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draft main report NEPAD

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           SUMMARY                             In developing an action plan, the approach
                                               adopted by NEPAD is two-pronged: a
                                               short-term action plan has been developed
                                               based primarily on a survey of the
                                               infrastructure projects and initiatives in the
One of the main priorities of NEPAD is         countries and included in the programs put
the promotion of regional integration in       forward by the regional economic
the continent because individual African       communities (RECs). For the short term
economies are typically too small to           plan, the main emphasis has been on
generate the economies of scale that can be    selecting projects and initiatives with a
found in larger markets. Bridging the          strong facilitation element. The project
infrastructure gap has been identified as an   selection process was guided by the
important element of promoting regional        following criteria: projects that are at an
integration in Africa. Infrastructure is       advance stage of preparation and that can
defined in this context as energy, water,      be fast-tracked; projects that support both
transport,     and     information      and    a regional approach to infrastructure
communications technology (ICT).               provision and regional integration; projects
                                               that have stalled for political reasons and
The development of regional infrastructure     where NEPAD’s intervention could be
is critical for sustaining regional economic   expected to make a difference; and
development and trade. The potential for       initiatives that offer solutions to regional
promoting regional integration in Africa       policy,     regulatory    or     institutional
through the sharing of the production,         constraints to regional infrastructure
management          and      operations   of   activities. The Short-term Action Plan will
infrastructure facilities and through hubs,    be linked to and complemented by a
development corridors or poles is              Medium-        and     Long-term       Action
considerable.                                  Programme that will take up projects and
                                               initiatives that require more time for
While the overall picture is one of lagging    preparation and development.
coverage, poor maintenance, weak
financing and inefficient management,          For each of the infrastructure sectors, the
                                               Plan contains a brief statement of overall
there are differences across countries.
Many countries have been able to upgrade       objectives linking the sub-sector with the
and expand their infrastructure assets and     overarching goal of reducing poverty.
improve services through a combination of      Next the Plan reviews the problems and
policy changes, institutional reforms and      challenges facing the sector and outlines
investments. Over the last decade the          the response under NEPAD. The four
movement of reform to decentralize and         common areas covered in the Plan are: (i)
move away from the public sector               facilitation – establishment of policy,
monopoly model, has gained momentum            regulatory and institutional framework to
in    all   infrastructure    sectors.   As    create a suitable environment for
                                               investment and efficient operations; (ii)
governments withdraw from direct
provision of services, they face the           capacity building initiatives to empower
challenge of establishing regulatory           particularly the implementing institutions
frameworks that foster fair competition,       to meet their mandates; (iii) physical or
support the emergence of regional markets      capital investment projects; and (iv)
and ensure that the end users obtain the       studies to prepare new priority projects.
expected benefits.
The role of NEPAD in ensuring the                    first stage in a rolling action plan that will
successful implementation of the Short               be updated periodically as and when better
Term Action Plan will be: a) Mobilising              information becomes available. The
political will and actions to implement              Medium-        and      Long-term      Action
policy and institutional reforms in the              Programme will be much more
sectors, including harmonising regulatory            comprehensive.
systems, and ratification of agreements; b)
Facilitating the mobilization of resources           2.     ENERGY SECTOR
for regional projects by pooling of
resources of the countries concerned and             The challenge for NEPAD’s Energy
by enlarging the participation of the                Infrastructure Initiative is to develop fully
private sector in operations as well as in           the energy resources of the continent in
financing of infrastructure; and c)                  order to deliver affordable energy services
Facilitating      knowledge        sharing,          to economic and social sectors. This will
networking and dissemination of best                 enhance economic and social development
practices among countries, RECs and                  and improve the standard of living of the
technical agencies.                                  continent’s     population.     Under     the
                                                     Initiative, the continent’s rich energy
Underpinning all NEPAD infrastructure                resources will be developed through
programs will be the objective of                    regional cooperation. Guaranteeing a
strengthening or developing sector                   sustainable supply of affordable energy
governance arrangements that are rule-               will contribute to a significant reduction in
based, predictable, transparent and                  poverty, inequality, and environmental
participatory. A peer review mechanism               degradation. The projects identified in the
will    be     established    to    monitor          Short Term Action Plan will support
implementation of the Plan and to identify           sustainable energy development, and serve
any areas requiring specific intervention to         as building blocks for the realization of
speed up action. The principal aim will be           medium- to long-term goals.
to create the enabling environment for
enhancing competitiveness and stepping               The Facilitation Project will promote
up the flow of investments.                          reforms and cooperation among African
                                                     countries, donors and the private sector for
The NEPAD program in infrastructure is               energy infrastructure development. The
not a new set of initiatives. What NEPAD             preparation and implementation of an
brings is a new vigour to accelerate the             Energy Protocol will assist in attracting
response to familiar problems and to                 more, less costly investment, as it will
implement tested policies and good                   include establishing legal, regulatory and
practices. The new sense of urgency is               institutional frameworks, assisting in
embodied in the Africa leadership’s                  providing     the    necessary     enabling
collective commitment and determination              environment to attract investors. This will
to urgently mobilize and harness all                 help to reduce the risks and enhance the
resources available to speed up economic             perceptions of investors with respect to
growth and social development and, thus,             private sector investments.
eradicate poverty.
                                                     The Plan also includes power system and
Due to the nature of the Short-term Action           gas/oil projects that are ready for
Plan, it does not contain all the projects           implementation. In addition, studies will
proposed by the RECs, nor does it set out            be undertaken for physical projects that
to achieve balance between regions in                will be implemented in the medium to long
Africa. It is to be interpreted rather as the        term. The Capacity Building Project is
intended to operationalise and strengthen
the African Energy Commission (AFREC)                Some of the critical issues which need to
and build capacity in the sub-regional               be addressed in order to accelerate the
organizations. As regards AFREC, it is               development of the Africa’s water
intended to transform the institution into a         resources include: (i) the adoption of
legal entity through the ratification of the
                                                     effective national and regional policies and
Convention and operationalise it through
the appointment of the Board and the                 institutional frameworks based on the
Technical Advisory Body by providing the             principle of integrated water resources
appropriate technical support to discharge           management         (IWRM),       (ii)     the
its responsibilities. The project would also         establishment of collaborative framework
provide technical support to the sub-                on     agreements     to    facilitate    the
regional organizations to strengthen their           management and development of shared
capacity in        the    formulation    and         water resources, (iii) capacity building;
implementation of regional policy, as well           and the urgent need for improved water
as strategy formulation, and preparation and         wisdom. While absorptive capacity is a
implementation of regional programs. The             limiting factor in some areas, inadequate
Capacity Building and Facilitation Projects          funding remains a major constraint for the
will be undertaken by the countries with             sector development: it is estimated that
support from AFREC in collaboration with             US$20 billion annually would be required
RECs.                                                to meet the continent’s Millennium goals.
A key role of NEPAD would be in                      In response to the challenges facing Africa
particular to support the strengthening of           in the water sector, the African Water
AFREC. Other important roles of NEPAD                Vision for 2025 has been developed to
relate to facilitating cooperation and               stimulate a shift in approach toward a
conclusion of agreements, monitoring                 more equitable and sustainable use and
implementation of projects. It is expected           management of Africa’s water resources
