Wednesday, July 3, 2013

Obama's Power Africa becker

Obama's Power Africa backer calls weak competition an investment incentive

Nigerian businessman Tony Elumelu, who backed President Barack Obama's Africa Power initiative with a $2.5 billion (1.65 billion pounds) investment pledge, said on Tuesday the lack of competition in the continent's nascent power sector makes it an investment gem. image
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U.S. President Barack Obama (C) delivers his speech during a visit to a power plant run by U.S. company Symbion Power in Dar es Salaam July 2, 2013. REUTERS/Stringer
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Reuters/Reuters - U.S. President Barack Obama delivers remarks on energy at Ubungo Power Plant in Dar es Salaam July 2, 2013. REUTERS/Jason Reed
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US President Barack Obama plays with a Socket ball, a soccer ball that captures energy to charge LEDs and small batteries, alongside Tanzanian President Jakaya Kikwete (left) on July 2, 2013 in Dar Es Salaam, Tanzania. Obama Tuesday vowed an urgent effort to bring electric power to the impoverished heart of Africa, as he wrapped up a week-long journey through the continent in Tanzania
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U.S. President Barack Obama (front L) points to a football at Ubungo Power Plant in Dar es Salaam July 2, 2013. REUTERS/Stringer
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DAR ES SALAAM - Nigerian businessman Tony Elumelu, who backed President Barack Obama's Africa Power initiative with a $2.5 billion investment pledge, said on Tuesday the lack of competition in the continent's nascent power sector makes it an investment gem.

US President Barack Obama Tuesday vowed an urgent effort to bring electric power to the impoverished heart of Africa, as he wrapped up a week-long journey through the continent in Tanzania.

Obama also performed a sombre double act with George W. Bush, linking up to remember victims of an embassy bombing in Dar es Salaam in 1998, a day after praising his predecessor's AIDS programme as a "crowning achievement."



The US leader travelled to the Ubungo power plant, repaired with US funds, to bemoan the plight of 70 percent of Africans who lack reliable access to electricity, and to promote his new $7 billion effort to help.

"All of us have to feel a sense of urgency. If we are going to electrify Africa, we've got to do it with more speed," Obama said.

The plan, dubbed "Power Africa," leverages loan guarantees and private sector finance and aims to double access to electricity in sub-Saharan Africa, where more than two-thirds of the population lives in the dark.

It will initially be targeted on Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.

Obama also had fun Tuesday trying out a device known as a "Socketball" which hides a generator inside a football and can be used to power a light or a cellphone using kinetic energy stored during a kick around.

The US leader juggled the ball on his foot and his head, and then demonstrated how it could be hooked up to a cellphone.

"I thought it was pretty cool," he said.

"You can imagine this in villages all across the continent."

Earlier, in an unusual meeting of the exclusive US presidents club on foreign soil, Obama met Bush, pioneer of the President's Emergency Plan for AIDS Relief (PEPFAR) which saved millions of lives, and also treats tuberculosis and malaria.

Democrat Obama and Republican Bush bowed their heads at a stone memorial to the 11 people killed in 1998 when Al-Qaeda bombed the US embassy in Dar Es Salaam.

They stood side by side as a US Marine fixed a red, white and blue wreath on a stand, and then greeted American and Tanzanian guests.

Bush, who also visited Zambia, was in Tanzania for a forum of regional First Ladies, hosted by his wife Laura, also attended by Michelle Obama.

Obama, Michelle and their two daughters later took off aboard Air Force One to head back to Washington, ending a tour that also included Senegal and South Africa, dominated by the fading health of anti-apartheid icon Nelson Mandela.

He repeatedly urged Africans to embrace the unifying legacy and singular crusade for political change embodied by Mandela, on a continent scarred by years of war and poor governance.

Delighted crowds had thronged Obama when he arrived in Tanzania on Monday, to drive home the message that he wanted to help "Africa to build Africa, for Africans."

As well as the power plan, Obama pushed initiatives on his trip to boost regional trade with America, to tear down customs and border logjams delaying exports and to save Africa's endangered elephants and rhinos.

Tanzania is the kind of African democracy, aided by US health and infrastructure programs, that Washington wants to see duplicated in the region.

It did not escape Washington's notice that Xi Jinping included Tanzania on his first foreign trip as president of China in March.

Throughout his Africa journey, Obama implicitly touted US-style investment and partnership as superior to Beijing's own Africa push, arguing US firms do more to build local economic capacity.

Obama left Africa more convinced that the region's future was bright. "Even as this continent faces great challenges this is also a moment of great promise for Africa," Obama told businessmen in Tanzania Monday.

He also renewed his promise to visit Kenya, after bypassing his late father's homeland on this African tour, as President Uhuru Kenyatta awaits trial at the International Criminal Court over 2007-2008 election violence.

"I am going to be president for another three and a half years," Obama said at a town hall meeting in Soweto that was broadcast to several African nations, including Kenya.



"If, in three years and seven months, I am not in Kenya, then you can fault me for not following through on my promise."

By Drazen Jorgic

DAR ES SALAAM

Nigerian businessman Tony Elumelu, who backed President Barack Obama's Africa Power initiative with a $2.5 billion (1.65 billion pounds) investment pledge, said on Tuesday the lack of competition in the continent's nascent power sector makes it an investment gem.

Obama's $7 billion plan to shine "light where currently there's darkness" in Africa by doubling access to power on the world's poorest continent, will be backed by another $9 billion in private sector money.

While growing access to bank credit and cheap mobile phones has transformed the lives of many Africans, the continent's poor infrastructure and lack of power supply have been a huge drag on economic growth across the continent.

Elumelu said he believed plugging the gap in power needs would take decades but, for investors who get in early, rewards would be similar to those realized when expansion began in Africa's telecommunications sector.

"When the telecommunication revolution started, were quite substantial. But with competition, the sector became saturated and highly competitive, so the margins began to drop," Elumelu told Reuters in an interview in Dar es Salaam.

"But there is no competition in power now. No competition at all."

Elumelu's investment company Heirs Holdings has about $300 million invested in Nigeria's power sector through its Transnational Corporation of Nigeria (Transcorp).

Earlier this year it bought a Nigerian power plant and it is in the process of raising its output to 1000 megawatts.

Elumelu said the plan is to acquire more power plants and to build new ones.

"We want to be the leading power company in Africa," said Elumelu, who pledged the most money to Obama's initiative.

Elumelu's investments in banks, oil and gas exploration, and power, are believed to be worth billions of dollars.

Other investors include Standard Chartered Bank , which has pledged $2 billion to Obama's initiative. General Electric has committed to bring 5,000 megawatt in power to Ghana and Tanzania, which will be the focus of the initiative along with Kenya, Ethiopia, Nigeria and Liberia.

"What is going to drive where we invest outside those countries is seriousness and commitment to the power sector reform," Elumelu said.

He said his next large-scale project would be to set up a fertiliser plant, which would use gas from two exploration blocks Heirs Holdings owns in Niger Delta to create fertiliser.

(Editing by George Obulutsa, Toni Reinhold)

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