[Senate Report 113-219]
[From the U.S. Government Publishing Office]
Calendar No. 489
113th Congress Report
SENATE
2d Session 113-219
======================================================================
ENERGIZE AFRICA ACT OF 2014
_______
July 24, 2014.--Ordered to be printed
Mr. Menendez, from the Committee on Foreign Relations,
submitted the following
R E P O R T
[To accompany S. 2508]
The Committee on Foreign Relations, having had under
consideration the bill (S. 2508) to establish a comprehensive
United States Government policy to assist countries in sub-
Saharan Africa to improve access to and the affordability,
reliability, and sustainability of power, and for other
purposes, reports favorably thereon, with amendments, and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Background.......................................................2
IV. Discussion.......................................................3
V. Cost Estimate....................................................7
VI. Evaluation of Regulatory Impact..................................7
VII. Changes in Existing Law..........................................8
I. Purpose
The purpose of S. 2508 is to establish a comprehensive
United States government policy to develop and coordinate
strategies and reforms that improve access to, and the
affordability, reliability, and sustainability of, power for
residents of sub-Saharan Africa. The bill also extends the
issuing authority of the Overseas Private Investment
Corporation through 2019 and grants it limited additional
authority for certain pilot projects focused on promoting
private sector electricity investments in sub-Saharan Africa.
S. 2508 further requires a progress report evaluating the
effectiveness of policies and investments made by the U.S. in
expanding electricity access in sub-Saharan Africa.
II. Committee Action
S. 2508 was introduced on June 19, 2014, by Senator
Menendez and co-sponsored by Senators Corker, Coons, Isakson,
Markey, and Johanns. On June 24, 2014, the committee considered
S. 2508 and reported it favorably, with amendments.
The committee took the following action with regard to
amendments:
A manager's package of amendments passed by voice vote.
Among other things, the manager's amendment added language
authorizing the establishment of an interagency working group
to coordinate the activities of the executive branch agencies
in carrying out the required strategy; added language
addressing prioritization of assistance for power projects in
sub-Saharan Africa by the Millennium Challenge Corporation; and
added language to the Statement of Policy section regarding
promotion of an all-of-the-above energy development strategy
for sub-Saharan Africa.
An amendment offered by Senator Flake to repeal the third
proviso of Section 7079(b) of the Consolidated Appropriations
Act, 2010, was defeated by voice vote.
An amendment offered by Senator Barrasso to strike Title II
of the bill failed by a roll call vote of 5-11, with Senators
Risch, Rubio, Johnson, Flake, and Barrasso voting in favor and
Senators Menendez, Boxer, Cardin, Shaheen, Durbin, Coons,
Udall, Kaine, Murphy, Markey, and Corker opposed. Senators
McCain and Paul did not vote.
III. Background
Chairman Menendez and Ranking Member Corker introduced S.
2508 to address the lack of electricity faced by nearly 70
percent of sub-Saharan Africa's population. The legislation
addresses solutions to the lack of overall access, lack of
access to affordable electricity options, and an inability to
ensure sustainable and reliable power. It establishes goals of
providing access to 50,000,000 sub-Saharan Africans by 2020 and
adding 20,000 megawatts of electricity by 2020. With increased
access to electricity, sub-Saharan Africans can turn away from
unsustainable and unhealthy fuel sources such as kerosene,
wood, and charcoal. The bill supports financing, regulatory
reform, and policy advocacy that will significantly increase
the continent's access to electricity in a responsible and
financially sustainable way and open new doors to private
sector investment, increased public health, and economic
growth.
On June 30, 2013, President Obama announced his ``Power
Africa Initiative'' to address these problems and double the
number of Africans with access to electricity. Power Africa
focuses on leveraging private investment to increase financing
for power projects in sub-Saharan Africa.
On May 8, 2014, the House of Representatives passed H.R.
