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                                                       Calendar No. 489
113th Congress                                                   Report
                                 SENATE
 2d Session                                                     113-219

======================================================================



 
                      ENERGIZE AFRICA ACT OF 2014

                                _______
                                

                 July 24, 2014.--Ordered to be printed

         Mr. Menendez, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                         [To accompany S. 2508]

    The Committee on Foreign Relations, having had under 
consideration the bill (S. 2508) to establish a comprehensive 
United States Government policy to assist countries in sub-
Saharan Africa to improve access to and the affordability, 
reliability, and sustainability of power, and for other 
purposes, reports favorably thereon, with amendments, and 
recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Background.......................................................2
 IV. Discussion.......................................................3
  V. Cost Estimate....................................................7
 VI. Evaluation of Regulatory Impact..................................7
VII. Changes in Existing Law..........................................8

                               I. Purpose

    The purpose of S. 2508 is to establish a comprehensive 
United States government policy to develop and coordinate 
strategies and reforms that improve access to, and the 
affordability, reliability, and sustainability of, power for 
residents of sub-Saharan Africa. The bill also extends the 
issuing authority of the Overseas Private Investment 
Corporation through 2019 and grants it limited additional 
authority for certain pilot projects focused on promoting 
private sector electricity investments in sub-Saharan Africa. 
S. 2508 further requires a progress report evaluating the 
effectiveness of policies and investments made by the U.S. in 
expanding electricity access in sub-Saharan Africa.

                          II. Committee Action

    S. 2508 was introduced on June 19, 2014, by Senator 
Menendez and co-sponsored by Senators Corker, Coons, Isakson, 
Markey, and Johanns. On June 24, 2014, the committee considered 
S. 2508 and reported it favorably, with amendments.
    The committee took the following action with regard to 
amendments:
    A manager's package of amendments passed by voice vote. 
Among other things, the manager's amendment added language 
authorizing the establishment of an interagency working group 
to coordinate the activities of the executive branch agencies 
in carrying out the required strategy; added language 
addressing prioritization of assistance for power projects in 
sub-Saharan Africa by the Millennium Challenge Corporation; and 
added language to the Statement of Policy section regarding 
promotion of an all-of-the-above energy development strategy 
for sub-Saharan Africa.
    An amendment offered by Senator Flake to repeal the third 
proviso of Section 7079(b) of the Consolidated Appropriations 
Act, 2010, was defeated by voice vote.
    An amendment offered by Senator Barrasso to strike Title II 
of the bill failed by a roll call vote of 5-11, with Senators 
Risch, Rubio, Johnson, Flake, and Barrasso voting in favor and 
Senators Menendez, Boxer, Cardin, Shaheen, Durbin, Coons, 
Udall, Kaine, Murphy, Markey, and Corker opposed. Senators 
McCain and Paul did not vote.

