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Kramer: Investment in renewable energy in Africa would benefit U.S. economy

It’s difficult for any American to imagine a life without easily accessible power inside and outside the home. But for millions in Africa, it’s still difficult to imagine life with it.

The development and investment in energy production in Africa need to succeed if parts of the continent’s economies are going to avoid plunging back into instability. Failure to improve would shred plans for trade and investment from the United States.

Compared to other economies that are already dependent on fossil fuels for electricity, renewable energy technologies could have high chances of success in Africa. These technologies could satisfy, even if only partially, the high demand for energy. Africa presents a wonderful opportunity as a testing ground for large scale renewable energy production. This is a win-win case for a continent that desperately needs development and can get it through the cleanest technologies the world can offer.

The International Energy Agency estimated last week that by 2040, nearly a half billion Africans still will not have access to electricity, according to a Tuesday article in The Wall Street Journal. This is in spite of a sturdy $7 billion “Power Africa” effort by the United States and more investment from around the world.

It’s good to see support from the United States in its Power Africa initiative, which consists of billions of dollars’ worth of investments in power infrastructure for companies that are developing new grids. The question now facing those African companies is from what resources they will develop that energy.



Africa is a landscape rich with oil and natural gas — offshore drilling is Nigeria and Ghana’s most lucrative industry and a 2013 report from the Energy Information Association showed that Sub-Saharan Africa possesses about 250 trillion cubic feet of proved natural gas reserves.

But those resources should serve as exports for Africans and act as job-creators if the historically corrupt governments can straighten themselves out. The real opportunity for economic growth and innovation lies in renewable energy technology, perhaps in Africa more than anywhere else in the world.

Investment from the United States and China will provide ample opportunity to develop wind, solar and geothermal fields. The main drawback of renewable technologies in the United States is a lack of “density,” or the ability to produce a large amount of power from a small amount of land — like an oil well can. The vast deserts of the Sahara are a solution to that. If there’s an area where increasingly inexpensive renewable energy projects that require vast amounts of land can succeed, it’s in Africa.

According to a June 2013 Bloomberg article, investment in renewables in Africa from China and Japan alone totaled $9.3 billion. Massive hydroelectric projects — think the Hoover Dam — in Ethiopia are funded by Chinese banks. United States will be doing the same in Power Africa.

A well-developed Africa with functioning industries can provide great business partners with the Chinese and U.S. governments. Although new renewable projects requiring lots of space will be an attack on the valued, open African landscape, it will be for the greater economic and environmental good.

Countries that have been struggling for development need these projects to succeed in order to literally fuel long-term growth, and that can open them up for more investment and trade from partners around the world. After centuries of poverty and stagnant development, a worldwide effort to power Africa is a win for all.

Phil Kramer is a sophomore finance major. His column appears weekly. He can be reached at pwkramer@syr.edu.





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