[House Report 113-433]
[From the U.S. Government Publishing Office]
113th Congress Rept. 113-433
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
ELECTRIFY AFRICA ACT OF 2014
_______
May 2, 2014.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Royce, from the Committee on Foreign Affairs, submitted the
following
R E P O R T
[To accompany H.R. 2548]
[Including cost estimate of the Congressional Budget Office]
The Committee on Foreign Affairs, to whom was referred the
bill (H.R. 2548) to establish a comprehensive United States
Government policy to assist countries in sub-Saharan Africa to
develop an appropriate mix of power solutions for more broadly
distributed electricity access in order to support poverty
alleviation and drive economic growth, and for other purposes,
having considered the same, reports favorably thereon with
amendments and recommends that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.................................................... 1
Summary and Purpose.............................................. 7
Background and Need for Legislation.............................. 7
Hearings......................................................... 9
Committee Consideration.......................................... 10
Committee Oversight Findings..................................... 10
New Budget Authority, Tax Expenditures, and Federal Mandates..... 10
Congressional Budget Office Cost Estimate........................ 11
Directed Rule Making............................................. 14
Non-Duplication of Federal Programs.............................. 14
Performance Goals and Objectives................................. 15
Congressional Accountability Act................................. 15
New Advisory Committees.......................................... 15
Earmark Identification........................................... 15
Constitutional Authority Statement............................... 15
Letters of Jurisdiction.......................................... 16
Section-by-Section Analysis...................................... 17
Changes in Existing Law Made by the Bill, as Reported............ 19
The Amendment
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Electrify Africa Act of 2014''.
SEC. 2. PURPOSE.
The purpose of this Act is to encourage the efforts of countries in
sub-Saharan Africa to improve access to affordable and reliable
electricity in Africa in order to unlock the potential for economic
growth, job creation, food security, improved health, education and
environmental outcomes, and poverty reduction.
SEC. 3. FINDINGS.
Congress finds that--
(1) 589,000,000 people in sub-Saharan Africa, or 68 percent
of the population, did not have access to electricity, as of
2010;
(2) in sub-Saharan Africa, electricity services are highly
unreliable and they are at least twice as expensive for those
with electricity access compared to other emerging markets;
(3) lack of access to electricity services disproportionally
affects women and girls, who often shoulder the burden of
seeking sources of heat and light such as dung, wood or
charcoal and are often more exposed to the associated negative
health impacts. Women and girls also face an increased risk of
assault from walking long distances to gather fuel sources;
(4) access to electricity creates opportunities, including
entrepreneurship, for people to work their way out of poverty;
(5) a lack of electricity contributes to the high use of
inefficient and often highly polluting fuel sources for indoor
cooking, heating, and lighting that produce toxic fumes
resulting in more than 3,000,000 annual premature deaths from
respiratory disease, more annual deaths than from HIV/AIDS and
malaria in sub-Saharan Africa;
(6) electricity access is crucial for the cold storage of
vaccines and anti-retroviral and other lifesaving medical
drugs, as well as the operation of modern lifesaving medical
equipment;
(7) electricity access can be used to improve food security
by enabling post-harvest processing, pumping, irrigation, dry
grain storage, milling, refrigeration, and other uses;
(8) reliable electricity access can provide improved lighting
options and information and communication technologies,
including Internet access and mobile phone charging, that can
greatly improve health, social, and education outcomes, as well
as economic and commercial possibilities;
(9) sub-Saharan Africa's consumer base of nearly one billion
people is rapidly growing and will create increasing demand for
United States goods, services, and technologies, but the
current electricity deficit in sub-Saharan Africa limits this
demand by restricting economic growth on the continent;
(10) approximately 30 African countries face endemic power
shortages, and nearly 70 percent of surveyed African businesses
cite unreliable power as a major constraint to growth;
(11) the Millennium Challenge Corporation's work in the
energy sector shows high projected economic rates of return
that translate to sustainable economic growth and that the
highest returns are projected when infrastructure improvements
are coupled with significant legislative, regulatory,
institutional, and policy reforms;
(12) in many countries, weak governance capacity, regulatory
bottlenecks, legal constraints, and lack of transparency and
accountability can stifle the ability of private investment to
assist in the generation and distribution of electricity; and
(13) without new policies and more effective investments in
electricity sector capacity to increase and expand electricity
access in sub-Saharan Africa, over 70 percent of the rural
population, and 48 percent of the total population, will
potentially remain without access to electricity by 2030.
SEC. 4. STATEMENT OF POLICY.
Congress declares that it is the policy of the United States--
(1) in consultation with sub-Saharan African governments, to
encourage the private sector, international community, African
Regional Economic Communities, philanthropies, civil society,
and other governments to promote--
(A) the installation of at least an additional 20,000
megawatts of electrical power in sub-Saharan Africa by
2020 to support poverty reduction, promote development
outcomes, and drive economic growth;
(B) first-time direct access to electricity for at
least 50,000,000 people in sub-Saharan Africa by 2020
in both urban and rural areas;
(C) efficient institutional platforms with
accountable governance to provide electrical service to
rural and underserved areas; and
(D) the necessary in-country legislative, regulatory
and policy reforms to make such expansion of
electricity access possible; and
(2) to encourage private sector and international support for
construction of hydroelectric dams in sub-Saharan Africa that--
(A) offer low-cost clean energy consistent with--
(i) the national security interests of the
United States; and
(ii) best international practices regarding
social and environmental safeguards,
including--
(I) engagement of local communities
regarding the design, implementation,
monitoring, and evaluation of such
projects;
(II) the consideration of energy
alternatives, including distributed
renewable energy; and
(III) the development of appropriate
mitigation measures; and
(B) support partner country efforts.
SEC. 5. DEVELOPMENT OF A COMPREHENSIVE, MULTIYEAR STRATEGY.
