Building a Sustainable Energy Fu

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					    1. Defining the scope of work

Building a Sustainable Energy Future (SEF) requires meeting the energy needs upon which
economic development depends, while improving social conditions and protecting
adequately the environment.

To place the African Continent in a path of Energy Sustainability, we need to think and act in
a manner to:

    (i)     Identify the real challenges faced by the African energy sector ;
    (ii)    Identify the obstacles impeding the development of the energy sector and the
            factors preventing to address the challenges;
    (iii)   Find ways and means to overcome the obstacles efficiently, whilst taking
            advantage of the numerous valuables opportunities offered in the Continent to
            foster its economic, social and environmental development;
    (iv)    Define appropriate policy objectives and strategies for Sustainable Energy
            Development (SED), and thus implement suitable and concrete actions to move
            towards a sustainable path;
    (v)     Collaborate, partner and make alliances with relevant stakeholders to advocate
            and support Africa’s aspirations to achieve effective Energy Sustainability in a
            reasonable timeframe.

I will also try to stick to this line of thinking and acting in this paper, in order to facilitate the
setting up of a comprehensive “New African Energy Strategy” for the Energy Sustainability of
the Continent.

    2. The African Energy landscape, today

Weak economic output and huge growing population

In 2004, Africa has a population of 865 million people (23), accounting for 13.6% of the World’s
population. Meanwhile, the economic output of the Continent is only around 3% of the
World’s total. (23)
    20th World Energy Congress, Rome, Italy                                    November 11-15, 2007

Africa’s GDP (using purchasing power parities, billion 2000 US$) totalled $2212 billion;
Southern Africa accounted for 37.1% of this total, North Africa 32.6%, West Africa 15.4%,
East Africa 10.1%, and Central Africa 4.8%. (23)

GDP (using exchange rates, billion 2000 US$) per capita is $786, represented only 1/7th of
the World’s average value and 1/36th of North America. (23)

                            African GDP split by region
                                Total: $2212 billion

    Southern Africa

       North Africa

       West Africa

        East Africa

     Central Africa

                      0%   5%   10%     15%     20%       25%   30%   35%   40%

Table 1: African GDP ( ppp) by region

(Source: International Energy Annual 2004 – Energy Information Administration, DoE, USA )

Africa is well endowed in fossil energy resources, with a high level of energy self
sufficiency for the Region, but these resources are unevenly distributed, concentrated
in a few countries

In January 2005, oil reserves in Africa were estimated at 101 billion barrels, around 9% of the
World’s total; three countries concentrated 85% and five countries concentrated 94.4 % of
these reserves (Libya 38.7%, Nigeria 35%, Algeria 11.7%, Angola 5.3%, and Egypt 3.7%). (1)

The proved gas natural reserves were estimated at 14.56 trillion cubic meters, 8.2 % of the
World’s total; four countries concentrated 92% and five countries concentrated 94.4% of
these reserves, (the same as above: Nigeria 38.4%, Algeria 31.3%, Egypt 12.1%, Libya
10.1%, and Angola 2.5%). (1)

Africa coal reserves are estimated at 36 Gtoe, around 5.7% of the World’s total; 90% of
these coal reserves are concentrated in South Africa, and over 97% of Africa’s coal is also
produced in South Africa. (10)

In 2004, Oil & Gas productions were estimated respectively at 9.5 million b/d (barrels a day)
and 149.5 billion cubic meters (around 11.7% and 5.5% of the World total, respectively). (1)

Nigeria accounted for 26.4% of African oil production and 12.8% of the gas produced in
2004; Algeria 20.4% and 57.9%; Libya 17.0% and 4.7%; and Egypt 7.5% and 19.3%,
respectively. (1)

Moreover, recently, new oil and gas reserves are being discovered in several African
countries and regions (Mauritania, Uganda, Tanzania, Zambia, the Gulf of Guinea, etc.).

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             Africa share of the World Energy Resources in 2005 (%)






         Oil (crude Oil & LNG)         Natural Gas                 Coal

Fig 1: Africa’s share of World Energy Resources in 2005 (fossil fuels) (% )
(Source: “Oil and Gas Journal”, 2005)

Oil exports amounted to 7.1 million b/d in 2003, around 12.4% of World’s total exports, with
five dominant countries accounting for about 81% of the total export: Nigeria 29.6%, Algeria
19.3%, Libya 14.7%, Angola 12.5% and Egypt 4.7%. (1)

Almost all the oil and gas exported are delivered to Europe and the US.

Africa’s refinery capacity is still very limited, 3.3 billion b/d (3.8% of the World total) and do
not meet transport requirements. Four countries totalled approximately 68% of African
refinery capacity: Egypt 24.2%, South Africa 15.8%, Algeria 14.5% and Nigeria 13.3). (1)

Hydropower a cornerstone for Energy Sustainability

Hydropower has enormous potential to contribute to the Sustainable Development of the
Continent. Large hydropower potential is present in East, Central and West Africa.

The gross theoretical potential hydropower potential is estimated at 3892 TWh/year, the
technically exploitable at 1917 TWh/year, and the economically exploitable at 1096
TWh/year. This latter potential is approximately twice the current electricity demand. (14)

In addition, the percentage of technical and economic hydropower potential currently
exploited is about 7%, the lowest in the World’s Regions (Western Europe 75%, North
America 69%, Australia 69%, LAC 33%, and Eastern Europe & Middle East 22%). (9)

Hydropower infrastructure, such as reservoirs, can provide multiple-usage and benefits,
particularly, through increased availability, reliability and quality of water supplies and
reduced flood risks, thus contributing to energy sustainability.

Weak commercial energy consumption and great inefficiency in energy use

Africa’s share of World energy demand was 3.4% in petroleum, 2.9% in gas, 3.5% in coal,
and 3.0% in electricity.