2548, the Electrify Africa Act of 2014, which seeks to
establish a comprehensive United States government policy to
develop an appropriate mix of power solutions, including
renewable energy, for more broadly distributed electricity
access.
S. 2508 provides a framework for a coordinated strategy for
the United States to work with sub-Saharan Africa in order to
improve access to electricity. It establishes the goals of
providing access to 50,000,000 sub-Saharan Africans by 2020,
and adding 20, 000 megawatts of electricity by 2020.
The bill encourages the Overseas Private Investment
Corporation (OPIC), the United States Agency for International
Development (USAID), the U.S. Department of Treasury, the World
Bank, the African Development Bank, and the U.S. Trade and
Development Agency to prioritize, as appropriate, loans,
assistance, and technical support that promote private
investment in projects that increase electricity access and
reliability. The bill also encourages these agencies to partner
with sub-Saharan African governments to develop policies that
reduce burdensome regulations that hinder private investment in
the electricity sector. To achieve broader energy access for
those currently living beyond the reaches of the existing
electricity infrastructure, S. 2508 places an increased
emphasis on the promotion and development of off-grid and
distributed technologies to be used at a local level.
S. 2508 also reauthorizes the Overseas Private Investment
Corporation (OPIC) through 2019, and grants it limited
additional authority for certain pilot projects focused on
promoting private sector electricity investments in sub-Saharan
Africa. This legislation also creates a new Inspector General
to oversee OPIC, which currently does not have its own
Inspector General.
The bill also requires a report to the committee in three
years outlining the strategies, investments, and policy changes
being made under the legislation. This report would detail the
electricity access programs U.S. government support and private
investment are going towards, accompanied with empirical
results indicating the yielded results of investments in terms
of increased electricity access and reliability.
S. 2508 recognizes that improving electricity access in
Africa will require a broad mix of fuel sources, many of which
exist in Africa in abundance. S. 2508 therefore takes a fuel
neutral, all-of-the-above approach. As called for in the policy
section of the bill, Energize Africa anticipates energy access
being addressed in sub-Saharan Africa using renewable and non-
renewable fuels. These fuels include solar, wind, natural gas,
and coal.
The bill also places strong emphasis on the development of
economically sound utilities. To ensure appropriate cost-
recovery by electricity transmission and distribution
operators, an appropriate policy and legal framework must be in
place. For this reason, the bill focuses not only on
facilitating private sector development of electricity
generation, the bill also requires implementing industry best
practices with respect to transmission and distribution such as
commercial cost recovery practices, regulatory reforms to
improve efficiencies, strengthening independent regulators, and
implementing smart grid technologies. The goal is to ensure
that national electric grids, developed with U.S. assistance,
will remain financially sustainable over the long term.
The legislation also aims to improve access to electricity
for communities who, because of existing constraints and
obstacles, are not or will not be linked to national and
regional grids in the near term. The bill calls for off-grid
and mini-grid technologies to be employed as an alternative
strategy to provide communities with electricity in an
economical way.
IV. Discussion
A summary of the key provisions of S. 2508, as amended,
follows:
Section 101
Section 101 states that the purpose of S. 2508 is to
encourage the efforts of countries in sub-Saharan Africa to
improve access to affordable and reliable power.
Section 102
Section 102 declares that it is the policy of the United
States, in coordination with international financial
institutions, sub-Saharan African governments and the private
sector, to:
(1) promote first-time access to power and power
services in sub-Saharan Africa for at least 50,000,000
people by 2020, in both urban and rural areas;
(2) encourage the installation of at least 20,000
additional megawatts of electrical power in sub-Saharan
Africa by 2020 through a broad mix of energy options
that will reduce poverty, promote sustainable
development, and drive economic growth;
(3) promote reliable, affordable, and sustainable
power in urban areas in order to promote economic
growth and job creation;
(4) promote efficient institutional platforms and
financing for the provision of electrical service to
rural and underserved populations;
(5) encourage the necessary in-country reforms that
will make possible the expansion of power access;
(6) promote reforms of power production, delivery,
and pricing, as well as regulatory reforms and
transparency, in order to support long-term, market-
based power generation and distribution;
(7) promote policies to displace kerosene lighting
with safer, cleaner technologies; and
(8) promote an all-of-the-above energy development
strategy for sub-Saharan Africa.