(a) Strategy.--The President shall establish a comprehensive,
integrated, multiyear policy, partnership, and funding strategy to
encourage countries in sub-Saharan Africa to develop an appropriate mix
of power solutions, including renewable energy, to provide sufficient
electricity access to people living in rural and urban areas in order
to alleviate poverty and drive economic growth. Such strategy shall
maintain sufficient flexibility and remain responsive to technological
innovation in the power sector.
(b) Report.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the President shall transmit to the
appropriate congressional committees a report setting forth the
strategy described in subsection (a).
(2) Report contents.--The report required by paragraph (1)
shall include a discussion of the elements described in
paragraph (3), and should include a discussion of any
additional elements relevant to the strategy described in
subsection (a).
(3) Report elements.--The elements referred to in paragraph
(2) are the following:
(A) The general and specific objectives of the
strategy described in subsection (a), the criteria for
determining success of the strategy, a description of
the manner in which the strategy will support partner
country efforts to increase production and improve
access to electricity, and criteria and indicators used
to select partner countries for focused engagement on
the power sector.
(B) Development, by partner country governments, of
plans and regulations at the national, regional, and
local level to increase power production, strengthen
existing electrical transmission and distribution
infrastructure, bolster accountable governance and
oversight, and improve access to electricity.
(C) Administration plans to support partner country
efforts to increase new access to electricity,
including a description of how the strategy will
address commercial and residential needs, as well as
urban and rural access.
(D) Administration strategy to support partner
country efforts to reduce government waste, fraud, and
corruption, and improve existing power generation
through improvement of existing transmission and
distribution systems, as well as the use of a broad
power mix, including renewable energy, and the use of a
distributed generation model.
(E) Administration policy to support partner country
efforts to attract private sector investment and public
sector resources.
(F) A description of the Administration's strategy
for the transfer of relevant technology, skills, and
information to increase local participation in the
long-term maintenance and management of the power
sector to ensure investments are sustainable and
transparent, including details of the programs to be
undertaken to maximize United States contributions in
the areas of technical assistance and training.
(G) An identification of the relevant executive
branch agencies that will be involved in carrying out
the strategy, the level and distribution of resources
that will be dedicated on an annual basis among such
agencies, timely and comprehensive publication of aid
information and available transmission of resource data
consistent with Administration commitments to implement
the transparency measures specified in the
International Aid Transparency Initiative by December
2015, the assignment of priorities to such agencies, a
description of the role of each such agency, and the
types of programs that each such agency will undertake.
(H) A description of the mechanisms that will be
utilized by the Administration, including the
International Aid Transparency Initiative, to
coordinate the efforts of the relevant executive branch
agencies in carrying out the strategy to avoid
duplication of efforts, enhance coordination, and
ensure that each agency undertakes programs primarily
in those areas where each such agency has the greatest
expertise, technical capabilities, and potential for
success.
(I) A description of the mechanisms that will be
established by the Administration for monitoring and
evaluating the strategy and its implementation,
including procedures for learning and sharing best
practices among relevant executive branch agencies, as
well as among participating countries, and for
terminating unsuccessful programs.
(J) A description of the Administration's engagement
plan, consistent with international best practices, to
ensure local and affected communities are informed,
consulted, and benefit from projects encouraged by the
United States, as well as the environmental and social
impacts of the projects.
(K) A description of the mechanisms that will be
utilized to ensure greater coordination between the
United States and foreign governments, international
organizations, African regional economic communities,
international fora, the private sector, and civil
society organizations.
(L) A description of how United States leadership
will be used to enhance the overall international
response to prioritizing electricity access for sub-
Saharan Africa and to strengthen coordination among
relevant international forums such as the Post-2015
Development Agenda and the G8 and G20, as well as the
status of efforts to support reforms that are being
undertaken by partner country governments.
(M) An outline of how the Administration intends to
partner with foreign governments, the international
community, and other public sector entities, civil
society groups, and the private sector to assist sub-
Saharan African countries to conduct comprehensive
project feasibility studies and facilitate project
development.
(N) A description of how the Administration intends
to help facilitate transnational and regional power and
electrification projects where appropriate.
SEC. 6. USAID.
(a) Loan Guarantees.--It is the sense of Congress that in pursuing
the policy goals described in section 4, the Administrator of USAID
should identify and prioritize--
(1) loan guarantees to local sub-Saharan African financial
institutions that would facilitate the involvement of such
financial institutions in power projects in sub-Saharan Africa;
and
(2) partnerships and grants for research, development, and
deployment of technology that would increase access to
electricity in sub-Saharan Africa.
(b) Grants.--It is the sense of Congress that the Administrator of
USAID should consider providing grants to--
(1) support the development and implementation of national,
regional, and local energy and electricity policy plans;
(2) expand distribution of electricity access to the poorest;
and
(3) build a country's capacity to plan, monitor and regulate
the energy and electricity sector.
(c) USAID Defined.--In this section, the term ``USAID'' means the
United States Agency for International Development.
SEC. 7. LEVERAGING INTERNATIONAL SUPPORT.
In pursuing the policy goals described in section 4, the President
should direct the United States' representatives to appropriate
international bodies to use the influence of the United States,
consistent with the broad development goals of the United States, to
advocate that each such body--
(1) commit to significantly increase efforts to promote
investment in well-designed power sector and electrification
projects in sub-Saharan Africa that increase energy access, in
partnership with the private sector and consistent with the
host countries' absorptive capacity;
(2) address energy needs of individuals and communities where
access to an electricity grid is impractical or cost-
prohibitive;
(3) enhance coordination with the private sector in sub-
Saharan Africa to increase access to electricity;
(4) provide technical assistance to the regulatory
authorities of sub-Saharan African governments to remove
unnecessary barriers to investment in otherwise commercially
viable projects; and
(5) utilize clear, accountable, and metric-based targets to
measure the effectiveness of such projects.
SEC. 8. OVERSEAS PRIVATE INVESTMENT CORPORATION.
