Home inFocus Israel: Beyond the Headlines (Spring 2016) Oil vs. Africa & the Israeli Solar Imperative

Oil vs. Africa & the Israeli Solar Imperative

Yosef Abramowitz Spring 2016
Rwandan President Paul Kagame being welcomed to Jerusalem by Howie Rodenstein, Chair of the Advisory Board of Energiya Global and Yosef Abramowitz

certain journalist, writing at the turn of the 19th century, and a keen observer of the Jewish condition in Europe, put forward twin revolutionary ideas. “Once I see the redemption of my people, the Jews, I would like to also reach out to the redemption of Africa.”

Theodore Herzl had little direct knowledge of the condition of Africa, other than being a multi-lingual and well-read minor statesman in Europe, which, at the time controlled the fate of much of Africa.

So when, despite great odds, the Jewish people actively returned to history as a nation with a newly formed state of their own in 1948, the African states were also shedding their European colonizers and moving toward independence. Golda Meir, then Foreign Minister, received the green light from David Ben Gurion to begin offering technical and agricultural training in dozens of African countries. “The most important and exciting contribution I have ever done was related to the role Israel played in developing countries, particularly in Africa,” she said.

Much of the history of the Middle East since World War I has been influenced not by Western aspirations for the healthy growth of the Arab world but by the quest for cheap and steady oil. The politics of oil was – and still is – a corrupting force that distorts what should be Europe and others’ natural affinity with the young, democratic Jewish state rather than with homophobic, misogynist, and undemocratic kingdoms. Geo-strategic interests, being what they are however, tended to isolate the Jewish state.

So when the Arab oil boycott of 1974 was launched to punish friends of Israel during the Yom Kippur War, Col. Moammar Qaddafi of Libya, an oil-fueled demagogic force in the Arab League and in the Organization of African States, rallied African countries to break or downgrade relations with Israel, and nearly ended decades of partnerships and altruism that fought diseases, increased crop yields, and advanced young societies. 

The oil boycott along with the Iranian revolution not only skyrocketed oil prices on the West—from $2 a barrel in 1972 to $42 a barrel in 1981—it enslaved two generations of Africans under the yoke of the world’s most expensive and volatile fossil fuel and the corruption culture that entrenches it.

Fast-forward four decades

I had the honor of being one of the representatives of the State of Israel at the Paris Climate Conference, a green ambassador of sorts, and the only kipa [Ed., Jewish skullcap] in a colorful sea of 40,000 people from 197 countries.  I wore the kipa and the delegate’s badge with pride, and some of the enduring memories from the event were the steady stream of handshakes and hugs that I received from African delegates and energy officials.

For Paris was not only about reducing global carbon emissions but also the relationship between the developed and the developing world. Disingenuous Saudi and Iranian diplomats unabashedly took to the floor to argue for less carbon accountability in the name of helping their brothers and sisters in the developing world not have too heavy a burden to bear in transitioning to cleaner energies.

Paris, like Copenhagen before it, was supposed to fail. But a confluence of American and European leadership, moral dynamics led by Island Nations, the Pope, and NGOs, and well choreographed international politics – along with a pledge to developing nations of $100 billion a year for ten years starting in 2020 to electrify cleanly – sealed the deal.

As Hanukkah ended and Paris celebrated, the whole world woke up to the need to decarbonize and to electrify cleanly, especially in Africa.

Israel in Rwanda

An hour outside of Kigali, Rwanda, 28,360 blue solar panels blanket a hill overlooking the Agahozo Shalom Youth Village, the home of 500 orphans from the Rwandan genocide. The field, in the shape of the African continent, not only supplies 6% of the country’s electrical generation capacity, it also is a tangible manifestation of Israeli solar know-how, Jewish ideals, and international finance.

Chaim Motzen, as the managing director, and I as CEO of Energiya, undertook to build East Africa’s first commercial solar power plant with Anne Heyman, a Zionist philanthropist who created the youth village. It happened to coincide with President Obama’s “Power Africa” initiative, which gave the project $400,000 in grant money and a political boost. When the ribbon on the $24 million field was finally cut, American and Israeli flags flapped behind the podium for the American Ambassador’s greetings and those of the sponsoring financial institutions from Europe.

In my own remarks, I linked our journey from creating Israel’s solar industry to exporting our successful model to Africa.

