Last week the U.S. House of Representatives passed the Electrify Africa Act of 2014, confirming the existence of a broad, bi-partisan consensus in favor of supporting U.S. direct investment in Africa’s energy sector.  The bill, which now heads to the Senate, seeks to establish a “comprehensive United States Government policy to encourage the efforts of countries in sub-Saharan Africa to develop an appropriate mix of power solutions.”  The Electrify Africa Act echoes many of the themes of President Obama’s Power Africa initiative, which the Administration announced last year and which Commerce Secretary Penny Pritzker will discuss next week on her Energy Business Development Mission to Ghana and Nigeria.  The bill passed by a vote of 297-117 and was sponsored by the chairmen and ranking members of the Foreign Affairs Committee and its Africa Subcommittee.

In addition to requiring the Administration to develop and report to Congress on its progress in developing a “comprehensive, integrated, multiyear policy, partnership, and funding strategy” the Electrify Africa Act includes a number of provisions that will help facilitate U.S. private sector participation in the development of Africa’s power sector, including:

  • USAID loans and grantsThe bill calls on USAID to identify and prioritize loan guarantees to African financial institutions that would facilitate the involvement of those institutions in power projects in sub-Saharan Africa and prioritize grants to develop African states’ capacities to build and distribute electricity.
  • Expanded OPIC support.  The bill would amend the Foreign Assistance Act of 1961 to require that the Overseas Private Investment Corporation (“OPIC”) “take prompt measures to increase the loan, guarantee, and insurance programs, and financial commitments, of the Corporation to sub-Saharan Africa.”
  • International policy support.  The bill directs the President to use the influence of the United States within appropriate international bodies to “commit to significantly increase efforts to promote investment in well-designed power sector and electrification projects in sub-Saharan Africa . . . in partnership with the private sector.”

There is no doubt that developing Africa’s power sector will yield substantial benefits for the people of sub-Saharan Africa, 68 percent of whom did not have access to electricity as of 2010.  Access to electricity creates economic opportunities, improves food security, and can even help address problems in vaccine delivery.  But the bill also underscores the opportunities available to U.S. companies to invest in Africa’s power sector.  U.S. investors are likely to find a receptive audience in the U.S. government, which may be able to assist with financing, loan guarantees, political risk insurance, and policy support.  Of course, investing in Africa presents certain unique risks, many of which can be mitigated through careful planning and sound legal advice.

Print:
EmailTweetLikeLinkedIn
Photo of Jonathan Wakely Jonathan Wakely

Jonathan Wakely practices at the intersection of national security and the private sector, advising clients on a range of significant international trade, cross-border investment, national security, supply chain security, and public policy matters.

Mr. Wakely has been recognized by Chambers USA for his…

Jonathan Wakely practices at the intersection of national security and the private sector, advising clients on a range of significant international trade, cross-border investment, national security, supply chain security, and public policy matters.

Mr. Wakely has been recognized by Chambers USA for his leading expertise in securing national security-related regulatory approvals for foreign investments. He regularly represents clients before the Committee on Foreign Investment in the United States (CFIUS), the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (better known as “Team Telecom”), and the Defense Counterintelligence and Security Agency (DCSA) in proceedings related to the mitigation of foreign ownership, control, or influence (FOCI). He was deeply involved on behalf of clients in the development of the Foreign Investment Review Modernization Act of 2018 (“FIRRMA”), which reformed CFIUS’s authorities, and its implementing regulations.

Mr. Wakely has advised on transactions with an aggregate value in excess of $250 billion across virtually all sectors, including semiconductors, telecommunications, financial services, software, IT services, energy, and real estate. His recent representations include successfully defending Qualcomm against the attempted hostile takeover by Broadcom, securing approval for the acquisition of Genworth Financial by China Oceanwide, and representing Ford Motor Company in connection with a $2.6 billion investment by Volkswagen in Ford’s autonomous driving subsidiary, Argo AI. He has negotiated and advised companies on compliance with many of the most significant, complex, and sensitive national security agreements of the past decade.

Mr. Wakely also regularly advises clients on public policy and government relations matters involving international trade, cross-border investment, and national security. He has represented trade associations, Fortune 100 companies, and sovereign states before Congress and the executive branch, including by designing and executing government relations campaigns to achieve policy, regulatory, and legislative goals.

Mr. Wakely is an adjunct professor at the Georgetown University Law Center, where he teaches a course on national security and the private sector. He has also published extensively on matters related to the regulation of foreign investment; his articles have appeared in the Harvard National Security Journal, The International Lawyer, and the Global Trade and Customs Journal. Before joining Covington, he served as a political analyst with the Central Intelligence Agency (CIA), where he provided strategic analysis to the President and other senior policymakers.