Section 103
Section 103 establishes a multiyear strategy that requires
the President to establish and submit to Congress, within 180
days, a comprehensive multiyear strategy to encourage the
efforts of countries in sub-Saharan Africa in implementing
national power strategies and developing an appropriate mix of
power solutions. The strategy must address ways to attract
private investment in the power sector, both on and off the
grid, assess the financial viability of power utilities, and be
sufficiently flexible to allow for technological innovation in
the power sector. Section 103 further states the President may
establish, as appropriate, an Interagency Working Group to
coordinate executive branch agencies involved in the
implementation of the strategy. The Interagency Working Group
would also facilitate partnerships between executive agencies,
the private sector, and other development agencies to ensure
effective implementation. Section 103 also establishes an
African Power Advisory Group, which will be formed to advise
the President on how to develop and implement the strategy. The
group shall be composed of up to 13 members appointed by the
President, including the Coordinator of the President's Power
Africa Initiative, 7 individuals from the power sector, 3
individuals with experience in working with the African
business community, or with African governments, one individual
with experience in utility regulation, and the official
designated pursuant to the National Defense Authorization Act
for Fiscal Year 2014 to coordinate efforts to increase United
States exports to Africa.
Section 104
Section 104 expresses the sense of Congress that, as the
United States deepens its engagement with countries in sub-
Saharan Africa pursuant to this Act, priority should be given
to countries with a demonstrated commitment to reforms that
will attract private investment in the electric sector, in
making prioritization determinations, the United States should
also consider business opportunities for the U.S. private
sector, the potential for fostering regional trade of
electricity, opportunities to collaborate with international
partners, and the availability of resources.
Section 105
Section 105 directs the Administrator of the United States
Agency for International Development to, as appropriate,
prioritize assistance and loan guarantees to local financial
institutions in sub-Saharan Africa and to establish metric-
based targets to measure their effectiveness.
Section 106
Section 106 requires the Director of the Trade and
Development Agency to, as appropriate, prioritize the promotion
of United States private sector participation in energy sector
development projects and funding of project preparation
activities in sub-Saharan Africa.
Section 107
Section 107 directs the Overseas Private Investment
Corporation OPIC to, as appropriate, prioritize investments in
the electricity sector infrastructure in sub-Saharan Africa,
including renewable energy projects, intended to maximize the
number of people with new access to power, improve energy
access infrastructure, provide reliable power, reduce
transmission and distribution losses, improve efficiency, and
reduce impediments to business productivity and investment. The
section also directs OPIC to implement streamlined procedures
to facilitate these investments. The section also requires OPIC
to expedite review of applications, encourage small- and
medium-sized enterprises and cooperative service providers to
participate in energy investment activities, and publish
information on the effects its energy investments have had on
economic development.
Section 108
Section 108 directs the United States Executive Directors
at the World Bank Group and the African Development Bank to use
the voice, vote, and influence of the U.S. to encourage those
institutions to prioritize increasing their investment in sub-
Saharan electrification projects; provide technical assistance
to regulatory authorities to, among other things, remove
barriers to commercially viable projects, to modify regulatory
and legal regimes to reduce certain losses, implement cost-
based tariffs and provide for commercial cost recovery, reduce
corruption and improve transparency, and implement reforms that
facilitate efficient power generation, transmission and
distribution, as well as off-grid energy markets; use clear,
accountable, and metric-based targets to measure effectiveness;
and support ongoing efforts to foster grown in the off-grid
lighting and power markets.