                            III. Background

    Chairman Menendez and Ranking Member Corker introduced S. 
2508 to address the lack of electricity faced by nearly 70 
percent of sub-Saharan Africa's population. The legislation 
addresses solutions to the lack of overall access, lack of 
access to affordable electricity options, and an inability to 
ensure sustainable and reliable power. It establishes goals of 
providing access to 50,000,000 sub-Saharan Africans by 2020 and 
adding 20,000 megawatts of electricity by 2020. With increased 
access to electricity, sub-Saharan Africans can turn away from 
unsustainable and unhealthy fuel sources such as kerosene, 
wood, and charcoal. The bill supports financing, regulatory 
reform, and policy advocacy that will significantly increase 
the continent's access to electricity in a responsible and 
financially sustainable way and open new doors to private 
sector investment, increased public health, and economic 
growth.
    On June 30, 2013, President Obama announced his ``Power 
Africa Initiative'' to address these problems and double the 
number of Africans with access to electricity. Power Africa 
focuses on leveraging private investment to increase financing 
for power projects in sub-Saharan Africa.
    On May 8, 2014, the House of Representatives passed H.R. 
2548, the Electrify Africa Act of 2014, which seeks to 
establish a comprehensive United States government policy to 
develop an appropriate mix of power solutions, including 
renewable energy, for more broadly distributed electricity 
access.
    S. 2508 provides a framework for a coordinated strategy for 
the United States to work with sub-Saharan Africa in order to 
improve access to electricity. It establishes the goals of 
providing access to 50,000,000 sub-Saharan Africans by 2020, 
and adding 20, 000 megawatts of electricity by 2020.
    The bill encourages the Overseas Private Investment 
Corporation (OPIC), the United States Agency for International 
Development (USAID), the U.S. Department of Treasury, the World 
Bank, the African Development Bank, and the U.S. Trade and 
Development Agency to prioritize, as appropriate, loans, 
assistance, and technical support that promote private 
investment in projects that increase electricity access and 
reliability. The bill also encourages these agencies to partner 
with sub-Saharan African governments to develop policies that 
reduce burdensome regulations that hinder private investment in 
the electricity sector. To achieve broader energy access for 
those currently living beyond the reaches of the existing 
electricity infrastructure, S. 2508 places an increased 
emphasis on the promotion and development of off-grid and 
distributed technologies to be used at a local level.
    S. 2508 also reauthorizes the Overseas Private Investment 
Corporation (OPIC) through 2019, and grants it limited 
additional authority for certain pilot projects focused on 
promoting private sector electricity investments in sub-Saharan 
Africa. This legislation also creates a new Inspector General 
to oversee OPIC, which currently does not have its own 
Inspector General.
    The bill also requires a report to the committee in three 
years outlining the strategies, investments, and policy changes 
being made under the legislation. This report would detail the 
electricity access programs U.S. government support and private 
investment are going towards, accompanied with empirical 
results indicating the yielded results of investments in terms 
of increased electricity access and reliability.
    S. 2508 recognizes that improving electricity access in 
Africa will require a broad mix of fuel sources, many of which 
exist in Africa in abundance. S. 2508 therefore takes a fuel 
neutral, all-of-the-above approach. As called for in the policy 
section of the bill, Energize Africa anticipates energy access 
being addressed in sub-Saharan Africa using renewable and non-
renewable fuels. These fuels include solar, wind, natural gas, 
and coal.
    The bill also places strong emphasis on the development of 
economically sound utilities. To ensure appropriate cost-
recovery by electricity transmission and distribution 
operators, an appropriate policy and legal framework must be in 
place. For this reason, the bill focuses not only on 
facilitating private sector development of electricity 
generation, the bill also requires implementing industry best 
practices with respect to transmission and distribution such as 
commercial cost recovery practices, regulatory reforms to 
improve efficiencies, strengthening independent regulators, and 
implementing smart grid technologies. The goal is to ensure 
that national electric grids, developed with U.S. assistance, 
will remain financially sustainable over the long term.
    The legislation also aims to improve access to electricity 
for communities who, because of existing constraints and 
obstacles, are not or will not be linked to national and 
regional grids in the near term. The bill calls for off-grid 
and mini-grid technologies to be employed as an alternative 
strategy to provide communities with electricity in an 
economical way.

                             IV. Discussion

    A summary of the key provisions of S. 2508, as amended, 
follows:

Section 101

    Section 101 states that the purpose of S. 2508 is to 
encourage the efforts of countries in sub-Saharan Africa to 
improve access to affordable and reliable power.

