ADB Energy Sector Activities, FINESSE Africa Program.
Policy Dialogue Conference The Role of Renewable Energy for Poverty Alleviation and Sustainable Development in Africa, 22-24 June 2005.
Alois P. Mhlanga FINESSE Africa Program African Development Bank Group a.mhlanga@afdb.org / finesse@afdb.org
Outline
A. ADB Activities in the Energy Sector
1) 2) 3) 4) 5) 6) 7) Energy Situation in Africa. Challenges ADB Energy Sector Policy (1994) Some approved projects New Operational Context Trends in recent Operations Conclusions
B. FINESSE Africa Program
1)
2) 3)
Goal & Objectives Activities Milestones
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1. Energy situation in Africa.
RESOURCES • ↑7% world oil & gas reserves. • 100 GW hydro potential – Congo R. • Wind, Geothermal, Solar, Coal etc. PRODUCTION (% of global) • 11% oil. • 5.5% gas • 3% electricity. CONSUMPTION • 13% global population but consumes 3% commercial energy. • Biomass accounts for 70% of total energy demand. • Electricity : • 70% no access to electricity (95% rural and 50% urban areas.
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2. Challenges
• Lack of investment capital. • Poor policy and regulatory frameworks. • Exposure to changes in oil prices. • Institutional and human capacity. • Poor interstate energy trade. • Environmental problems. • Poor energy information/data systems.
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3. ADB Energy Sector Policy.
• Institutional and human capacity building. • Policy and regulatory framework support. • Encourage private sector participation. • Environmental protection. • Creation of information/data systems. • Regional integration & International Cooperation
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4. ADB Group Cumulative Approval Loans & Grants by sector (19672003)
Power Supply : 185 projects / 4700 million US$ total
* African Development Bank Group Annual Report 2003
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3
Power Supply Sector
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Power Series1 87% Petroleum Fuelwood 5.20% 0.50% Solar 0.50% Geotherm al 0.10% Coal 0.10%
(1967-2001)
Energy in general 7.00%
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Power Supply Sector Projects by region
2500 2000 1500 1000 500 0 North West South East Centre Multi
Amount in million US$
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5. New Operational Context
• ADB New Vision – 1999 • New Partnership for Africa’s Development (NEPAD) 2001. • ADB Strategic Plan - 2002
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ADB Vision
National Focal Areas • Agriculture and rural development. • Capacity Building - human. • Promoting Private Sector Investment. • Improving Governance. Continental Focal Area • Regional integration Crosscutting Issues • Environment Protection
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• Gender
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NEPAD
• Governance • Agriculture • Infrastructure • Transport • NTIC • Water and Sanitation • Energy
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ADB Strategic Plan
• Operationalise the Bank’ vision. • Focus on POVERTY REDUCTION. • Selected focal areas – Infrastructure. • Rural electrification. • Power grid interconnections. • Use of renewable energy technologies
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6. Recent Trends
1. Multinational Projects Number of Operations Amount in mil. UA (1UA ~1.5US$)
121
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314
1967-2004
Pipeline 2005-2007
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6. Recent Trends
2. Rural Electrification and Renewables
Examples of projects financed
(millions USD) • • • • • • • Cameroon : Rural electrification Master plan / 1,2 Niger : National household energy plan : 1 million Sénégal : Electrification rural : 15 Bénin : Electrification de 17 centres ruraux : 7 Bénin : Second rural electrification : 19 Mozambique : Tourism and rural electrification project : 17 Ethiopie : Rural electrification : 57 • • Rural Energy Project – Mali. Gas/Solar Thermal Hybrid – Maroc Capacity Building and Small Hydro Project – 10 Countries ↑ 20 Countries. Tchad : Electrification of Schools Lesotho : Rural electrification and Renewable energy project.
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Projects in the pipeline 2005-2007
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• •
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Conclusions
• Multinational projects ↑. • Rural electrification and Renewable energy ↑. • Capacity Building – Institutional and human. • Power sector reforms. • Rehabilitation of current infrastructure. • International Cooperation.
