POWER AFRICA TRANSACTIONS AND REFORMS PROGRAM FINAL REPORT POWER AFRICA TRANSACTIONS AND REFORMS PROGRAM FINAL REPORT DECEMBER 2019 Submitted by: O. LLYR ROWLANDS, CHIEF OF PARTY TETRA TECH ES, INC. 1320 N. COURTHOUSE ROAD, SUITE 600 ARLINGTON, VA 22201 EMAIL: [email protected] CONTRACT NUMBER: AID-623-C-14-00003 MAY 23, 2014 TO NOVEMBER 23, 2019 DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. This publication was produced for review by the United States Agency for International Development. It was prepared by Tetra Tech ES, Inc. Photo by Ryan Kilpatrick CONTENTS 1. EXECUTIVE SUMMARY 2 2. INTRODUCTION 6 East Africa 9 Liberia 73 Djibouti 19 Nigeria 79 Ethiopia 23 Senegal 88 Kenya 31 Southern Africa 95 3. RESULTS 9 Rwanda 44 Angola 98 Tanzania 49 Malawi 101 West Africa 56 Zambia 103 Ghana 65 Monitoring and Evaluation (M&E) 107 Power Africa Tracking Tool (PATT) 109 4. SUPPORT TO THE Power Africa Partners 110 COORDINATOR’S Gender Integration 111 Environmental and Social Due Diligence 113 OFFICE 107 Communications 117 Strategy Documents 121 5. CHALLENGES & Challenges 124 LESSONS Lessons Learned 125 LEARNED 124 6. RECOMMENDATIONS FOR FUTURE POWER AFRICA SUPPORT 128 APPENDIX A: PATRP RESULTS 135 APPENDIX B: PATRP ACRONYMS 144 PATRP FINAL REPORT 1 1. EXECUTIVE SUMMARY Launched in 2013, Power Africa is This final report details PATRP’s activities during contract implementation (May 2014 to November 2019), a U.S. Government-led partnership, which included transaction advisory support for power coordinated by the United generation projects, assistance to off-grid electrification efforts, energy sector policy and regulatory support to States Agency for International African governments, and a range of other work streams Development (USAID), that brings designed to achieve Power Africa’s goals. together the collective resources of over 170 public and private OUR GOALS sector partners to double access PATRP’s key targets mirrored Power Africa’s overarching to electricity in sub-Saharan Africa. goals, and centered on: Power Africa’s goal is to add more • Adding power generation capacity by bringing late-stage transactions to financial close, as well as than 30,000 megawatts (MW) of building a pipeline of power generation projects at all new electricity generation capacity stages of development; and connect 60 million new homes • Increasing electricity connections for homes and businesses to power by 2030. and businesses through support to transmission, distribution, and off-grid companies; and • Improving the enabling environment In 2014, USAID selected Tetra in partner countries to facilitate private Tech to lead the Power Africa sector engagement. Transactions and Reforms Program (PATRP), a five-year ADDING POWER contract to provide technical GENERATION CAPACITY assistance, capacity-building, To help Power Africa reach its 30,000 MW goal, PATRP engaged experienced transaction advisors to identify and and transaction advisory advance promising power generation projects across the services across the continent. continent. PATRP’s life-of-project targets were to achieve 6,421 MW of financially closed generation capacity, in addition to an ambitious pipeline of 32,120 MW of projects (i.e. pending financial close). Over the course of the contract, PATRP facilitated the financial close of 5,263 MW of power generation projects, of which 1,487 MW have been commissioned and are providing critical electricity supply across the continent. 2 PATRP FINAL REPORT EXHIBIT 1 EXHIBIT 2 PATRP FINANCIALLY CLOSED TRANSACTIONS PATRP COMMISSIONED TRANSACTIONS BY COUNTRY BY COUNTRY Rwanda 36.6 MW Uganda 49.7 MW Malawi 60 MW Zambia 79.8 MW Senegal 247.7 MW Senegal 29 MW Tanzania 374.7 MW Uganda 41 MW Cameroon 420 MW Zambia 82.2 MW Nigeria 459 MW Tanzania 172 MW Ghana 552 MW Kenya 310 MW Kenya 771.3 MW Ghana 357 MW South Africa 2,205.4 MW Nigeria 460.7 MW 0-200 MW 401-600 MW 800+ MW 0-200 MW 201-400 MW 401-600 MW 201-400 MW 601-800 MW PATRP also secured a pipeline of more than 250 active Power Africa transactions at various stages, representing nearly 33,000 MW of potential generation capacity. These transactions are monitored by the web-based Power Africa Tracking Tool (PATT), developed by PATRP, which allows Power Africa and its stakeholders to track transactions as they progress toward financial close and commercial operation. The PATRP pipeline increased significantly year by year, from under 10,000 MW at inception, to nearly 33,000 MW at the end of the contract. EXHIBIT 3 PATRP ADDITIONS TO THE PROJECT PIPELINE BY YEAR (MW) 35,000 242 20,000 4,386 4,386 25,000 5,889 5,889 5,889 20,000 12,462 12,462 12,462 12,462 15,000 10,000 5,000 9,883 9,883 9,883 9,883 9,883 0 2015 2016 2017 2018 2019 PATRP FINAL REPORT 3 EXHIBIT 4 EXHIBIT 5 PATRP