(a) In General.--The Overseas Private Investment Corporation should--
(1) in carrying out its programs and pursuing the policy
goals described in section 4, place a priority on supporting
investment in the electricity sector of sub-Saharan Africa,
including renewable energy, and implement procedures for
expedited review of and, where appropriate, approval of,
applications by eligible investors for loans, loan guarantees,
and insurance for such investments;
(2) support investments in projects and partner country
strategies to the extent permitted by its authorities,
policies, and programs, that will--
(A) maximize the number of people with new access to
electricity to support economic development;
(B) improve the generation, transmission, and
distribution of electricity;
(C) provide reliable and low-cost electricity,
including renewable energy and on-grid, off-grid, and
multi-grid solutions, to people living in rural and
urban communities;
(D) consider energy needs of individuals where access
to an electricity grid is impractical or cost-
prohibitive;
(E) reduce transmission and distribution losses and
improve end-use efficiency; and
(F) reduce energy-related impediments to business and
investment opportunity and success;
(3) encourage locally-owned, micro, small- and medium-sized
enterprises and cooperative service providers to participate in
investment activities in sub-Saharan Africa; and
(4) publish in an accessible digital format measurable
development impacts of its investments, including appropriate
quantifiable metrics to measure energy access at the individual
household, enterprise, and community level; and
(5) publish in an accessible digital format the amount, type,
location, duration, and measurable results, with links to
relevant reports and displays on an interactive map, where
appropriate, of all OPIC investments and financings.
(b) Amendments.--Title IV of chapter 2 of part I of the Foreign
Assistance Act of 1961 is amended--
(1) in section 233 (22 U.S.C. 2193)--
(A) in subsection (b), by inserting after the sixth
sentence the following new sentence: ``Of the eight
such Directors, not more than five should be of the
same political party.''; and
(B) by adding at the end the following new
subsection:
``(e) Investment Advisory Council.--The Board shall take prompt
measures to increase the loan, guarantee, and insurance programs, and
financial commitments, of the Corporation in sub-Saharan Africa,
including through the use of an investment advisory council to assist
the Board in developing and implementing policies, programs, and
financial instruments with respect to sub-Saharan Africa. In addition,
the investment advisory council shall make recommendations to the Board
on how the Corporation can facilitate greater support by the United
States for trade and investment with and in sub-Saharan Africa. The
investment advisory council shall terminate on December 31, 2017.'';
(2) in section 234(c) (22 U.S.C. 2194(c)), by inserting
``eligible investors or'' after ``involve'';
(3) in section 235(a)(2) (22 U.S.C. 2195), by striking
``2007'' and inserting ``2017'';
(4) in section 237(d) (22 U.S.C. 2197(d))--
(A) in paragraph (2), by inserting ``, systems
infrastructure costs,'' after ``outside the
Corporation''; and
(B) in paragraph (3), by inserting ``, systems
infrastructure costs,'' after ``project-specific
transaction costs''; and
(5) by amending section 239(e) (22 U.S.C. 2199(e)) to read as
follows:
``(e) Inspector General.--The Board shall appoint and maintain an
Inspector General in the Corporation, in accordance with the Inspector
General Act of 1978 (5 U.S.C. App.).''.
(c) Annual Consumer Satisfaction Survey and Report.--
(1) Survey.--
(A) In general.--For each of calendar years 2014
through 2016, the Overseas Private Investment
Corporation shall conduct a survey of private entities
that sponsor or are involved in projects that are
insured, reinsured, guaranteed, or financed by the
Corporation regarding the level of satisfaction of such
entities with the operations and procedures of the
Corporation with respect to such projects.
(B) Priority.--The survey shall be primarily focused
on United States small businesses and businesses that
sponsor or are involved in projects with a cost of less
than $20,000,000 (as adjusted for inflation).
(2) Report.--
(A) In general.--Not later than each of July 1, 2015,
July 1, 2016, and July 1, 2017, the Corporation should
submit to the congressional committees specified in
subparagraph (C) a report on the results of the survey
required under paragraph (1).
(B) Matters to be included.--The report should
include the Corporation's plans to revise its
operations and procedures based on concerns raised in
the results of the survey, if appropriate.
(C) Form.--The report shall be submitted in
unclassified form and shall not disclose any
confidential business information.
(D) Congressional committees specified.--The
congressional committees specified in this subparagraph
are--
(i) the Committee on Appropriations and the
Committee on Foreign Affairs of the House of
Representatives; and
(ii) the Committee on Appropriations and the
Committee on Foreign Relations of the Senate.
SEC. 9. TRADE AND DEVELOPMENT AGENCY.
(a) In General.--The Director of the Trade and Development Agency
should--
(1) promote United States private sector participation in
energy sector development projects in sub-Saharan Africa
through project preparation activities, including feasibility
studies at the project, sector, and national level, technical
assistance, pilot projects, reverse trade missions, conferences
and workshops; and
(2) seek opportunities to fund project preparation activities
that involve increased access to electricity, including power
generation and trade capacity building.
(b) Focus.--In pursuing the policy goals described in section 4,
project preparation activities described in subsection (a) should focus
on power generation, including renewable energy, improving the
efficiency of transmission and distribution grids, including on-grid,
off-grid and mini-grid solutions, and promoting energy efficiency and
demand-side management.
SEC. 10. PROGRESS REPORT.
Not later than three years after the date of the enactment of this
Act, the President shall transmit to the Committee on Foreign Affairs
of the House of Representatives and the Committee on Foreign Relations
of the Senate, and post through appropriate digital means, a report on
progress made toward achieving the policy goals described in section 4,
including the following:
(1) The number, type, and status of policy, regulatory, and
legislative changes implemented in partner countries to support
increased electricity generation and access, and strengthen
effective, accountable governance of the electricity sector
since United States engagement.
