[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
ELECTRIFY AFRICA ACT OF 2013
=======================================================================
MARKUP
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
ON
H.R. 2548
__________
FEBRUARY 27, 2014
__________
Serial No. 113-117
__________
Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
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__________
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
STEVE CHABOT, Ohio BRAD SHERMAN, California
JOE WILSON, South Carolina GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas ALBIO SIRES, New Jersey
TED POE, Texas GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina KAREN BASS, California
ADAM KINZINGER, Illinois WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas ALAN GRAYSON, Florida
PAUL COOK, California JUAN VARGAS, California
GEORGE HOLDING, North Carolina BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas JOSEPH P. KENNEDY III,
SCOTT PERRY, Pennsylvania Massachusetts
STEVE STOCKMAN, Texas AMI BERA, California
RON DeSANTIS, Florida ALAN S. LOWENTHAL, California
TREY RADEL, Florida--resigned 1/27/ GRACE MENG, New York
14 deg. LOIS FRANKEL, Florida
DOUG COLLINS, Georgia TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas
TED S. YOHO, Florida
LUKE MESSER, Indiana
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
C O N T E N T S
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Page
MARKUP OF
H.R. 2548, To establish a comprehensive United States Government
policy to assist countries in sub-Saharan Africa to develop an
appropriate mix of powersolutions for more broadly distributed
electricity access in order to support poverty alleviation and
drive economic growth, and for other purposes.................. 2
Amendment in the nature of a substitute to H.R. 2548 offered by
the Honorable Edward R. Royce, a Representative in Congress
from the State of California, and chairman, Committee on
Foreign Affairs, and the Honorable Eliot L. Engel, a
Representative in Congress from the State of New York........ 19
Amendment to the amendment in the nature of a substitute to
H.R. 2548 offered by the Honorable Mark Meadows, a
Representative in Congress from the State of North
Carolina................................................. 50
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE RECORD
APPENDIX
Markup notice.................................................... 56
Markup minutes................................................... 57
Markup summary................................................... 59
ELECTRIFY AFRICA ACT OF 2013
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THURSDAY, FEBRUARY 27, 2014
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:06 a.m., in
room 2172 Rayburn House Office Building, Hon. Edward Royce
(chairman of the committee) presiding.
Chairman Royce. The committee will come to order. I will
ask members to take their seats. And pursuant to notice, we
need today to mark up H.R. 2548, the Electrify Africa Act. And
without objection, all members may have 5 legislative days to
submit statements for the record or any extraneous materials
for today's bill. So I will now call up H.R. 2548. Without
objection, the bill is considered read.
The Royce-Engel amendment in the nature of a substitute
that was provided to your offices Tuesday morning is considered
base text for purposes of the markup and is open for amendment
at any point. And after my brief remarks, I will recognize the
ranking member, Mr. Engel from New York, and then any other
members seeking recognition to speak on today's bill.
[The information referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Royce. Ladies and gentlemen, when we flip a light
switch in this country, we power up a computer or swipe a
credit card, we take for granted that the electricity that we
are going to need to do that function is going to be there. But
imagine for a moment if our shops or our schools or our
hospitals and our homes had absolutely no electricity, what
would happen if you flipped that switch and nothing happened?
Even the most industrious manufacturer would be very hard
pressed to stay in business. The most dedicated surgeon would
be powerless in a hospital to save lives. And unfortunately,
this is the reality throughout most of sub-Saharan Africa.
Seventy percent of Africans lack access to dependable
electricity.
The Electrify Africa Act is a response to this massive
power shortage. It offers a market-based, strategic framework
to bring affordable energy that is reliable to the 600 million
people in sub-Saharan Africa who currently have none. Why do we
care? We care because jobs are at stake, also human lives are
at stake.
Now over all of Africa, the population is now about one
billion. We have one billion consumers. The African continent
has great economic potential. Last year, a bipartisan committee
of a delegation here traveled to three countries, to Ghana, to
Liberia, and Nigeria to see how these countries could make
better use of the African Growth and Opportunity Act. I can
tell you I and Greg Meeks have traveled in the past to these
countries to see what could be done to create more economic
growth. And we passed landmark legislation a decade ago in
order to try to increase trade, increase opportunity, remove
the barriers for exports from these countries to the U.S. But
in all three of these countries, the production of goods for
export was rendered nearly impossible by a lack of affordable
energy, even where other countries in the region were doing
well and where conditions were ripe for manufacturing, the
problem is that the cost of running a plant on a diesel
generator is simply prohibitive, not to mention the absence of
electronic devices and Internet access now so critical to
businesses and now very critical to education.
This lack of electricity even has a direct impact on our
nation's spending. For example, the U.S. Embassy in Liberia
spends--how much do you think they spend on their diesel
generator there? $10,000 a day. That is why it is so
impractical to think that small businesses are going to be set
up to run and then have to rely on diesel generators. There is
no usable grid in Liberia right now.