Section 109
Section 109 states that the African Development Foundation
should seek opportunities to make grants and provide technical
support to businesses and organizations in sub-Saharan Africa
that qualify and are developing on- and off-grid solutions to
meet the power needs of rural communities underserved by
national grids.
Section 110
Section 110 states that the Chief Executive Officer and the
Board of Directors of the Millennium Challenge Corporation
should assess, as appropriate, the extent to which insufficient
access to and reliability of electricity is a binding
constraint on sustainable economic growth in sub-Saharan
Africa; and, as appropriate, prioritize, among other things,
the provision of assistance and engagement with governments in
support of private and public sector efforts to reform
regulatory framework and increase access to electricity, both
on- and off-grid.
Section 111
Section 111 requires a 3-year evaluation of progress made
towards achieving the policy goals of section 103. The report
reviews policies advocated by the United States that promote
increased energy access and electricity sector reform. The
report also identifies the number and type of projects
receiving United States government support, the total costs of
the project, the amount of U.S. supported investment, and
empirical results of the project in terms of increased
electricity to businesses, communities, and individuals.
Section 201
Section 201 extends OPIC's issuing authority through 2019.
Section 202
Section 202 directs OPIC to develop, within 180 days of
enactment of this Act, policies to simplify and streamline the
process for reviewing and considering of investments, among
other things, in sub-Saharan Africa under $20 million in order
to promote increased investment and reduce administrative
costs.
Section 203
Section 203 establishes an advisory board to provide OPIC
with guidance on investing in power projects in Africa.
Section 204
Section 204 creates a five year pilot program that would
permit OPIC to assist, with specific limitations on the size of
the assistance, joint ventures or partnerships that are owned,
in a controlling share, by U.S. citizens for power projects in
sub-Saharan Africa.
Section 205
Section 205 creates a five year pilot project to allow OPIC
to invest in power projects by eligible investors in sub-
Saharan Africa where the Corporation's total support does not
exceed $50,000,000. The section also creates a five year pilot
program to allow OPIC to provide currency guaranties for a
local branch of a foreign bank, if the project is sponsored by
an eligible investor and is a power project in sub-Saharan
Africa.
Section 206
Section 206 allows OPIC to extend the term of obligation
for renewable energy projects from 20 years to 30 years for
power projects in sub-Saharan Africa.
Section 207
Section 207 addresses the role of Inspector General for
OPIC. Currently, OPIC does not have its own inspector general
and the USAID inspector general oversees OPIC. This provision
would create a separate Inspector General for OPIC.
Section 208
Section 208 directs OPIC to undertake an annual customer
survey to determine how well it is meeting the needs of its
customer base, consistent with U.S. foreign policy interests.
Section 209
Section 209 provides authority for OPIC to hire not more
than 20 additional temporary employees, on a limited-
appointment basis under existing federal government
authorities, specifically for sub-Saharan Africa power related
work.
Section 210
Section 210 establishes the sense of Congress that
appropriations should be made to address the administrative
expenses necessary for OPIC should for the enactment of the
Energize Africa Act through the year 2019.
Section 211
Section 211 requires OPIC to submit a report within 180
days on the effectiveness of its existing authorities for
energy and infrastructure projects and whether further
authorities, such as the ability for OPIC to invest directly in
projects, might be appropriate or effective.
V. Cost Estimate
In accordance with XXVI, paragraph 11(a) of the Standing
Rules of the Senate, the committee notes that the cost estimate
provided by the Congressional Budget Office was not available
for inclusion in this report. The estimate will be printed in
either a supplemental report or the Congressional Record when
it is available.
