Bridging the Energy Gap: A Study in Effective Philanthropy

Problem Statement

On June 30, 2013 in Cape Town, South Africa, President Obama announced Power Africa — an initiative to double the number of people with access to power in Sub-Saharan Africa. Power Africa will work with African governments and partners such as the World Bank in six focus countries—Ethiopia, Kenya, Ghana, Nigeria, Tanzania, and Liberia—to add more than 10,000 MW of clean energy capacity. While the initiative is an important step forward in addressing energy poverty in an environmentally sustainable way, it has a few pitfalls that should be resolved in order to maximize effectiveness of the program.

Since the program’s primary goal is to increase the number of people with access to electricity in sub-Saharan Africa, we should measure the program’s effectiveness in terms of the increase in energy access per dollar spent. With that in mind, the fact that the initiative focuses primarily on countries with lower rates of energy poverty relative to the rest of sub-Saharan Africa and more established grid infrastructures is troubling. While doing so likely increases USAID’s ability to successfully build large-scale projects, it also decreases the number of truly energy poor that the investment reaches. Adding generation capacity to the grid without aggressively expanding transmission infrastructure only increases the reliability of electricity for those who can already access it. Energy poverty is most prevalent in geographically remote regions with low average household incomes because utilities lack the incentives to serve those communities.

The key problems with USAID’s current approach are that it does not serve these communities that are most in need, nor does it collaborate sufficiently with local stakeholders. USAID takes a very macro-level approach, not engaging directly with the energy poor communities that it strives to serve, and, as a result, neglecting feedback that could improve the effectiveness of the Power Africa Initiative.