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MODERATOR: Good afternoon to everyone from the U.S. Department of State’s Africa Regional Media Hub, and I apologize for the short delay due to technical difficulties. I would like to welcome our participants from across the continent and thank all of you for taking part in this discussion. Today we are very pleased to be joined by U.S. Special Presidential Coordinator Amos Hochstein. Mr. Hochstein will discuss the Partnership for Global Infrastructure and Investment, which aims to deliver quality sustainable projects to close the infrastructure gap in low and middle-income countries while strengthening the global economy and securing supply chains. He will also discuss the upcoming G20 and U.S.-Africa Leaders Summit. He is joining us from Washington, D.C.
We will begin today’s call with opening remarks from Coordinator Hochstein and then we will turn to your questions. We will try to get to as many of them as we can during the time that we have.
As a reminder, today’s briefing is on the record, and with that, I will turn it over to Coordinator Hochstein for his opening remarks.
MR HOCHSTEIN: Thank you, and good morning and apologies – and for some of you, good afternoon – apologies again for the delay.
As was just described, I’m here to talk about the Partnership for Global Infrastructure and Investment. This is really an outgrowth of President Biden’s proposal, as discussed at the G7 soon after his election – a few months after his election about a year and a half ago at the G7 meeting and then discussed again at the G7 this past year in the summer, in July.
And what we – what the intent is really is to look at the world and to try to narrow the gap, the infrastructure gap between developed and developing countries, between high-income, middle-income, and low-income countries, and to ensure that we can work together – governments around the world, multilateral development banks, financial institutions, public money as well as private money – and to make sure that the flows of finance are going towards projects equally around the world or more equally around the world, and focusing specifically in areas that are both important to growing economies and to grow the specific economies in lower and middle-income countries while also strengthening the supply chains and the economic interests of all countries around the world.
The reason that it has to be both a economic win for emerging economies as well as for developed is because we have to make sure that this initiative is a commercial one, it is a bankable project; that this is not handouts, it’s not additional assistance or aid. It is driving projects that are commercial. And to do that, there has to be an incentive not only of earning a dollar on these investments, but to really create economic ties, dependency ties between countries, between regions. And if you can create not just business deals that are going to make a return, but also strengthen the relationship between the countries – between the United States and countries that are – countries and developing countries around the world where one is a supplier of the other and one is an integrator of the other in both directions, that will create strong economic ties that are more lasting and enduring than just a number of transactions.
So let me say what we’re talking about. We’re looking specifically – instead of trying to address everything, which means that you end up addressing very little in reality, we’re looking at a number of specific sectors that – to start with so that we can develop that concept and potentially move it out from there.
The first is on energy security, and the definition of energy security is quite broad. As we are looking towards the energy transition and making sure that we are moving the economy from a fossil fuel-based economy to a renewable economy, developing countries have a lot of opportunity here. One is skipping some generations of technology, enabling the connectivity of more people to electricity, especially at a time when we are electrifying almost everything. And as we look out 10 years out, the electrification rates around the world are going to continue. So countries that are not electrified will have an even harder time connecting into the global economic system.
Second is that we have to develop – in doing an energy transition, we’re really unplugging one part of the global energy system or the whole energy system and we can’t simply plug it in somewhere else. We have to build a whole new one. And for that, we need a whole new ecosystem, whole new supply chains. And many of those areas that are needed for the supply chains of energy security, of 21st century clean energy, are in developing countries. Whether it’s the metals or the rare earths or it’s the processing facilities or the assembly lines, all these need to – have to happen in a way that connects the world to each other and to itself. And countries, specifically in Africa, have a tremendous amount to contribute into this new economy, and this is the moment where we’re creating a whole new supply chain system that Africa can become not just a participant in, but a leader in.
And for that, we need several – significant investment from the best and the brightest companies around the world. From the United States to Australia to Europe to the Middle East, everyone needs to participate in this opportunity. To do it so that it is a benefit, of lasting benefit, not to governments or to certain business leaders, but to the people of these countries, we want to make sure it’s a real alternative.
