[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, 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

                              ----------                              
                                                                   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]