When I chaired the Africa Subcommittee, I saw first hand
how a lack of electricity stifles development. Women spend long
days searching for wood or searching for charcoal to provide
heat for their families. Children study with light from highly
flammable kerosene lamps and health risks are very high as a
result. Cold storage of vaccines is almost impossible in this
kind of a situation. Families resort to using inefficient and
highly polluting sources of fuel and you can imagine what
happens when the toxic fumes from those fuels waft through
their homes. As a matter of fact, that causes more deaths in
the region than HIV/AIDS and malaria combined.
Many of this committee have spent years working to help
transition African countries away from assistance into economic
growth. The Electrify Africa Act mandates a clear and
comprehensive U.S. policy so that the private sector can
proceed with the certainty it needs to generate electricity in
Africa at no cost, by the way, to the U.S. taxpayer.
We need to be engaged. Where the United States has left a
void for economic investment in Africa, China of course, steps
in. China has directed $2 billion toward energy projects on the
continent. If the United States wishes to tap into this
potential consumer base, we must act now. So another point I
would make for the members.
And I want to thank Ranking Member Eliot Engel and Africa
Subcommittee Chair Chris Smith and Ranking Member Karen Bass,
in particular, for helping craft this bill which comes at a
crucial moment in time. And I want to also recognize the wide
range of support for the bill from the 35 African Ambassadors
who have sent letters of support to us here on Capitol Hill to
the private sector groups like Chamber of Commerce and the
Corporate Council of Africa and advocacy groups like the ONE
Campaign and I would just like to ask those members of the ONE
Campaign who are with us, if they would just stand for a moment
to be recognized as well. Thank you very much for your
engagement on this issue and the assistance in trying to
electrify Africa.
And at the end of the day, I know the committee wants to
see communities in sub-Saharan Africa flourish. This bill sets
out a comprehensive, sustainable, market-based plan to bring
hundreds of millions of Africans into the global economy. And I
will now turn to our ranking member, Mr. Eliot Engel of New
York for his opening statement.
Mr. Engel. Mr. Chairman, thank you for holding this markup
of the Electrify Africa Act. I am very pleased and honored to
be the lead Democratic cosponsor of this bipartisan legislation
which addresses a critically important issue and let me say,
did you ever see so many good looking, young people who stood
up. I want to thank them for everything they are doing as well.
It really makes me feel good when there are young people who
are so involved. We have great hope for this country and for
the future of the planet with young people being so heavily
involved.
Mr. Chairman, sub-Saharan Africa is one of the most energy-
deficient regions of the world with nearly 70 percent of the
population which is more than half a billion people lacking
access to electricity. In some countries that figure is even
higher. In DRC, 85 percent of the population has no power;
Kenya, 82 percent; Uganda, 92 percent. And those are really
staggering statistics. The lack of reliable electricity has
many negative consequences. In desperation, people burn
anything they can find for heat and cooking: Wood, plastic,
trash, and other toxic materials. These dirtier fuels cause
greater harm to people's health and to the environment. Rural
populations living off the grid require kerosene and cooking
fuel to be transported from larger cities, making essential
commodities cost more for those who are already struggling to
survive.
Many businesses have had a hard time succeeding because
they are forced to pour expensive diesel fuel into generators
day and night or deal with constant power outages from
unreliable electrical grids. Hospitals cannot provide adequate
services because they are unable to provide consistent cold
storage, light or power for life-saving devices and the list
goes on and on.
This bill begins to tackle these challenges in a
comprehensive way. It directs the Executive Branch to develop a
strategy to increase electrification in Africa and to employ
U.S. assistance programs to help accomplish that goal. This
long-term strategy will focus not only on building more power
plants, but also on increasing African Government
accountability and transparency improving regulatory
environments and increasing access to electricity in rural and
poor communities through small, renewal energy projects.
Only by addressing all of these challenges together will
people in Africa finally have access to electricity that will
allow them to grow their economies and ultimately reduce their
reliance on foreign aid.
Mr. Chairman, I know that you know sub-Saharan Africa is
filled with dynamic individuals trying to make their countries
better and I believe this bill supports their entrepreneurial
spirit.
Mr. Chairman, our staffs have worked together in a
bipartisan fashion which I am pleased to say has been the way
we have run this committee. It has been a pleasure. We drafted
this bill and refined it with a substitute now before us and we
did it together. So Mr. Chairman, I appreciate your deep
commitment to the people of sub-Saharan Africa and I look
forward to working with you to move this bill forward. I yield
back.
Chairman Royce. Thank you, Mr. Engel, very much. And thank
you for your assistance also in drafting the legislation. We
will go now to any members seeking to speak. We will go first
to Mr. Chris Smith of New Jersey.
Mr. Smith. Thank you very much, Mr. Chairman. Thank you,
and Eliot Engel, for crafting this excellent bill, the
Electrify Africa Act. Congress' interest in Africa is not only
long standing and robust, but it is often varied. At times the
focus is on peace and development, the mitigation of war.
