Obama's 'Power Africa' is Solyndra for Africa

The new $7 billion "Power Africa" initiative that President Barack Obama announced on June 30 during a speech in Cape Town, South Africa is billed as a genuine attempt to increase electricity production and distribution throughout sub-Saharan Africa. In reality, it is likely a "green energy" boondoggle that will reward favored companies, cronies and contributors--a "Solyndra for Africa," out of sight of the U.S. media.

The evidence is clear. In unveiling the project, Obama told the audience in Cape Town that Power Africa would "support clean energy to protect our planet and combat climate change." The day before, speaking to youth leaders in the former black township of Soweto, Obama said that Africa should not be allowed to develop in the same way the U.S. and other developed nations had--a familiar environmentalist refrain (video at CNS News):

Everybody is going to have to make some important choices here....Ultimately, if you think about all the youth that everybody has mentioned here in Africa, if everybody is raising living standards to the point where everybody has got a car and everybody has got air conditioning, and everybody has got a big house, well, the planet will boil over--unless we find new ways of producing energy.

Africa already has several home-grown power giants--including Eskom, the South African public utility, which is one of the largest power companies in the world. Eskom produces a great deal of energy from coal, but also runs a nuclear power plant near Cape Town and has mastered cutting-edge technology such as the pebble-bed modular reactor (PMBR). It is hardly in need of first-world assistance in expanding its reach.

In addition, some of the greatest environmental and economic failures in Africa have been "green" energy projects--particularly hydroelectric dams, such as the Cahora Bassa project in Mozambique, which likely exacerbated the disastrous floods of 2000. Many of these have been constructed with funding and loans from outside sources, such as the World Bank, which has come to realize the risks in such large projects.

At the moment, China is investing in energy in Africa--primarily in oil, which it needs to feed its still-rapidly growing economy. African nations are therefore interested in developing oil and other fossil fuel resources. The only way to ensure that Africa produces "green" energy is to control the way the money is spent--which will mean reaching deals with African governments to honor favored companies with energy contracts.

Those deals will come at a price. In South Africa, American firms will likely have to follow the laws around Black Economic Empowerment, which require that a large percentage of ownership be in the hands of "historically disadvantaged individuals." In practice, this means handing over large chunks of investment to "entrepreneurs" who are senior members of the ruling party with little business skill or experience.

Like Solyndra, "Power Africa" will likely not produce as much energy as promised, while lining the pockets of politically-connected individuals in both the U.S. and Africa. Meanwhile, China, which does not mind if Africans are driving cars and living in large houses with air conditioning, will continue to invest in Africa in ways that generate actual economic growth, relegating the U.S. to the sidelines in Africa's economic future.


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