Section 102

    Section 102 declares that it is the policy of the United 
States, in coordination with international financial 
institutions, sub-Saharan African governments and the private 
sector, to:

          (1) promote first-time access to power and power 
        services in sub-Saharan Africa for at least 50,000,000 
        people by 2020, in both urban and rural areas;
          (2) encourage the installation of at least 20,000 
        additional megawatts of electrical power in sub-Saharan 
        Africa by 2020 through a broad mix of energy options 
        that will reduce poverty, promote sustainable 
        development, and drive economic growth;
          (3) promote reliable, affordable, and sustainable 
        power in urban areas in order to promote economic 
        growth and job creation;
          (4) promote efficient institutional platforms and 
        financing for the provision of electrical service to 
        rural and underserved populations;
          (5) encourage the necessary in-country reforms that 
        will make possible the expansion of power access;
          (6) promote reforms of power production, delivery, 
        and pricing, as well as regulatory reforms and 
        transparency, in order to support long-term, market-
        based power generation and distribution;
          (7) promote policies to displace kerosene lighting 
        with safer, cleaner technologies; and
          (8) promote an all-of-the-above energy development 
        strategy for sub-Saharan Africa.

Section 103

    Section 103 establishes a multiyear strategy that requires 
the President to establish and submit to Congress, within 180 
days, a comprehensive multiyear strategy to encourage the 
efforts of countries in sub-Saharan Africa in implementing 
national power strategies and developing an appropriate mix of 
power solutions. The strategy must address ways to attract 
private investment in the power sector, both on and off the 
grid, assess the financial viability of power utilities, and be 
sufficiently flexible to allow for technological innovation in 
the power sector. Section 103 further states the President may 
establish, as appropriate, an Interagency Working Group to 
coordinate executive branch agencies involved in the 
implementation of the strategy. The Interagency Working Group 
would also facilitate partnerships between executive agencies, 
the private sector, and other development agencies to ensure 
effective implementation. Section 103 also establishes an 
African Power Advisory Group, which will be formed to advise 
the President on how to develop and implement the strategy. The 
group shall be composed of up to 13 members appointed by the 
President, including the Coordinator of the President's Power 
Africa Initiative, 7 individuals from the power sector, 3 
individuals with experience in working with the African 
business community, or with African governments, one individual 
with experience in utility regulation, and the official 
designated pursuant to the National Defense Authorization Act 
for Fiscal Year 2014 to coordinate efforts to increase United 
States exports to Africa.

Section 104

    Section 104 expresses the sense of Congress that, as the 
United States deepens its engagement with countries in sub-
Saharan Africa pursuant to this Act, priority should be given 
to countries with a demonstrated commitment to reforms that 
will attract private investment in the electric sector, in 
making prioritization determinations, the United States should 
also consider business opportunities for the U.S. private 
sector, the potential for fostering regional trade of 
electricity, opportunities to collaborate with international 
partners, and the availability of resources.

Section 105

    Section 105 directs the Administrator of the United States 
Agency for International Development to, as appropriate, 
prioritize assistance and loan guarantees to local financial 
institutions in sub-Saharan Africa and to establish metric-
based targets to measure their effectiveness.

Section 106

    Section 106 requires the Director of the Trade and 
Development Agency to, as appropriate, prioritize the promotion 
of United States private sector participation in energy sector 
development projects and funding of project preparation 
activities in sub-Saharan Africa.

Section 107

    Section 107 directs the Overseas Private Investment 
Corporation OPIC to, as appropriate, prioritize investments in 
the electricity sector infrastructure in sub-Saharan Africa, 
including renewable energy projects, intended to maximize the 
number of people with new access to power, improve energy 
access infrastructure, provide reliable power, reduce 
transmission and distribution losses, improve efficiency, and 
reduce impediments to business productivity and investment. The 
section also directs OPIC to implement streamlined procedures 
to facilitate these investments. The section also requires OPIC 
to expedite review of applications, encourage small- and 
medium-sized enterprises and cooperative service providers to 
participate in energy investment activities, and publish 
information on the effects its energy investments have had on 
economic development.

Section 108

    Section 108 directs the United States Executive Directors 
at the World Bank Group and the African Development Bank to use 
the voice, vote, and influence of the U.S. to encourage those 
institutions to prioritize increasing their investment in sub-
Saharan electrification projects; provide technical assistance 
to regulatory authorities to, among other things, remove 
barriers to commercially viable projects, to modify regulatory 
and legal regimes to reduce certain losses, implement cost-
based tariffs and provide for commercial cost recovery, reduce 
corruption and improve transparency, and implement reforms that 
facilitate efficient power generation, transmission and 
distribution, as well as off-grid energy markets; use clear, 
accountable, and metric-based targets to measure effectiveness; 
and support ongoing efforts to foster grown in the off-grid 
lighting and power markets.