Five countries, namely South Africa, Egypt, Algeria, Nigeria and Libya account for 78% of
commercial primary energy consumption. (1)

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Africa per capita primary energy consumption is the lowest of the World’s Regions, and
represents about 3% of World average, while the Continent energy intensity (energy
consumption per unit of GDP) is about 190% of the World average. These prove the low
level of energy consumption as well great inefficiency in energy use. (23)

The main reasons for Africa’s small share of the World’s commercial energy consumption
are: low per capita incomes, low level of industrialisation, low usage of automobiles, and
weak penetration of household appliances.

Low electricity access impeding the social and economic development of the

Electricity generation capacity was 103.2 TW, around 3.1% of the World’s total; of this 46% is
in Southern Africa and 36% in North Africa. (10) The electricity generated was 494 TWh in
2004: 82% was thermal and 17.8% hydro.

Africa’s electricity access rate is estimated at 35.5% (i.e. about 2/3 of the African population
have no access to electricity), the lowest of the World’s developing Regions (Middle East
1.8%, LAC 89.2%, East Asia 88.1%, and Asia 42.8%). (12)

Sub-Saharan Africa has the lowest electrification rate: 23.6% (8.4% for its rural areas), and
North Africa the highest, 91.8%. (12)

                    Electricity Access Rates 2002
                                                                                  Fig 2: Electricity Access
                        LAC                                                       rates in 2002

  North Africa & Middle East

         Sub-Saharan Africa


                               0%   20%      40%        60%   80%      100%
                                             Access Rates

(Source: International Energy Agency, IEA – “World Energy Outlook, 2002”, IEA, Paris, 2002.)

Electricity connection rate is very low in Sub-Saharan Africa and the IEA estimated that if the
current trends are pursued, electricity access rate in this region will be only 51% by 2030,
compared to 66% for South Asia and 95% for the DCs.

                    GDP(PPP)per                                                       Energy
                                           TPES per           Consumption
    Region           capita (2000                                                Production/TPES
                                          capita (toe)         per capita
                        US$)                                                     (Self sufficiency)
Africa                    2290                0.67                 547                   1.75
Asia                      3309                0.63                 617                   0.87
China                     5540                1.25                1607                   0.94
LAC                       7037                1.10                1645                   1.35
OECD                     25340                4.73                8204                   0.70
North America            29327                6.42               10833                   0.83
World                     8231                1.74                2516                   1.01

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 Table 2 : Per Capi ta Ratios

(Source: International Energy Agency, IEA – “Energy Balances for Non-OE CD Countries” and “World
Energy Statistics 2006”, IEA, Paris, 2006.)

Huge biomass energy use, in an inefficient and unhealthy way

Traditional biomass energy sources are used by a majority of people in rural areas which rely
on it to satisfy their basic energy needs (coking, lighting and heating), but in an inefficient
way, with adverse consequences on their health as well as on the environment. They will
remain the primary energy source for most people for long time. So proper measures should
be taken to modernize its supply, conversion and use in a sustainable way.

Africa Total Primary Energy Supply (TPES)

                          1,8%           17,5%                Coal, lignite
                                                              Natural Gas
                                                 22,8%        Biomass and wastes
                                 14,0%                        Other

Fig 3: Fuel Shares of Total Primary Energy Supply (%) - 2005

   3. The challenges

The key challenges faced by the African energy sector are:

       Low level of access to commercial energy and huge dependence on traditional
        biomass to satisfy basic energy needs, linked with high level of poverty (energy
       Weak per capita commercial energy consumption;
       Huge need for development of a weak energy infrastructure, and
       Lack of investment and financing for energy projects.

Addressing these challenges is critical for sustainable economic and social development,
and assured access to secure, affordable and reliable energy. While this sounds
tremendous, it is not beyond reach and may be addressed if all the stakeholders join forces,

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as well as means, and strive to bring about required changes and support the right actions in
a sustainable way.

    4. The obstacles to Sustainable Energy Development (SE D)
The obstacles to the SED of Africa are described as follows:

   Socio-demographic
 High growing population with majority suffering from poverty;
 Under-development of rural areas.

   Economic
 Unfavourable investment climate and non-transparent business practices;
 High level of skilled youth unemployment, forcing them to emigrate in Europe or the US.

   Financial
 Lack of financing and investment for energy projects (whilst significant investment and
  financing are needed for energy infrastructure and facilities to sustain increased
  economic growth and to improve the low living conditions of populations).

   Political and institutional
 Lack of political will and engagement to move forward;
 Weak institutions;
 High level of corruption / bad governance;
 High political risks and linked to that high cost of energy projects;
 Weak participation of the private sector in the energy field (versus omnipresence of the
 Local communities’ unrest and restiveness and other disruptive activities of these
  communities in certain areas, like the Nigeria Niger Delta.

   Energy-related
 Lack of adequate energy infrastructure;
 Weak energy integration;
 Weak energy efficiencies along the energy chain;
 Weak local content in the oil and gas industry chains (local content is gauged by the
  amount of goods & services produced locally, without compromising quality, health,
  safety and environment standards);
 Huge quantity of gas flaring in oil producing countries. Gas flaring is a lost of huge
  business opportunities and contributes to polluting the environment and to harm the local
  population through toxic airborne pollutants. It is still going on in African oil producing
  countries (Angola, Algeria, Nigeria, etc.) because the appropriate infrastructure needed to
  deal with it is not in place yet. It is estimated that Angola flares 85% of its natural gas and
  Nigeria about 40%; this costs $2.5 billion a year in lost economic revenues; (7)

    Nota: WEC highlighted in its 2006 Statement (19), that “if the natural gas flared in Africa
    today were used for power generation, it could produce 200 TWh of electricity per year,
    or about 50% of the current power consumption of the African Continent and more than
    twice the level of power consumption in Sub-Saharan Africa (excluding South Africa)”.

 Higher energy prices impact negatively the African net oil-importing countries, particularly
  fragile economies, and threat the security of supply, but offer great opportunities to oil-
  exporting countries.

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The question to answer is: how to overcome these obstacles in a concrete, efficient and
accelerated way?