This is not trying to encourage companies to come and establish mining operations or take over mining operations or processing and just keep things as they are, but rather in a way that is open and transparent, where we know that the resources will be shared directly with the people, where we know that there will be respect for internationally recognized labor laws. No more child labor in these mining operations or in these electricity utility operations (inaudible). Making sure that there’s gender equality and there are opportunities for women in the workspace and providing women and men the kind of opportunities to have a better life. That the investment is done so that it is not just the businesses that are connected to the electricity grid and water system – water systems and roads, but rather the people that work in those facilities are able to go to homes that are electrified, that their children could go to schools that are new schools that are well equipped, and that they have opportunities for growth. The only way we will close this gap is if we are driving money toward – private money together with public money towards bankable projects that invest in the people as well as the projects themselves.
Another area that we’re going to look at beyond just electrification and mining are the – what connects them to the global markets, making sure that there are roads and rail and new ports that can serve as gateways to the global economy and to a smoother supply chain.
Second – or third, we’re looking at how do we strengthen the IT – the ICT systems and making sure that there’s more broadband and there is higher degree of integration into 3 all the way to 5 and 6G so that people are connected to the global commercial system. If you compare 2G to 3G, it was a huge step up in electronics and connectivity, but if you compare 3 to 5G, it is a whole world of difference. And if countries are not able to connect themselves to what the internet world will look like next year and in five years, then the gap of the connective countries to the non-connective countries will have much (inaudible) consequences as we go forward. So the idea is to replace, upgrade, and in some cases build from scratch the kinds of systems. But they have to be systems that are not ones that have back doors that allow other governments to control and violate privacy of individuals, but rather make sure countries are able to have secure, safe from cyber, and also safe for people who use these systems as they connect.
And health. We need to have learned the lessons from the pandemic and make sure that the next time – and there will be a next time – that we have a global pandemic or a health crisis that there’s manufacturing of medicine and vaccines and antivirals that takes place in Africa, not just elsewhere for Africa. So that Africa doesn’t – African people don’t have to wait until the rest of the world is ready to share those kinds of medications. And we’re already working on establishing those kinds of facilities that, again, will not be assistance. They will be commercial.
And we want to make sure that across the board, everything that we do ensures that we’re building this new economy across Africa that is open to women not just by ensuring that there are jobs for women. That is not enough. It is to make sure that the family, the fabric of society allows women to participate in this economy, that there’s child care, that there are options for women in different cultures and in different parts of Africa to be able to have all the opportunities to grow, to participate in the workforce, and to be in that workforce not in jobs that are designated as jobs for women, but rather to compete for jobs at the highest levels and to have continued investment in them and their growth as well. So that is part of the agenda.
Just (inaudible) before we open to questions, we in the United States cannot do this alone. We have to do it by joining forces with G7 and now with G – we did that already – with G20 countries as we – President Biden will co-host in a meeting that we will announce soon that we’ll be together with other leaders at the G20 to join forces into investing into this effort, into the PGII effort. That will require government money, it will require our export finance institutions across the world, it will require the World Bank and the Africa Development Bank and others, and it will require, most importantly, for all those institutions to mitigate the risks so that the real dollars – real larger dollars from the private sector, from banks, from companies, from private equity, from hedge funds to all come into this process feeling that their risk is mitigated.
Because let’s be honest. There are a lot of hurdles for private sector money to come into Africa to invest because of the financial risk, reputational risk, and corruption risks. (Inaudible) governments need to do everything we can, not for Africa but with Africa – with African leaders who we’ve heard them say time and again, and in my travels in Africa, Secretary Blinken’s and other U.S. officials’, we hear time and again we don’t want a handout, we want to reform. And if there’s a willingness to execute reforms, then we will be there to help direct and encourage and incentivize private capital to come to countries across the world, and specifically in Sub-Saharan Africa and North Africa.
So with that I’m going to close it here, the opening, and see if we have any questions and I’ll turn it over back to the moderator.
MODERATOR: Okay. Thank you very much, Coordinator Hochstein. We’ll now begin the question and answer portion of today’s call. We ask that you limit yourself to one question related to the topic of today’s briefing, which is the Partnership for Global Infrastructure and Investment, the upcoming G20 Summit, and U.S. Africa Leaders Summit.
