Power Africa Governance Donor Partner WG November 14, 2013

What is Power Africa? Power Africa is about mobilizing private resources to close priority projects in six African countries 2 Power Africa Private investors commit to invest in the energy sector USG assists government to implement reforms and facilitates transactions Government implements reforms needed to spur investment

3 Power Africa Sector Reforms Power Africa recognizes need to “do things differently”. It is a PPP, about promoting good business, not traditional aid. Like the Big Results Now!, it is about “business unusual.” Power Africa countries selected based on commitment to reforms. Power Africa recognizes role & value of delivery units and their role in catalyzing reforms and fast-tracking transactions.

Public and Private Sector Collaboration As part of Power Africa, over 40 companies from around the globe have signaled their interest in investing in African energy. It is up to Tanzania to attract this investment. For the US Government, Power Africa is a “Whole of Government” initiative which engages: USAID, State Department, OPIC, US Export-Import Bank, Trade & Development Agency, MCC, Department of Commerce, Department of Treasury, Department of Energy. As well, USG seeks opportunities for closer collaboration and coordination with the full range of development partners in each country. 4 Power Africa

On-going USG Power Activities in Tanzania USAID Energy Governance Capacity Initiative (EGCI) MCC 1 st Compact 5 Power Africa

USAID Power Activities in Tanzania Partnership for Growth: A 5-year timeline, started July 2012 Working with key sector counterparts on specific actions MEM, TANESCO, ZECO, REA, EWURA (eventually TPDC) Coordinating with USG agencies and other Development Partners, including the World Bank and AfDB USAID currently using five mechanisms in Tanzania: Energy Utility Partnership Program: TANESCO & ZECO Energy Regulatory Partnership Program: EWURA & ZURA Energy Efficiency Program: TANESCO, ZECO, EWURA, MEM Private Capital Group for Africa: REA Africa Infrastructure Program: EWURA, MEM 6 Power Africa

7 U.S. Department of State-led, interagency effort to provide of technical and capacity building assistance to the governments of select countries on the verge of becoming significant oil and gas producers. Core objective: help countries establish capacity to manage their oil and gas sector revenues wisely and in a manner that maximizes the value of the resource development for the government. In Tanzania, EGCI funding supports technical assistance to the Tanzania Revenue Authority to improve payer compliance and enhance capacity related to transfer pricing. In 2012, EGCI supported the Tanzanian Energy Ministry in hosting region- wide conference on managing offshore oil and gas resources. EGCI is looking at additional opportunities to provide further technical assistance and training in the coming months. Energy Governance Capacity Initiative

8 Power Africa MCC’s current compact has nearly $207 million dedicated to expanding access to electricity on the mainland and Zanzibar. MCC- First Compact Nearly 3000 Kilometers of new transmission & distribution line 27 new or upgraded substations New 100 MW submarine power cable between Mainland & Unguja $4.7 million PV solar programme in Kigoma Technical assistance to TANESCO & ZECO e.g., cost of service support, loss reduction Agenda of continued policy reform to enhance sustainability, e.g. cost reflective tariffs; enhanced opportunities for private sector participation

What’s New under Power Africa Tanzania’s commitment to reform Big Results Now! Commitment to enabling environment for investment Increased focus on private sector engagement Letters of Intent Developers pledged > 9.6 GW of generation projects in Power Africa countries, representing in > $14.5 billion in investment. Financial partners pledged to make available > $8 billion for energy, via project finance, new financing facilities/platforms, and fundraising Focus on Transactions Focus on closing transactions Transactions Solutions Group Transactions Advisor(s) 9 Power Africa

10 BRN! Targets ambitious results by 2016 Power Africa

Much in common Commitment to reforms Fast-tracking transactions GOT – USAID Signed LOI, July 2013 USG to support PDB structure as BRN! succeeds Power Africa efforts will seek to align with BRN! And coordinate with other DPs 11 Power Africa BRN! – Power Africa Nexus LETTER OF INTENT  Roadmap for sector reform  Adoption of Subsidy Policy  Development of a REFIT program  Cost-reflective tariff structure  Unification & rationalization of PPP structures  Movement towards competitive bidding IPPs/PPPs