that NEPAD would assist in putting into              for poverty alleviation, socio-economic
place the necessary energy institutions,             development, regional cooperation and the
frameworks, structures, policies and                 environment.
strategies to further public-private
partnerships for development of the energy           The proposed programmes/initiatives
sector.                                              included in the Short Term Action Plan are
                                                     fully in support of the Africa Water Vision
3.     WATER AND SANITATION                          and     its   Framework       for   Action.
                                                     Accordingly, the proposed programmes
Sustainable use of available and finite              and projects included in the Short Term
water resources is essential for the socio-          Action Plan are fully in support of the
economic development of the continent                Africa Water Vision and its Framework
and for eradicating poverty. The available           for Action. They address the following
resources have to be harnessed to meet the           themes: a) enabling environment for
growing basic needs of water supply and              regional co-operation; b) support for the
sanitation for a large number of Africa’s            development of national IWRM policies;
population, contribute to food security              c) meeting urgent water needs; d)
                                                     improving water wisdom; and e)
through use of water for irrigation, and
                                                     strengthening the financial base for the
also be able to tap the available renewable          desired water future.
hydropower potential of the continent,
required to drive its industries.
Some of the proposed short-term                      seamless rail services; d) efficient ports
interventions are either just entering the           and safe seas and ports; and e) safe, secure
implementation phase or are at an                    and efficient skies and airports.
advanced level of preparation.
                                                     The goal of trade corridors without
NEPAD support will be in the form of                 borders and barriers is central to the
mobilizing political commitment, bringing            NEPAD transport agenda as cumbersome
to bear peer review using independent                and unpredictable clearance procedures in
organizations or annual review reports on            the ports, at border crossings, and at inland
progress made by countries or regions in             terminals, as well as unnecessary road
achieving selected targets, and facilitating         checks, are a major source of delays and
the mobilization of funding required by              costs along trading routes particularly
some of the proposed programmes.                     along the corridors serving landlocked
                                                     countries. The role of NEPAD will be to
4.     TRANSPORT                                     accelerate the implementation, by member
                                                     States, of existing agreements and
The goal of the NEPAD transport program              protocols to eliminate non-physical
is to close Africa’s gap in transport                barriers and help RECs to set benchmarks
infrastructure and services, by: a)                  and seek compliance through the NEPAD
Reducing the costs and improving the                 peer review mechanism.
quality of services; b) Increasing both
public and private financial investment in           The goal of better and safer roads to
transport infrastructure; c) Improving the           bring Africa together will be pursued by
maintenance of transport infrastructure              accelerating the development of regional
assets; d) Removing formal and informal              networks and by strengthening the
barriers to the movements of goods and               capacity for sustainable road management.
people; and e) Supporting regional                   The first priority will be to support road
cooperation and the integration of markets           sector development programs (RSDPs)
for transport services.                              based on the network management
                                                     approach and on institutional arrangements
NEPAD’s role in the transport sector will            to ensure reliable funding of maintenance
be to provide strategic leadership by                and accountability to users. The medium
mobilizing political support and financial           term goal is to bring the number of
resources to pursue needed reforms and to            countries that are implementing or
launch programs and projects in support of           preparing RSDP from 15 at present to at
regional      integration     and     overall        least 25. Increased investment in regional
competitiveness. NEPAD will promote                  roads will be pursued under the framework
innovative approaches to mobilize                    of sub-regional programs prepared by the
resources to develop infrastructure along            RECs. NEPAD will support the
regional corridors to facilitate trade and to        development of guiding principles for
open up previously isolated regions.                 planning and financing the upgrading of
NEPAD transport objectives will be                   roads along regional corridors.
pursued under programs targeting specific
institutional constituencies.                        The immediate major challenge for
                                                     railways is to reverse the historical poor
The NEPAD transport program has been                 management of most national public
developed along five broad themes,                   railways.
namely, a) trade corridors without borders
and barriers; b) better and safer roads to           The goal of competitive and seamless rail
bring Africa together; c) competitive and            services will be pursued through
institutional reforms combined with                centers.
investments. NEPAD will also support
joint or coordinated concessions and cross         Political commitment at high levels will be
shareholdings across borders as well as            a powerful driver for NEPAD objectives,
well as the integration of railway services        in transport, however in order to obtain
in multi-modal logistic chains.                    rapid progress on the ground, the delays
                                                   and the problems that have plagued
In order to fulfill their role as Africa’s         regional initiatives will have to be
gateway to rest of the world, regional ports       overcome.      NEPAD will pursue the
need to improve their performance and              establishment of a Regional Transport
modernize their operations. The goal of            Reform and Integration Support Facility
efficient ports will be to align the               for Africa (TRISFA). The proposed
performance of all African ports with the          facility would be set up as a trust fund
best among them specifically by reducing           modelled along the lines of the Private
container clearing time by half or to the          Participation in Infrastructure Advisory
five-day benchmark by year 2006. The               Facility (PPIAF) and would be demand
component for safe seas and ports                  driven. It will offer punctual support to
includes measures to protect Africa’s              RECs and agencies engaged in NEPAD
seaboard from the risks of maritime                transport programs.
pollution and to ensure the safety of its
ports. NEPAD will foster multi-country
approaches to capacity building and                5.     INFORMATION AND
environmental preparedness.                               COMMUNICATIONS
                                                          TECHNOLOGIES (ICTS)
The goal of safe, secure and efficient
skies and airports is to lower the cost of         The problem of inadequate access to
air travel and freight, to reduce the              affordable     telephones,    broadcasting
isolation of Africa in the air transport           services, computers and the Internet in
market, and to improve safety on the               most African countries is due to the poor
ground and in the air. The first objective         state of Africa’s ICT infrastructure, the
will be to consolidate the Yamoussoukro            weak and disparate policy and regulatory
Decision through support directed at sector        frameworks and the limited human
reform, airline privatisation, regulatory          resource capacity in these countries.
capacity, restructuring of civil aviation          Although African countries, in recent
services and upgrading of aviation                 years have made some efforts to facilitate
infrastructure. The safety and security            the ICT infrastructure deployment, roll-out
agenda will be supported through the               and exploitation process in a number of
implementation of: (i) a regional UACC             areas, Africa still remains the continent
(Upper Air Space Control Center) project;          with the least capability in ICT and least
(ii) two regional GNSS project (Global             served by telecommunication and other
Navigation     Satellite   System);    (iii)       communications facilities.
measures to comply with ICAO security
standards; and, (iv) joint safety oversight        The threat posed by the digital divide to
inspection capacity (COSCAP). At the               the rapid development of African countries
political level the NEPAD peer review              can on the whole be attributed to their
mechanism        will      support      the        inability to deploy, harness and exploit the
implementation of the Yamoussoukro                 developmental opportunities of ICTs to
Decision. NEPAD will also help to build            advance         their       socio-economic
consensus for joint action regarding in            development. There is therefore an urgent
particular modern upper air space control          need to put in place and implement ICT
initiatives to bridge the digital divide at            Initiative,  The       African    Regional
four levels namely: (i) bridging the divide            Telemedicine Initiative, The Electronic
between the rural and urban areas within a             Governance & Government Initiative for
given country: (ii) bridging the gap                   Africa, The African Electronic Commerce
between countries of a given sub-region,               and Trade Initiative, The African Regional
(iii) bridging the inter-regional gap and              Tele-education Initiative and The Africa
(iv) bridging the gap between Africa and               Content      Development        Promotion
the rest of the world.                                 Initiative.