So the first question will go to Youssouf Bah from Aljazeera Media Network in Guinea. The question is this: “What strategy does the U.S. have in place for global infrastructure on energy security in poorer African countries? And also, how is the U.S. going to help Ukraine on energy security?”
MR HOCHSTEIN: Well, it is a good question. I think look, to do energy security we’ve already done a couple of projects, and I’ll give one as an example. We are – through our encouragement, we’ve launched a $2 billion project for solar power in Angola, which will be a four-part project across the country, four different and distinct projects that will take a country like Angola that has – actually has a lot of oil and gas and yet is moving on the energy transition. This will increase the level of connectivity of people, the number of people in Angola, that are connected.
But this is not a one-off project. The idea behind this project is that we would like to – you can’t say cut and paste, or copy and paste rather, because every country is different, but we’re already looking at expanding this model out to at least another one if not two other African countries. That will dovetail together with Power Africa and some other initiatives to use U.S.-backed finance to encourage this kind of a project. This is a incredibly exciting project for us. It’s an American company. We don’t always have American companies. And it will significantly increase both clean energy and connectivity.
Another area is that we’ve been working with companies to look at the energy security supply chains, and we would like to see American and European and Australian investment into African supply chains, and we’re going to have some announcements to be made in the months ahead there as well. So these are just examples, but we believe that if we put EXIM Bank or DFC or KFW from Germany or JBIC from Japan and the World Bank, all these resources together, we are able to incentivize private capital from coming in.
Regarding Ukraine energy security, I don’t think we should talk about it too much here, but we are laser-focused on working together with our allies at the moment to identify a way to deliver (inaudible) and the energy equipment and energy infrastructure that the brutal Russian forces are attacking at the moment as they continue their senseless invasion into a neighboring country for no apparent reason except to sow chaos and vanity.
MODERATOR: All right, thank you very much. For our next question we’ll go to the question submitted by Wael Badran of Alittihad newspaper in the Emirates. The question is: “The U.S. and UAE have reached an agreement to spend $100 billion on clean energy projects with a goal of adding 100 gigawatts globally by 2035. Will the African countries have any share from these investments, and how can the agreement contribute in fighting climate change?”
MR HOCHSTEIN: This agreement is – it’s called PACE. This agreement that we signed just last week is a truly exciting agreement between the U.S. and the United Arab Emirates leadership. It’s a testament to two things. One, the absolute strength and growing strength of the bilateral relationship between the United States and UAE. We have this – our countries have forged a unique and remarkable bond. We have fought wars together, we have made peace together, and now we are looking to jointly lead in the clean energy transition, which is really an economic engine of the future. And specifically, this agreement looks at to jointly investing $100 billion in the United States, in the United Arab Emirates, and in low and middle-income countries. And Africa will be one of the regions that will benefit from this effort and this initiative, 100 percent.
MODERATOR: Okay, thank you very much. I see a couple of hands raised, so the first one I saw was from Kylie Atwood at CNN, so let’s go ahead and take her question.
QUESTION: Hi, thanks for doing the call. Two questions, Amos. First on the broadband and connectivity upgrading to 5G in Africa, I’m just wondering if you could be a little more specific as to where exactly in the continent you’re eyeing to come in and replace those 2G and 3G networks. Obviously, a lot of them are backed by China, so how challenging is it to come in and be the future alternative, and how quickly can that be done?
And then just my second question just on the numbers here, of the 600 billion that was pledged last year as part of this investment, how much of that has already been put to use? Thanks.
MR HOCHSTEIN: Thanks, Kylie. Great questions.
On the first one, so we’re going to have some announcements be made in short order on the – on these – on the 5G effort. You’re right, some of these are backed by Huawei and China. We are – what we are suggesting is that, first, there are countries that don’t have any connectivity, people don’t have connectivity at all. So we’re looking across the value chain of first is connecting countries and communities to it.