Sometimes it is more of an interest on trade. Others obviously,
and all of us, I think, play a role in all of this. We believe
education is the key to Africa's future success. And of course,
humanitarian issues and combating of things like malaria, HIV/
AIDS and TB are very, very high on the agenda. But you know,
all of this and all of the progress is held back by the lack of
electricity. And this legislation isn't a grant. It is not a
brand new set of foreign aid initiatives. It calls for very
serious cooperation and a strategy to electrify Africa, to use
many of the advances we have made over the last several years
with regards to electricity, best practices, of course, doing
it in an environmentally sane and safe way letting us share
that with Africa. Let us do it as partners. This legislation is
an idea whose time has come and I thank the chairman for
sponsoring it.
Chairman Royce. Thank you, Mr. Smith. We now go to Karen
Bass of California.
Ms. Bass. Thank you, Chairman Royce and Ranking Member
Engel for your hard work on this and I would like to associate
myself with the comments of the ranking member Engel in terms
of congratulating the chair on how the committee is run and the
bipartisan way in which we have done legislation.
With greater access to electricity, Africa has the capacity
to grow its economies, facilitating greater volumes of intra-
regional, trans-continental, and international trade. Greater
access to electricity also enables countries to expand human
capacity and address the critical challenges of under
employment. Access to additional power will also help both
individual countries and geographic regions address
infrastructure challenges, all of which contribute to
increasing the capacity of African nations and the continent as
a whole.
Greater access to electricity improves the quality of life
for not only urban, but rural communities. In the absence of
electricity, the ability to work, to run a household, or to do
homework after dark is truly a challenging feat, especially in
rural areas. Many of you may have heard the inspiring story of
the young Kenyan engineering student, Mr. Evans Wadongo, one of
CNN's top heroes of 2010, who at the age of 19 literally
transformed the lives of people in his village by developing a
solar lamp. Ask why he spent so much time and money attempting
to produce the lamp, Mr. Wadongo said he did so to improve the
lives of people like himself and to ensure that no other
student had to go through what he had to go through just to
study.
Mr. Wadongo's eyesight is permanently damaged due to
prolonged use of kerosene lamps and the irritation of his eyes
from kerosene fumes. Reportedly, Mr. Wadongo hopes to produce
some 100,000 solar lamps by 2015. His story underscores the
importance of balanced access to electrical power and the need
to ensure that power is not simply directed to the economic
sectors, but also to the rural and low-income communities where
many bright students like Mr. Wadongo live.
I think for all of us, it is very hard to imagine what it
would be like to go through a day without electricity. I often
think of the health challenges that this presents and the
number of women on the continent who have to deliver children
in the dark.
In closing, I want to acknowledge the concerns raised by a
number of organizations and express my appreciation to your
staff, Mr. Chairman, for meeting with all of the advocacy
groups and taking their concerns into consideration. I
understand that their concerns are that renewables be included,
that access to electricity be for the general population, and
that we make sure that governance of the infrastructure is
transparent. I yield back the balance of my time.
Chairman Royce. Thank you, Congresswoman Bass. We will now
go to Congressman Duncan of South Carolina.
Mr. Duncan. I want to thank the chairman. You know, this is
an interesting bill to me, being a pro-energy guy and thinking
about improving the quality of lives for folks all around the
globe, specifically in Africa today, but we can incorporate
most third world countries and how do we improve the lives of
folks that are using charcoal to cook with or wood or coal to
heat their homes. Electricity does that.
Electricity provides a way to keep food from spoiling for a
long time. Electricity provides an ability for third world
parents to educate their children and help them read after the
sun goes down. It provides the air quality improvement. If you
are cooking and heating with combustible products like coal or
charcoal or wood, air quality is not as good.
So I am supportive of this effort. But I want to mention to
the committee one thing that I would hope the administration in
embracing this bill would consider and that is small, modular
reactors which is a new technology, but new to this day, but
not new to the nuclear industry. It has been around a long
time. Small modular reactors can power small cities, large
neighborhoods, and in this case in Africa, small villages with
a very stable 24/7 baseload power supply to meet the needs of
the electrical components there.
And if you think about--and I think about the African
villages, but also the manufacturing processes that could come
in to provide incomes and stability, I think about the moms and
dads having fresh food in their refrigerators and cooking over
electric stoves and that sort of thing. So there are a lot of
things to think about when we think about electricity in third
world countries and transmission lines and security and other
things, especially with regard to small modular reactors that I
know others that may not like nuclear power will raise the
concern about proliferation of nuclear materials, but there are
ways that can be used in that area.
So I would hope that the administration would look at small
modular reactors as a viable source and it is not all just
hydro power. There are other ways that we can meet the needs. I
think this is the right thing to try to support electrifying
Africa and all of the third world to bring them up in their
standard of liver and quality of life. And with that, Mr.
Chairman, I yield back.
Chairman Royce. Thank you. We go now to Mr. Meeks of New
York.
Mr. Meeks. Thank you, Mr. Chairman. First, I want to join
Mr. Engel and Ms. Bass in congratulating you. This is not new
for you. You have been working to make sure that Africa
receives the kind of investments and infrastructure from the
time that you were the chair of the Subcommittee on Africa and
you have conducted yourself here in a manner to make sure that
that has become a reality. And so I want to thank you for your
hard work and your diligence on this particular bill.