   5. Opportunities offered by the African Continent

There are numerous “rooms” of opportunities that can be seized to overcome the obstacles
and to develop the energy sector in a sustainable path:

    Vast and diverse energy potential: (2)
    Oil, coal, natural gas, hydropower, geothermal, solar and wind energy, and bio-fuels
     offer great potential, but are generally largely unexploited;
    Great potential for electricity generation, interconnection and trade;
    Large potential for energy efficiencies improvement along the whole energy chain; the
     technologies are available in the developed World, Africa has an opportunity to take
     advantage of them;
    Lowest CO2 emissions in the World, and thus, large potential market for carbon
     credits. The industrial World is willing to reduce carbon emissions due to concerns
     about climate change. It is likely that a greater reduction in carbon emissions per unit
     of investment can be achieved by investing in Projects in Africa compared to
     investments made in the industrial countries. This is a potential win-win opportunity
     for both Africa and the Industrialized World. (2)

    Great opportunities for technology leapfrogging,
    Taking advantage of the technological development of the industrial World; this is
     essential to accelerate the contribution of technologies which are very weak in Africa
     and to achieve the objectives of Energy Sustainability.

    Significant investment opportunities:
    High opportunities for investment in small, medium and large-scale energy projects;
    Huge investments expected to flow into the region, supported by high profitability
     rates, cheap labour costs and low production costs.

                                                         (2) & (4)
   6. Targeted Policy Objectives for SED

We can identify a range of priority objectives, including:

       Giving higher priority to access to affordable modern energy services and energy
       poverty reduction should be the first objective. This is vital for improving the living
       conditions of the populations, increasing the productivity for the development of small
       industrial and commercial activities, small craft industries, modern agricultural
       production mode and facilitating the fight again hunger and malnutrition, etc.;
       Promoting energy diversification with a more appropriate energy mix (diversification of
       energy sources and fuels is critical for achieving the three WEC millennium energy
       goals of accessibility, availability and acceptability, “keeping all energy options
       Developing energy co-operation and integration (power pool, energy efficiency
       programmes, interregional oil and gas pipelines and other sub-regional, regional or
       continental projects as recommended by the NEPAD Energy Programme);
       Initiating or developing Energy Market Reform with appropriate regulation, and
       sustaining increased use of market-based mechanisms;

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   Encouraging private sector participation in the energy sector and public-private
   Mobilising adequate financing and promoting innovative financing mechanisms and
    use of sustainable best practices of financing in the energy sector; in particular :
    - creating suitable business environment / welcoming investment regime;
    - developing risk mitigation & risk management instruments;
    - developing financial schemes, including project finance, domestic savings;
    - fostering financing partnerships linked to environmental goals (CDM);

    Nota : we must call on international aid and lending and multilateral organisations to
    develop new sources of political risk insurance and new instruments of risk
    management to encourage investments in Africa and the DCs.

    Strengthening or developing the role of Regional organisations and institutions
    (financing and economic institutions, energy organisations, NGOs, etc.) in promoting
    energy development and integration;
    Deploying and disseminating suitable technologies, taking advantage of the
    technological developments of the industrialised world, and accelerating the
    contribution of suitable advanced technologies (in cleaner fossil fuels and renewable
    energy, energy efficiency and CCS);
    Sustaining technology transfer and human capacity building;
    Promoting greater Energy Efficiency through technology transfer and deployment of
    best practices; this will include energy savings in the residential, industrial and
    transportation sectors, as well as Demand Side Management in the electricity sector;
    Reducing and banning gas flaring in producing countries, by seizing all the
    opportunities allowing marketing and monetizing their natural gas. For example by
    developing domestic markets and sub-regional and regional infrastructure (West
    African Gas Pipeline, Trans Saharan Gas Pipeline) and exports: LPG / NGL, LNG
    (liquefied natural gas), GTP (Gas-to-power) and GTL (Gas-to-liquid) projects -
    (Nigeria plans to ban its natural gas flaring by 2008, Angola and Algeria will follow by
    2010); (7)
    Reducing greenhouse gas emissions (by promoting clean energy technologies and
    best practices for the preservation of the environment);
    Promoting and developing the local content in the oil & gas industry (this is a
    fundamental economic and security issue that should be considered in energy
    policies and strategies definition and implementation of the African oil & gas
    producing countries; (Brazil and Norway have built a dynamic local oil & gas industry
    through suitable implementation of local content, policy actions and measures – local
    content in Brazil is about 60%);
    Promoting the role of women in human capacity and research & development,
    because they are major users, consumers, producers and decision-makers of energy
    for households);
    Improving regional energy planning and the availability of energy information and
    data (energy data collection and energy information system implementation and
    Promoting energy matters knowledge and more access to IT (information technolo gy)
    including for the youth; this is of utmost importance in the New Knowledge Society
    and the Global Economy;
    Building on enhanced and new partnerships and new alliances with all potential
    stakeholders and exploring new opportunities for collaboration and cooperation
    amongst them.

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    7. Priority Actions to be taken to build a Sustainable Energy Future
       for Africa

The actions listed in the following areas (3) are of paramount importance and must be
considered to address the challenges the African energy sector is facing:

Developing a more sustainable energy mix

The current African Energy Mix is not sustainable (cf. Fig3) and continuing along the current
path of the energy system will not allow meeting the Energy Sustainable Development
objectives, and thus realise a Sustainable Energy Future.

Indeed, realising a Sustainable Energy Future will require a well balanced and diversified
energy mix, with greater contribution of renewable energy resources and cleaner energy
sources (as well as higher energy efficiencies in the energy chain).

Fossil fuels are abundant and tradable but highly concentrated in some parts of Africa; but
they are not renewable and will last for a limited period of time, about 50 years for oil and gas
resources, and a few centuries for coal which will become more competitive for electricity
generation after 2050. So, for the next three or forth decades, fossil fuels will continue to
dominate the energy mix of Africa; but their depletion should be envisaged in the second half
of the century. In addition, their combustion produces more carbon dioxide than any other
human activity. Consequently, is essential to encourage their efficient use and to also
develop and accelerate cleaner fossil fuel technologies to reduce the impact of human-
induced emissions on the quality of human life and the natural environment. (16)

Seeing its great potential, hydropower is seen as a good option to increase the contribution
of renewable energy in the African energy mix, provided projects are formulated in a
bankable form and the social and environmental implications of larger projects are suitably
Both large and small scale hydropower projects can contribute to the African energy mix in a
sustainable manner.