(2) A list of power sector and electrification projects
United States Government instruments are supporting to achieve
the policy goals described in section 4, and for each such
project--
(A) a description of how each such project fits into
the national power plans of the partner country;
(B) the total cost of each such project and predicted
United States Government contributions, and actual
grants and other financing provided to such projects,
broken down by United States Government funding source,
including from the Overseas Private Investment
Corporation, the United States Agency for International
Development, the Department of the Treasury, and other
appropriate United States Government departments and
agencies;
(C) the predicted electrical power capacity of each
project upon completion, with metrics appropriate to
the scale of electricity access being supplied, as well
as total megawatts installed;
(D) compliance with international best practices and
expected environmental and social impacts from each
project;
(E) the estimated number of women, men, poor
communities, businesses, schools, and health facilities
that have gained electricity connections as a result of
each project at the time of such report; and
(F) the current operating electrical power capacity
in wattage of each project.
Amend the title so as to read:
A bill to establish a comprehensive United States
Government policy to encourage the efforts of countries in sub-
Saharan Africa to develop an appropriate mix of power
solutions, including renewable energy, for more broadly
distributed electricity access in order to support poverty
reduction, promote development outcomes, and drive economic
growth, and for other purposes.
Summary and Purpose
H.R. 2548, the Electrify Africa Act of 2014, is a response
to the massive power shortage plaguing nearly 600 million
people in the sub-Saharan region. Recognizing that lack of
electricity limits economic opportunities and adversely affects
humanitarian conditions, the Act sets out a comprehensive,
sustainable, and market-based approach to bring people facing
endemic power shortages in sub-Saharan Africa into the global
economy. To achieve this purpose, the bill directs the
President to establish a multiyear strategy to develop an
appropriate mix of power solutions. The bill describes several
mechanisms by which the United States can aid the efforts of
private-sector and public-sector organizations seeking to
expand electricity access in the region, including USAID grants
and loan guarantees and OPIC investment prioritization.
Finally, the bill establishes oversight mechanisms and
reporting requirements to mitigate waste, fraud, or abuse.
The purpose of the legislation is to provide a clear
strategic framework that encourages the efforts of the private
sector and countries in sub-Saharan Africa to improve access to
affordable, reliable electricity in order to unlock the
potential for economic growth and community well-being.
Background and Need for Legislation
Nearly 600 million people in sub-Saharan Africa lack access
to electricity. This endemic power shortage has devastating
effects on the region, including economic stagnation, hazardous
health conditions, and constraints on educational
opportunities. United States government actions to encourage
expanded electricity access will allow these nations to
flourish and contribute to the global economy. H.R. 2548 is
motivated by a genuine desire to address this need and is
consistent with U.S. humanitarian, economic and national
security interests.
Unlocking Economic Potential
The African Growth and Opportunity Act (AGOA) provides
African countries with liberal access to U.S. markets. Despite
this favorable trade environment, many sub-Saharan African
nations have been unable to meaningfully participate in the
international economy. For example, in the first eleven months
of 2013, Liberia exported only $3,000 worth of goods. Lack of
electricity access is one of the most significant constraints
on economic growth. Seventy percent of surveyed African
businesses cite unreliable power as a major obstacle. Even
where trade conditions are ripe, the cost of running a plant on
a diesel generator in a nation without an energy grid is
prohibitive.
Lack of electricity not only prevents African nations from
participating in the global economy as manufacturers, but also
prevents the people of sub-Saharan Africa from taking part in
the market as consumers. With improved access to electricity,
United States' goods, services, and technology can reach the
nearly one billion people in sub-Saharan Africa. Communities
will be able to purchase and utilize modern technology,
including Internet access and cellular telephones.
China has already recognized this significant opportunity.
Where the United States has left a void for economic investment
in Africa, China has stepped in to direct nearly $2 billion
towards energy projects on the continent, leveraging Chinese
companies. If the United States wishes to tap into this
potential consumer base and effectively compete, it must act.
The Millennium Challenge Corporation's work in the energy
sector shows high projected economic rates of return that
translate into sustainable economic growth. With U.S.-supported
efforts to overcome the weak governance capacity, regulatory
bottlenecks, and legal constraints, private investment in the
sub-African energy sector can, and will, flourish.
Allowing Communities to Flourish
In addition to economic considerations, increased
electricity access in sub-Saharan African countries will
eliminate hazardous health and welfare conditions. Without
electricity, cold storage of vaccines is almost impossible, and
doctors are unable to utilize life-saving technology. Because
of power shortages, women spend long days searching for wood,
charcoal, and dung, placing themselves in danger to provide
heat and light for their families. Men and women farm for
sustenance, unable to safely store excess produce for trade or
profit, and children study with light from highly-flammable
kerosene lamps. Resultant health risks are extremely high.
Toxic fumes from highly inefficient and polluting sources cause
more than 3 million deaths per year in sub-Saharan Africa- more
than HIV/AIDS and malaria combined.
Supporting a Range of Energy Solutions for Diverse Circumstances
H.R. 2548 recognizes that there is no ``one size fits all''
energy solution for the countries in sub-Saharan Africa. It
supports an appropriate mix of non-renewable and renewable
energy options to address the dire need for electricity, while
recognizing the potential environmental impacts of this
technology.
The Electrify Africa Act acknowledges that sub-Saharan
Africa has abundant resources to fuel renewable sources of
energy, including sunlight, wind, geothermal, and water.
Electrify Africa declares that it is U.S. policy to support
hydroelectric dams that offer low-cost clean energy consistent
with U.S. national security interests and best international
practices regarding social and environmental safeguards. The
Committee also recognizes that non-renewable energy options
including natural gas, oil and clean coal are readily available
in sub-Saharan Africa.
H.R. 2548 encourages increasing access to rural and off-
grid communities with a variety of approaches. A substantial
proportion of the population in Sub-Saharan Africa and will
continue to live in rural communities, which are often the last
to benefit from large, centralized power grid systems. H.R.
2548 recognizes that rural communities cannot be forgotten in
the push to increase electricity access, and that mini-grid and
off-grid technologies can be well suited for these areas.
