US Export-Import Bank pushes Africa renewables

By Adelaide Changole and Paul Burkhardt with assistance from Ntando Thukwana.
The US Export-Import Bank said it is increasing its focus on Africa and clean energy, approving its biggest renewable investment on the continent while the earlier financing of a Mozambique gas project remains under review.

The bank in June approved a direct loan for more than $900 million for two solar plants in Angola, an unprecedented clean energy project for Ex-Im that will also create thousands of jobs in the US, the export credit agency’s chair Reta Jo Lewis said in an interview in Johannesburg on Friday. She was on her fourth trip to sub-Saharan Africa since starting the role in February last year.

“The renewable energy mandate that comes from Congress also coincides with what the administration has asked us to do,” and there’s broad scope for the size and type of investment, she said on the sidelines of a conference. “Ex-Im is looking and interested in all types of projects, all sectors.”

The agency added about $1.6 billion of lending in Africa this year to reach an overall exposure of $7 billion to the region, according to Lewis. Its interest in energy projects on the continent includes a wide swath of investments from solar power to gas. She also traveled to a US-Africa nuclear summit in Ghana last week to promote domestic companies that export the technology.

“Our goal is to look at bankable projects,” Lewis said. “Don’t automatically think that a deal is too little or a deal is too large for us.”

Ex-Im has granted other loans globally that have drawn scrutiny for being out of step with US President Joe Biden’s pledge to curb public funding support of fossil fuels. Environmental groups have criticized the agency’s support of an Indonesian oil refinery.

The lender provided a $4.7 billion loan in 2020, during the administration of former President Donald Trump, to take up the largest share of financing for a Mozambique gas project led by TotalEnergies SE. The project was halted the following year due to the security threat posed by an insurgency.

Total now plans to return and Mozambique expects export credit agencies that have been involved to reaffirm their lending commitments by the end of the year.

“On that particular loan, which was approved in the previous administration, one of the things is that project is undergoing due diligence,” Lewis said. “I can’t comment on the timeline, that’s too hypothetical.”

Source: Bloomberg L.P.

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