Last week, ZAG-S&W co-hosted a panel discussion and webinar with the Embassy of Israel centered on energy investment in developing countries. The panelists discussed the potential for investment in solar and other distributed energy resources in growth markets such as Sub-Saharan Africa, with an emphasis on the contribution that Israeli technology and innovation can make in this area.

Investments have shifted to emerging and developing countries, as these nations seek to lessen dependence on fossil fuels. Geographic areas such as Sub-Saharan Africa have enormous potential renewable energy resources and growing energy demands, but lack the infrastructure to deliver reliable, accessible, and cost-effective electricity to the population.

The conference panel was comprised of Mark Norris (Sullivan & Worcester UK), Rick Angiuoni (Export-Import Bank of the U.S.), Brian O’Hanlon (Overseas Private Investment Corporation), and Dr. Astorre Modena (Terra Venture Partners). The panel was moderated by Jim Wrathall (Sullivan & Worcester DC).

Overview of the Africa Opportunity

Mr. Norris began the discussion with an overview of energy investment opportunities in Sub-Saharan Africa. Africa has experienced huge population growth and electricity demand over the last ten years. The continent has vast renewable energy resources, but investments in energy generation infrastructure have not kept pace due to several challenges. Mr. Norris identified several of these obstacles, such as limited debt financing, low credit ratings of some African countries, and limited domestic financing.  Mr. Norris pointed out the extraordinary opportunities that will be created for businesses willing to take on these challenges.

The Power Africa Initiative

The next two panelists, Rick Angiuoni from the Export-Import Bank and Brian O’Hanlon from OPIC, discussed the U.S. Power Africa Initiative and explained how their organizations are helping to overcome the hurdles described by Mr. Norris. Specifically, the commitments of the United States to its partnership with Sub-Saharan Africa include 30,000 megawatts (MW) of additional clean, efficient and renewable energy, billions of increased private sector investments, and increased access to electricity for businesses and households.

Mr. Angiuoni identified how the Export-Import Bank, as the official export credit agency of the U.S., can form strategic partnerships to bring lower priced commercial debt, longer tenors, additional transparency, and extensive experience in structuring projects to help alleviate the massive investment backlog Africa faces in its capacity, connections, and transmission networks.

Next, Brian O’Hanlon described how OPIC has developed innovative financial solutions to support U.S. private capital, including debt, financing, insurance, and support for private equity investment funds. OPIC has a long-standing record of experience and commitment to renewable energy in emerging markets, including $1.5 billion in commitments to develop energy projects in Africa.

The last panelist, Dr. Astorre Modena, discussed how Terra Venture Partners, a multi-stage fund, invests in novel Israeli technologies in the clean technology, renewable energy, resource efficiency, and sustainability fields. He highlighted how many of these technologies may help solve some of the energy challenges in developing countries.

Take-Aways

While financing energy infrastructure projects in developing counties and emerging markets, such as those in Sub-Saharan Africa, can be challenging, enormous public benefits can be realized. Some 600 million people are without access to electricity in this region and many more experience regular rolling black-outs throughout the year.

Further, the less financial resource intensive nature of these distributed energy projects provides strong investment opportunities. The U.S. lags behind Europe and China in energy investments in Africa, but the commitments the U.S. made in the Power Africa Initiative are expected to enable investments to steadily increase year-over-year.

This outstanding panel brought together committed leaders with the experience to navigate the challenging investment landscape and help investors fully realize the opportunities that exist. For you reference, below are their presentations and the audio of the panel discussion.

Energy Investment in Developing Countries (PDF)

Audio recording with slides (mp4)