Africa’s hydroelectricity production costs are, either the lowest in the World (ex. Inga in
DRC), either very compeitive compared to the production costs of the best thermal options.

For example, developing the Grand Inga Project would be a realistic and affordable option to
address the challenges of energy supply for many African countries and the 560 million
Africans who do not have a well suited access to commercial energy today, and do so
without GHG emissions. Generally speaking, the Project might a major impact on the
Sustainable Energy Future of the entire African Continent; it could also be considered as an
important energy integration project for Africa. 1

Sustainability guidelines and assessment protocols have been developed ( 14)&(17) to facilitate
social, economic, and environmental assessment of new hydro projects and the
management of existing hydropower facilities, and significant progress done in principles and
concepts (14) & (17) ; these provide a clear framework for good practices, and ensure that
hydropower projects meet agreed sustainability standards. Thus, these new tools will help to

  The Grand Inga Project would make even more sense, because it is estimated that the price of electricity fro m
Inga at the Italian border would be lower than the price Italy is currently paying for French nuclear, and given
further expected electricity price increases in Europe.

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move forward to practical actions for the development of small and big hydro projects

Solar and wind energy are more evenly distributed than fossil resources in Africa, and offer
great economic potential with a big potential market. Promoting their use in Africa, as the
technologies mature, will have positive effects in the energy mix, as well as external effects,
such as, job creation and pollution reduction. Nevertheless, for that purpose, it is needed to
expend the market for the related technologies in order to help bring costs down, as well as
to set up proper policies and actions including support for R&D and the use of portfolio
standards and tariffs to enhance the market penetration of these technologies. (16)

Bio fuels produced from biomass (ethanol, bio diesel) are present in various forms in Africa.
Due to the higher oil prices along with the environmental problems, they are expected
offering great opportunity for energy sources diversification and will likely contribute more
substantially in the African energy mix in the future, on the detriment of fossil fuels use,
provided they are harnessed efficiently to avoid conflicts over land use for “food, fuel and
feed”. They can play a significant role in meeting the growing energy needs for rural areas,
boosting rural economies and generating local employment, contributing to local revenue
generation, and thereby, reducing drastically rural energy poverty and leveraging sustainable
rural development. In addition, they can also offer opportunities for carbon trading. (15)
Today ethanol fuel programs exist or are envisaged in many African countries (Malawi, Mali,
Kenya, Senegal, Tanzania, Zimbabwe, etc.).

Nuclear energy is a realistic option to develop further for electricity production in Africa -
South Africa is currently developing Nuclear power, and Egypt and Nigeria are serious
candidates in the future - and would make a greater contribution in the African energy mix for
reasons of energy security and because nuclear power can produce energy without
emissions of air pollutants and GHG, provided that the technologies offer lower costs, the
master of the technology, public confidence, etc.

In the future, hydrogen production from biomass and coal (and electricity power plants)
would be the dominant energy use.

Realising the potential of opportunity in Energy Efficiency (7) & (18)

Africa is one of the World’s less energy efficient region. It is estimated that up to 40% of the
energy input in production processes across the Continent is wasted. It is also clear that a
great deal of the energy available is not converted into “useful energy” and thus “useful
work”, i.e. national wealth or GDP increase.

Nevertheless, there are great potential and opportunities gains in Energy Efficiency, in:
power plant performance improvement, energy savings in buildings, household appliances,
industrial processes and the transportation sector. These must be realised systematically.

Therefore, Energy Efficiency improvement should be a high priority for Africa’s Strategy for
Sustainable Energy Development; and African states should integrate energy efficiency in
their national energy strategies and policies (with specific targets), as well as their sectoral
policies (land planning, transportation, social housing, urban planning, etc.), and should
collaborate, and co-ordinate their efforts for the achievement of the policy objectives.

The implementation of these policies will offer a route for meeting the growing energy
demand for energy services in a more responsible and often cost-effective way.

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Co-ordination of policies and measures at the regional and international levels would help to
overcome the obstacles for the implementation of both regulations and price signals.

Examples of key policy actions and specific measures – taking into account already existing
successful policies in Africa - could include:
    implementing legal and regulatory framework and appropriate institutions to enhance
      energy efficiency in the national and regional levels;
    creating and / or developing an enabling environment for facilitating energy efficiency
      projects and programmes;
    establishing grants/financial support, subsidies, audits schemes, tax incentives, soft
      loans, etc., at the national level and CDM at the international level;
    initiating measures toward the public, raising their awareness on intelligent use of
      energy, and convincing them that energy efficiency can bring real and beneficial
    setting up and promoting labels and minimum energy performance standards (MEPS)
      & Labels (S&L) for the most important energy-using products, including end-use
      appliances (in particular information / communication equipment), vehicles and
      industrial equipments;
    establishing EE testing laboratories to support national and regional EE labeling and
      standards (S&L) programmes;
    setting up guidelines for implementing EE projects in the industry, as well as,
      guidelines for consumers and manufacturers through a set of tools : labelling,
      standards, codes and information;
    reflecting on new instruments in the African context such as: 1/ obligations of energy
      saving for energy companies, “white certificates” system; 2/voluntary / negotiated
      agreements with large energy consumers or equipment manufacturers;
    setting up DSM tools and initiatives in the electricity and the road transport sectors;
    creating local energy information centres, establishing good information systems,
      strengthen data collection networks;
    initiating benchmarking and facilitating regional and international cross-country
      energy efficiency indicators;
    setting up innovative financial schemes (ESCO’s, EE Funds, Loan Guarantee
      mechanism, GEF, CDM, etc.), and involving the local financial sector to support the
      EE projects and programmes;
    setting up adequate pricing incentives for EE;
    setting up appropriate measures and tools in the electricity sector for “revenue
      protection”, reducing the huge level of technical and non- technical losses (25%),
      targeting levels of 5 to 10% in a reasonable timeframe;
    assisting local manufacturers in manufacturing efficient lighting systems and
      household appliances, and enhancing the capabilities of local technical operators;
    putting more focus on technology leapfrogging from industrialized countries,
      technology transfer and capacity building.