Section 109

    Section 109 states that the African Development Foundation 
should seek opportunities to make grants and provide technical 
support to businesses and organizations in sub-Saharan Africa 
that qualify and are developing on- and off-grid solutions to 
meet the power needs of rural communities underserved by 
national grids.

Section 110

    Section 110 states that the Chief Executive Officer and the 
Board of Directors of the Millennium Challenge Corporation 
should assess, as appropriate, the extent to which insufficient 
access to and reliability of electricity is a binding 
constraint on sustainable economic growth in sub-Saharan 
Africa; and, as appropriate, prioritize, among other things, 
the provision of assistance and engagement with governments in 
support of private and public sector efforts to reform 
regulatory framework and increase access to electricity, both 
on- and off-grid.

Section 111

    Section 111 requires a 3-year evaluation of progress made 
towards achieving the policy goals of section 103. The report 
reviews policies advocated by the United States that promote 
increased energy access and electricity sector reform. The 
report also identifies the number and type of projects 
receiving United States government support, the total costs of 
the project, the amount of U.S. supported investment, and 
empirical results of the project in terms of increased 
electricity to businesses, communities, and individuals.

Section 201

    Section 201 extends OPIC's issuing authority through 2019.

Section 202

    Section 202 directs OPIC to develop, within 180 days of 
enactment of this Act, policies to simplify and streamline the 
process for reviewing and considering of investments, among 
other things, in sub-Saharan Africa under $20 million in order 
to promote increased investment and reduce administrative 
costs.

Section 203

    Section 203 establishes an advisory board to provide OPIC 
with guidance on investing in power projects in Africa.

Section 204

    Section 204 creates a five year pilot program that would 
permit OPIC to assist, with specific limitations on the size of 
the assistance, joint ventures or partnerships that are owned, 
in a controlling share, by U.S. citizens for power projects in 
sub-Saharan Africa.

Section 205

    Section 205 creates a five year pilot project to allow OPIC 
to invest in power projects by eligible investors in sub-
Saharan Africa where the Corporation's total support does not 
exceed $50,000,000. The section also creates a five year pilot 
program to allow OPIC to provide currency guaranties for a 
local branch of a foreign bank, if the project is sponsored by 
an eligible investor and is a power project in sub-Saharan 
Africa.

Section 206

    Section 206 allows OPIC to extend the term of obligation 
for renewable energy projects from 20 years to 30 years for 
power projects in sub-Saharan Africa.

Section 207

    Section 207 addresses the role of Inspector General for 
OPIC. Currently, OPIC does not have its own inspector general 
and the USAID inspector general oversees OPIC. This provision 
would create a separate Inspector General for OPIC.

Section 208

    Section 208 directs OPIC to undertake an annual customer 
survey to determine how well it is meeting the needs of its 
customer base, consistent with U.S. foreign policy interests.

Section 209

    Section 209 provides authority for OPIC to hire not more 
than 20 additional temporary employees, on a limited-
appointment basis under existing federal government 
authorities, specifically for sub-Saharan Africa power related 
work.

Section 210

    Section 210 establishes the sense of Congress that 
appropriations should be made to address the administrative 
expenses necessary for OPIC should for the enactment of the 
Energize Africa Act through the year 2019.

Section 211

    Section 211 requires OPIC to submit a report within 180 
days on the effectiveness of its existing authorities for 
energy and infrastructure projects and whether further 
authorities, such as the ability for OPIC to invest directly in 
projects, might be appropriate or effective.