To address these challenges, the Plan                  The Plan provides details of the broad
proposes three broad areas of programs for             institutional arrangements required for
implementation under Short-term Action                 facilitating the implementation of the
Plan; namely:         ICT Infrastructure               projects and initiatives identified under the
Development and Roll-out Projects; ICT                 three broad program areas. The roles that
Infrastructure Development and Roll-out                NEPAD will play in facilitating the
Facilitation    Projects;     and      ICT             implementation of the projects of the
Infrastructure Exploitation and Utilization            short-term plan are also detailed.
Initiatives. A number of projects and                  Specifically, NEPAD will: (i) promote the
initiatives have been identified for                   projects and initiatives both within and
implementation under each of these three               outside Africa; (ii) in consultation with the
broad program areas.                                   various      sub-regional    and     regional
                                                       stakeholders of each of the initiatives
First, five ICT physical infrastructure                identify the effective ways and means by
development projects to speed up the                   which to support and speed up the
process of sub-regional and regional                   implementation of each of the initiatives
connectivity and inter-connectivity are                within the time-frame of the Plan and (iii)
identified for implementation under the                facilitate the mobilization of the required
Plan.                                                  financial resources from both domestic and
                                                       external sources to speed up the process of
Second, five sub-regional and regional                 implementation of the projects. Issues
initiatives directed at facilitating the ICT           relating to the risk factors associated with
infrastructure development, deployment                 each of the project areas identified for
and rollout process have been identified.              implementation are also addressed in the
These include: harmonizing the regulatory              Plan.
framework and environment across the
sub-regions; developing the necessary                  6.     PUBLIC PRIVATE
human resources; facilitating the effective                   PARTNERSHIP (PPP) IN
participation of African countries in global                  INFRASTRUCTURE
ICT policy and decision making; and                           DEVELOPMENT
strengthening       regional       institutions
mandated to support ICT infrastructure                 Public-Private Partnerships (PPPs) have
development, roll-out and deployment                   emerged over the last decade as one of the
activities on the continent.                           best ways to foster development, fuelled
                                                       by insufficient investment, growing
Finally, to facilitate the wide deployment,            pressures on government budgets and a
exploitation and utilization of ICTs within            general concern about service provision by
the societies and economies of Africa, six             state enterprises and agencies. PPPs have
continental umbrella initiatives are                   taken place mainly in economic (physical)
identified for implementation namely:                  infrastructure, such as power, transport,
African SCAN-ICT and E-Readiness                       telecommunications, and water and
sanitation. The desire for greater efficiency         bodies in countries where they are absent
and better services, as well as the limited           as well as facilitating networking and
volume of public resources available to               sharing of experience among regulatory
finance such services are now increasingly            agencies and other similar organizations.
leading governments to embrace public-
private     partnership     approach.      In         Where required, NEPAD will encourage
developing countries, the total level of              and assist countries to create PPP technical
PPP’s in infrastructure grew from US$                 units staffed with relevant and skilled
16.6 billions in 1990 to over US $95                  personnel (legal, financial, economic,
billion by 1998. However, in Africa, the              procurement and technical expertise) with
value of transactions and number of                   capabilities to plan and execute PPP
countries with PPP projects are still                 programs. In addition, NEPAD will
limited. Over the 1990-98 period, Africa              facilitate collaboration and exchange of
accounted for about US$ 14 billion of the             experience in PPPs between technical units
total investment of US$ 496 billion made              of countries as well as the dissemination of
in PPP projects in developing countries, as           information on good practices.
compared to US$ 237 billion for Latin
America and Caribbean region.                         7.      PREPARATION OF THE
                                                              MEDIUM - LONG TERM
In order for more PPPs to emerge in                           ACTION PLAN
Africa, countries need to improve the
business environment. At present serious              A Medium-Long Term Action Plan
constraints exist in many countries. These            (MLTAP) study will be undertaken to
constraints are: inadequate legal and                 complement and supplement efforts
regulatory framework for PPPs; lack of                undertaken within the Short-Term Action
technical    skills   to   manage     PPP             Plan. It would unfold over an 18-month
programmes and projects; unfavourable                 period starting in 2003. The principal
investor perception of country risk,                  objectives of the MLTAP will be to:
Africa’s limited role in global trade and
investment, small market size, limited                -    To prepare medium to long term
infrastructure, and limited financial                      strategy for sectors or sub-sector to
markets.                                                   attain specific service and coverage
                                                           standards for each sub-region
NEPAD will encourage governments to                   -    To develop medium term programs to
undertake needed reforms to improve the                    implement the strategy with measures
business climate. This would include                       in the three areas of sector policies and
liberalization of investment, trade, and                   institutional reform, investment and
prices, promoting competition, creating                    sector financing, capacity building.
deeper and broader financial markets, tax             -    To prepare a regional overview on the
reforms, ensuring that commercial law                      basis of the sub-regional programs
protects property rights.                                  including support measures and
                                                           initiatives to speed-up implementation
Furthermore, NEPAD will encourage and                      and facilitate coordination among
assist African governments to create the                   NEPAD partners.
necessary legal and regulatory framework              -    To prepare address cross cutting
for PPPs by assessing existing laws                        themes: governance and regulation,
affecting PPPs and drafting the Law on                     financing and pricing, capacity
PPPs and regulation, drafting model PPPs                   building and knowledge networks.
contracts. NEPAD will also encourage and              -    To establish an Africa Infrastructure
assist countries to establish Regulatory                   Database and develop plan for its
     upkeep.                                          parent body of the NEPAD initiative, form
                                                      the      sub-regional   level     planning,
The proposed cross cutting study on                   coordination and monitoring of the
financing of infrastructure under NEPAD               integration process. The OAU/AU is the
is particularly important. This is because            apex body at continental level. For
all sub-sectors call for an increase in               NEPAD, the OAU/AU has designated
commercial financing but the fact is that             special committees, the Heads of State
the mobilization of private financing has             Implementation Committee (HSIC) and
been slow and sparse. Very little has been            the NEPAD Steering Committee (SC), to
mobilized on the domestic markets.                    drive the process. NEPAD have also
NEPAD will pursue the development of                  designated specialised institutions, such as
instruments to facilitate the channelling of          the AfDB and ECA, to assist it in the
private financing into infrastructure                 development and elaboration of specific
programs. Specifically, the financing study           initiatives and programmes.
will review the following issues: a)
guarantee and insurance schemes; b)                   Next Steps: The action steps envisaged
mobilisation of domestic resource for                 following the completion of this report are
long-term finance; c) financing for                   classified in the following main themes:
regional multi-country projects; and d)
leveraging of public funds. The study will            a)   Processing    and      Securing     of
also review the emerging African                           Endorsement the Report and Short-
experience with regulation; specifically: a)               term Programme: Among the major
distribution of responsibilities between                   activities to be undertaken is the
regulator and sector agencies; b) statutes,                consultation with RECs and other
tenure, financing of regulatory bodies; c)                 designated agencies. This consultation
multi-sector vs. single sector regulators;                 will provide an initial opportunity to
and d) regional regulation in telecom, air                 secure buy-in of these organisations,
transport, cross-border power traffic etc.                 which are critical for successful
                                                           implementation of the programme.
The MLTAP study would be carried out                       Activities under this theme will be
by teams of consultants under the                          completed by 10 July 2002.
oversight of a steering committee
comprising of RECs and the NEPAD                      b) Mobilising          RECs           and
Secretariat, and a coordination unit at the              Implementation Agencies: After
AfDB. An advisory panel would provide                    endorsement of the programme by the
quality assurance.                                       OAU/AU, the RECs and other
                                                         designated implementing agencies
8.      WAY FORWARD                                      will     be  given     implementation
                                                         guidelines and instructions. Each REC
The first step will be to establish an                   will coordinate the elaboration of
effective institutional framework for                    targets and key activities and time
implementation       of     the     NEPAD                schedules       for      implementing
programme. The individual countries                      programmes or projects it is involved
constitute the nuclei of all programmes                  with. The Secretariat, assisted by a
and implementation actions. Working with                 designated     specialised     African
civil society and private sector, they are               Institution as the infrastructure
expected to internalise the NEPAD                        coordinator, will synthesis the
programmes       in   their     development              submissions of the RECs in order to
strategies such as the PRSP. The RECs as                 harmonise them. Activities under this
building blocks of the OAU/AU, the
     theme will be completed by 15                  institutional framework may lead to
     December 2002.                                 elongated process, or that the capacity
                                                    constraints will not be solved. NEPAD
c)   Mobilising         Finance:        The         will avoid additional layers of bureaucracy
     responsibility to mobilise finance will        and promote capacity building initiatives.
     be shared between countries, RECs              The Financial Risk that there will be
     and the NEPAD apex institutions.               delays in implementing projects due to
     They will set in motion a fund raising         lack of or delayed availability of funds
     machinery, which will include                  will be mitigated by proactively addressing
     intermittent road shows, round tables          the concerns of potential financiers and
     or investment forums. This activity            investors.
     will be continuous.

