[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/ or http://www.gpo.gov/fdsys/ __________ U.S. GOVERNMENT PRINTING OFFICE 86-871 PDF WASHINGTON : 2013 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 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, FloridaALAN 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 ---------- 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 ---------- 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:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 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 ---------- Material Submitted for the Record [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]