                            V. Cost Estimate

    In accordance with XXVI, paragraph 11(a) of the Standing 
Rules of the Senate, the committee notes that the cost estimate 
provided by the Congressional Budget Office was not available 
for inclusion in this report. The estimate will be printed in 
either a supplemental report or the Congressional Record when 
it is available.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirement of paragraph 11(b) of rule XXVI 
of the Standing Rules of the Senate, the committee has 
considered the regulatory and paperwork impact of S. 2508, as 
amended, and decided that such impact would be minimal. Section 
208 directs OPIC to conduct a survey of a sample of its 
customers to assess the satisfaction of those customers with 
the operation and procedures of OPIC, with particular attention 
to small businesses and cooperatives. Because the survey would 
be voluntary, and would be conducted only with a sample of 
customers, it is the committee's judgment that the regulatory 
and paperwork impact of this provision would be minimal.

                      VII. Changes in Existing Law

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, 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 
italic, existing law in which no change is proposed is shown in 
roman).

FOREIGN ASSISTANCE ACT OF 1961

           *       *       *       *       *       *       *


    Sec. 233. Organization and Management. (a) * * *

           *       *       *       *       *       *       *

    [(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 4 years after 
the date of the enactment of this subsection.]
    (e) Activities in Sub-Saharan Africa; Investment Advisory 
Council.--
          (1) In general.--The Board should take prompt 
        measures to prioritize, as appropriate, the loan, 
        guarantee, and insurance programs, and financial 
        commitments, of the Corporation in sub-Saharan Africa 
        in the areas of power generation, distribution, and 
        off-grid power and lighting, 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.
          (2) Recommendations.--The investment advisory council 
        described in paragraph (1) shall make recommendations 
        to the Board on how the Corporation can facilitate 
        greater support by the United States for private sector 
        trade and investment with and in sub-Saharan Africa.
          (3) Termination.--The investment advisory council 
        described in paragraph (1) shall terminate on December 
        31, 2018.
          (4) Applicability of federal advisory committee 
        act.--The investment advisory council described in 
        paragraph (1) shall not be subject to the Federal 
        Advisory Committee Act (5 U.S.C. App.).

           *       *       *       *       *       *       *

    Sec. 235. Issuing Authority, Direct Investment Authority 
and Reserves.--
    (a) Issuing Authority.--
          (1) Insurance and financing.--(A) The maximum 
        contingent liability outstanding at any one time 
        pursuant to insurance issued under section 234(a), and 
        the amount of financing issued under sections 234(b) 
        and (c), shall not exceed in the aggregate 
        $29,000,000,000.
          (B) Subject to spending authority provided in 
        appropriations Acts pursuant to section 504(b) of the 
        Federal Credit Reform Act of 1990, the Corporation is 
        authorized to transfer such sums as are necessary from 
        its noncredit activities to pay for the subsidy and 
        administrative costs of the investment guaranties and 
        direct loan programs under subsections (b) and (c) of 
        section 234.
          (2) Termination of authority.--The authority of 
        subsections (a), (b), and (c) of section 234 shall 
        continue until [2007] 2019.

           *       *       *       *       *       *       *

    Sec. 237. General Provisions Relating to Insurance 
Guaranty, and Financing Program.--(a) * * *

           *       *       *       *       *       *       *

    [(e) No insurance, guaranty, or reinsurance of any equity 
investment shall extend beyond twenty years from the date of 
issuance.]
    (e) Maximum Term of Obligation.--
          (1) In general.--Except as provided in paragraph (2), 
        no insurance, guaranty, or reinsurance of any equity 
        investment shall extend beyond 20 years after the date 
        of issuance.
          (2) Extended term of obligation for certain 
        projects.--An insurance, guaranty, or reinsurance of an 
        equity investment in a renewable energy project in sub-
        Saharan Africa may extend up to 30 years after the date 
        of issuance.

           *       *       *       *       *       *       *

    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.]

