* U.S. $7 billion initiative follows big Chinese projects
* Obama hints U.S. investment will create markets, jobs
By Ed Stoddard
JOHANNESBURG, July 2 U.S. President Barack
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 was billed as a highlight of his African tour.
He announced the Power Africa initiative in Cape Town on
Sunday in a speech which he also urged the fast-growing but
still troubled region to follow the shining example of South
Africa's anti-apartheid hero Nelson Mandela.
But Obama's proposal, which aims to partner U.S. government
financing with private sector investment, may look low-wattage
compared with China's already ongoing big electricity projects
on the world's least-developed - and least lit - continent.
Beijing has been lighting the way in Africa with billions of
dollars of promised power investment and projects. As with other
infrastructure development opportunities in Africa, Washington
seems to be arriving late to the party.
Visiting Africa in March, China's President Xi Jinping
renewed an offer of $20 billion in loans to "help African
countries turn resource endowment into development strength".
A major chunk of this Chinese money is aimed at connecting
up African economies with electricity, from Zambia to Ethiopia.
"The major thrust of the Chinese infrastructure spend in
Africa has been in the power sector. It is tens of billions of
dollars," said Martyn Davies, the chief executive of Frontier
Advisory, a strategy and investment advisory company.
The Asian giant has a huge appetite for African resources
from copper to oil and they cannot be extracted without power.
China's Sichuan Hongda Co. Ltd. signed a $3 billion deal
with Tanzania in 2011 to mine coal and iron ore and build a
600-megawatt (MW) coal-fired power plant in the country's south.
The centrepiece among an array of Chinese power projects in
Ethiopia is the $4.1 billion Grand Renaissance Dam.
NOT JUST A MINE, BUT A MARKET
Satellite imagery of "Africa at Night" shows a mostly dark
continent, the main exceptions being the region's dominant
economy South Africa, the more developed North African
Mediterranean coast, and scattered pinpricks of light in the
oil-producing Gulf of Guinea, which includes Nigeria.
More than a century after the invention of the light bulb,
the World Bank says only one in four people have access to
electricity in Sub-Saharan Africa.
According to the International Energy Agency (IEA), the
region will require more than $300 billion in investment to
achieve universal electricity access by 2030.
In numbers of projects and investment pledges, China seems
well ahead of America at the moment in the race to add more
bright spots to Africa's nocturnal gloom. Some Chinese projects,
for example a hyro-power project in Ghana that started producing
130 MW a month ago, have already come on line.
Power plants cannot be built overnight and it may take years
for similar U.S. initiatives in Africa to be up and running.
This may put America at a disadvantage to China in the
scramble for African resources.
But Obama clearly hinted American investment may be better
for Africa than Chinese investment in creating industries and
jobs on the continent - not just sucking our resources - with
more of a focus on a potential consumers' market.
"Our primary interest when it comes to working with Africa
on energy issues has to do with how do we power Africa so that
it can be an effective market creating jobs and opportunity,"
Obama told a news conference in South Africa on Saturday.
"We also then have somebody to trade with and sell iPods to,
and airplanes, and all kinds of good stuff," he added.
"Obama seemed to be taking more of a Brazilian approach to
Africa. A lot of Brazilian policy is looking at what Brazil can
sell to the African market," said Alex Vines, head of the Africa
Programme at UK-based Chatham House.
Stressing rising oil, natural gas and clean energy
production in the United States, Obama told his South African
audience: "Frankly, we don't need energy from Africa".
Oil exports from Africa's top producer Nigeria to the United
States have fallen from over a million barrels per day (bpd) in
2010 to 383,000 now, the U.S. Energy Information Agency says.
Angola's U.S. exports in the same period dropped to 172,000 bpd
from 393,000 as the domestic U.S. shale gas boom has taken off.
"THE MORE THE MERRIER"
While he made a point of saying he did not view Beijing's
trade and investment surge as a threat to U.S. interests - "the
more the merrier" was his take on foreign economic involvement
in Africa - Obama could not resist a veiled mild jibe at the way
Chinese companies conduct their businesses there.
"If somebody says they want to come build something here,
are they hiring African workers? If somebody says that they
want to help you develop your natural resources, how much of the
money is staying in Africa?" Obama said.
This echoed complaints from some government and business
circles in Africa that Chinese companies often bring in their
own workforces to develop resource-related infrastructure
projects, creating few new jobs, let alone value-adding
processing or manufacturing industries.
The U.S. initiative, called Power Africa, will see
Washington commit more than $7 billion over the next five years
with the stated goal to "double access to power in sub-Saharan
Africa," according to the White House. This includes up to $5
billion being made available by the U.S. Export-Import Bank.
Over $9 billion in U.S. private sector investments have also
been committed to support development of more than 8,000 MW.
But not everyone was happy. Outspoken American real estate
mogul Donald Trump called Obama's Power Africa plan "crazy".
"Every penny of the $7 billion going to Africa as per Obama
will be stolen - corruption is rampant! ... We should be
concerned about the American worker & invest here," Trump
tweeted on his @realDonaldTrump Twitter Account.
(Additional reporting by Sureka Asbury and Pascal Fletcher in
Johannesburg, Fumbuka Ng'wanakilala in Dar es Salaam, Aaron
Maasho in Addis Ababa and Kwasi Kpodo in Accra; Editing by