A new bill before the US Congress could lead to a dramatic improvement in America’s ability to fund large-scale power projects overseas, helping to counter growing Chinese influence in Africa and Asia.
The Better Utilization of Investments Leading to Development Act (BUILD Act) is intended to put US development finance on a par with China, which is making massive infrastructure investments in the developing world through its development finance institutions.
The BUILD Act would double the amount that America can lend to projects in the developing world from $29 billion to $60 billion, while also bringing a host of US development agencies under roof as part of a new turbo-charged development finance corporation (DFC). It will also support US companies that want to export to low and middle-income countries.
Significantly, the new DFC would have the power to make investments as well as lend, meaning it could take on bigger projects in riskier environments. This opens the door to more US investment in large-scale power generation, which the current Administration has earmarked as a top development priority.
The White House is keen to ensure that American and not Chinese energy technology is used to bring electricity to the 1.2 billion people who currently live without it. At a recent infrastructure conference, US Energy Secretary Rick Perry said: “sharing more of our energy abundance has tremendous implications here and abroad. Geopolitically, it frees our allies from reliance on unstable or unfriendly sources, and it reduces our trade deficit. Domestically, it will be a catalyst for further job creation and spur economic growth up, down, and beyond the supply chain.”
The US is also clear that a serious plan to achieve universal access has to include fossil fuels as well as renewables. As Perry says: “the world, especially developing economies, will continue to need fossil fuels, as over a billion people on the planet live without access to electricity,” he said. “Look those people in the eyes that are starving and tell them you can’t have electricity because as a society we decided fossil fuels were bad.”