings after the sun goes down. And their health
    outcome and wellness are compromised as many have mentioned
    without electricity.
        In addition to the obvious impact on quality of life, it is
    also critical that energy be provided if the full potential of
    Africa is to be realized. According to the African Development
    Bank, Africa's economy is growing faster than that of any other
    continent. At the same time, in 2012, USAID assistance to 42
    African countries totaled $8.1 billion. We cannot expect
    African countries to be able to fully take ownership of their
    own successes and failures and reach their full growth
    potential until and unless they establish basic dependable and
    comprehensive infrastructure.
        A coordinated U.S. strategy to improve access to modern
    electricity will boost African economic growth and security. It
    will also increase U.S. investment in a rapidly-growing
    continent. And I am proud to be one of many cosponsors of this
    act and really just want to end by saying that this is an
    action that is not only in the best interest of the countries
    on the continent, but also in the best interest of the national
    security interest of our country and the long-term economic
    well-being of this country. I urge my colleagues to support its
    passage. And with that, I yield back.
        Chairman Royce. Thank you, Mr. Cicilline. We go now to Mr.
    Meadows of North Carolina.
        Mr. Meadows. Thank you, Mr. Chairman, and thank you for
    your leadership as well as Ranking Member Engel. I have had the
    opportunity to work with Ms. Bass on this particular issue as
    well and so my hats off to so many.
        In an environment where fiscal--as my good friend from
    Alabama, he and I both share our concerns over the fiscal
    responsibility of our Government. I would like to point out and
    associate my remarks with my good friend from Florida, Mr.
    Yoho. OPIC is one of the few things, one of the few agencies
    within the Federal Government that actually provides a return.
        And if you look at some of the most difficult times in
    terms of foreign governments, either in North Africa or the
    Middle East, in terms of having a difficult time with the
    political stability, even in spite of that environment, since
    2009, OPIC has returned over $800 million to the general
    Treasury. So if in the most difficult of times they can provide
    a positive return, I think that it is the kind of risk as a
    small business owner that I would love to have that model to
    continue to work, providing return to general Treasury.
        And as we start to work these things together, I have met
    with Ambassadors from all over Africa. And their big concern
    quite frankly is is that America is not playing and not
    investing in African countries like China is. And if we are
    going to compete globally we need to unleash the private sector
    to allow them to invest in these countries in a real and full
    way, and embrace the kind of relationship that we have with
    many of our friends in Africa.
        And so I wholeheartedly support this bill and appreciate
    the work of so many in leadership who have moved this bill
    forward. And you can count on my support. I yield back.
        Chairman Royce. I thank the gentleman. Any other members
    seeking recognition. If not, are there any amendments to the
    base text?
        Mr. Meadows, do you have an amendment at the desk?
        Mr. Meadows. Thank you, Mr. Chairman, I do have an
    amendment at the desk.
        Chairman Royce. Than I will ask the Clerk to read that
    amendment.
        Ms. Marter. Amendment to the amendment in the nature of a
    substitute to H.R. 2548 offered by Mr. Meadows of North
    Carolina. Page 17 after line 2, insert the following: See
    annual consumer satisfaction survey and report, one survey, a,
    in general, for each of calendar years 2014 through 2016, the
    Overseas Private Investment Corporation shall conduct a survey
    of private entities that sponsor or are involved in projects
    that are insured, reinsured, guaranteed or financed by the
    Corporation regarding the level of satisfaction of such
    entities with the operations and procedures of the Corporation
    with respect to such projects.
        [The information referred to follows:]

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        Mr. Meadows. Mr. Chairman, could I move that this amendment
    be considered read?
        Chairman Royce. Without objection. The Chair reserves a
    point of order and recognizes the author to briefly explain his
    amendment.
        Mr. Meadows. Thank you, Mr. Chairman. This is a very simple
    amendment that really becomes a tool to hopefully allow the
    Overseas Private Investment Corporation to conduct annual
    surveys to report back to this committee and other appropriate
    committees within Congress in terms of the level of
    satisfaction, potential problems, or potential improvements
    that might be suggested either that they have taken or that we
    might consider legislatively to improve really the focus on
    small businesses. It only pertains to those small businesses or
    businesses that are sponsored with projects that cost less than
    $20 million. It just provides an issue where we can start to
    evaluate the effectiveness of this program and be a more
    effective body here in terms of addressing the needs and making
    it streamlined in terms of the return that I previously spoke
    about, hopefully making that one that we can count on on a
    regular basis going forward and with that I would be open to
    answer any questions.
        Chairman Royce. Do any members seek recognition to speak on
    the amendment? Yes, Mr. Grayson of Florida.
        Mr. Grayson. Thanks. If I understand this amendment
    properly, what it is is it is depicting as a consumer
    satisfaction survey a survey of entities who benefit from OPIC
    as it is used in the term here in the amendment, private
    entities that sponsor or are involved in projects with OPIC. I
    am not sure that is a good idea. I don't think that resembles
    people's conventional view of what a consumer satisfaction
    survey is.
        Also, I am concerned about the potential cost of this. OPIC
    operates at a profit, in part, because it is not tied down by
    what amounts to an unfunded mandate like this one. I haven't
    heard any discussion yet of what this would cost. If we load
    down OPIC with unfunded mandates, then presumably OPIC will
    stop being profitable.
        I have some points of order that I would like to raise, Mr.
    Chairman. Should I raise them now during this time or wait
    until debate is over?
        Chairman Royce. I think now might be the time, Mr. Grayson,
    that you want to raise any point of order you might have.
