Power Africa: Any case studies yet? Maybe...

What is Power Africa? First, let me direct you to the White House Fact Sheet on Power Africa. Great, quick read. Next, I’ll explain it in my own words.

Simply put, I think Power Africa is a major shift in how our country views Africa…. and I like it! For a number of years the U.S. government’s focus has been on an initiative called Feed the Future, which, given the amount of arable land that has not been touched on this continent, is a good thing. In Fiscal Year 2012 (FY2012), the initiative focused on 19 countries and helped more than 7 million food producers make improvements, improved the cultivation of 4 million hectares of land, and helped increase the value of exports of targeted commodities by $84 million.

With the world population rising, we need more food – it made sense to direct USAID in that direction. What I have observed is that much of the effort of FtF has been focused on helping smallholder farmers. Good? Yes. But, is that really keeping up with where Africa is today, and more importantly, where Africa is going?

Well... here comes Power Africa. From what I observe looking out my office window here in Addis Ababa, Ethiopia, Africa is booming! I saw it in Uganda in 2008, Mozambique in 2010, Senegal, Zambia, Zimbabwe in 2011 and now in Ethiopia. The cities are alive. Addis is a great example. This growing metropolis has cranes scattered across the skyline, carrying bags of cement, wires, sheetrock, bricks and blocks to the tops of large buildings. Up they rise. I have weekly meetings with construction companies, block factories, sheetrock companies, cable companies...the list goes on. They are growing and yet starving for capital. According to research conducted by the IFC and McKinsey Global Institute, the total financing gap for SMEs in Africa is between $140 billion and $170 billion.

This country - this continent - is industrializing. Of course Africa has its share of problems and aid is still playing a role in helping the least served. But the hungry engine of capitalism is in fifth gear. And what does industry need a lot of? Power! That’s right. So, what is Power Africa? In my very non-jargony, sophomoric words it means “Wow. I think I am getting that Africa is changing, growing, industrializing, and maybe the U.S. needs an initiative to get in, get involved and start participating with her private sector! Because everyone else is.”

What does it mean for Africa? What I hope it means is that, instead of seeing just Chinese, Indian, Turkish and (fill in the country’s name other than the U.S.) doing all of the nation-building in the cities, we’ll start seeing some U.S. flags waving, painted on trucks, rigs and machines. I also hope it means that investors will see this great continent as an investment destination they can do business with. Come on over. There are amazing companies in these cities, some even working in the power sectors that could be great partners, clients and collaborators with U.S. companies. So, what does this mean for Africa? I hope it means more U.S. private-sector partners and investors knocking on their door.

What does it mean for the United States? See above. America – it’s time.

Any case studies? Actually, yes, there are a few. Here’s the 30-second rundown of one. In 2012, RENEW met a great entrepreneur who had lived in the United States, but, after starting a successful engineering company in Michigan, decided to come back to Ethiopia – his homeland – and start a clean energy company here. We introduced him to a group of impact angels from Charlotte, North Carolina in March of 2013 and, after a lot of work, due diligence, structuring, etc., the Charlotte angels closed an investment in dVentus. The investment is allowing the company to develop technology for a smart grid power transmission system in the country. The savings these little circuit boards will have are astonishing. The story goes on. Because of this angel investment the company is now attracting the interest of much larger financiers, and U.S. companies that want to be their partner. Success? Well, that remains to be seen. After all, this is business on the frontier.

I know there are more of these stories out there waiting to happen. Investors are ready. Businesses are ready. Africa is ready. Thank you Power Africa for providing the phrase that will help transform this industrializing continent into an economic success story – one smart grid meter at a time.