VI. Evaluation of Regulatory Impact
Pursuant to the requirement of paragraph 11(b) of rule XXVI
of the Standing Rules of the Senate, the committee has
considered the regulatory and paperwork impact of S. 2508, as
amended, and decided that such impact would be minimal. Section
208 directs OPIC to conduct a survey of a sample of its
customers to assess the satisfaction of those customers with
the operation and procedures of OPIC, with particular attention
to small businesses and cooperatives. Because the survey would
be voluntary, and would be conducted only with a sample of
customers, it is the committee's judgment that the regulatory
and paperwork impact of this provision would be minimal.
VII. Changes in Existing Law
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, existing law in which no change is proposed is shown in
roman).
FOREIGN ASSISTANCE ACT OF 1961
* * * * * * *
Sec. 233. Organization and Management. (a) * * *
* * * * * * *
[(e) Investment Advisory Council.--The Board shall take
prompt measures to increase the loan, guarantee, and insurance
programs, and financial commitments, of the Corporation in sub-
Saharan Africa, including through the use of an investment
advisory council to assist the Board in developing and
implementing policies, programs, and financial instruments with
respect to sub-Saharan Africa. In addition, the investment
advisory council shall make recommendations to the Board on how
the Corporation can facilitate greater support by the United
States for trade and investment with and in sub-Saharan Africa.
The investment advisory council shall terminate 4 years after
the date of the enactment of this subsection.]
(e) Activities in Sub-Saharan Africa; Investment Advisory
Council.--
(1) In general.--The Board should take prompt
measures to prioritize, as appropriate, the loan,
guarantee, and insurance programs, and financial
commitments, of the Corporation in sub-Saharan Africa
in the areas of power generation, distribution, and
off-grid power and lighting, including through the use
of an investment advisory council to assist the Board
in developing and implementing policies, programs, and
financial instruments with respect to sub-Saharan
Africa.
(2) Recommendations.--The investment advisory council
described in paragraph (1) shall make recommendations
to the Board on how the Corporation can facilitate
greater support by the United States for private sector
trade and investment with and in sub-Saharan Africa.
(3) Termination.--The investment advisory council
described in paragraph (1) shall terminate on December
31, 2018.
(4) Applicability of federal advisory committee
act.--The investment advisory council described in
paragraph (1) shall not be subject to the Federal
Advisory Committee Act (5 U.S.C. App.).
* * * * * * *
Sec. 235. Issuing Authority, Direct Investment Authority
and Reserves.--
(a) Issuing Authority.--
(1) Insurance and financing.--(A) The maximum
contingent liability outstanding at any one time
pursuant to insurance issued under section 234(a), and
the amount of financing issued under sections 234(b)
and (c), shall not exceed in the aggregate
$29,000,000,000.
(B) Subject to spending authority provided in
appropriations Acts pursuant to section 504(b) of the
Federal Credit Reform Act of 1990, the Corporation is
authorized to transfer such sums as are necessary from
its noncredit activities to pay for the subsidy and
administrative costs of the investment guaranties and
direct loan programs under subsections (b) and (c) of
section 234.
(2) Termination of authority.--The authority of
subsections (a), (b), and (c) of section 234 shall
continue until [2007] 2019.
* * * * * * *
Sec. 237. General Provisions Relating to Insurance
Guaranty, and Financing Program.--(a) * * *
* * * * * * *
[(e) No insurance, guaranty, or reinsurance of any equity
investment shall extend beyond twenty years from the date of
issuance.]
(e) Maximum Term of Obligation.--
(1) In general.--Except as provided in paragraph (2),
no insurance, guaranty, or reinsurance of any equity
investment shall extend beyond 20 years after the date
of issuance.
(2) Extended term of obligation for certain
projects.--An insurance, guaranty, or reinsurance of an
equity investment in a renewable energy project in sub-
Saharan Africa may extend up to 30 years after the date
of issuance.
* * * * * * *
Sec. 239. General Provisions and Powers.--(a) * * *
* * * * * * *
[(e) The Inspector General of the Agency for International
Development (1) may conduct reviews, investigations, and
inspections of all phases of the Corporation's operations and
activities and (2) shall conduct all security activities of the
Corporation relating to personnel and the control of classified
material. With respect to his responsibilities under this
subsection, the Inspector General shall report to the Board.