        Mr. Grayson. Thank you, Mr. Chairman. First, I am concerned
    about the germaneness of this amendment, both with regard to
    Rule 5(b)(3) and in general. I note that this amendment doesn't
    contain the word Africa, nor the word electricity in it. It may
    be a good idea on its own. I tend to think not. But this seems
    to me to be something that is properly presented to committee
    as a stand-alone bill and is not germane to Electrify Africa
    Act.
        Chairman Royce. If I could respond to that point at this
    moment, Mr. Grayson?
        Mr. Grayson. yes.
        Chairman Royce. In my consultation here with the
    parliamentarian, he tells me that because of the subject in
    Section 8 of the base text, this amendment is germane. The
    rationale is this. The subject in the base text speaks to the
    issue of OPIC as a whole in sections of that language, but not
    exclusively to African electrification. So it would be germane
    under that reading.
        Mr. Grayson. Well, Mr. Chairman, I would also like to raise
    a point of order concerning this being a second order
    amendment. We are now looking at amendment to the amendment in
    the nature of a substitute. Does the committee entertain
    second, third, and fourth order amendments?
        Chairman Royce. Let me give you again the parliamentarian's
    view on this. The Meadows amendment is subject to second degree
    amendment because the amendment in the nature of a substitute
    is base text rather than an amendment.
        Mr. Grayson. Can the chairman clarify that further for
    future reference?
        Chairman Royce. The ANS is base text as though it was the
    introduced text of the bill itself. So it is not an amendment.
    And I think that is usually the way an amendment in the nature
    of a substitute, once it is accepted is treated.
        Mr. Grayson. Mr. Chairman, that raises an interesting
    general point and I am asking now not just for this context,
    but for future reference, does that mean that an amendment in
    the nature of a substitute is counted as base text whether or
    not it meets the 48-hour notice rule?
        Chairman Royce. It did meet the 48-hour notice rule.
        Mr. Grayson. If it had not met the 48-hour notice rule,
    would that still be the case?
        Chairman Royce. We would not, under committee rules in that
    situation put it as base text. We would have to consider it
    instead as an amendment.
        Mr. Grayson. Thank you, Mr. Chairman, that is very helpful
    and will be interesting in future context. I would also like to
    raise a point of order concerning the committee's jurisdiction
    over this particular amendment, both with regard to the fact
    that it applies to OPIC as a stand-alone and that it seems to
    involve the expenditure of appropriated funds.
        Chairman Royce. Well, yes, according to the House
    parliamentarian, OPIC is within, clearly, the jurisdiction of
    this committee. We have authority oversight over OPIC and
    jurisdiction over OPIC. So the amendment would be in order.
        Mr. Grayson. All right, thank you for those rulings. I will
    continue to object to this amendment on the basis that it
    amounts to an unfunded mandate against OPIC and should have
    properly been brought as a stand-alone bill for the committee's
    perusal and not as a last-minute amendment. Thank you. I yield
    back.
        Chairman Royce. I thank the gentleman for yielding. Do
    other members wish to seek recognition to speak on this
    amendment?
        The Chair withdraws the point of order and I would point
    out to just recognize myself for a minute, OPIC is already
    doing much of what is requested I think in this amendment. And
    I wonder, returning to the author of the amendment, Mr.
    Meadows, would you like to respond?
        Mr. Meadows. You know, I enjoy a good relationship and
    wholeheartedly support the efforts of OPIC and have worked with
    them both privately and certainly encouraging other members to
    support not only their efforts, but the efforts in general to
    promote overseas private investment. This particular function
    becomes something that would make this a function of an
    obligatory requirement to report annually to Congress on
    efforts that they are taking, something that quite frankly
    under the current leadership that they are doing now, however,
    with change of the administration and the potential change in
    leadership within that particular corporation, that could
    change. And so this promotes an activity that I think that we
    are enjoying now and more codifies it and makes it official.
    Thank you, Mr. Chairman.
        Chairman Royce. For my remaining time, upon some
    reflection, I think the survey, arguably, would then require
    OPIC to provide some information here that might be pretty
    useful, that could help improve their operation and their
    relevance to small business and of course, at the end of the
    day, small business remains the largest employer in the United
    States. So from that standpoint, this information could be
    useful and I am told that they do surveys currently.
        So my presumption is that this would fit within the
    framework of what they are currently doing without tremendous
    additional cost, but probably with the added benefit of being
    useful to small business in the United States. And from that
    standpoint, I am prepared to support the amendment and
    appreciate the gentleman's effort. But if there is no further
    request for recognition, the question will occur on Mr.
    Meadows' amendment.
        All of those in favor say aye.
        All those opposed say no.
        In the opinion of the Chair, the ayes have it. The
    amendment is agreed to and we will go now to a recorded vote.
    Let me also--without objection, H.R. 2548, as amended. Hearing
    no further amendments to this measure, the question occurs on
    agreeing to H.R. 2548, as amended. All those in favor say aye.
        All those opposed, no.
        In the opinion of the Chair, the ayes have it. The bill, as
    amended, is agreed to. Without objection, H.R. 2548 is ordered
    favorably reported. It will be reported as a single amendment
    in the nature of a substitute. Staff is directed to make any
    technical and conforming changes and that concludes business
    for today.
        I want to thank Ranking Member Engel and all of our
    committee members for their constitutions and assistance to
    today's markup. And in addition, I would like to thank Nilmini
    Rubin. I would like to thank our other staff members here,
    Worku Gachou and Jackie Quinones for their support on this
    legislation. Thank you very much. We stand adjourned.
        [Whereupon, at 11:01 a.m., the committee was adjourned.]

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