As far as where we’re going to start, I think that when it comes to in Africa, I think we have to start at places that already have a base of connectivity where we can do some upgrades. And some of that is by the systems themselves in the countries, some is by making sure that there’s fiber optic cable that is connecting the shore in Africa to the rest of the global network, to the rest of the global network that will allow the faster connectivity. So there’s a lot to do here. This is – we talk about these things in sort of top lines, but this is really, really complicated. And so what we’re doing is we are meeting with the telecom companies and the integrators in the United States and around the world to put packages together that can come into countries.
We’re going to start with – in the coming months we’re going to be announcing some things in the first set of countries in Africa and Southeast Asia will be ones where there is already a backbone of existing infrastructure that we will then be able to build on.
As for as the 600 billion, that’s more of a – that’s a G7 number. We’re staring that deployment, so as I said, we announced that in July. We are – we then announced that we’re going to be trying to do – what we’re doing is a $2 billion deal in Angola. So I don’t have the number in front of me how much of the 600, but the 600 is of course over a period of several years, and I think five years is what we said. And I expect that this year will be sort of the beginning and then we ramp up a lot more as we go forward.
We’re actually – we’re way ahead of schedule on some of this because we’re able to see – the thing that I didn’t talk about as much before, but Kylie, for the very first time in my working in this area and in foreign policy, we are really doing things jointly with some of our G7 partners. We are working very closely with Japan, very closely with Germany and Australia and others, on co-investing money, identifying the resources that they have with ours. So I think this is really a model where it will be difficult at the end to see how much is the American money versus other money because we’re going to blend some of that together in order to make this work.
Lastly I’ll say look, Africa is the hardest place to create brand new investment, but that is – the challenge is also of the – the magnitude of the challenge is also the strength of the opportunity. And we are in advanced discussions with a number of global companies for new investments that they plan to announce in Africa across these issues and these sectors, and I hope they’ll be making those in the next very few months.
MODERATOR: Okay, thank you very much. So our next question was submitted in the Q&A. Susan from Target Media asks: “I would like to understand what the U.S. Government is planning for South Sudan, the youngest country in the world that has seen vicious cycles of conflicts and still struggles with impacts of climate change such as floods and drought.”
MR HOCHSTEIN: Look, no doubt that South Sudan, as the people of South Sudan have suffered everything from famine to war and are dealing with the effects of climate change, and have the – our hearts go out there and we have to see what we can do to increase opportunity for investment there. Again, PGII, this initiative is not meant to replace all other initiatives. It is trying to be an accelerator of investment in these sectors. So I don’t want to talk about one country versus another. There is a lot to do. We are – I’ve started my travels and my team’s travels in Africa. We’ll continue those into 2023 in order to start identifying these projects. So I can’t go into what exactly we’re going to do (inaudible), but the issue of – when I talk about energy security, sometimes people think that is separate from climate change or from responsiveness to the climate crisis. I think it’s quite the opposite. Energy security is climate security, so whatever we’re going to be doing is going to be mitigating and it’s going to be – into investments into technologies and infrastructure that mitigates the climate effects on African countries.
And again, I’m not trying to – I want to be very clear about this. I am not trying to solve in this initiative all the problems in Africa across the board. When we do that, when we’re over-ambitious, we don’t get anything done. So what we’re trying to do is do this one transaction at a time, one project at a time, where we can have not small projects but mid and larger scale projects that can actually have an impact in their surroundings. And if we can have an island of success and replicate it across the board, then we will have many islands of success that will start connecting to each other, and that will have a meaningful impact.
So by trying to bring in, not replacing, the World Bank or USAID or others, but rather using this initiative to incentivize private capital coming in to investment, we will be able to have a bigger impact at a shorter period of time.
MODERATOR: Thank you. I’d like to turn now to a question which was submitted in advance from Ranaivoson Garry of L’Express de Madagascar. The question is: “Is the African Leaders Summit a way for the United States to respond to competition from China and Russia in partnership with African countries?”