           *       *       *       *       *       *       *

    (l) Assessment of Customer Satisfaction.--
          (1) In general.--Each fiscal year, the Corporation 
        shall conduct a survey of a sample of its customers to 
        assess the satisfaction of those customers with the 
        operation and procedures of the Corporation, with 
        particular attention to customers of the Corporation 
        that are small businesses and cooperatives.
          (2) Report to congress.--The Corporation shall 
        include in its annual report required under section 
        240A a report on the survey conducted under paragraph 
        (1) that includes, as appropriate, summaries of 
        recommendations made by customers of the Corporation 
        with respect to ways to improve the operations and 
        procedures of the Corporation.

INSPECTOR GENERAL ACT OF 1978

           *       *       *       *       *       *       *



SECTION 8G. REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL 
                    ENTITIES

    (a) Notwithstanding section 12 of this Act, as used in this 
section--

           *       *       *       *       *       *       *

          (2) the term ``designated Federal entity'' means 
        Amtrak, the Appalachian Regional Commission, the Board 
        of Governors of the Federal Reserve System and the 
        Bureau of Consumer Financial Protection, the Board for 
        International Broadcasting, the Commodity Futures 
        Trading Commission, the Consumer Product Safety 
        Commission, the Corporation for Public Broadcasting, 
        the Defense Intelligence Agency, the Denali Commission, 
        the Equal Employment Opportunity Commission, the Farm 
        Credit Administration, the Federal Communications 
        Commission, the Federal Election Commission, the 
        Election Assistance Commission, the Federal Housing 
        Finance Board, the Federal Labor Relations Authority, 
        the Federal Maritime Commission, the Federal Trade 
        Commission, the Legal Services Corporation, the 
        National Archives and Records Administration, the 
        National Credit Union Administration, the National 
        Endowment for the Arts, the National Endowment for the 
        Humanities, the National Geospatial-Intelligence 
        Agency, the National Labor Relations Board, the 
        National Reconnaissance Office, the National Security 
        Agency, the National Science Foundation, the Overseas 
        Private Investment Corporation, the Panama Canal 
        Commission, the Peace Corps, the Pension Benefit 
        Guaranty Corporation, the Securities and Exchange 
        Commission, the Smithsonian Institution, the United 
        States International Trade Commission, the Postal 
        Regulatory Commission, and the United States Postal 
        Service;

           *       *       *       *       *       *       *

          (4) the term ``head of the designated Federal 
        entity'' means the board or commission of the 
        designated Federal entity, or in the event the 
        designated Federal entity does not have a board or 
        commission, any person or persons designated by statute 
        as the head of a designated Federal entity and if no 
        such designation exists, the chief policymaking officer 
        or board of a designated Federal entity as identified 
        in the list published pursuant to subsection (h)(1) of 
        this section, except that--
                  (A) with respect to the National Science 
                Foundation, such term means the National 
                Science Board;
                  (B) with respect to the United States Postal 
                Service, such term means the Governors (within 
                the meaning of section 102(3) of title 39, 
                United States Code);
                  (C) with respect to the Federal Labor 
                Relations Authority, such term means the 
                members of the Authority (described under 
                section 7104 of title 5, United States Code);
                  (D) with respect to the National Archives and 
                Records Administration, such term means the 
                Archivist of the United States;
                  (E) with respect to the National Credit Union 
                Administration, such term means the National 
                Credit Union Administration Board (described 
                under section 102 of the Federal Credit Union 
                Act (12 U.S.C. 1752a);
                  (F) with respect to the National Endowment of 
                the Arts, such term means the National Council 
                on the Arts;
                  (G) with respect to the National Endowment 
                for the Humanities, such term means the 
                National Council on the Humanities; [and]
                  (H) with respect to the Peace Corps, such 
                term means the Director of the Peace Corps; and
                  (I) with respect to the Overseas Private 
                Investment Corporation, such term means the 
                Board of Directors of the Overseas Private 
                Investment Corporation (established under 
                section 233(b) of the Foreign Assistance Act of 
                1961 (22 U.S.C. 2193(b));