Power AfricaGovernance Donor Partner WG

November 14, 2013

What is Power Africa?Power Africa is about mobilizing private resources to close priority projects in six African countries

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Power Africa

Private investors commit to

invest in the energy sector

USG assists government to

implement reforms and facilitates transactions

Government implements

reforms needed to

spur investment

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Power AfricaSector Reforms

Power Africa recognizes need to “do things differently”. It is a PPP, about promoting good business, not traditional aid.

Like the Big Results Now!, it is about “business unusual.”

Power Africa countries selected based on commitment to reforms.

Power Africa recognizes role & value of delivery units and their role in catalyzing reforms and fast-tracking transactions.

Public and Private Sector Collaboration

As part of Power Africa, over 40 companies from around the globe have signaled their interest in investing in African energy. It is up to Tanzania to attract this investment.

For the US Government, Power Africa is a “Whole of Government” initiative which engages: USAID, State Department, OPIC, US Export-Import Bank, Trade & Development Agency, MCC, Department of Commerce, Department of Treasury, Department of Energy.

As well, USG seeks opportunities for closer collaboration and coordination with the full range of development partners in each country.

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Power Africa

On-going USG Power Activities in Tanzania

USAID

Energy Governance Capacity Initiative (EGCI)

MCC 1st Compact

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Power Africa

USAID Power Activities in Tanzania

Partnership for Growth: A 5-year timeline, started July 2012

Working with key sector counterparts on specific actions MEM, TANESCO, ZECO, REA, EWURA (eventually TPDC)

Coordinating with USG agencies and other Development Partners, including the World Bank and AfDB

USAID currently using five mechanisms in Tanzania:Energy Utility Partnership Program: TANESCO & ZECO

Energy Regulatory Partnership Program: EWURA & ZURA

Energy Efficiency Program: TANESCO, ZECO, EWURA, MEM

Private Capital Group for Africa: REA

Africa Infrastructure Program: EWURA, MEM

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Power Africa

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Power Africa

U.S. Department of State-led, interagency effort to provide of technical and capacity building assistance to the governments of select countries on the verge of becoming significant oil and gas producers.

Core objective: help countries establish capacity to manage their oil and gas sector revenues wisely and in a manner that maximizes the value of the resource development for the government.

In Tanzania, EGCI funding supports technical assistance to the Tanzania Revenue Authority to improve payer compliance and enhance capacity related to transfer pricing.

In 2012, EGCI supported the Tanzanian Energy Ministry in hosting region-wide conference on managing offshore oil and gas resources.

EGCI is looking at additional opportunities to provide further technical assistance and training in the coming months.

Energy Governance Capacity Initiative

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Power Africa

MCC’s current compact has nearly $207 million dedicated to expanding access to electricity on the mainland and Zanzibar.

MCC- First Compact 2008 - 2013

Nearly 3000 Kilometers of new transmission & distribution line

27 new or upgraded substations

New 100 MW submarine power cable between Mainland & Unguja

$4.7 million PV solar programme in Kigoma

Technical assistance to TANESCO & ZECO e.g., cost of service support, loss reduction

Agenda of continued policy reform to enhance sustainability, e.g. cost reflective tariffs; enhanced opportunities for private sector participation

What’s New under Power AfricaTanzania’s commitment to reform

Big Results Now!

Commitment to enabling environment for investment

Increased focus on private sector engagement

Letters of IntentDevelopers pledged > 9.6 GW of generation projects in Power Africa countries, representing in > $14.5 billion in investment.

Financial partners pledged to make available > $8 billion for energy, via project finance, new financing facilities/platforms, and fundraising

Focus on TransactionsFocus on closing transactions

Transactions Solutions Group

Transactions Advisor(s)9

Power Africa

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BRN! Targets ambitious results by 2016

Power Africa

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Much in commonCommitment to reforms

Fast-tracking transactions

GOT – USAID Signed LOI, July 2013USG to support PDB structure as BRN! succeeds

Power Africa efforts will seek to align with BRN!And coordinate with other DPs

Power AfricaBRN! – Power Africa Nexus

LETTER OF INTENT

Roadmap for sector reform Adoption of Subsidy Policy Development of a REFIT program Cost-reflective tariff structure Unification & rationalization of PPP

structures Movement towards competitive bidding

IPPs/PPPs