d) Implementing                  NEPAD
   Infrastructure Short-term Action
   Plan: The proposed timing of
   implementation     of     the    main
   components of the programme will
   thus be reviewed, according to
   availability of funds. Activities will
   continue over the whole plan period of
   4-5 years.

e)   Establishing a Peer review and
     monitoring system: The first action
     will be to set up a sector Peer Review
     and Monitoring System by September

f)   Undertaking        a       Long-Term
     Infrastructure Perspective Study:
     The long-term perspective study is
     planned to overlap with the
     implementation of the short-term
     programme. The study process will
     thus also provide an opportunity to
     review and refine elements of the
     short-term plan, including the criteria
     for selection of projects, benchmarks
     and targets. It would unfold over an
     18-month period starting in 2003.

Risks: A Political Risk that some
countries may not pursue or delay
implementation of NEPAD endorsed
programmes will be mitigated through
intensive engagement and actions to be
determined within the framework of peer
review. An Institutional Risk that the

                         Abbreviations and Acronyms

ADF         African Development Forum
AEP         African Energy Program (AfDB)
AfDB        African Development Bank
ABN         Niger Basin Authority
AIDS        Acquired Immune Deficiency Syndrome
AMCOW       African Ministerial Conference on Water
ASP         Africa Solar Program
ATU         African Telecommunications Union
AU          African Union
AWV         African Water Vision
BC          Beira Corridor
BOAD        West African Development Bank
BOT         Build Operate Transfer
BOOT        Build Own Operate Transfer
CBLT        Lake Chad Basin Commission
CD          Customs Department
CEMAC       Economic and Monetary Community of Central Africa
CEPGL       Economic Community of the Great Lakes states
COMESA      Common Market for Eastern and Southern Africa
COSCAP      Co-operative Development of Operational Safety and        Enhancing
            Airworthiness Programme
DC          Development Corridor
DOT Force   United Nations Digital Opportunities Task force
DRC         Democratic Republic of Congo
DRCANSA     DRC-Angola-Namibia-South Africa (Interconnection Study)
EAC         East Africa Community
ECA         Economic Commission for Africa
ECCAS       Economic Community of Central African States
ECOWAS      Economic Community of West African States
EIB         European Investment Bank
EU          European Union
FAO         Food and Agriculture Organization
FDI         Foreign Direct Investment
FFA         Framework For Action
GEF         Global Environmental Facility
GIRE        Integrated Water Resources Management
GDP         Gross Domestic Product
GNP         Gross National Product
GEF         Global Environment Facility
GENI        Global Energy Network Institute
HIV         Human Immunodeficiency Virus
HSIC        Heads of State Implementation Committee
HYCOS       Hydrological Cycle Observing System
ICD         Inland Container/Clearance Depot
ICT         Information and Communications Technology
ICW         International Conference on Water and Environment
IFAD        International Fund for Agricultural Development
IGAD        Intergovernmental Authority on Development
IMO      International Maritime Organisation
ISDN     Integrated Services Digital Network
ISM      International Safety Management
ITU      International Telecommunications Union
IWMI     International Water Management Institute
IWRM     Integrated Water Resources Management
LDC      Least Developed Countries
KM       Knowledge Management
LGP      Liquefied Petroleum Gas
MARPOL   International Convention for Prevention of Pollution from Ships
MC       Mombassa Corridor
MDC      Maputo Development Corridor
MDG      Millennium Development Goals
MOWCA    Maritime Organisation of West and Central Africa
MRU      Manu River Union
MU       Mepanda Uncua
NBI      Nile Basin Initiative
NC       Northern Corridor
NEPAD    New Partnership for Africa's Development
NRSE     New and Renewable Sources of Energy
NTO      National Telecommunications Organisation
OAU      Organisation of African Unity
OECD     Organisation for Economic Cooperation and Development
O&M      Operations and Maintenance
OMVG     Gambia River Basin Organization
OMVS     Senegal River Basin Organization
PAR      Project Assessment Report
PPIAF    Private Participation in Infrastructure Advisory Facility
PPP      Public Private Partnership
PV       Photovoltaic
QOL      Quality of Life
RASCOM   Regional African Satellite Communications Organisation
REC      Regional Economic Community
RMI      Road Management Initiative
RSA      Republic of South Africa
RSDP     Road Sector Development Programme
ROT      Rehabilitate Operate and Transfer
RTTP     Rural Travel and Transport programme
SADC     Southern African Development Community
SAPP     Southern African Power Pool
SARA     Southern Africa Railways Association
SATCC    Southern Africa Transport and Communications Commission
SODECI   Societe de Distribution d’Eau de La Cote d’Ivoire (Ivorian Water Utility)
SSA      Sub-Sahara Africa
SSATP    Sub-Sahara Africa Transport Policy
SDI      Spatial Development Initiative
STEM     Short-Term Energy Market (SAPP)
TAF      Technical Assistance Fund (ADF)
TAH      Trans African Highway
TKH      Trans Kalahari Corridor
TOR      Terms of Reference
TRISFA   Transport Reform and Integration Facility
UEMOA    West African Economic and Monetary Union
UMA      Union of the Arab Maghreb
UN       United Nations
UNCED    United Nations Conference on Environment and Development
UNTAD    United Nations Commission for Trade and Development
UN-ICT   United Nations - Information and Communications Technology
US/USA   United States of America
US$      United States Dollars
WAGP     West African Gas Pipeline
WAPP     West Africa Power Pool
WASH     Water and Sanitation for Health
WaSP     Water and Sanitation Programme
WEC      World Energy Council
WES      Water and Environmental Sanitation
WHO      World Health Organization
WMO      World Meteorological Organization
WSP      World Solar Programme
WUP      Water Utility Partnership

                                                       TABLE OF CONTENTS

CHAPTER 1:                          INFRASTRUCTURE OVERVIEW

1.     INTRODUCTION ...............................................................................................................1
2.     THE APPROACH ...............................................................................................................2
3.     THE PROGRAMME ...........................................................................................................3
4.     CAPACITY BUILDING .......................................................................................................3
5.     GOVERNANCE AND PEER REVIEW ..................................................................................4
6.     MEDIUM – LONG TERM ACTION PLAN .............................................................................4

CHAPTER 2:                          ENERGY

1.     INTRODUCTION ...............................................................................................................5
2.     BACKGROUND .................................................................................................................5
     2.1      Sustainable Energy ...........................................................................................................................5
     2.2      Energy and Quality of Life...............................................................................................................6
3.     AFRICAN ENERGY SECTOR CHALLENGES AND OPTIONS ................................................7
     3.1      Uneven Energy Resources Distribution and Needs..........................................................................7
     3.2      Energy Efficiency and Reliability of Energy Supply .......................................................................8
     3.3      Sustainable Biomass Use..................................................................................................................9
     3.4      Access to Affordable Energy Services ...........................................................................................10
     3.5      Reducing Risk.................................................................................................................................11
     3.6      Capacity Building ...........................................................................................................................12
     3.7      Energy Policy and Planning ...........................................................................................................13
     4.1      Regional Cooperation .....................................................................................................................14
     4.2      Role of AFREC and RECs ............................................................................................................14
     4.3      Philosophy, Strategy and Approach for Identification of Short-term Action Projects...................15
5.     SHORT-TERM ACTION PROGRAM FOR NEPAD PROJECTS ..............................................16
     5.1      Power Systems Projects..................................................................................................................17
     5.2      Gas/Oil Transmission Projects .......................................................................................................18
     5.3      Studies for Physical Projects ..........................................................................................................18
     5.4      Capacity Building Projects and Studies (Regional) .......................................................................18
     5.5      Facilitation Projects and Studies (Regional) ..................................................................................19
     5.6      Summary of Outputs of the Proposals............................................................................................21
6.     NEPAD INVOLVEMENT IN IMPLEMENTATION OF THE PROJECTS ..................................22
     6.1      Power Systems Projects..................................................................................................................22
     6.2      Gas/Oil projects ..............................................................................................................................22

     6.3      Studies for Physical Projects ..........................................................................................................23
     6.4      Capacity Building and Facilitation .................................................................................................23
     6.5      NEPAD Activity Matrix.................................................................................................................23
7.     CONCLUDING REMARKS ...............................................................................................24

CHAPTER 3:                          WATER SECTOR
1.     INTRODUCTION .............................................................................................................25

2.     WATER RESOURCES OF AFRICA ....................................................................................26
3.     SECTOR STATUS, ISSUES AND CHALLENGES.................................................................28
     3.1      Overview ........................................................................................................................................28
     3.2      Current Status .................................................................................................................................28
     3.3      Policies and Strategies ....................................................................................................................28
     3.4      Information on Resources...............................................................................................................29
     3.5      Management of Large River Basins ...............................................................................................29
     3.6      Access to Water Supply and Sanitation..........................................................................................29
     3.7      Irrigation .........................................................................................................................................30
     3.8      Degradation of River Basins...........................................................................................................30
     3.9      Drought and Desertification ...........................................................................................................30
     3.10     Water Quality .................................................................................................................................31
     3.11     Fishery and Recreation ...................................................................................................................31
     3.12     River Transport...............................................................................................................................31
     3.13     Hydropower ....................................................................................................................................31
4.     INITIATIVES ...................................................................................................................31
     4.1      Africa Water Vision for 2025.........................................................................................................31
     4.2      Regional Initiatives.........................................................................................................................32
     4.3      National Programmes .....................................................................................................................34
5.     PROPOSED ACTIONS ......................................................................................................34
     5.1      Strategic Approach and Planning. ..................................................................................................34
     5.2      Short-term Action Plan...................................................................................................................34
     5.3      Implementation...............................................................................................................................38
     5.4      Mechanism for Monitoring.............................................................................................................38
6.     THE ROLE OF NEPAD .....................................................................................................38
     6.1      Water Sector Governance...............................................................................................................38
     6.2      Improve Access ..............................................................................................................................38
     6.3      Partnership for Managing Shared Watercourses ............................................................................39
     6.4      Enhancing Knowledge Base, Sustainability of Installations, and Capacity to Manage Extreme
              Events .............................................................................................................................................39
     6.5      Mobilizing the Financial Resources ...............................................................................................39