LATE-STAGE TRANSACTIONS (PENDING FINANCIAL PATRP CONNECTIONS BY COUNTRY CLOSE) BY COUNTRY Uganda 7 MW Burundi 19 MW Angola 381 Ethiopia 20 MW Côte d’Ivoire 503 Djibouti 30 MW Niger 614 Malawi 41 MW Cameroon 3,371 Senegal 120 MW Liberia 5,581 South Africa 122 MW Ghana 8,452 Rwanda 145 MW DRC 11,443 Tanzania 147 MW Ethiopia 14,682 Zambia 180 MW Senegal 24,845 Ghana 222 MW 0-200 MW Tanzania 55,451 Sierra Leone 224 MW 201-400 MW Zambia 85,964 0-50,000 Côte d’Ivoire 390 MW Uganda 97,361 50,001-100,000 Kenya 491 MW 401-600 MW Rwanda 116,337 Mali 500 MW 601-800 MW Kenya 559,826 100,001-200,000 Nigeria 1,715 MW 800+ MW Nigeria 694,596 200,000+ INCREASING ELECTRICITY IMPROVING THE CONNECTIONS FOR ENABLING ENVIRONMENT HOMES AND BUSINESSES To create the conditions for private sector engagement and investment in sub-Saharan Africa’s energy sector, For the millions of people in sub-Saharan Africa who Power Africa promoted policy and regulatory reforms lack access to reliable electricity, new power generation in partner countries, strengthened key institutions, projects are only part of the solution. Power Africa and trained future energy sector leaders. PATRP also aimed to increase access to electricity by adding provided an array of support to further these efforts, 60 million new connections to homes and businesses. including policy development, technical training, and PATRP’s share of this goal was 907,000 new connections, dedicated institutional capacity building via embedded through a combination of support to electricity expert advisors. PATRP exceeded all enabling distribution companies and support to off-grid electricity environment targets by drafting 150 policies, companies. In the end, PATRP added more than implementing 59 policies, and training 6,417 1.7 million new on-and off-grid electricity people, of which 1,288 were women. connections across the continent, significantly surpassing contract targets. Exhibit 6 highlights PATRP’s achievements in key areas. Exhibit 5 highlights the locations of PATRP’s on-grid and off-grid connections results. 4 PATRP FINAL REPORT EXHIBIT 6 PATRP RESULTS ON KEY PROJECT GOALS INDICATOR TOTAL CUMULATIVE % ACTUAL VS TARGETS ACTUAL TARGET Generation Capacity Pending Financial Closure1 32,120 MW 32,862 MW 102% Generation Capacity Reached Financial Closure 6,421 MW 5,263 MW 82% Generation Capacity Commissioned 990 MW 1,487 MW 150% New Grid and Off-grid Actual Direct Connections 907,525 1,729,848 190% Training and Capacity Building (Persons Trained) 1,542 6,417 (5,085 M) 416% (1,289 F) Policies Drafted 55 150 272% Policies Implemented 25 59 236% Power Lines Reached Financial Close 606 KM 2,153 KM 355% 5,263 MW 1,729,848 1,487 MW Reached Financial Closed On-Grid & Off-Grid Generation Capacity Target: 6,421 MW Direct Connections Commissioned Average Size: 88.9 MW Target: 907,525 Target: 990 MW 32,862 MW 6,417 150 Added to Pipeline Project People Trained Policies (5,069 men; Drafted Target: 32,120 MW 1,288 women) 2,153 Km of Power Lines 59 Reached Financial Close Policies Implemented 1 The Cumulative Actual figure represents the total potential generation capacity of the projects at the time they were onboarded as PATRP-supported transactions. MW values may have changed during the course of project development. PATRP FINAL REPORT 5 2. INTRODUCTION Launched in 2013, Power Africa is To achieve these ambitious goals, Power Africa draws on the combined expertise and resources of 12 U.S. a U.S. Government-led partnership, Government (USG) agencies, and more than 170 public coordinated by the United and private sector partners. Together with African governments, Power Africa is stimulating investment States Agency for International in sub-Saharan Africa’s energy sector, bringing critical Development (USAID), that aims power projects online, and providing access to electricity to increase access to electricity for millions. for homes and businesses in sub- In 2014, USAID selected Tetra Tech to lead the Power Saharan Africa, where two-thirds Africa Transactions and Reforms Program (PATRP) under a five-year contract to provide technical assistance, of people live without power. capacity-building, and transaction advisory services from a base office in Pretoria, South Africa. The PATRP team was led by Tetra Tech, ES, Inc., as the prime contractor, The initiative’s early goals were with Nexant, Inc., and BDO Risk Advisory Services as to add 10,000 MW and 20 million principal subcontractors. Other services were provided connections in a first set of Power by Aurecon, McKinsey, and several U.S.-based and other small businesses. Africa focus countries: Ethiopia, Ghana, Kenya, Liberia, Nigeria, In addition to transaction advisory assistance, PATRP also supported power sector reforms and utility and Tanzania.