Responding adequately to the climate change issue

Africa’s CO2 emissions are the lowest in the World, compared to the other World`s regions.
In 2003, they were estimated at 763 Mt CO2, representing 3% of the total World emissions,
versus 15 % for China, and 51.2 % for OECD countries.

Africa is very vulnerable to climate change; and its capability to adapt is very weak. In
addition, Africa is facing challenges such as : high population growth, high use of traditional
biomass, fragile ecosystems, depletion of natural resources, and poverty.

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The definition and implementation of policies addressing these challenges, improving the
management of environmental aspects and favouring the well-being of the poor could
simultaneously stimulate Africa’s sustainable development, reinforce its capability to adapt
and reduce its vulnerability to the related effects of climate change.

Examples of concrete policy options, that might have substantial effects on GHG emissions
reduction and contribute to mitigate climate change effects, include:
    Change of behaviour, social innovation, technology transfer, and capacity building;
    Improvement of institutional, legal and regulatory frameworks;
    Improvement of energy efficiencies in the whole energy chain;
    Reduction of emissions from industrial by-products and the gas used in the industry;
    Transition toward low carbon content fuels and low / zero emission technologies,
        including renewable energy and most efficient use of biomass energy;
    Promoting the introduction of new and climate-friendly technologies, through
        innovative public/private support mechanisms that provide the additional finance to
        make these new technologies competitive;
    Developing innovative financing mechanisms to accelerate the deployment of existing
       competitive and climate-friendly technologies, in both the public and private sectors;
    Developing markets mechanisms (CDM, JI, Carbon Fund, etc.), to promote cleaner
    fossil fuels and climate protection; and
    Promotiing Carbon Capture and Storage technologies (in the future).

The deployment of clean energy technologies, and more generally, the implementation of the
policy actions and related measures, would requiert a global co-ordinated or intergrated
Strategy to overcome the obstacles and the market barriers and to facilitate the achievement
of the objectives in a Sustainable way.

Developing sustainable financing mechanisms and financing modern energy access

Energy demand is rapidly growing in Africa and requires huge investments to develop the
energy system. For example, the IEA estimated that if we were to reverse the past and
current negative trends for electricity access and achieve the universal electricity access
goal, this would require an additional investment and financial commitment of US $ 665
billion by 2030, or US $ 30 billion per year in additional investment, and nearly 80 % of this
investment will be needed in Africa and South Asia. (12)
It is clear that there is a huge need for investment to tap the energy resources, and to
develop the energy infrastructure and facilities. Therefore the key issue is financing.

So the question is: how to finance the needed investments and ensure secure and reliable
supply of energy products and services to meet the growing demand? This will require, inter-
alias: 1/ secure and predictable investment climates; 2/ proper institutional, legal and
regulatory frameworks conducive to successful private-public-partnerships, and; 3/ project
development opportunities and innovative financing mechanisms.

The only way for Africa to mobilize the necessary finances to achieve the required
investments is a major increase in transfers from industrialized countries (ODA and FDI), as
well as a determined effort to mobilize the substantial potential of its domestic savings /

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With this end in view, good state’s and corporate governance, political stability and
welcoming investment regime are the usual and most effective means by which external
finance is best attracted.

Public funding is also needed and should be combined with the right policies if we are
committed to scale up energy access. Accordingly, Governments should commit themselves
to a more determined effort to mobilise the appropriate funds and subsequently to ensure
that the funds allocated are used efficiently for sustainable projects. This requires good

The need for innovative financing mechanisms is more and more important and urgent, given
the higher expected use of new decentralized systems with scattered facilities, distributed,
marketed and operated by numerous small companies or individuals. In this context, a
number of new examples of financing mechanisms such as revolving funds and energy
banking have been introduced to enhance energy investments in rural areas.

Promoting, and investing in the best available technologies (BAT) which can improve
the situation (encouraging the introduction, development, and use of reliable, affordable and
cleaner technologies). (3) & (4)

Development, deployment and dissemination of appropriate technologies through public-
private partnership could play an essential role in: 1/ increasing resource development, 2/
expanding energy access for the poor, and 3/ facilitating access to other basis services such
as water, health, agriculture, telecommunication and education.

In more general terms, providing energy for sustainable development and particularly
expanding and spreading energy access will require a mix of suitable technologies, aimed at
“Keeping all options open”: LPG, grid-based facilities, diesel power engines, mini / micro
hydropower, PV and wind systems, micro-turbines (using diesel oil fuel or natural gas), micro
combined heat power (CHP) systems producing both electricity and heat, in a cost- effective
way, bio-fuels, etc. (4)

Developing innovative financing schemes, particularly through public-private-partnerships,
will be required to accelerate the deployment of existing competitive technologies, as well as
to promote the development and dissemination of new technologies.

Setting up social measures, aimed at scaling up commercial energy access and improving
the standards of living for the population, particularly the poor.

In the electricity sector, several initiatives have been experimented or proposed in some DCs
and these should be pursued (4). They include the following:
      A “lifeline tariff” to be set up : providing to the poorest a small essential amount of
        electricity (i.e. 50 to 300 kWh per household per month) free of charge or at a very
        low tariff (but all consumption beyond that should be priced at marginal cost) ;
      Providing social assistance to the poor through Governments allocating them a cash
        voucher of a pre-determined amount to pay their electricity bills. This later system can
        be efficient because it does no distort the tariffs and does not hide price signals.

