US-Africa Summit: US firms to invest $14bn in Africa
US companies have pledged $14 billion of investment in Africa in areas such as energy and infrastructure, US President Barack Obama has said. The announcement came at the first US-Africa Leaders’ Summit, seen as an effort to strengthen US ties with Africa as China increases its African investments. The deals announced on Tuesday included a $5 billion partnership between private-equity firm Blackstone and Aliko Dangote, Africa’s richest businessman, for energy infrastructure projects in sub-Saharan Africa, as well as investments in Mr Obama’s Power Africa initiative by General Electric and the World Bank. Meanwhile, Ghana’s Fidelity Bank announced that it has chosen IBM for a five-year contract to manage its technology infrastructure and services. Mr Obama also said that the US would offer an additional $7 billion of financing through the Doing Business in Africa (DBIA) Campaign. Speaking to over 40 African heads of state, Obama said: “As critical as all these investments are, the key to unlocking the next era of African growth is not going to be here in the US, it is going to be in Africa”. (BBC News; Washington Post)
Policy & Research
Singapore approves bill to fine domestic and overseas air polluters
Singapore’s parliament has passed a bill proposing fines for companies that cause haze pollution, regardless of whether the companies operate on the island. Last year, Singapore suffered its worst haze on record, as smoke from forest clearing in neighbouring Indonesia shrouded the city. Some of the forest clearing was believed to have been done by plantation companies with Singapore connections. Companies found guilty of causing haze could be fined up to US$80,347 for each day they pollute. “We have to make companies accountable for the harm they inflict on our health and environment,” said Vivian Balakrishnan, Minister of Environment and Water Resources. Lawmakers hope overseas companies will comply to retain access to Southeast Asia’s banking and business hub. A number of palm oil and forestry companies are listed on the Singapore Exchange. Kala Anandarajah, from law firm Rajah & Tann LLP, raised concerns about the difficulty of enforcing the law outside Singapore, however, adding: “it is critical that the law be introduced as it is one of many ammunition that is required to fight a very difficult environmental problem”. (Reuters)
Six major shipping companies will slow down to protect whales
Six international shipping companies have agreed to slow their ships down along the Santa Barbara coastline of the US as part of a coordinated effort to reduce air pollution and protect endangered whales. The shipping companies will reduce the speed at which some of their ships travel along this strip from about 21 miles per hour to less than 14 miles per hour. The participating companies – COSCO, Hapag Lloyd, K Line, Maersk Line, Matson, and United Arab Shipping Company– will receive $2,500 per slowed-down transit through the Channel. Shiva Polefka, a researcher for the Centre For American Progress’s Ocean Program, said: “What makes this program noteworthy is that local environmental advocates and managers got international companies to come to the table and start implementing a simple solution that reduces air pollution and protects marine wildlife”. The program is part of a broader long-term effort to reduce whale fatalities associated with shipping incidents. Shifting the path of popular shipping lanes along the West Coast could also lower the risk to marine mammals that gather to feed in along the routes. (Climate Progress)
Corporate Reputation
BP payments in Angola show need for transparency, says Global Witness
Global Witness, an advocacy group that campaigns against corruption, is using the occasion of the US-Africa trade meeting in Washington to call for more transparency in the payments that Western companies make to foreign governments. In a recent report, the group delves into payments that BP has made in Angola, a country where the energy giant’s offshore drilling operations are a key piece of its plan to boost profits and production in coming years. Global Witness says that BP and its partners agreed to pay $350 million to build a research centre in Angola, apparently affiliated with the country’s state-run oil company Sonangol, but that there is no evidence to suggest that the research centre exists. When questioned by Global Witness, a BP spokesman said: “How Sonangol ultimately spends that money is the prerogative of the Angolan state… The money was paid directly to Sonangol”. The report encourages the US Securities and Exchange Commission and European governments to force companies to publicly disclose these types of payment. (Wall Street Journal)
Responsible Investment
Asia Climate Partners promises to mobilise green private equity investment
Asia’s fast-expanding clean tech sector received a boost this week with the launch of a venture that promises to mobilise private equity investment in low carbon projects across the continent. The Asian Development Bank (ADB), ORIX Corporation and Robeco Institutional Asset Management have jointly formed Asia Climate Partners (ACP). The companies said ACP would initially be capitalised with $400 million from its founders and will be based in Hong Kong. Investments will focus on companies that are structured to generate market-driven, risk-adjusted returns and have a positive environmental and social impact. “We believe that ACP provides an innovative platform to deploy capital into climate-related transactions across Asia”, said Todd Freeland, director general of ADB’s Private Sector Operations Department. The $400 million of capitalisation means the new organisation will be positioned to make a significant impact. “The substantial resources that the founding partners are committing to ACP will help position it as the preeminent investor in this asset class in Asia from day one, and represents a clear signal of the depth of our collective belief in the investment strategy and its return potential,” he added. (Business Green)
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