I want to thank Ranking Member Engel who has consistently
and constantly been working very hard to work in a bipartisan
manner, making sure that his contributions to you and the way
he listens and talks to members on our side of the rise on this
committee. That makes this happen and that makes these things
work. So I want to thank Mr. Engel and Mr. Smith, who is always
on humanitarian causes and works hard in doing what he has to
do. And in regards to this bill, I want to thank you, because
it is a joint effort.
And of course, my friend and colleague, Karen Bass, who I
think of two things. Number one, I also think of my good friend
who is looking down from heaven, Donald Payne, who had worked
so hard and so tremendously for a long period of time on
working on Africa and trying to see this happen and then the
baton being passed to Karen Bass, who in her vision, says that
we are going to work and she was going to work just as hard as
Donald did. And every time I look up, there is something in my
hand about Africa that Karen is producing to make sure that
Africa is on the thoughts and the minds and the hearts of
everybody. So I want to thank you.
And of course, I want to thank Mr. Bono and the ONE
Campaign who decided to utilize his celebrity to make sure it
becomes on the lips of a lot of individuals. Sometimes if you
don't have a celebrity, what is going on in other parts of the
world no one knows about. But the ONE Campaign and Mr. Bono
decided that they were going to stay focused on this and bring
the attention to the world. And that then also gives us the
motivation on the committee to make sure that we get something
and we do something right. And I think that is what we are
doing here today. So I want to thank them.
I am so excited to see that the committee takes this
proactive action to increase U.S. engagement and investment in
Africa. You know, years ago when one would discuss Africa often
we only heard it characterized as the poorest continent on the
planet. That is no longer the case. More often you hear about
flourishing economic progress today. Six out of the top ten
fastest growing economies in the world are in sub-Saharan
Africa. Over the past decade it has been a six-fold increase in
U.S. and foreign direct investment in sub-Saharan Africa to
$39.5 billion.
On June 30, 2013, in a speech in Capetown, South Africa,
President Barack Obama remarked, ``There is a historic shift
taking place from poverty to growing, massive middle class.''
Africa has a great story to tell, but more needs to be done for
Africa to reach its full potential. Investments and key
infrastructure such as reliable energy are vital to continuing
African growth and development.
President Obama's Power Africa initiative capitalizes on
the progress by leveraging international support, the private
sector, and regional cooperation to dramatically increase
electricity across Africa. The Electrify Africa Act will
solidify ambitious goals for low cost, clean energy on the
continent, including 20,000 megawatts of electrical power by
2020.
I have hosted various seminars and trade events to
encourage trade and investment in Africa. The Electrify Africa
Act of 2014 will bring the kind of confidence to investors that
Africa has the capacity to support long-term economic growth
and is a stable partner for private corporations, NGOs,
international organizations, and entrepreneurs. Through this
bill, more effective investments in the electricity sector will
further enhance Africa's trade capacity. And it will give
children the ability to learn; hospitals, the opportunity to
heal; families, the opportunity to come together; create jobs
and opportunities for those who had none.
I look forward to working with my colleagues on this
committee to ensure Africa's future continues to be as bright
as the sun. Thank you, and I yield back.
Chairman Royce. Thank you very much. We go now to Mr. Mo
Brooks of Alabama.
Mr. Brooks. Mr. Chairman and members of the committee, I
very much appreciate the altruistic motivations that I have
heard in support of this legislation, but quite frankly I don't
believe America's financial condition is such that it supports
spending this money that we don't have on these projects. The
realities of America's financial condition, quite frankly, are
rather dire. Over the past 5 years we have averaged trillion-
dollar deficits every single year. That has been our average.
To put that in a different perspective, I would ask the members
and the audience to think in terms of their personal finances.
How long could each of us stay out of bankruptcy if year after
year after year for 5 consecutive years, 30 percent of our
operational costs, what we spent to live on, was borrowed
money? Yet that is the financial condition of the United States
of America over the past 5 years.
We have economic history that we can look at that tells us
what the dire consequences are going to be if we continue on
this path. You can look at Detroit and Stockton, major cities
in the United States of America. They are in bankruptcy because
of this tendency to spend money that you don't have which
politicians are also apt to do. Now in Detroit, they are
bailing in bankruptcy whether retirees of the City of Detroit
are going to receive the pensions that they earned during their
lifetimes and that they now need during their elderly years.
We can look at Spain and Greece, again, a couple of
governments who have not had financial constraint and who have
been spending money that they do not have. Their unemployment
rate right now exceeds 25 percent in both of those nations. Now
think about that for a moment. Those are unemployment rates
because of financial irresponsibility that are worse than at
any point in time during America's Great Depression of the
1930s.