The agency primarily responsible for administering part I shall
be reimbursed by the Corporation for all expenses incurred by
the Inspector General in connection with his responsibilities
under this subsection.]
* * * * * * *
(l) Assessment of Customer Satisfaction.--
(1) In general.--Each fiscal year, the Corporation
shall conduct a survey of a sample of its customers to
assess the satisfaction of those customers with the
operation and procedures of the Corporation, with
particular attention to customers of the Corporation
that are small businesses and cooperatives.
(2) Report to congress.--The Corporation shall
include in its annual report required under section
240A a report on the survey conducted under paragraph
(1) that includes, as appropriate, summaries of
recommendations made by customers of the Corporation
with respect to ways to improve the operations and
procedures of the Corporation.
INSPECTOR GENERAL ACT OF 1978
* * * * * * *
SECTION 8G. REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL
ENTITIES
(a) Notwithstanding section 12 of this Act, as used in this
section--
* * * * * * *
(2) the term ``designated Federal entity'' means
Amtrak, the Appalachian Regional Commission, the Board
of Governors of the Federal Reserve System and the
Bureau of Consumer Financial Protection, the Board for
International Broadcasting, the Commodity Futures
Trading Commission, the Consumer Product Safety
Commission, the Corporation for Public Broadcasting,
the Defense Intelligence Agency, the Denali Commission,
the Equal Employment Opportunity Commission, the Farm
Credit Administration, the Federal Communications
Commission, the Federal Election Commission, the
Election Assistance Commission, the Federal Housing
Finance Board, the Federal Labor Relations Authority,
the Federal Maritime Commission, the Federal Trade
Commission, the Legal Services Corporation, the
National Archives and Records Administration, the
National Credit Union Administration, the National
Endowment for the Arts, the National Endowment for the
Humanities, the National Geospatial-Intelligence
Agency, the National Labor Relations Board, the
National Reconnaissance Office, the National Security
Agency, the National Science Foundation, the Overseas
Private Investment Corporation, the Panama Canal
Commission, the Peace Corps, the Pension Benefit
Guaranty Corporation, the Securities and Exchange
Commission, the Smithsonian Institution, the United
States International Trade Commission, the Postal
Regulatory Commission, and the United States Postal
Service;
* * * * * * *
(4) the term ``head of the designated Federal
entity'' means the board or commission of the
designated Federal entity, or in the event the
designated Federal entity does not have a board or
commission, any person or persons designated by statute
as the head of a designated Federal entity and if no
such designation exists, the chief policymaking officer
or board of a designated Federal entity as identified
in the list published pursuant to subsection (h)(1) of
this section, except that--
(A) with respect to the National Science
Foundation, such term means the National
Science Board;
(B) with respect to the United States Postal
Service, such term means the Governors (within
the meaning of section 102(3) of title 39,
United States Code);
(C) with respect to the Federal Labor
Relations Authority, such term means the
members of the Authority (described under
section 7104 of title 5, United States Code);
(D) with respect to the National Archives and
Records Administration, such term means the
Archivist of the United States;
(E) with respect to the National Credit Union
Administration, such term means the National
Credit Union Administration Board (described
under section 102 of the Federal Credit Union
Act (12 U.S.C. 1752a);
(F) with respect to the National Endowment of
the Arts, such term means the National Council
on the Arts;
(G) with respect to the National Endowment
for the Humanities, such term means the
National Council on the Humanities; [and]
(H) with respect to the Peace Corps, such
term means the Director of the Peace Corps; and
(I) with respect to the Overseas Private
Investment Corporation, such term means the
Board of Directors of the Overseas Private
Investment Corporation (established under
section 233(b) of the Foreign Assistance Act of
1961 (22 U.S.C. 2193(b));