Strategic Framework and Tools
H.R. 2548 provides a comprehensive means to address issues
stemming from electricity shortages. It declares that the
United States, in consultation with sub-Saharan African
governments, will encourage: (i) the installation of an
additional 20,000 megawatts of electrical power in the region
by 2020, (ii) the provision of first-time access to electricity
for at least 50 million people by 2020, and (iii) any reforms
necessary to facilitate these goals. Developed prior to the
announcement of the Administration's Power Africa Initiative,
Electrify Africa provides a framework for investment in
Africa's energy sector that includes much needed oversight and
transparency mechanisms. The strategic framework required
through the Electrify Africa Act helps provide the transparency
to the private sector and recipient countries that will allow
them to direct their own resources to help increase energy
access. The Electrify Africa Act lays out a plan poised to
endure long after the Administration's Power Africa initiative
concludes.
Given the ability of the Overseas Private Investment
Corporation (OPIC) to catalyze investment in sub-Saharan
Africa's electricity sector, H.R. 2548 requires OPIC to
prioritize such investments, while implementing numerous
reforms. The Committee fully expects OPIC, during its limited
three-year reauthorization, to use its range of financing tools
to promote investment in electricity generation and
distribution across sub-Saharan Africa in coordination with
other implementing agencies. Reform measures imposed through
the Electrify Africa Act include: 1) requiring that OPIC become
more transparent and digitally post its investments, including
their impact; 2) require that an Inspector General be appointed
for OPIC; 3) making the Board of OPIC bipartisan for the first
time; and 4) reactivating the investment advisory council to
allow individuals outside of government to share insights on
how to improve investments in sub-Saharan Africa.
Hearings
During the 113th Congress, the Committee held the following
hearings related to the content of H.R. 2548:
July 18, 2013, Subcommittee on Africa, Global Health,
Global Human Rights, and International Organizations
hearing on ``Resources in Africa'' (Corinna Gilfillan,
Global Witness USA; Mohammed Amin Adam, Centre for
Energy Policy; Anquan Boldin, Oxfam America; Tutu
Alicante of EG Justice); and
May 7, 2013, Subcommittee on Africa, Global Health,
Global Human Rights, and International Organizations
hearing on ``Increasing American Jobs through Greater
Exports to Africa'' (Stephen Lande, Manchester Trade;
Peter C. Hansen, Law Office of Peter C. Hansen, LLC;
Sharon T. Freeman, All American Small Business
Exporters Association; Barbara Keating, Computer
Fronteirs).
During the 112th Congress, the Committee held the following
hearings and briefings related to the content of H.R. 2548:
June 20, 2012, Subcommittee on Africa, Global Health,
Global Human Rights, and International Organizations
hearing on ``The African Growth and Opportunity Act:
Ensuring Success (Anthony Carroll, Manchester Trade,
Ltd.; Paul Ryberg, African Coalition for Trade;
Jaswinder Bedi, African Cotton and Textile Industries
Federation; Stephen Hayes, The Corporate Council on
Africa);
March 29, 2012, the Subcommittee on Africa, Global
Health, Global Human Rights, and International
Organizations hearing on ``Assessing China's Role and
Influence in Africa'' (Hon. David Shinn, Elliot School
of International Affairs, George Washington University;
Donald Y. Yamamoto, Bureau of African Affairs. U.S.
Dept. of State; Carolyn Bartholomew, United States-
China Economic and Security Review Commission; J. Peter
Pham, Michael S. Ansari Africa Center, Atlantic
Council; Stephen Hayes, The Corporate Council of
Africa); and
March 18, 2013, the Subcommittee on Terrorism,
Nonproliferation, and Trade held a briefing on the
Overseas Private Investment Corporation with President
Elizabeth Littlefield, Executive Vice President Mimi
Alemayehou, and Vice President and Chief Financial
Officer Allan Villabroza.
Committee Consideration
On February 27, 2014, the Foreign Affairs Committee marked
up the bill, H.R. 2548, pursuant to notice, in open session. An
amendment in the nature of a substitute, offered by the
Chairman, and a second-degree amendment from Rep. Mark Meadows
requiring an OPIC report on customer satisfaction, were agreed
to in separate voice votes. The bill, as amended, was agreed to
by voice vote.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of rules of
the House of Representatives, the Committee reports that
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of House Rule X, are
incorporated in the descriptive portions of this report,
particularly in the ``Background and Purpose'' and ``Section-
by-Section Analysis'' sections.
New Budget Authority, Tax Expenditures, and Federal Mandates
In compliance with clause 3(c)(2) of House Rule XIII and
the Unfunded Mandates Reform Act (P.L. 104-4), the Committee
adopts as its own the estimate of new budget authority,
entitlement authority, tax expenditure or revenues, and Federal
mandates contained in the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974.
Congressional Budget Office Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 12, 2014.
Hon. Edward R. Royce, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2548, the
Electrify Africa Act of 2014.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sunita
D'Monte, who can be reached at 226-2840.
Sincerely,
Douglas W. Elmendorf.
Enclosure
cc:
Honorable Eliot L. Engel
Ranking Member
H.R. 2548--Electrify Africa Act of 2014
As ordered reported by the House Committee on Foreign
Affairs on February 27, 2014
SUMMARY
H.R. 2548 would extend through 2017 the authority of the
Overseas Private Investment Corporation (OPIC) to provide loans
and insurance to help U.S. companies invest and expand in
overseas markets. It also would require the Administration to
encourage the private sector, other nations, international
organizations, and nonprofits to increase access to electricity
in sub-Saharan Africa. CBO estimates that implementing the
legislation would save $86 million over the 2014-2019 period,
assuming appropriation actions consistent with the bill. Pay-
as-you-go procedures do not apply because enacting this
legislation would not affect direct spending or revenues.
H.R. 2548 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 2548 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
BASIS OF ESTIMATE
For this estimate, CBO assumes that H.R. 2548 will be
enacted in 2014, that the necessary amounts will be
appropriated each year, and that outlays will follow historical
spending patterns for the affected programs.