You can look at Argentina and Venezuela if you want more
examples of the consequences of the path that we are on, where
in 1 month their currency was devalued anywhere from 17, 18
percent on the low side to roughly 50 percent on the high side
in 1 month. Of course, you are going to have economic adverse
consequences from that or you can look at Puerto Rico, a part
of the United States, which just 2 weeks ago Fitch downgraded
their sovereign debt to junk bond status.
Puerto Rico is going to be suffering for years, if not
decades, because of the financial irresponsibility of their
leadership or they didn't properly prioritize and where they
didn't say no to good things, not because they don't want to do
those good things, but because they don't have the money with
which to do those good things.
Let us be clear then. Every penny that is spent by America
on building power plants and power lines in Africa is borrowed.
It is money we do not have and money we do not have the ability
to pay back. That having been said, there is some issue about
whether this bill is going to cost American taxpayers money. I
would direct everyone to Section 6 of the bill which is page 11
where we are going to be guaranteeing loans: ``USAID should
identify and prioritize loan guarantees to local sub-Saharan
African financial institutions.'' That is money that the United
States of America is on the hook for.
If you go to the very next paragraph, it is talking about
partnerships and grants, again, taxpayer money that would have
to be spent. If you want to look at Section 8 on page 13, the
Overseas Private Investment Corporation, which by the way we
appropriated $55 million for in FY 2012 and the President is
asking for $72 million in 2014 in his budget proposal. That
also is going to be assisting with investments that in turn
cost money ultimately that may be American taxpayer money.
Before I go any further, let me emphasize, USAID does not
come cheap. We are talking $17 billion FY 2014, $17 billion.
That is how much that is costing American taxpayers. Or if you
want to go to Section 9, Director of Trade and Development,
page 17 again, this one is talking about, if you will bear with
me while I get to that page, ``the Director of Trade and
Development Agency should promote United States private sector
participation in energy sector development.'' That is
administration. That is going to cost money for us to do that.
``Seek opportunities to fund project preparation activities
including power generation.'' There is a whole slew of things
that are going to cost, but the bottom line is this, there is
no way that anyone can say that this is not going to cost
American taxpayers money. It is. Money that we don't have.
You can make the argument that the money is going to be
spent anyways, and that we ought to spend it on this program
which is a separate argument. But I would submit in response
that once you lock this legislation in it is going to be very
difficult to cut the funding to conform to the financial
circumstances that we face as a nation. So I admire the
altruism that is expressed so far. I regret that because of our
nation's financial condition I cannot support spending American
taxpayer dollars on power lines and power plants in Africa.
Chairman Royce. To recognize myself, of course, what this
bill is about is giving the private sector in the United States
the certainty it needs to go in and create in Africa products
that are American-made products that create American jobs over
the Overseas Private Investment Corporation. And if we go
through the scoring of the CBO, this, in fact, is a proposal
that not only does not cost, this is one of the few proposals
that we are going to pass that actually is scored to bring
revenues into the Federal coffers here in the United States.
Why is that so? Because when you give American companies the
certainty that they can go and invest, they do so. They create
the synergy of the new jobs and the new economic relationship
and to put this in context, this is something of a race in
Africa between the private sector, the U.S. going in and
investing, and China going in and investing in a very different
way.
When the U.S. goes in, we have a certain template that we
are attempting to sell here, market economy, an open economy,
not sole sourcing products, but opening up to the international
market. The rule of law becomes part of this because over AGOA,
this is part of the thesis of what we do when we engage with
African states, recognizing the rule of law, recognizing an
independent court system, and now providing energy,
uninterrupted energy in order to be able to entice additional
U.S. investment in the subcontinent.
So at the end of the day, when we look at the CBO report
and it shows a return of tens of millions of dollars on these
projects, I would argue that this is a very wise investment for
the United States to make. And I know Mr. Sherman seeks
recognition from California, thank you.
Mr. Sherman. I want to associate myself with the chairman's
opening statement and just about everything else that has been
said there. In response to the gentleman from Alabama, as the
chairman points out, this bill has no additional cost. We have
an obligation to spend our foreign development dollars as
effectively as possible and I am proud to be one of many
cosponsors of this bill because this bill will help us be more
efficient.
It involves using existing loan guarantee authority,
encouraging the World Bank and the African Development Bank to
use their dollars to focus on electricity. And as to the
Overseas Private Investment Corporation, we have had hearings
in our subcommittee on this. As a technical matter, $72 million
is appropriated this year or will be under the President's
request, but that is a bookkeeping entry.
Over the years, the Overseas Private Investment Corporation
has returned more money to the Treasury than it has received.
And I am confident that the guarantee fees that it will charge
to guarantee debt to finance projects, to electrify Africa will
again be part of their success in earning a profit for the
United States Treasury.
So even if one is not an enthusiastic supporter of foreign
aid, I happen to be, but not everyone is, this bill represents
the very efficient use of a small amount of money that would be
spent anyway to do something that is important for Africa as
well, illustrated in the comments here and also very important
for African global trade. I yield back.