CHAPTER 4:                          TRANSPORT
1.     OVERVIEW.....................................................................................................................40
2.     TRADE CORRIDORS WITHOUT BORDERS AND BARRIERS .............................................45
     2.1      Objective.........................................................................................................................................45
     2.2      Challenges ......................................................................................................................................45
     2.3      Response.........................................................................................................................................45
     2.4      Benefits...........................................................................................................................................46
     2.5      Program ..........................................................................................................................................46
     2.6      The Role of NEPAD.......................................................................................................................47
3.     BETTER AND SAFER ROADS TO BRING AFRICA TOGETHER ..........................................47
     3.1      Objective.........................................................................................................................................47
     3.2      Challenges ......................................................................................................................................47
     3.3      Benefits...........................................................................................................................................50
     3.4      Program ..........................................................................................................................................51
     3.5      The role of NEPAD ........................................................................................................................52
4.     COMPETITIVE AND SEAMLESS RAIL SERVICES .............................................................53
     4.1      Objective.........................................................................................................................................53
     4.2      Challenges ......................................................................................................................................53
     4.3      Response.........................................................................................................................................54
     4.4      Benefits...........................................................................................................................................54
     4.5      Program ..........................................................................................................................................55
     4.6      The Role of NEPAD.......................................................................................................................55
5.     EFFICIENT PORTS ..........................................................................................................55
     5.1      Objective.........................................................................................................................................55
     5.2      Challenges ......................................................................................................................................56
     5.3      Response.........................................................................................................................................56
     5.4      Benefits...........................................................................................................................................57
     5.5      Program ..........................................................................................................................................57
     5.6      The Role of NEPAD.......................................................................................................................57
6.     SAFE SEAS AND PORTS ..................................................................................................57
     6.1      Objective.........................................................................................................................................57
     6.2      Challenges ......................................................................................................................................58
     6.3      Response.........................................................................................................................................58
     6.4      Benefits...........................................................................................................................................58
     6.5      Program ..........................................................................................................................................58
     6.6      The Role of NEPAD.......................................................................................................................59
7.     INLAND WATERWAYS ...................................................................................................59

     7.1      Objective.........................................................................................................................................59
     7.2      Challenges ......................................................................................................................................59
     7.3      Response.........................................................................................................................................59
     7.4      Benefits...........................................................................................................................................59
     7.5      Program ..........................................................................................................................................60
     7.6      The Role of NEPAD......................................................................................................................60
8.     SAFE, SECURE AND EFFICIENT SKIES AND AIRPORTS ...................................................60
     8.1      Objective.........................................................................................................................................60
     8.2      Challenges ......................................................................................................................................60
     8.3      Response.........................................................................................................................................61
     8.4      Benefits...........................................................................................................................................62
     8.5      Program ..........................................................................................................................................62
     8.6      The Role of NEPAD.......................................................................................................................63
9.     IMPLEMENTATION SUPPORT .........................................................................................64
     9.1      Challenges ......................................................................................................................................64
     9.2      Response.........................................................................................................................................65
     9.3      Benefits...........................................................................................................................................65
     9.4      Program ..........................................................................................................................................65
     9.5      Role of NEPAD ..............................................................................................................................66

1.     INTRODUCTION .............................................................................................................67
2.     COMPONENTS OF THE ICT INFRASTRUCTURE ...............................................................67
3.     PROGRESS MADE BY AFRICAN COUNTRIES ..................................................................67
4.     CURRENT STATUS OF ICTS IN AFRICA ...........................................................................69

7.     IMPLEMENTATION ARRANGEMENTS AND THE ROLE OF NEPAD ..................................78

                                    INFRASTRUCTURE DEVELOPMENT
1.     ROLE OF PPPS IN DEVELOPMENT ..................................................................................83
2.     CHALLENGES AND OPPORTUNITIES ..............................................................................84
3.     NEPAD AND DEVELOPMENT OF PPP’S IN AFRICA ..........................................................85

CHAPTER 7:                          WAY FORWARD
1.     INTRODUCTION .............................................................................................................86
2.     NEPAD INSTITUTONAL FRAMEWORK............................................................................86

3.     NEXT STEPS ...................................................................................................................88
4.     RISKS .............................................................................................................................91

1.1       Number of People Living on Less than $1 per day                                                                                1
1.2       NEPAD – Short Term Action Plan - Selection Criteria of Projects                                                                2
2.1       Criteria for Selection of Short-Term Energy Projects                                                                           16
2.2       NEPAD Activity Matrix for Energy Sector                                                                                        23
3.1       Relationship between Water and other NEPAD Programmes                                                                          26
3.2       Available Renewable Water Resources                                                                                            26
3.3       Renewable Water Resources and their Use                                                                                        27
3.4       Africa Water Vision                                                                                                            31
3.5       Africa Water Vision Messages                                                                                                   32
3.6       Short-term Action Plan Programme Themes for Water Sector                                                                       34
4.1       SADC Regional Development Corridors Programme                                                                                  44
4.2       Summary of Transport Short-term Action Plan                                                                                    45
4.3       Facilitation of Inter-State road Transit in UEMOA                                                                              46
4.4       Summary of Short-Term Programs/Projects – Trade Corridors                                                                      47
4.5       The Road Management Initiative (RMI/SSATP)                                                                                     49
4.6       Short-Term Program for Roads                                                                                                   52
4.7       Performance of Selected Railway Corridors                                                                                      53
4.8       Short-Term Projects/Programs for Railways                                                                                      55
4.9       Container Handling Performance                                                                                                 56
4.10      Short-Term Projects for Ports                                                                                                  57
4.11      Short-Term Projects for Safe Seas and Ports                                                                                    58
4.12      Short-Term Action Plan for Inland Waters                                                                                       60
4.13      Short-Term Program for Air Transport                                                                                           64
5.1       African Countries with Independent Regulatory Authorities                                                                      67
5.2       Status of Development of ICT National Policies and Plans in African Countries                                                  68
5.3       Comparison of key ICT Infrastructure Indicators                                                                                69
5.4       Short-Term Plan: ICT Infrastructure Deployment and Rollout Projects                                                            77
5.5       Short-Term Plan: ICT Infrastructure Deployment Facilitation Projects                                                           78
5.6       Short-Term Plan: ICT Infrastructure Exploitation and Utilisation Initiatives                                                   78
5.7       Institutional Arrangements for Implementation of ICT Rollout Projects                                                          81
5.8       Institutional Arrangements for Implementation of ICT Facilitation Projects                                                     81

5.9      Institutional Arrangements for Implementation of ICT Utilisation Projects    82

2.1      Linkages between Access to Commercial Energy and Quality of Life             6
2.2      Important Challenges in Addressing Poverty via Sustainable Energy            7
2.3      Options in Addressing Sustainable Energy Dev. via Regional Co-operation      7
2.4      Strategy and Approach for Integrated Energy Project Development              15
3.1      Access to Sanitation                                                         30
3.2      Access to Water Supply                                                       30
4.1      Transport and Insurance Cost as a Percentage Value of Exports                40
4.2      Percent of Paved Roads                                                       48
4.3      Performance of Malawi Railways (MR) and CEAR (MR Concessionaire)             54
4.4      Comparative Air Fare Levels for Selected Routes                              61
5.1      Cumulative Number of Telecommunication Regulatory Agencies in Africa         68
5.2      Average Connections Charges as a % of GDP per Capita                         70
5.3      Internet Users per 1000 Inhabitants                                          71
5.4      Internet Hosts per 1000 Inhabitants                                          71
5.5      Regional Population and Main Telephone Lines Distribution                    72
5.6      African Regional Teledensities                                               72
5.7      Average Regional Cost of Telephone Services                                  73
5.8      Average Regional Internet/IT Penetration                                     73
5.9      Largest Cities Share of Population and Main Telephone Lines                  74
5.10     Internet Penetration and GDP per Capita                                      76