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2014-2019
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Reauthorizing OPIC
Administrative Expenses 0 2 32 41 41 10 126
Estimated Authorization Level
Estimated Outlays 0 2 27 39 40 14 122
Positive Subsidy Costs for Loans 0 27 28 28 0 0 83
Estimated Authorization Level
Estimated Outlays 0 1 5 13 17 16 52
Negative Subsidies for Loans 0 -18 -64 -80 -74 -29 -265
Estimated Authorization Level
Estimated Outlays 0 -18 -64 -80 -74 -29 -265
Insurance Programs 0 -1 -2 -2 0 0 -5
Estimated Authorization Level
Estimated Outlays 0 * -1 -2 -1 -1 -5
Subtotal for Reauthorizing OPIC 0 10 -6 -13 -33 -19 -61
Estimated Authorization Level
Estimated Outlays 0 -15 -33 -30 -18 * -96
Inspector General * 2 2 2 2 2 10
Estimated Authorization Level
Estimated Outlays * 1 2 2 2 2 9
Promoting Access to Electricity * * * * * * 1
Estimated Authorization Level
Estimated Outlays * * * * * * 1
Total Changes * 12 -4 -11 -31 -17 -50
Estimated Authorization Level
Estimated Outlays * -14 -31 -28 -16 2 -86
----------------------------------------------------------------------------------------------------------------
Note: OPIC = Overseas Private Investment Corporation; * = between -$500,000 and $500,000.
Reauthorizing OPIC
OPIC assists U.S. companies to expand and invest overseas
by providing direct loans, loan guarantees, and insurance.
OPIC's authority to enter into new agreements expires at the
end of fiscal year 2014; however, under current law, it would
continue to operate for some years after that date to service
its existing contracts. Section 8 would extend OPIC's authority
to enter into new contracts through 2017.
The bill would not authorize the appropriation of specific
amounts. CBO assumes that appropriations would continue for
both the administrative costs and the subsidy costs of new
loans and guarantees as defined in the Federal Credit Reform
Act (FCRA).\1\ Some of the loans OPIC provides yield a net
budgetary savings under the cost formula specified in FCRA,
which requires that the expected government cash flows be
discounted using the rates on Treasury securities of comparable
maturity. In recent years, OPIC has generated sufficient
receipts through such loans with negative subsidies to more
than offset its other costs.
---------------------------------------------------------------------------
\1\Under the Federal Credit Reform Act of 1990, the subsidy cost of
a direct loan or loan guarantee is the net present value of estimated
payments by the government to cover defaults and delinquencies,
interest subsidies, or other expenses, offset by any payments to the
government, including origination fees, other fees, penalties, and
recoveries on defaulted loans. The net present value does not include
the cost of market risk. Such subsidy costs are recorded in the budget
when the loans are disbursed.
---------------------------------------------------------------------------
CBO estimates that implementing section 8 would yield net
savings of $96 million over the 2015-2019 period, assuming
appropriation actions consistent with the bill. The components
of that estimate are discussed below.
Administrative Expenses. Based on information from OPIC,
CBO estimates that under current law the agency would begin
reduce its staffing in 2015 but severance payments would keep
administrative expenses at the current level ($63 million) in
that year. Thus, under the bill, CBO estimates that
reauthorizing OPIC would require additional appropriations of
only $2 million in 2015 for administrative expenses. Over the
2015-2017 period, CBO estimates that OPIC's total
administrative expenses would grow by 2 percent each year. In
2018, when its authorization would expire, CBO estimates that
severance payments associated with staff reductions would keep
administrative expenses at the same level as in 2017 but that
by 2019 the additional amounts needed would begin to decline.
Assuming appropriation of the estimated amounts, CBO estimates
that under section 8 administrative expenses would increase by
$122 million over the 2015-2019 period.
Positive Subsidy Costs. CBO estimates that in 2015 OPIC
would require appropriations of $27 million for the subsidy
cost of new agreements (that amount is identical to the enacted
level for 2014). Based on information from OPIC about its
recent and projected growth, CBO estimates that over the 2015-
2017 period the subsidy appropriations that OPIC would require
would grow by 2 percent each year. Starting in 2018, when
OPIC's authorization to provide new loans and insurance would
expire, it would not need a subsidy appropriation. Assuming
appropriation of the necessary amounts, CBO estimates that
subsidy costs under section 8 would increase by $52 million
over the 2015-2019 period.
Negative Subsidies. Some of OPIC's loan programs have lower
default rates and higher fees than its other products and,
thus, generate net collections to the government. Based on
information from OPIC, CBO estimates that under section 8 it
would collect an additional $18 million in 2015 and $265
million over the 2015-2019 period.
Insurance Programs. OPIC's insurance programs offer
protection against political risks associated with investing
overseas such as expropriation, political violence or civil
strife, and currency inconvertibility. Information from OPIC
suggests that most policies have terms of 20 years and that
reauthorizing OPIC for three years would cause only small
changes in net collections. CBO estimates that under section 8
OPIC would collect an additional $5 million over the 2015-2019
period.
Inspector General
Section 8 also would establish an Inspector General (IG)
for OPIC. Currently, the IG for the United States Agency for
International Development (USAID) covers OPIC's programs. Based
on information from OPIC, CBO estimates that the agency would
hire one IG and three support staff and would contract out
certain functions such as financial auditing. After including
costs for compensation, office space, travel, and other
expenses and adjusting for lower costs for the USAID IG, CBO
estimates that implementing that requirement would cost about
$9 million over the 2015-2019 period, assuming appropriation of
the necessary amounts.