Chairman Royce. Yes, if the gentleman yields back, I would
point out that what we are actually talking about here is a
template. For some time now, this country has been moving away
from aid, the U.S. has been moving away from aid to trade with
Africa. But to now say that we are going to move away from
trade and investment in Africa with respect to the OPIC
template which again is giving U.S. firms the security they
need to go in, they are paying fees. And I just want the
members to understand this. The fees that the companies pay to
go in in order to make these investments is what covers the
cost. And the structure of that fee system is such that
according to the Congressional Budget Office, there is a return
on investment. In other words, there is net revenues flowing in
going forward to the U.S. Treasury when contrasted with the
expenditures. It is a net revenue of tens of millions of
dollars.
So with that said, let me recognize who is next in the
queue and that is Mr. Gerry Connolly of Virginia.
Mr. Connolly. I thank the chairman, and I associate myself
with his remarks. I also thank our colleague from Alabama, Mr.
Brooks, for giving voice to the alternative view of the United
States' role in the world. What he basically said was the goals
contained in the markup today and the legislation today an the
markup are altruistic and worthy in that regard, but we can't
afford them.
This zero sum gain view of the United States' role in the
world, I would argue, is very dangerous. It is a false choice
to tell the American people we cannot continue to afford to be
engaged in the world. And even when things are financed, self-
financed, we still can't afford them in that point of view. In
fact, we need to retreat.
I find it ironic that electrification in Africa, for
example, is referred to as an altruistic endeavor. Indeed, Mr.
Brooks' own home state of Alabama was a prime beneficiary of
rural electrification during the New Deal. And I am sure his
constituents are grateful that a different administration at a
time of far greater economic stress than today, made that
investment in his citizens, in his state, in his economy. And
the return on that investment has been profound.
When we talk a zero sum gain about the United States
retreating from the world, we give up on the idea that an
investment can have a return on it. When the United States
makes an investment in other people, in other places, it is not
only altruism, I would say to my colleague, it is also
enlightened self-interest because the return in terms of
economic activity, in terms of trade, in terms of investment
both ways, is going to be considerable. It is a minor
investment relative to the return we are going to see in 20 or
30 years' time. It is not just altruism. It is also enlightened
self-interest.
And in fact, I would argue it is about our own future and
our children's future because as the chairman indicated, if we
don't do it, there are others more than willing to make those
investments because they do see the return, the Chinese chief
among them. And I don't want to be the person who has to answer
the next generation why is the Africa-Chinese trade the
dominant trade in that part of the world and we don't even have
a slice of it? And the answer is because somebody, somewhere 20
years before said because we can't afford it. It is a false
choice and I hope this committee will reject that choice,
although I commend my colleague for making it quite clear what
that choice is. With that, I yield back, Mr. Chairman.
Chairman Royce. We now go to Mr. Ted Yoho of Florida.
Mr. Yoho. Thank you, Mr. Chairman, and my sentiments were
similar to Mr. Brooks in the beginning, but as I studied this,
when you see OPIC, OPIC has a self-sustaining basis at no net
cost to the American taxpayers. It is generated net profits of
$272 million on Fiscal Year 2012 which has helped reduce the
Federal budget deficit for the 35th consecutive year in a row.
And today, OPIC has supported nearly 200 billion of
investment in more than 4,000 projects around the world and it
has generated $75 billion in U.S. exports and supported more
than 277,000 American jobs. And I have been looking for a way
and I know this committee has and I do commend you for the
leadership you have had and the bipartisan support we have had
on this committee of a way to have a paradigm shift in our
foreign aid. And if this is a way that we can invest and not
give aid to corrupt governments, but invest and it generates
money to the American taxpayers, I am in support of it. And I
yield back. Thank you.
Chairman Royce. Do any other members seek--oh, yes. Mr.
Cicilline. Sorry, sir.
Mr. Cicilline. Thank you, Mr. Chairman. I, too, would like
to begin by recognizing and thanking you and Ranking Member
Engel for the bipartisan way in which you have approached this
important issue and for continuing to educate members of this
committee and the general public on the importance of
supporting the energy sector in Africa.
I would also like to acknowledge the contributions of our
subcommittee chair, Congressman Smith, and the passionate and
determined and relentless advocacy and leadership of our
Ranking Member Karen Bass who has been such a strong advocate,
not only for this piece of legislation but for so many issues
important to Africa.
In sub-Saharan Africa, almost 600 million people do not
have access to electricity. This, of course, presents
challenges not only to quality of life, but also health,
educational opportunities, and safety. In particular, women and
girls are at greater risk of physical violence without street
lamps and phones. And many children are not able to attend
school because they are needed to complete tasks at home and
those who are lucky enough to go to school, often can't study
in the evenings after the sun goes down. And their health
outcome and wellness are compromised as many have mentioned
without electricity.
In addition to the obvious impact on quality of life, it is
also critical that energy be provided if the full potential of
Africa is to be realized. According to the African Development
Bank, Africa's economy is growing faster than that of any other
continent. At the same time, in 2012, USAID assistance to 42
African countries totaled $8.1 billion. We cannot expect
African countries to be able to fully take ownership of their
own successes and failures and reach their full growth
potential until and unless they establish basic dependable and
comprehensive infrastructure.