“What we see up there today is hope, for Rwanda, for Africa and the world,” I said ten months before the Paris Climate Conference. “From the Arava Desert and Jerusalem to Agahozo Shalom, we see light. From Agahozo Shalom to the East African Union, we see light. From the Union to the entire African continent, we see light. And from Africa to the Paris Climate Conference, together we will bring light and hope. Light is a metaphor for enlightenment. And we have learned that impact investing and electric power drive development, jobs, health care, and education.”

Energy on the African Continent

There are 600 million people in Africa without access to electricity and another 200 million or so that are relying on dirty and still expensive diesel for their power.

“Access to electricity is fundamental to opportunity in this age,” said President Obama, in announcing the Power Africa program in Tanzania in 2013. “It’s the light that children study by; the energy that allows an idea to be transformed into a real business. It’s the lifeline for families to meet their most basic needs. And it’s the connection that’s needed to plug Africa into the grid of the global economy. You’ve got to have power.”

Luckily, bringing power to Africa is a bipartisan issue in the United States, and the Electrify Africa Act passed the House (297-117) and Senate (100-0) in February 2016. The President signed it into law on February 8, 2016.  The Act calls for “a multiyear strategy to assist countries in sub-Saharan Africa implement national power strategies and develop an appropriate mix of power solutions, including renewable energy, to provide access to reliable, affordable, and sustainable power in order to reduce poverty and drive economic growth.”

Israel’s Role

Israel is especially well positioned to fulfill African and American power aspirations for the continent, especially through solar energy.

Africa, with its political and business risks, is well suited to Israeli risk and project management in difficult environments. Security challenges in what would normally be key markets keep other investors away, while Hebrew is commonly heard in the business lounges of the capital airports in these regions. The solar fields in Israel had to be designed with extra consideration given to security and the effects of rockets and more. 

New and emerging markets also take a certain innovative creativity to crack and the Israeli spirit of technical and other innovation are the necessary ingredients to create new markets, which is what we were able to do in Rwanda and now elsewhere.

We are investing in a 10-nation strategy in Africa for solar energy, with a quadruple bottom line return for investors. First, we are bringing a clean energy that is usually half the price of power from burning diesel, so we are not seeking any subsidies.

The solar business is a great business if one knows how to manage the risks; a 25-year bankable Power Purchase Agreement, especially with the World Bank or the American government standing behind it, provides solid returns. Using the financial returns, we in Israel have designed our solar business to advance three other bottom lines that are well suited to Africa’s needs: humanitarian, environmental, and advancing Israel’s diplomatic standing.

And Rwanda’s Role

In Rwanda, for example, the Norwegian Sovereign Wealth Fund—the world’s largest—is making decent returns. Included in the cost structure of the project is a project covering the medical bills for 500 orphans for 25 years, as well as some solar training for its students. Africa is peppered with an infinite amount of humanitarian opportunities that could be rolled into the economics of these solar fields and we know how to do it. It is simply part of our DNA.

The environmental bottom line of solar in Africa is that we are diesel killers, having reduced Rwanda’s dependence on dirty and expensive diesel for power from 40 percent in 2012 to 30 percent by the time we interconnected.   

And the political return on investment is enormous. You may recall that during the 2014 Gaza war the decisions of the UN Security Council were completely balanced. In the days when we were hooking up Rwandan President’s Kagame’s most important development project, Rwanda’s Ambassador to the UN served as the Security Council’s President. And Rwanda’s abstention from a December 2014 Security Council draft resolution calling for a one-year timetable for an Israeli-Palestinian settlement and a three-year timetable for Israeli withdrawal from territory, helped to sink the one-sided draft, preventing the need for a U.S. veto.

Prime Minister Binyamin Netanyahu, following his recent meeting with the President of Kenya in Israel, promised an Israeli return to Africa.   

“More and more African countries realize that Israel is a partner in a unique way that we can work together to maximize the opportunities of the future “

In Africa, the United States and Israel could work together to fulfill the President’s Power Africa agenda and Israel should, in turn, be seeking U.S. support to have the Jewish state be re-invited back as an observer to the African Union.

For Africa, Israel can be a superpower of goodness, providing water, food, and green energy. Energy drives economic and social development and represents an historic opportunity for Israel and the Jewish people to fulfill Herzl’s desire to be part of “the redemption of Africa.”

Yosef I. Abramowitz is a founder of solar industries in Israel, East Africa, West Africa and elsewhere. He serves as CEO of Energiya Global Capital and can be followed @KaptainSunshine.