Obama's 'Power Africa' Plan Greases Billions In Deals For General Electric

[Purveyor]

In Cape Town, South Africa over the weekend, President Obama talked about a new energy plan called “Power Africa.” He described it as “a new initiative that will double access to power in sub-Saharan Africa.” The president implied that the U.S. government will invest $7 billion in taxpayer money to help bring 10,000 mw of electricity to sub-Saharan Africa. Electricity, he said, is “the lifeline for families to meet their most basic needs and it’s the connection needed to plug Africa into the grid of the global economy. You’ve got to have power.”

Providing that power could be a real boon to American (and global) companies focused on power generation and energy management. Indeed, as the president said, “my own nation will benefit enormously if you reach full potential.”

One of the big partners for the president’s plan is General Electric GE -0.81%. Among the private companies that the president said have “committed more than $9 billion in investment” to the Power Africa project, G.E. appears to be front and center. According to the White House statement on Power Africa, “General Electric commits to help bring online 5,000 megawatts of new, affordable energy through provision of its technologies, expertise and capital in Tanzania and Ghana.”

Some of this investment is already in the works. In late June G.E. signed a tentative deal with the government of Ghana to build a 1,000 mw power plant. This plant would likely be fueled with natural gas sourced from the Jubilee offshore field, a multi-billion-dollar project, in which Texas-based Anadarko Petroleum APC +0.74% has a large stake. G.E. is newly focused on Africa, and is actively marketing power generation products to African companies, and recently sold Jenbacher natural gas engines to Diageo DEO -0.52% to power its Nigerian breweries.

General Electric will be perhaps the biggest beneficiary of that $7 billion in U.S. taxpayer funds that Obama says will underwrite Power Africa. The lion’s share of the $7 billion appears to be directed by the U.S. Export-Import Bank, which will “make available $5 billion in support of U.S. exports for the development of power projects.” This doesn’t mean that Ex-Im is spending or investing those $5 billions, rather the job of the Ex-Im bank is to help finance trading opportunities that private sector lenders are not willing to take a risk on. As Ex-Im describes its mission: “We assume credit and country risks that the private sector is unable or unwilling to accept. We also help to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters.”

MORE...

http://www.forbes.com/sites/christopherhelman/2013/07/01/with-power-africa-plan-obama-to-grease-billions-in-deals-for-g-e/

[matt819]

1. Make No Mistake

With few exceptions, foreign aid is never about aid to foreign countries. It is about aid to American companies to enter or expand in foreign markets. If one of the results is aid to actual foreign people, this is merely a side effect.

Books have been written about this. It is not news. Oh, and by the way, despite the odd small American company benefiting from these efforts, these primary beneficiaries are the major multinationals. And the irony, if you can call it that, is that they often have more power than the US Government in the markets they wish to enter/expand in, so in the 21st century I can't help but wonder why we're doing this at all.

That said, if the US Government is going to pave the way or otherwise support American companies in their efforts to enter or expand their operations in foreign markets, then one eensy-weensy condition should be something along the lines of either paying for this service and paying taxes on revenues generated by these actions.

[EC]

2. Well, someone has to do it.

They need electricity, so who better to do it than an electric company?