A coordinated U.S. strategy to improve access to modern
electricity will boost African economic growth and security. It
will also increase U.S. investment in a rapidly-growing
continent. And I am proud to be one of many cosponsors of this
act and really just want to end by saying that this is an
action that is not only in the best interest of the countries
on the continent, but also in the best interest of the national
security interest of our country and the long-term economic
well-being of this country. I urge my colleagues to support its
passage. And with that, I yield back.
Chairman Royce. Thank you, Mr. Cicilline. We go now to Mr.
Meadows of North Carolina.
Mr. Meadows. Thank you, Mr. Chairman, and thank you for
your leadership as well as Ranking Member Engel. I have had the
opportunity to work with Ms. Bass on this particular issue as
well and so my hats off to so many.
In an environment where fiscal--as my good friend from
Alabama, he and I both share our concerns over the fiscal
responsibility of our Government. I would like to point out and
associate my remarks with my good friend from Florida, Mr.
Yoho. OPIC is one of the few things, one of the few agencies
within the Federal Government that actually provides a return.
And if you look at some of the most difficult times in
terms of foreign governments, either in North Africa or the
Middle East, in terms of having a difficult time with the
political stability, even in spite of that environment, since
2009, OPIC has returned over $800 million to the general
Treasury. So if in the most difficult of times they can provide
a positive return, I think that it is the kind of risk as a
small business owner that I would love to have that model to
continue to work, providing return to general Treasury.
And as we start to work these things together, I have met
with Ambassadors from all over Africa. And their big concern
quite frankly is is that America is not playing and not
investing in African countries like China is. And if we are
going to compete globally we need to unleash the private sector
to allow them to invest in these countries in a real and full
way, and embrace the kind of relationship that we have with
many of our friends in Africa.
And so I wholeheartedly support this bill and appreciate
the work of so many in leadership who have moved this bill
forward. And you can count on my support. I yield back.
Chairman Royce. I thank the gentleman. Any other members
seeking recognition. If not, are there any amendments to the
base text?
Mr. Meadows, do you have an amendment at the desk?
Mr. Meadows. Thank you, Mr. Chairman, I do have an
amendment at the desk.
Chairman Royce. Than I will ask the Clerk to read that
amendment.
Ms. Marter. Amendment to the amendment in the nature of a
substitute to H.R. 2548 offered by Mr. Meadows of North
Carolina. Page 17 after line 2, insert the following: See
annual consumer satisfaction survey and report, one survey, a,
in general, for each of calendar years 2014 through 2016, the
Overseas Private Investment Corporation shall conduct a survey
of private entities that sponsor or are involved in projects
that are insured, reinsured, guaranteed or financed by the
Corporation regarding the level of satisfaction of such
entities with the operations and procedures of the Corporation
with respect to such projects.
[The information referred to follows:]
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Mr. Meadows. Mr. Chairman, could I move that this amendment
be considered read?
Chairman Royce. Without objection. The Chair reserves a
point of order and recognizes the author to briefly explain his
amendment.
Mr. Meadows. Thank you, Mr. Chairman. This is a very simple
amendment that really becomes a tool to hopefully allow the
Overseas Private Investment Corporation to conduct annual
surveys to report back to this committee and other appropriate
committees within Congress in terms of the level of
satisfaction, potential problems, or potential improvements
that might be suggested either that they have taken or that we
might consider legislatively to improve really the focus on
small businesses. It only pertains to those small businesses or
businesses that are sponsored with projects that cost less than
$20 million. It just provides an issue where we can start to
evaluate the effectiveness of this program and be a more
effective body here in terms of addressing the needs and making
it streamlined in terms of the return that I previously spoke
about, hopefully making that one that we can count on on a
regular basis going forward and with that I would be open to
answer any questions.
Chairman Royce. Do any members seek recognition to speak on
the amendment? Yes, Mr. Grayson of Florida.
Mr. Grayson. Thanks. If I understand this amendment
properly, what it is is it is depicting as a consumer
satisfaction survey a survey of entities who benefit from OPIC
as it is used in the term here in the amendment, private
entities that sponsor or are involved in projects with OPIC. I
am not sure that is a good idea. I don't think that resembles
people's conventional view of what a consumer satisfaction
survey is.
Also, I am concerned about the potential cost of this. OPIC
operates at a profit, in part, because it is not tied down by
what amounts to an unfunded mandate like this one. I haven't
heard any discussion yet of what this would cost. If we load
down OPIC with unfunded mandates, then presumably OPIC will
stop being profitable.
I have some points of order that I would like to raise, Mr.
Chairman. Should I raise them now during this time or wait
until debate is over?
Chairman Royce. I think now might be the time, Mr. Grayson,
that you want to raise any point of order you might have.
Mr. Grayson. Thank you, Mr. Chairman. First, I am concerned
about the germaneness of this amendment, both with regard to
Rule 5(b)(3) and in general. I note that this amendment doesn't
contain the word Africa, nor the word electricity in it. It may
be a good idea on its own. I tend to think not. But this seems
to me to be something that is properly presented to committee
as a stand-alone bill and is not germane to Electrify Africa
Act.