7.3      Implementation Actions and Time Schedule                                     89

Appendix 1      Concept Note - Medium-Long Term Action Plan for Africa's Infrastructure
Appendix 2      Energy Sector - Project Briefs and Project Assessment Reports
Appendix 3      Water and Sanitation Sector - Project Briefs and Profiles
Appendix 4      Transport Sector - Project Briefs and Profiles
Appendix 5      Information and Communication Technologies (ICTs) Sector - Project Briefs

                 CHAPTER 1                                    Underlying one of NEPAD’s primary
                                                              poverty reduction objectives, to reduce
                                                              Africa’s economic marginalisation, is the
         INFRASTRUCTURE                                       maxim that there can be no development
            OVERVIEW                                          without trade and there can be no trade
                                                              without infrastructure. Infrastructure is
                                                              defined in this context as transport, energy,
1.         INTRODUCTION                                       water        and        information       and
                                                              communications technology (ICT). The
Poverty is the most fundamental reality in                    primary activity space of NEPAD is the
Africa, and its alleviation, if not                           region. Through the principle of
eradication, is Africa's largest, most urgent                 subsidiarity, infrastructure activities within
challenge. NEPAD is a pledge by African                       the national economic space remain the
leaders, based on a common vision and a                       purview of the Governments concerned;
firm and shared conviction, that they have                    NEPAD’s primary role is to promote, to
a pressing duty, inter alia, to eradicate                     facilitate and to monitor the development
poverty. This is especially important in the                  of regional infrastructure activities. A
light of recent findings (see Box 1.11) that,                 secondary role for NEPAD is to help to
while other regions in the world are                          put in place the structures, institutional
making steady progress with respect to                        capacity and financing that will be
poverty reduction targets, Africa is                          necessary to meet Africa’s Millennium
slipping further and further behind. Thus,                    Goals and to promote the harmonisation of
NEPAD’s creation has come at a critical                       policies and regulation, even though these
juncture in Africa’s development; never                       activities will, in fact, be undertaken at the
has it been more important to get to grips                    national level.
with the intractable problems that underlie
Africa’s malaise.                                             Why is Regional Infrastructure
     Box 1.1: Number of people living on less than $1 a
              day (millions)
      Despite progress, millions remain in extreme            While the role of infrastructure within a
                                                              country is well recognised, what is less
                            1990       1999      2015
                                                              well understood is the role of regional
     East Asia and the       452        260       59
     Pacific                                                  infrastructure. The concept of regional
     (excluding China)       92         46         6          infrastructure is important because African
     Europe and               7         17         4          economies are typically too small to
     Central Asia
     Latin America           74         77        60          generate the economies of scale that can be
     and the Caribbean                                        found in larger markets. Thus, transaction
     Middle East and          6          7         6          costs are high and competitiveness is low.
     North Africa
     South Asia              495       490        279         The potential for reducing transaction
     Sub-Sahara              242       300        345         costs and increasing competitiveness
     Africa                                                   through the sharing of the production,
     TOTAL                  1,276     1,151       753         management         and     operations    of
     (excluding China)       916       936        700
                                                              infrastructure facilities and through hubs,
                                                              development corridors or poles is
Infrastructure services are important
aspects in addressing NEPAD’s poverty
reduction goals for Africa.
                                                              Opportunities for shared facilities are
                                                              obvious in the cases of trade in electricity
                                                              and gas. They also exist in the areas of
    World Bank                                            1
water resource management, railways,                 export/import business. It is no wonder
telecommunications and even universities             that Africa’s international competitiveness
and training centres. In the road, rail and          remains compromised and its penetration
port sub-sectors, opportunities are more             of global markets remains feeble.        Yet
likely to exist in the undertaking of                they are all areas in which a regional
development corridors associated with                approach can be expected to provide
road projects. In the port and air transport         economies of scale and to reduce both the
sectors, they are likely to arise through the        costs of factors of production and
development of port and airline hubs in              transaction      costs.      In     addition,
critical locations to serve not only a single        infrastructure activities create an excellent
country, but also its hinterland.                    opportunity     to      pursue     NEPAD’s
                                                     governance and peer review agendas at a
 Economies of scale can result from both             sectoral level. This is the thrust of the
the physical provision of infrastructure and         NEPAD Short-term Action Programme for
the associated operations and services. It is        Infrastructure.
estimated      that   pooling      electricity
generation facilities in Southern Africa             2.         THE APPROACH
could generate savings for Southern Africa
of US$80 million per annum in operating               The approach adopted by NEPAD is two-
costs and US$700 million in expansion                pronged: a short-term action programme
costs over the next 20 years. Creating air           has been developed based on a survey of
transport hubs could eliminate the need for          the      infrastructure    projects    under
costly     airport    construction--Abidjan          preparation by countries and by regional
Airport development cost US$32 million--             institutions. This project selection process
to those hubs that would carry large                 have been guided by the following criteria:
volumes of international and regional                projects that are at an advance stage of
traffic.       Creating        multi-country         preparation and that can be fast-tracked;
telecommunications       markets       would         projects that support both a regional
encourage the private sector to invest in            approach to infrastructure provision and
the latest technology to replace current             regional integration; projects that have
out-dated systems.                                   stalled for political reasons and where

At the operating level, additional savings                 Box 2.1: NEPAD – Short Term Action Plan
could be achieved. Rail systems that                              Selection Criteria of Projects
require a change of locomotive and crew at                Projects that are at an advance stage of preparation
each border crossing create higher than                   and that can be fast-tracked
necessary operating costs and prices for                  Projects that support both a regional approach to
customers and they also create delays,                    infrastructure provision and regional integration
increasing time to market and reducing
                                                          Projects that have stalled for political reasons and
competitiveness. Having to deal with                      where NEPAD’s intervention could be expected to
multiple, different national systems with                 make a difference
respect to customs, transit documents,
                                                          Initiatives that offer solutions to regional policy,
insurance documents, etc., imposes a                      regulatory or institutional blockages to regional
substantial burden on producers and                       infrastructure activities
manufacturers, especially when they create
                                                          Projects that respond to the involvement of the private
opportunities for rent-seeking behaviour.                 sector in infrastructure provision

Similar examples can be produced for                 NEPAD’s intervention could be expected
virtually every factor of production and             to make a difference; initiatives that offer
virtually every service associated with the          solutions to regional policy, regulatory or

institutional blockages to regional                     4.     CAPACITY BUILDING
infrastructure activities; and projects that
respond to another NEPAD objective, that                Many of the sub-sectoral initiatives
of involving the private sector in                      described below refer to or include
infrastructure provision. The Short-term                activities related to capacity building. It is
Action Programme will be linked to and                  however, appropriate to make two general
complemented by a Medium- and Long-                     comments regarding capacity building at a
term Action Programme that will take up                 broader level.
projects and initiatives that require more
time for preparation and development.                   First, the activities included in the Short-
                                                        term Action Programme in Infrastructure
Due to the nature of the Short-term Action              provide a unique opportunity to create a
Programme, it contains relatively few                   body of knowledge regarding what works
items that can be expected to showcase                  and what does not, to create pilot and
NEPAD in action. Needless to say, it does               demonstration activities and create a bank
not contain all the projects proposed by the            of knowledge that will be invaluable in
RECs, nor does it set out to achieve                    helping others to avoid having to reinvent
balance between regions in Africa. It is to             the wheel. Experience with the
be interpreted rather as the first stage in             implementation of the Yamoussoukro
a rolling action plan that will be                      Decision on the liberalisation of air
updated periodically as and when better                 transport could be instructive for the
information becomes available. The                      creation and operation of the Africa
Medium-       and      Long-term     Action             Energy Charter; the Maputo Development
Programme will be much more                             Corridor experience could be useful in the
comprehensive.                                          creation of development corridors in
                                                        Eastern and West Africa. This will only
3.      THE PROGRAMME                                   happen, however, if NEPAD resolutely
                                                        promotes a culture of sharing knowledge
For each of the infrastructure sub-                     and learning from others in national,
sectors—water, energy, transport and ICT                regional and continental entities.
(Information    and      Communications
Technology), the Short-term Action                      Second, experience with regional training
                                                        centres has been mixed. It would be useful
Programme contains a brief statement of
each sub-sectoral vision, the problems                  for NEPAD to sponsor an inventory of the
facing the sub-sector and the NEPAD                     capacities and performance of these
response.                                               training centres, including a diagnosis of
                                                        their means and capacity to meet their
This brief overview is complemented by                  mandates, the extent to which they are
brief descriptions of specific physical                 valued by their potential clients, and the
                                                        extent that they are genuinely empowered
infrastructure projects, studies and policy,
regulatory or institutional initiatives that            by those who gave them their mandates.
will be promoted and facilitated by                     The results would form the basis for a
NEPAD both in terms of helping to                       programme of strengthening and/or
                                                        rationalisation of the institutions to enable
remove obstacles at the highest political
level and of assisting with raising the                 them to play a fuller role in the
necessary funding.2                                     development of the continent.