In the oil and gas industry, Governments and multinational energy companies should take
care of the basic needs of local communities, consider them as valued stakeholders, and
invest in, or improve, social and economic facilities. They should create a safe & healthy
operating environment in order to support the sustainable development of their areas. The
notion of “state and corporate responsibility” should find its whole meaning with regard to
these issues.

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Encouraging and developing private initiatives, cooperative schemes and public-
private partnerships.

Public-private partnerships are of great interest for a number of reasons including: 1/
leveraging the needed funds; 2/ sharing the risks of investments; and, 3/ working together in
partnership to develop rural electrification and raise the level of electrification rate.

Today there are examples of successful initiatives of public-private private partnerships in
rural electrification. For examples: (4)
     Shifting the responsibility for rural electrification to private cooperatives (as in
         Bangladesh, in partnership with NRECA) ;
     Establishing effective partnerships with small and medium-sized local enterprises for
         grid extension to urban and rural customers and off-grid solar photovoltaic power (as
         in South Africa with Eskom) ;
     Restructuring inefficient monopolies and introducing new regulatory frameworks,
         creating rural electrification authority or agencies (as in India, and several African
         countries: Senegal, Mali, Cameroon, Uganda, Kenya, etc.).

Furthermore, developing private-public partnerships can strengthen democratic institutions of
governance, open markets, mobilize and use development resources more effectively.

Initiating / Developing Energy Market Reform and appropriate Regulation
Internal energy markets should be developed to foster competition in a more sustainable
way, in order to allow the consumers to reap the benefits of such competition, and thus to
enjoy: 1/ access to commercial energy at reasonable prices, 2/ reliability of energy services,
and 3/ security of energy supply. These presuppose the development of electricity
interconnections and gas pipelines, and also, the setting up of effective regulations.

The adoption and implementation of Energy Market Reform (EMR) aimed at rationalising the
activities of the incumbent utilities and clearing out their inefficiencies, organising regional
energy trade and facilitating the development of large-scale integrated energy projects are
necessary conditions for boosting the competitiveness of the African industry and would
contribute to economic growth and jobs creation. The key to successful EMR is effective
regulation which must safeguard the interests of both customers and investors, remain free
from political influence, encourage competition and be open and transparent (effective
regulation & empowerment of the regulators). (21)

Given the scale of the daunting energy challenges, and also due to the fact that certain
challenges cannot be adequately dealt by markets, it is critical defining the appropriate role
for public authorities.

Implementing sound and sustainable energy policies suited to the local and regional
                  (3) & (4)
The key actions               to be taken relatively to the policies to be implemented could include:

        Improving the business investment climate in order to attract more private capital,
         including domestic savings ;
        Developing open, transparent, efficient and competitive energy markets,
         particularly for gas and electricity;

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        Restructuring the energy sector in a more efficient way, considering the local
         specificities and circumstances ;
        Ensuring security of energy supplies;
        Diversifying the energy mix, with the aim of making it more efficient and
         sustainable; and particularly, driving initiatives and setting up appropriate
         regulations and incentives to increase the contribution of renewable and
         alternative energy sources in the energy mix (hydropower, solar, wind,
         geothermal, biomass/fuels);
        Promoting energy efficiency, including large programs of energy savings, as well
         as Demand Side Management ;
        Supporting energy technology innovation and a wider and accelerated
         deployment and dissemination of sustainable energy technologies ; in particular,
         developing low-carbon energy sources and promoting environmental-friendly
         technologies to address climate change;
        Pricing energy efficiently (by promoting competitive energy pricing), and phasing
         out subsidies for conventional energy supply and use;
        Internalising externalities, such as social and environmental impacts ;
        Building institutional and human capacity in sustainable energy ;
        Introducing more effective regulatory measures to improve market operations and
         protect public benefits ;
        Forging new partnerships and alliances ;
        Achieving more effective regional and international cooperation, as well as closer
         links between multilateral trade and environmental measures ;
        Developing the needed infrastructures at a regional or continental level, as
         recommended in the NEPAD program.

These policy actions could improve the business climate and thus enhance investments in
the energy sector, enhance energy security & infrastructure development and address
disparities among countries and sub-regions, particularly with respect to: energy
development, energy access and consumption and infrastructure.

A related Strategy for the Energy Sustainability of the Continent “New African Energy
Strategy” could focus on the following three key energy objectives defined as “WEC
Millennium Energy Goals”:

    Spreading and speeding up modern energy access, including to the poor;
    Securing availability / deliverability of energy at affordable prices; and
    Addressing environmental sustainability.

The implementation of this New Strategy and the related policy actions is a huge challenge
requiring consistent support and determination from all the stakeholders of the African
energy sector.

   8. “Acting Now and Together” to support Africa Aspirations for
      Energy Sustainability

The following concrete proposals for action, identified as Africa’s Aspirations for Energy
Sustainability, should be taken “now” to move forward and should be supported by all the
concerned stakeholders: (2) & (15)

 Creation of Centres of Excellence for Sustainable Energy (CESEs) in Africa (20)

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In terms of outcomes, it is expected that the CESEs will be instrumental in achieving the
     - Market transformation for clean energy technologies (including renewable energy and
        bio fuels) deployment and dissemination;
     - Increased and accelerated access to commercial and modern energy for the poor, as
        well as, increased energy efficiencies (including developing ESCOs); and
     - Increased capacity to develop sustainable energy projects and programs in the rural
        areas of the Region.

   This is an example of private-public partnership (industry and government) and will involve
   local, regional and international stakeholders.
   We must support expansion of those centres and help spread them throughout Africa.

 Development of renewable and alternative energy sources could contribute significantly to
  Sustainable Energy Development, in providing access to modern energy, mitigating GHG
  emissions, and enhancing energy security through cooperation and partnership.

 Development of sustainable biomass projects and programmes, modernizing the overall
  energy chain of traditional biomass energy – these will contribute to promotion of women
  by reducing their domestic and repetitive chores (such as firewood collection), improve
  health and education, and provide a cleaner and healthier household environment -
  (women should play a great role for that purpose, as they are the main users of biomass
  for coking).