Chairman Royce. If I could respond to that point at this
moment, Mr. Grayson?
Mr. Grayson. yes.
Chairman Royce. In my consultation here with the
parliamentarian, he tells me that because of the subject in
Section 8 of the base text, this amendment is germane. The
rationale is this. The subject in the base text speaks to the
issue of OPIC as a whole in sections of that language, but not
exclusively to African electrification. So it would be germane
under that reading.
Mr. Grayson. Well, Mr. Chairman, I would also like to raise
a point of order concerning this being a second order
amendment. We are now looking at amendment to the amendment in
the nature of a substitute. Does the committee entertain
second, third, and fourth order amendments?
Chairman Royce. Let me give you again the parliamentarian's
view on this. The Meadows amendment is subject to second degree
amendment because the amendment in the nature of a substitute
is base text rather than an amendment.
Mr. Grayson. Can the chairman clarify that further for
future reference?
Chairman Royce. The ANS is base text as though it was the
introduced text of the bill itself. So it is not an amendment.
And I think that is usually the way an amendment in the nature
of a substitute, once it is accepted is treated.
Mr. Grayson. Mr. Chairman, that raises an interesting
general point and I am asking now not just for this context,
but for future reference, does that mean that an amendment in
the nature of a substitute is counted as base text whether or
not it meets the 48-hour notice rule?
Chairman Royce. It did meet the 48-hour notice rule.
Mr. Grayson. If it had not met the 48-hour notice rule,
would that still be the case?
Chairman Royce. We would not, under committee rules in that
situation put it as base text. We would have to consider it
instead as an amendment.
Mr. Grayson. Thank you, Mr. Chairman, that is very helpful
and will be interesting in future context. I would also like to
raise a point of order concerning the committee's jurisdiction
over this particular amendment, both with regard to the fact
that it applies to OPIC as a stand-alone and that it seems to
involve the expenditure of appropriated funds.
Chairman Royce. Well, yes, according to the House
parliamentarian, OPIC is within, clearly, the jurisdiction of
this committee. We have authority oversight over OPIC and
jurisdiction over OPIC. So the amendment would be in order.
Mr. Grayson. All right, thank you for those rulings. I will
continue to object to this amendment on the basis that it
amounts to an unfunded mandate against OPIC and should have
properly been brought as a stand-alone bill for the committee's
perusal and not as a last-minute amendment. Thank you. I yield
back.
Chairman Royce. I thank the gentleman for yielding. Do
other members wish to seek recognition to speak on this
amendment?
The Chair withdraws the point of order and I would point
out to just recognize myself for a minute, OPIC is already
doing much of what is requested I think in this amendment. And
I wonder, returning to the author of the amendment, Mr.
Meadows, would you like to respond?
Mr. Meadows. You know, I enjoy a good relationship and
wholeheartedly support the efforts of OPIC and have worked with
them both privately and certainly encouraging other members to
support not only their efforts, but the efforts in general to
promote overseas private investment. This particular function
becomes something that would make this a function of an
obligatory requirement to report annually to Congress on
efforts that they are taking, something that quite frankly
under the current leadership that they are doing now, however,
with change of the administration and the potential change in
leadership within that particular corporation, that could
change. And so this promotes an activity that I think that we
are enjoying now and more codifies it and makes it official.
Thank you, Mr. Chairman.
Chairman Royce. For my remaining time, upon some
reflection, I think the survey, arguably, would then require
OPIC to provide some information here that might be pretty
useful, that could help improve their operation and their
relevance to small business and of course, at the end of the
day, small business remains the largest employer in the United
States. So from that standpoint, this information could be
useful and I am told that they do surveys currently.
So my presumption is that this would fit within the
framework of what they are currently doing without tremendous
additional cost, but probably with the added benefit of being
useful to small business in the United States. And from that
standpoint, I am prepared to support the amendment and
appreciate the gentleman's effort. But if there is no further
request for recognition, the question will occur on Mr.
Meadows' amendment.
All of those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it. The
amendment is agreed to and we will go now to a recorded vote.
Let me also--without objection, H.R. 2548, as amended. Hearing
no further amendments to this measure, the question occurs on
agreeing to H.R. 2548, as amended. All those in favor say aye.
All those opposed, no.
In the opinion of the Chair, the ayes have it. The bill, as
amended, is agreed to. Without objection, H.R. 2548 is ordered
favorably reported. It will be reported as a single amendment
in the nature of a substitute. Staff is directed to make any
technical and conforming changes and that concludes business
for today.
I want to thank Ranking Member Engel and all of our
committee members for their constitutions and assistance to
today's markup. And in addition, I would like to thank Nilmini
Rubin. I would like to thank our other staff members here,
Worku Gachou and Jackie Quinones for their support on this
legislation. Thank you very much. We stand adjourned.
[Whereupon, at 11:01 a.m., the committee was adjourned.]
A P P E N D I X
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