                                                        It might also be appropriate to undertake a
  Funding decisions on individual projects or           similar exercise with the RECs to ensure
initiatives would, of course be subject to the
decision-making processes of the funding agencies
                                                        that they have the capacity to undertake

the enhanced roles that they will be called        Many of the interventions retained under
upon to play under NEPAD, that                     the short-term action plan are in fact
overlapping responsibilities are eliminated        elements of broader programs and
and that they learn from each other to their       comprise a combination of policy
mutual benefit. It is in Africa’s interest         measures and institutional reform,
that the RECs are strong; it is in NEPAD’s         investment and capacity building. The
interest to help them become so.                   preparation has also showed the potential
                                                   value of exchanges between the RECs to
5.     GOVERNANCE AND PEER                         foster the dissemination of good practices
       REVIEW                                      and innovations. The Medium-Long Term
                                                   Action Plan would complement and
Since many regional infrastructure                 supplement efforts undertaken within the
initiatives and projects are blocked by a          Short-Term Action Plan.
failure at the national level to carry
through on commitments made at the                 The goal of the Medium-Long Term
regional level, it has been deemed                 Action Plan is to ensure the steady and
appropriate to take a leaf from the NEPAD          sustained development of infrastructure on
governance and peer review initiative and          the continent. It would deal with three
to create a mechanism for assessing on an          inter-related areas of: (i) policies,
annual basis the status of infrastructure          regulation and institutional structures; (ii)
development in each country. Following             investment requirements and financing;
the example of the African Economic                and, (iii) institutional capacity utilization
Outlook produced by the OECD and the               and development as well as knowledge
African Development Bank, NEPAD                    sharing and networking.
would sponsor a companion volume—the
African infrastructure Outlook--that would
set out for each country the rate of
progress achieved in key infrastructure
areas, such as basic services to the poor,
facilities for industry and trade,
privatisation, cost recovery, sectoral
financial governance by governments and
parastatals.    In     addition    to  the
establishment of a sector peer review
system, the publication of independently
produced data will allow partners from the
public and private sectors to assess
progress and will provide them with a
more substantive basis for investment


The preparation of the short-term action
plan has shown the need for a
programmatic framework for setting
objectives against benchmarks and
defining strategies and rolling programs.

            CHAPTER 2                              and operations of energy infrastructure
                                                   facilities is immense.

              ENERGY                               The objective of this report is to propose
                                                   projects, studies/initiatives for NEPAD’s
1.     INTRODUCTION                                Short-term Action Plan. The proposed
                                                   projects     were      identified  through
Energy services are a crucial input to             consultation with regional and sub-
providing adequate food, shelter, clothing,        regional organizations. The projects were
water, sanitation, medical care, schooling,        then prioritised on the basis of agreed
and access to information - important              selection criteria. Detailed Project
aspects in addressing poverty reduction in         Assessment Reports (PARs) and Terms of
the continent. Increased access to energy          Reference (TORs) for Studies were
services will not, in itself, result in            prepared for the prioritised projects,
economic or social development, but lack           studies and initiatives recommended for
of adequate energy inputs can be a severe          NEPAD's Short-term Action Program.
constraint to development. The energy
sector has a key role in bridging the              The challenge for NEPAD’s African
infrastructural gap in Africa.                     Energy Infrastructure Initiative is to
                                                   develop fully the energy resources of the
African leaders have now realized that a           continent in order to deliver affordable
‘Business as Usual’ approach of                    energy to the various economic and social
implementing projects and programs has             sectors. This will enhance economic
not advanced the economic development              development and improve the standard of
of Africa, and have formulated the                 living of the continent’s population. The
NEPAD initiative to promote, amongst               objective of the proposed Energy
other things, the development of the               Infrastructure Projects is, therefore, to
African energy infrastructure through a            exploit the continent’s rich energy
new form of partnership.          NEPAD            resources, through regional cooperation,
initiatives will foster policy and                 and to contribute towards poverty
institutional reforms needed to improve            reduction and economic development in
efficiency and create the environment that         the continent in line with the overarching
would enable the financing of the sector           objectives of NEPAD.
through internal cash generation and the
private sector.
                                                   2.        BACKGROUND
As shown in Chapter 1, the economies of
individual African countries are typically         2.1       Sustainable Energy
too small to generate the economies of
scale that can be found in integrated              Sustainable energy can be defined as
markets. Hence, energy infrastructure              energy produced and used in ways that
development that is limited to meeting             support human development over the long
country level demands only is associated           term, in all its social, economic, and
with high transaction costs and low                environmental dimensions3. Guaranteeing
competitiveness. Furthermore, as also              a sustainable supply of affordable
shown and demonstrated earlier, in Africa,
the potential for reducing transaction costs       3
                                                      UNDP/UNDESA/WEC: World Energy Assessment:
and increasing competitiveness through             Energy and the Challenge of Sustainability, United Nations
                                                   Development Program/ United Nations Department of
the sharing of the production, management          Economic and Social Affairs/World Energy Council, New York,
                                                   September 2000

energy is one of the best ways to address                     enhancing reliability of supply and
poverty, inequality, and environmental                        reducing adverse environmental impacts.
degradation everywhere on the planet4. In
relation to sustainable energy, the United                     Energy use is closely linked to a range of
Nations Commission on Sustainable                             social issues, including poverty reduction,
Development at its Ninth Session in April                     population growth, urbanization, and
2001 deliberated on energy and transport                      opportunities for women. Energy is needed
for sustainable development. Key issues                       to meet basic human needs (food
that required particular attention were                       consumption, clean water supply, shelter,
identified, together with appropriate                         health, education, employment etc) and
strategies and options to correct the                         economic growth. Generally, the quality of
situation .                                                   life improves with commercial energy use,
                                                              which is associated with increased
Energy is central to achieving the goals of                   economic      activities   and     industrial
sustainable development, and reducing                         development. An increase in availability
poverty is a requirement of sustainable                       and use of electricity is generally
development. Presently, access to modern                      associated with an improved quality of
energy in Africa is limited, and the current                  life.
energy supply system is not sufficiently
reliable or affordable to support                             On the other hand, lack of electricity
widespread economic growth. The                               usually means inadequate illumination,
productivity of one third of the world's                      and few labour saving appliances, as well
people, many of whom are in Africa, is                        as limited telecommunications and
compromised by lack of access to                              possibilities for commercial enterprise.
commercial energy and perhaps another                         The energy consumption patterns of poor
third suffer economic hardship and                            people - especially their reliance on
insecurity due to unreliable energy                           traditional fuels in rural areas - tend to
supplies. NEPAD's energy infrastructure                       keep them impoverished. Fig 2.1 shows
initiative will play a key role in                            some of the linkages between increased
increasingly connecting the African urban                     energy access for basic needs and quality
and rural poor to reliable, commercial                        of life.
sources of energy and contribute towards
poverty reduction.                                                   Fig 2.1. Linkages between Access to
                                                                    Commercial Energy and Quality of Life
2.2      Energy and Quality of Life                                               Improved Quality of Life

The energy dimension of poverty is the                           Increased Literacy Rate              Increased Life Expectancy

absence of adequate, affordable, reliable,                                          Increased Commercial
quality, safe, and environmentally sound                                              Energy Access for
                                                                                    Basic Needs/ Economic
energy services to support economic                                                      Development

growth and human development. NEPAD                                  Increased Potable                       Reduced Infant
                                                                       Water Access
will play a significant part in furthering                                                                   Mortality Rate

regional cooperation and integration,
which will minimise the cost of supply
arising from the economies of scale of
large regional supply systems, whilst

  Doucet G: Making Energy Affordable by Making its
Production Sustainable, Global Energy Business, McGraw-
Hill, New York, March/April 2001