Promoting Access to Electricity
H.R. 2548 would require the Administration to encourage the
private sector, other nations, international organizations, and
nonprofits to increase access to electricity in sub-Saharan
Africa. In June 2013, the President announced a new initiative,
dubbed ``Power Africa,'' to double access to power in sub-
Saharan Africa. Several federal entities, including OPIC,
USAID, the United States Trade and Development Agency, the
Millennium Challenge Corporation, and the Export-Import Bank
are tasked with providing technical assistance, loans,
insurance, grants, and other types of assistance to implement
that initiative. Based on information from some of those
entities, CBO expects that most of the bill's requirements
relating to promoting access to electricity will be implemented
under that initiative. CBO estimates that implementing new
requirements, such as the development of a comprehensive
strategy and subsequent reports to the Congress, would cost
less than $500,000 each year and total $1 million over the
2014-2019 period, assuming the availability of appropriated
amounts.
PAY-AS-YOU-GO CONSIDERATIONS:
None.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 2548 contains no intergovernmental or private-sector
mandates as defined in UMRA and would not affect the budgets of
state, local, or tribal governments.
ESTIMATE PREPARED BY:
Federal Costs: Sunita D'Monte
Impact on State, Local, and Tribal Governments: J'nell L.
Blanco
Impact on the Private Sector: Paige Piper/Bach
ESTIMATE APPROVED BY:
Theresa Gullo
Deputy Assistant Director for Budget Analysis
Directed Rule Making
Pursuant to clause 3(c) of House Rule XIII, as modified by
section 3(k) of H.Res. 5 during the 113th Congress, the
Committee notes that H.R. 2548 contains no directed rule-making
provisions.
Non-Duplication of Federal Programs
Pursuant to clause 3(c) of House Rule XIII, as modified by
section 3(j)(2) of H.Res. 5 during the 113th Congress, the
Committee states that no provision of this bill establishes or
reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Performance Goals and Objectives
H.R. 2548 is intended to encourage efforts to expand access
to electricity in sub-Saharan Africa. To achieve this goal, the
Act requires the President to create a comprehensive plan in
which the United States will work with the governments of sub-
Saharan African countries and public-sector and private-sector
organizations. The Act declares that the United States will
encourage achievement of three objectives: (i) the installation
of an additional 20,000 megawatts of electrical power in the
region by 2020, (ii) the provision of first-time access to
electricity for at least 50 million people by 2020, and (iii)
any reforms necessary to facilitate these goals.
Congressional Accountability Act
H.R. 2548 does not apply to terms and conditions of
employment or to access to public services or accommodations
within the Legislative Branch.
New Advisory Committees
H.R. 2548 does not establish or authorize any new advisory
committees.
Earmark Identification
H.R. 2548 contains no congressional earmarks, limited tax
benefits, or limited tariff benefits as described in clauses
9(e), 9(f), and 9(g) of House Rule XXI.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
Letters of Jurisdiction
----------
----------
Section-by-Section Analysis
Section 1. Short Title. The Electrify Africa Act of 2014.
Section 2. Purpose. To improve access to affordable and
reliable electricity in sub-Saharan Africa.
Section 3. Findings. Almost 70% of the population in sub-
Saharan Africa (589 million people) does not have access to
electricity. Roughly 30 African countries face endemic power
shortages. Business leaders in the region say this lack of
affordable and reliable power is one of the biggest constraints
to economic growth. It also presents serious environmental and
health risks.
Section 4. Statement of Policy. Declares the United States,
in consultation with sub-Saharan African governments, will
encourage: (i) the installation of an additional 20,000
megawatts of electrical power in the region by 2020, (ii) the
provision of first-time access to electricity for at least 50
million people by 2020, and (iii) any reforms necessary to
facilitate these goals. Declares that U.S. policy encourages
private sector and international support for the construction
of hydroelectric dams that offer low-cost clean energy
consistent with U.S. national security interests and best
international practices regarding social and environmental
safeguards.
Section 5. Development of a Comprehensive, Multiyear
Strategy. Requires the Administration to create a multiyear
strategy to develop an appropriate mix of power solutions,
including renewable energy, in order to provide access to
electricity in sub-Saharan Africa. Requires the President,
within 180 days of the bill's enactment, to outline this
strategy to Congress in a report detailing, among other things:
(i) strategy objectives, (ii) criteria for selecting partner
countries, (iii) plans to attract public and private-sector
investment, (iv) plans to coordinate with local governments to
localize responsibility for long-term management and
maintenance, (v) a list of U.S. agencies involved in
implementation, and (vi) mechanisms for monitoring the
strategy's implementation.
Section 6. USAID. States that USAID should prioritize loan
guarantees and research grants that will facilitate power
projects in sub-Saharan Africa. Encourages USAID to consider
providing grants to support and expand electricity access.
Section 7. Leveraging International Support. States that
U.S. representatives to appropriate international bodies should
encourage those bodies to: (i) increase efforts to promote
investment in the sub-Saharan electricity sector, (ii)
coordinate with private sector actors for increased electricity
access, and (iii) assist sub-Saharan African governments in
removing regulatory barriers to investment in commercially
viable electricity projects.
Section 8. Overseas Private Investment Corporation.
Requires the Overseas Private Investment Corporation (OPIC) to
prioritize investment in the sub-Saharan electricity sector,
and to expedite review of electricity projects in the region.
Amends existing law to (i) require a bipartisan board, in that
no more than five of eight Directors may be from the same
political party, (ii) re-establish a temporary investment
advisory council to assist OPIC in developing energy programs
in sub-Saharan Africa, (iii) reauthorize OPIC until 2017, and
(iv) require the appointment of an OPIC Inspector General.
Requires OPIC to publish, in digital form, a list of
investments and their impact at the community level. The
Committee expects the list of investments to be comprehensive
and not just limited to investments in electricity.
Section 9. Trade and Development Agency. States that the
Director of the Trade and Development Agency should promote
private sector participation in energy sector projects in sub-
Saharan Africa, including through feasibility studies and pilot
projects, and seek opportunities to fund projects that increase
access to electricity.