 Promotion of sustainable bio-fuel projects and programmes (taking advantage of the
  existing opportunities in the agricultural sector and the large available manpower in the
  rural areas) and under conditions that attract foreign and domestic financing, provided the
  preservation of national food and feed security.

 Promotion and development of youth energy projects (initiating a vast promotion and
  development of micro and small energy and agricultural projects, especially for African
  young entrepreneurs (men & women) could contribute to reduce drastically the youth
  massive and risky emigration to Europe and the US, as well as their exodus to the already
  crowed African cities).

 Development of innovative financing mechanisms to promote modern energy access,
  energy efficiency, renewable energy and clean energy technologies, technology transfer,
  carbon markets, etc.

 Promoting Regional Energy Planning and Integration; these could link projects to markets
  over greater distances, reduce investments risks and facilitate financing.

 Development of large regional or continental energy projects, such as the Grand Inga
  project and the associated “Electricity Highways”, the Trans-Saharan Gas Pipeline project
  (4500 km; US$7 billion), electricity interconnection projects initiated by the five African
  Power Pools, etc.
  For example, underwriting the political and country risks will allow the business players to
  develop these projects on purely commercial terms.

 Implementation, financing and development of rural energy projects and programmes, and
  strengthening the capacities of the local institutions dealing with the issues of rural energy

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 Catalyzing new projects for CDM and carbon credit, particularly, small and medium
  renewable energy projects, including run-of-river hydropower and energy efficiency

 Reduction of gas flaring in Africa, for example, by supporting demonstration projects of
  gas flaring, through PPP.

 Promotion of the African content in the oil and gas industry (this will enable the
  Exploration & Production industry to sustain and accelerate economic growth, to expand
  job creation and to spread economic and social prosperity).

 Development of demonstration projects or/and conducting feasibility studies as “African
  Regional Initiatives on Carbon Capture & Storage”, and focusing on the financing
  required and the demonstration of the technology. This could be initiated in cooperation
  with the member companies of the Carbon Sequestration Leadership Forum (CSLF)
  and/or with the WEC Cleaner Fossil Fuels Systems Committee (CFFS). (20)

 Development and implementation of appropriate energy policies and strategies that drive
  changes in the African energy sector (towards a Sustainable Energy Future). For
  example, supporting the disseminating of the WEC Energy Policy Scenarios Study to
  2050, throughout Africa and its five sub-regions, will be helpful for the African
  Governments to set up appropriate energy policies and regulations, and better targeting
  their national energy policies.

 Establishment and development of the Africa Energy Information System, as well as
  initiating the training of the energy experts in charge of data collection, analysis and
  treatment (cf. AFREC action plan)(20). This will be particularly relevant to improve
  information gathering and dissemination, as well as energy system planning.

 Establishment and implementation of Energy Charters (this will help the African
  Governments to create the conditions allowing to ensure favourable investment climate,
  energy security, regional energy integration, appropriate regulation frameworks, and
  smooth functioning of the energy markets).

 Creation of Eco-Economic Resorts and Environment Education Centres (an example of
  such projects is initiated by the US-DoE in Botswana) (5), and will be developed in other
  African countries. The main objectives of these projects are:
   - To deploy advanced technologies of clean power generation, from fossil fuels,
       abundant in Africa, as a catalyst toward sustainable development of selected
       locations within the countries;
   - To provide electricity, while simultaneously enhancing environment quality,
       preserving natural habitats and improving the economic viability of the selected
       locations through the development of tourism.

   For example, the following technologies could be developed in this context: (5) & (6)
   - Wastewater treatment plant to prevent further damage to natural ecosystems, as well
       as to improve the overall quality of local water resources;
   - Atmospheric fluidized bed that can be fuelled by coal or refinery by-products and also
       by a variety of waste feedstock from industrial, municipal, or agricultural sources.

   9. Shaping the Sustainable Energy Future of Africa, through Energy
       Policy Scenarios

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The construction of Scenarios provides a method for exploring the future, and in particular,
the future developments of the energy systems and their implications in the achievement of
the energy goals for Sustainability: accessibility, availability and acceptability. (22)

Scenarios construction is not a method for predicting the future. Scenarios enable us to
explore the future in an imaginary and creative way and they allow us to attempt to answer
our own questions about what might happen in the future. (22)

Then we can raise the following question:
What should be the Scenarios (desirable futures) that would be characterised by meeting all
the sustainable requirements, and thus shape the Sustainable Development of the African

In other words, if the following Scenarios take place, this will result on good opportunities for
the African energy sector to achieve the transition towards a Sustainable Future.

Having said that, I will build on the ongoing WEC Energy Policy Scenarios Study to 2050,
and thus consider the following two Scenarios axes: Government Engagement (more or
less) versus Cooperation and Integration (more or less). (22)
Indeed, in one hand, a necessary condition for Sustainable Energy Development is for
Governments to become engaged in their countries development process, and in the other
hand, Cooperation (between peoples and nations) and Integration, can play a significant role
in realizing the goals of Sustainable Development in the interest of all the humankind.
I will consider the two following Scenarios that are of interest for Africa:

Scenario GE-HC: High Government Engagement x High Cooperation / Integration
In this Scenario, Governments will decide 1/ to share their experience and expertise to
sustain social, economical and environmental policy objectives, 2/ to strengthen regional
integration initiatives, and 3/ to co-operate extensively in the international level in order to
tackle the key energy , economic and environmental issues for Sustainable Development.

Scenario LG-HC: Light Government x High Cooperation / Integration
The primary driver of this Scenario is economic development, on the basis of market
liberalization to promote GDP growth through security of supply and affordable energy.
Government involvement will be constrained and there will be few levies or subsidies. The
opening of markets and the reduction in trade barriers will encourage the freer flow of goods
and services.

What are the impacts of these Scenarios?

           a. Impacts of Scenario GE-HG (8)

The Governments are highly engaged and accordingly will intervene actively in pursuit of the
following policy objectives: security of energy supply, energy poverty eradication and clim ate
change mitigation.