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ADB FINESSE Africa Program
FINESSE – Financing Energy Services for Small-Scale Energy Users
Overall Goal, Assist countries in Africa to formulate appropriate policy and regulatory frameworks and develop capacity to generate a pipeline of investment projects in renewable energy and energy efficiency.
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program objectives
increase capacity of Bank staff to deal with alternative energy
establish RMCs ownership and commitment to RE&EE programs
operationalise RE&EE in Bank's projects and programs
identify and prepare sustainable energy components for Bank's portfolio
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increase capacity of Bank staff to deal with alternative energy
establish RMCs ownership and commitment to RE&EE programs
operationalise RE&EE in Bank's projects and programs
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Increase capacity of Bank staff to deal with RE&EE issues
identify and prepare sustainable energy components for Bank's portfolio
ACTIVITIES: • Assess existing capacity.
• Develop training material and RE Tool
• Conduct awareness raising and training seminars
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increase capacity of Bank staff to deal with alternative energy
establish RMCs ownership and commitment to RE&EE programs
operationalise RE&EE in Bank's projects and programs
2
Establish RMCs’ ownership and commitment to RE&EE ACTIVITIES:
identify and prepare sustainable energy components for Bank's portfolio
• Stakeholders Consultation
• Assess RMC technical assistance and training needs.
•
Draw up a program to assist RMCs in policies and institutional capacity building.
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increase capacity of Bank staff to deal with alternative energy
establish RMCs ownership and commitment to RE&EE programs
operationalise RE&EE in Bank's projects and programs
3
Operationalise RE&EE in Bank’s projects and programs ACTIVITIES:
identify and prepare sustainable energy components for Bank's portfolio
• Review the current policies, procedures and practices for RE&EE financing in other financial institutions • Update Bank’s 1994 energy sector policy and develop RE& EE strategy. • Develop a set of technical and financial guidelines • Train Bank staff & RMC personnel on the use of guidelines
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increase capacity of Bank staff to deal with alternative energy
establish RMCs ownership and commitment to RE&EE programs
operationalise RE&EE in Bank's projects and programs
4
RE&EE components included in Bank’s lending portfolio ACTIVITIES:
identify and prepare sustainable energy components for Bank's portfolio
• Identify and prepare business plans for RE&EE projects to be included in the Bank’s lending portfolio. • Organize a donor’s round-table conference. • Co-ordinate with donor agencies to mobilising resources (grants and/or loans) to be packaged with Bank’s alternative energy loans • Prepare, appraise, supervise and evaluating renewable energy and energy efficiency investments by the Bank. 21
Milestones
1. Capacity Building
• training seminars & demonstrations + field visits.
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breakfast meetings with Task Managers + Management.
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Intensive training for Bank Staff and RMCs.
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RE toolkit being developed for Bank Staff and RMCs.
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Milestones
2. Policy support.
• Consultative workshop held & sub-regional action plans developed. • Internal working group constituted. • Energy Policy Update & RE/EE strategy. • National/Regional policy support from subregional assessments reports.
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Milestones
3. Portfolio development
Public Sector, • Health, Education, Poverty, Rural electrification. Private Sector, • Micro hydro / Biomass / Wind. • ADB direct access to GEF, developing proposals. • National / sub-regional feasibility studies. • Bundling of projects / Lines of credit.
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Outreach
Newsletter: • first issue April 2004 • special issues on wind energy, Energy & Gender and Kyoto protocol Web site: • under construction • portal on renewable energy and energy in Africa • linked from ADB home page
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partnerships
• UNCCD RCU in ADB.
• MoUs with UN organisations, UNEP, UNDP, UNCCD.
• GVEP, REEEP, ENERGIA, TPN5, etc.
• NGOs, research organisations, donors, private investors.
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wind energy
• wind energy investors conference
(28+29 Oct 2004)
• present report on wind resource assessment in Africa • areas with wind potential combined with policy environment. • action plan developed
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End of Program Situation
RE&EE capacity established in the Bank; RMCs’ ownership and commitment to RE&EE established; RE&EE projects and programs operationalised in the Bank and RMCs exposed to these programs; and 3-5 RE&EE projects in the portfolio of the Bank.
Thank you / Merci.
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