MR HOCHSTEIN: Well, look, I think it depends how you see the word “competition.” There is no doubt that we would like to see a competition that drives our partnership upwards, and a competition that has – that enables choice for African countries to choose what kind of companies they want to do business with. Are these companies that are going to be adhering to international standards of labor and transparency, or not? Will these companies leave five years later, ten years later, a better social fabric behind them, or not? Is there going to be what’s called CSR – corporate social responsibility – investment in a community, or not?
So yes, that’s the competition we want, and it’s not a secret competition. It’s a very open and public competition. We believe that companies from the United States or from the G7 countries or G20 or some of the G20 countries, that those companies should be more interested in providing that option, providing that alternative to African – to people in Africa, to governments in Africa, to say we don’t want debt traps, we don’t want enormous amount of financial investment that comes with remarkable debt. We want the kind of investment that benefits our countries in the long term.
So yes, we want to compete. We want us to be – we want our companies to be in the game. We want to be in the competition between us and the alternatives. For too long, countries felt that they didn’t have a competitive bidding, that companies just got their choice of investment and infrastructure and natural resources with no bidding at all, and where through corruption or other unfortunate methods the people were robbed of their resources and of their opportunity.
So yes, I want to compete. I want to compete, but I want it to be an open competition where – make a choice. Here is what the alternatives are, and I think that most governments will choose the kinds of investments that are better for their people. And if they don’t, at least their people will know that there was an option and that they could have done better, and then they can make their political views known as a result.
MODERATOR: Okay, thank you very much. I think we’ve got time for one more question. There was a question submitted in the Q&A. Samuel Debebe of EBS Television asks: “About U.S. plans to help Africa in its drive to speed up electrification, how much financing do you plan to invest in Africa, especially in the Horn of Africa?”
MR HOCHSTEIN: Well, as I said before, I think this is in conjunction with some of our other efforts on Power Africa that has already been in play for quite some time. And this, as I said, we’re going to take the project that I described in Angola, where we’re investing – financing a $2 billion project for solar power and battery power; we are going to replicate that in other places, and we’re going to – we’re in conversations with other companies, Western companies that are looking to make those similar kinds of investments to increase electrification.
But what we want to do when we do the increase of electrification is to make sure that it’s done in a way that is sustainable, long lasting, and part of where the global economy is going. We don’t want to have short-terms gains for longer-term pain, and we believe that that is entirely in line with what we hear from African leaders in almost every meeting. They want to be part of the energy transition. I think they deserve to be. They’re now making their voices heard today and yesterday at the COP and tomorrow. President Biden is going to be at the COP in just a couple of days. We are going to – these are the kinds of conversations we need to have to make sure that there is the appropriate investment.
So we are going to – everything we’re doing and talking about today is about accelerating that effort. And I can tell you that during the Africa Leaders Summit that will take place in Washington in December, we’re going to have exactly this conversation. It’s a two-way street, though. We will do what we can to accelerate an investment, and we need African countries to do what they can to create the kind of business environment that will encourage businesses to invest. And that is a much better and more rigorous fight against corruption, much more transparency, much more certainty of the investment rules, and strengthening the rule of law. That will benefit the country for – in attracting business, and it will benefit the lives of every citizen and resident in those countries.
So this is a two-way street: We will do what we have to do in this bargain and to encourage additional investment and to mitigate the risks; and African leaders need to do their part of the bargain of creating the kind of rule of law and strengthening of institutions that is required for public and private capital to flow. And to the degree that they need assistance in that, we are not only ready, we’re already offering technical assistance across all the issues that I just raised on governance and rule of law strengthening and investment rules of the road.
So I am very optimistic that we are able to join together in a partnership with African leaders ahead of the Africa Leaders Summit, strengthening it during the Africa Leaders Summit, and implementing right after the Africa Leaders Summit.
So with that, thank you very much for the opportunity to talk to everyone. I appreciate everyone logging in, tuning in, or watching. And I hope that we can do this again sometime closer to and around the time of the Africa Leaders Summit. Thank you.
MODERATOR: All right. Thank you very much, Special Coordinator Amos Hochstein, for speaking to us today. And all our journalists, thank you for participating. If you have any questions about today’s briefing, you may contact the Africa Regional Media Hub at AFMediaHub@state.gov. Thank you very much for participating.
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