The African states agree to cooperate further in order to tackle key energy issues for
sustainability and there will be a stimulus for regional integration and international co-
operation to develop energy projects and energy infrastructures.

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Energy security and supply will be reinforced through intensive integration and co-operation
in the Region (including the African fossil fuels producer countries).

Multilateral International Institutions and other donors’ agencies and regional development
banks will have a big role to play in the financing of the energy infrastructure and projects
locally and regionally. Domestic financial savings will also contribute substantially to the
financing of energy projects.

There will be a stimulus to develop appropriate technologies for the needs of the local and
regional developing markets.

High energy price shocks are not seen as probable.

Primary energy mix will be developed and diversified with an increasing share of coal, natural
gas (if available), hydropower and other renewable energy (solar and wind), as well as of
massive bio-fuels in road transportation. The share of hydropower, coal and new renewable
(wind and solar) will be substantial in the electricity generation. Modern biomass will also be
extensively experienced by rural populations.

Governments will contribute positively through appropriate energy, economic, social and
environmental policies, to improve the economies, the environment, the social welfare, and
to combat poverty with the help and engagement of the International Community.

There will be major opportunities for technology development and deployment to improve the
3As (Accessibility, Availability and Acceptability), and particularly, for more efficient
processing and delivering energy infrastructure. So, the three energy goals of Accessibility,
Availability and Acceptability will likely be improved in this Scenario.

           b. Impacts of Scenario LG-HC (8)

Security of energy supply will be achieved through market forces.

Better performance of national economies is expected due to increased involvement of the
private sector.

The private sector will be the main player in the energy market and Governments’ role will be
limited to the development of the enabling measures and regulations and to initiate the
required reforms to make the energy sector competitive and more efficient through the
market forces. These will encourage investments in new projects in the countries and the

High energy price shocks will likely occur, but the related consequences can be absorbed as
a result of free trade and subsequently the economy will always recover after short recession

The energy sector will be organized according to market principles and market forces will
determine technology development and foster new technologies. Thus, due to
competitiveness, there will be a substantial use of coal in the energy mix, (and natural gas if
the resources are available), as well as large introduction of bio fuels in transportation. The
share of coal in electricity generation will be substantial. Consequently, CO2 emissions will
remain higher. However, this may be partly compensated as a result of active market driven
mechanisms, such are CDM, JI and International emissions trading which will allow countries
to manage GHG emissions in a more sustainable manner.

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The market driven interchange will lead to the transfer of technology and know how.

Active energy efficiency and conservation measures will be adopted as a result of
introduction of modern technologies and higher energy prices.

Innovations will contribute to reduce energy costs and increase modern energy access.

There will be opportunities for technology “leapfrogging”, through accelerated development
and deployment of energy-based technologies.

Availability will be improved in this Scenario, although Accessibility and Acceptability may not
be a priority and will depend greatly on appropriate mitigated policies by Governments.


1. Eni Spa / Ufficio Studi Economici ed Energetica, Italy”- “World Oil and Gas Review 2005”,
    June 2005
2. FALL, Latsoucabé - “Tackling the obstacles for Energy Sustainability for Africa”, Global
    Forum on Sustainable Energy GFSE-6th, 29 November – 1 December, Vienna, Austria.
3. FALL, Latsoucabé - “Energy Access and Poverty – Taking the Right Actions” – ESI
    AFRICA ISSUE 3 - October 2006.
4. FALL, Latsoucabé - “Energy Access: illusion or reality for the poor?” – Multi-Science
    Publishing CO.LTD United Kingdom Energy & Environment, Volume 16 N°5 2005, pages
5. FALL, Latsoucabé – “Exploring the Potential of United States / United Nations
    Collaboration for the Development of Africa and other Regions: Eco-Industrial and Eco-
    Economic Opportunities – The Energy Needs of Developing Countries”, UN Energy and
    Transport Branch, Division or Sustainable Development, 21 March 2003, New York City,
6. FALL, Latsoucabé – “Energy and Economic Development Using Clean Coal
    Technologies”, United States – African Energy Ministerial Conference, Casablanca,
    Morocco, June 3-4, 2002.
7. FALL, Latsoucabé – WEC Regional Forum on Energy Efficiency, “Recommendations &
    Follow-up”, Abuja, Nigeria, 8-9 January 2007.
8. FALL, Latsoucabé – “Energy Policy Scenarios to 2050 – West Africa Sub-Region”,
    August 2006.
9. IAE – Electricity Information, 2006.
10. International Energy Agency, IEA – “Energy Balances for Non-OECD Countries”, 2006
    Edition, IEA, Paris, 2006.
11. International Energy Agency, IEA – “Key World Energy Statistics 2006”, IEA, Paris,
12. International Energy Agency, IEA – “World Energy Outlook, 2002”, IEA, Paris, 2002.
13. International Energy Annual 2004 – Energy Information Administration, DoE, USA.
14. International Hydropower Association (IHA) –
15. International Institute for Sustainable Development (IISD) – “Sixth Meeting of the Global
    Forum on Sustainable Energy: Africa is energising itself”, Vol. 93, N°4, 4 December 2006.
16. UNDP, UNDESA, WEC – “World Energy Assessment – Overview 2004 Update”, 2004.

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17. World Commission on Dams – “Dams and Development – A new framework for Decision-
    Making”, 2006 –
18. World Energy Council – ADEME – “Energy Efficiency: A Worldwide Review – Indicators,
    Policies, Evaluations” – July 2004.
19. World Energy Council – “Energy Efficiency: Pipedream or Reality” – WEC Statement
20. World Energy Council, WEC – “Africa Regional Action Plan 2005-2007”, 2004.
21. World Energy Council, WEC – “Energy Market Reform, September 2004
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    April 2006.
23. World Energy Council, WEC “Energy Policy Scenario Study to 2050 – All Africa Data”,
    Draft report for Africa”, December 2006.

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