Section 10. Progress Report. Requires the President, within
three years of this bill's enactment, to submit to the House
Foreign Affairs Committee and the Senate Foreign Relations
Committee, and post in digital form, a report detailing
progress towards the bill's goals, along with any associated
costs of implementation.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
FOREIGN ASSISTANCE ACT OF 1961
* * * * * * *
PART I--
* * * * * * *
CHAPTER 2--OTHER PROGRAMS
* * * * * * *
Title IV--Overseas Private Investment Corporation
* * * * * * *
Sec. 233. Organization and Management.--(a) * * *
(b) Board of Directors.--All powers of the Corporation
shall vest in and be exercised by or under the authority of its
Board of Directors (``the Board'') which shall consist of
fifteen Directors, including the Chairman, with eight Directors
constituting a quorum for the transaction of business. Eight
Directors shall be appointed by the President of the United
States, by and with the advice and consent of the Senate, and
shall not be officials or employees of the Government of the
United States. At least two of the eight Directors appointed
under the preceding sentence shall be experienced in small
business, one in organized labor, and one in cooperatives. Each
such Director shall be appointed for a term of no more than
three years. The terms of no more than three such Directors
shall expire in any one year. Such Directors shall serve until
their successors are appointed and qualified and may be
reappointed. Of the eight such Directors, not more than five
should be of the same political party.
The other Directors shall be principal officers of the
Government of the United States whose duties relate to the
programs of the Corporation, including the President of the
Corporation, the Administrator of the Agency for International
Development, the United States Trade Representative, and one
such officer of the Department of Labor, designated by and
serving at the pleasure of the President of the United States.
The United States Trade Representative may designate a Deputy
United States Trade Representative to serve on the Board in
place of the United States Trade Representative.
There shall be a Chairman and a Vice Chairman of the Board,
both of whom shall be designated by the President of the United
States from among the Directors of the Board other than those
appointed under the second sentence of the first paragraph of
this subsection.
All Directors who are not officers of the Corporation or
officials of the Government of the United States shall be
compensated at a rate equivalent to that of level IV of the
Executive Schedule (5 U.S.C. 5315) when actually engaged in the
business of the Corporation and may be paid per diem in lieu of
subsistence at the applicable rate prescribed in the
standardized Government travel regulations, as amended, from
time to time, while away from their homes or usual places of
business.
* * * * * * *
(e) Investment Advisory Council.--The Board shall take
prompt measures to increase the loan, guarantee, and insurance
programs, and financial commitments, of the Corporation in sub-
Saharan Africa, including through the use of an investment
advisory council to assist the Board in developing and
implementing policies, programs, and financial instruments with
respect to sub-Saharan Africa. In addition, the investment
advisory council shall make recommendations to the Board on how
the Corporation can facilitate greater support by the United
States for trade and investment with and in sub-Saharan Africa.
The investment advisory council shall terminate on December 31,
2017.
Sec. 234. Investment Insurance and Other Programs.--The
Corporation is hereby authorized to do the following:
(a) * * *
* * * * * * *
(c) Direct Investment.--To make loans in United States
dollars repayable in dollars or loans in foreign currencies
(including, without regard to section 1415 of the Supplemental
Appropriation Act, 1953, such foreign currencies which the
Secretary of the Treasury may determine to be excess to the
normal requirements of the United States and the Director of
the Bureau of the Budget may allocate) to firms privately owned
or of mixed private and public ownership upon such terms and
conditions as the Corporation may determine. Loans may be made
under this subsection only for projects that are sponsored by
or significantly involve eligible investors or United States
small business or cooperatives.
The Corporation may designate up to 25 percent of any loan
under this subsection for use in the development or adaptation
in the United States of new technologies or new products or
services that are to be used in the project for which the loan
is made and are likely to contribute to the economic or social
development of less developed countries.
No loan may be made under this subsection to finance any
operation for the extraction of oil or gas. The aggregate
amount of loans under this subsection to finance operations for
the mining or other extraction of any deposit of ore or other
nonfuel minerals may not in any fiscal year exceed $4,000,000.
* * * * * * *
Sec. 235. Issuing Authority, Direct Investment Authority
and Reserves.--
(a) Issuing Authority.--
(1) * * *
(2) Termination of authority.--The authority of
subsections (a), (b), and (c) of section 234 shall
continue until September 30, [2007] 2017.
* * * * * * *
Sec. 237. General Provisions Relating to Insurance
Guaranty, and Financing Program.--(a) * * *
* * * * * * *
(d) Fees.--
(1) * * *
(2) Credit transaction costs.--Project-specific
transaction costs incurred by the Corporation relating
to loan obligations or loan guarantee commitments
covered by the provisions of the Federal Credit Reform
Act of 1990, including the costs of project-related
travel and expenses for legal representation provided
by persons outside the Corporation, systems
infrastructure costs, and other similar expenses which
are charged to the borrower, shall be paid out of the
appropriate finance account established pursuant to
section 505(b) of such Act.
(3) Noncredit transaction costs.--Fees paid for the
project-specific transaction costs, systems
infrastructure costs, and other direct costs associated
with services provided to specific investors or
potential investors pursuant to section 234 (other than
those covered in paragraph (2)), including financing,
insurance, reinsurance, missions, seminars,
conferences, and other preinvestment services, shall be
available for obligation for the purposes for which
they were collected, notwithstanding any other
provision of law.
* * * * * * *
Sec. 239. General Provisions and Powers.--(a) * * *
* * * * * * *
[(e) The Inspector General of the Agency for International
Development (1) may conduct reviews, investigations, and
inspections of all phases of the Corporation's operations and
activities and (2) shall conduct all security activities of the
Corporation relating to personnel and the control of classified
material. With respect to his responsibilities under this
subsection, the Inspector General shall report to the Board.
The agency primarily responsible for administering part I shall
be reimbursed by the Corporation for all expenses incurred by
the Inspector General in connection with his responsibilities
under this subsection.]
(e) Inspector General.--The Board shall appoint and
maintain an Inspector General in the Corporation, in accordance
with the Inspector General Act of 1978 (5 U.S.C. App.).
* * * * * * *