       CHALLENGES AND OPTIONS                       Fig 2.2. Important Challenges in
                                                    Addressing Poverty via Sustainable
The development of energy in the                    Energy
continent still lags behind population
growth and socio-economic needs that are
being experienced by nearly all African                                   Uneven Distribution
                                                                         of Resources & Needs
                                                                                                       Poor Access to
countries. In Africa, per capita commercial                                                          Commercial Energy
energy use has barely increased since 1970                      Low Energy
                                                          Efficiency &Reliability
and remains at less than 10 percent of per                                            Addressing Poverty      Poor Information
                                                                                    via Sustainable Energy
capita use in North America. In essence
                                                                  Weak                                       Non Sustainable
this means that most Africans have no                    Institutional Capacity                               Use of Biomass
access to commercial energy3. Africa with                                  Poor Policies &
                                                                             Strategies         Affordable Energy
13% of the world’s population, consumes
only 3% of the world’s commercial energy
although its share of the world’s energy
production is 7%. Thus Africa’s per capita               Fig 2.3. Options in Addressing Sustainable
                                                           Energy Development via Regional Co-
energy consumption is very low by world                                   operation
standards, and much of the commercial
energy it produces is consumed elsewhere.                              Integrated
                                                                  Resource Development
                                                                                                 Information Systems
A driving force must be to make African                     Increased Energy
                                                         Efficiency & Reliability
energy industry more competitive. As                                                                               NRSEs
Africa is in competition with other                                            Regional
continents regarding potential investors,            Rural Energy                                                  Training
there is a need for African countries to                Access

pool their resources and enhance regional                                                                Sustainable Use of
cooperation and integration on the                         Enhanced Institutional
                                                                                            Adopt Policies
continent in order to improve international                     Capacity
                                                                                             & Strategies
competitiveness by making energy
services available at competitive costs in
line with NEPAD’s objectives. Putting in           3.1          Uneven      Energy     Resources
place the necessary legal, institutional and                    Distribution and Needs
regulatory frameworks will constitute an
important first step as part of the process.       Africa has an abundance of commercial
                                                   energy resources (e.g. coal, gas, oil, new
Fig 2.2 shows the important challenges             and renewable, and nuclear), but they are
involved in the provision of sustainable           not uniformly distributed with regard to
energy to contribute towards poverty               form, locality and needs. North and West
reduction, which NEPAD intends to                  Africa have the bulk of the oil and gas
address in its Short-term Action Program.          reserves, whereas Southern Africa holds
                                                   most of the coal deposits. Vast
Fig 2.3 shows areas of cooperation in              hydroelectric potential is located mainly in
sustainable energy development, which              Central Africa, and forms part of Africa’s
will contribute towards economic growth            extensive renewable sources of energy.
and poverty reduction. Through regional            However, most of the energy resources are
cooperation, the projects will assist in           in those areas far from present demand
developing the continent’s rich energy             centres, often in countries with poor
resources.                                         economic conditions and with inadequate
                                                   infrastructures. It is thus not energy

resources that are lacking in Africa, but                   namely,     Nigeria,  Angola,   Gabon,
rather the technical and financial capacity                 Equatorial Guinea, Congo and Cameroon6.
to harness and optimally exploit them, and
the political will to implement the                         Reducing gas flaring in Africa requires the
numerous interconnections needed for                        political will for countries - in Africa and
their utilisation as part of an integrated                  globally - to come together to solve the
development strategy to match supply with                   problem and encourage the development
demand5.        However,     policy    and                  of regional markets to justify the large up-
institutional reforms at the country level                  front investments. Sector reforms are
must be put in place.                                       needed to create incentives to capture the
                                                            economic value of natural gas. Linking the
Africa is a net exporter of energy, mainly                  reduction in gas flaring with international
of oil, but also of natural gas and coal.                   climate change treaties would facilitate
Africa’s oil exports come mainly from a                     funding by building on the global
few      countries     (Algeria,     Angola,                dimension of the problem.
Cameroon, Congo, Egypt, Gabon, Libya,
Nigeria, and more recently, Equatorial                      A similar point can be made with respect
Guinea and Sudan). Natural gas exports                      to Africa’s huge and largely untapped
come overwhelmingly from Algeria, and                       hydro potential. Spilling water from dams
coal exports almost exclusively from                        for lack of adequate demand and not
South Africa. Dependency on oil as a                        harnessing hydro resources may be likened
commercial fuel represents at times nearly                  to gas flaring on the basis that it
half of the energy bill of non-oil producing                constitutes a waste of low-cost and
countries. Intra-African trade in oil and gas               abundant energy resource. In each case,
is limited, and would be enhanced by                        Africa should embark on a program to
regional cooperation.                                       exploit both hydro and flared gas, as well
                                                            as other resources, for multi-purpose uses
Gas flaring causes global, regional and                     including power generation.
local environmental problems and
constitutes the waste of a valuable and                     3.2      Energy Efficiency and Reliability
non-renewable resource. This takes place                             of Energy Supply
for lack of local markets and vision to link
into international markets, as well as lack                 In past decades, African energy intensity,
of infrastructure. Flared gas is a relatively               which is a measure of commercial energy
cheap natural resource that could be                        consumption per dollar of GDP, has
tapped to reduce the cost of electricity,                   increased whilst during the same period
increasing Africa’s competitiveness and                     there has been a decline in the world
supporting economic opportunities for                       average energy intensity. Energy supply
Africa. Such energy could otherwise have                    and end-use efficiencies in the continent
been used. The gas flared in Nigeria alone                  are still only two-thirds to one half of what
could fuel total annual electricity                         would be considered best practice in the
production for Sub-Saharan Africa. 89%                      developed world. Thus an important
of worldwide gas flaring is in developing                   objective of regional integration efforts
countries; of which 25% is flared in Sub-                   should be to improve the inefficient
Saharan Africa; and 75% of that in
Nigeria. Six countries account for Sub-
Saharan Africa flaring/venting of gas,                      6
                                                               World Bank : Gas Flaring in Africa. Challenges and
                                                            Opportunities, NEPAD Work in Progress Review Workshop,
                                                            Benoni, January 2002
  ADB : Energy Situation of Africa. Synthesis Report,
African Energy Program, Abidjan, 1995

utilization     of     the    continent’s       energy           others, and lessons learned by top
resources.                                                       utilities/organisations in Africa and the
                                                                 developed world would be disseminated as
The direction of energy systems and                              part of NEPAD’s Initiative. Benchmarking
energy policies must be shifted towards                          performance against peers in the
greater emphasis on end-use efficiency,                          international scene is an important part of
renewable energies and low-emission                              the performance improvement measures.
technologies. Cooperation activities need
to be formalized with developed countries                        3.3        Sustainable Biomass Use
and international institutions regarding
energy efficiency to assist African                              Some 2 billion people, or one-third of the
countries to develop capabilities and                            world's population, many of whom are in
expertise to implement sustained least cost                      Africa, have no access to modern energy
energy development. There is great                               and rely heavily on traditional energy
potential in African countries for                               sources.    Africa’s   biomass      energy
promoting energy efficiency activities as a                      consumption is estimated to be the same as
way of increasing the competitiveness of                         that of China and India whilst their
their economies, fostering technology                            population is three times that of Africa.
progress, and protecting the environment7.                       Biomass accounts for about two-thirds of
                                                                 the energy consumption of 32 Sub-Saharan
Much plant in Africa is being under-                             African countries.
utilised, and low levels of plant availability
are being recorded. It is necessary to                           Dependence on traditional fuels will long
improve reliability and lower the cost of                        remain a reality. It is not so much their use
energy supply to productive activities in                        that is wrong, but the manner in which
Africa     thus    making      them     more                     they are being managed and used, not
competitive, in order to attain the                              always at a sustainable rate. Given the
economic growth as required in the                               extent of the level of wood-fuel use in
objectives of NEPAD. There is therefore a                        Africa, one critical element of a more
need to ensure the optimum utilisation of                        appropriate energy mix for Africa is more
plant assets, in particular before any                           sustainable biomass use8. In part this can
additional plant is purchased.                                   be achieved by more efficient end use such
                                                                 as improved cooking stoves, using LPG
The ability to identify a wide range of                          for domestic use etc, but it also calls for
"best practice" options aimed at                                 more sustainable management of forests
performance improvement is important. In                         and farmland trees. The implementation of
the past it may have been adequate to                            improved energy services for sustainable
simply identify the "best" technical option,                     rural development in Africa is an urgent
but in today's market-based business                             necessity in order to address poverty.
environment, the most cost-effective
option is the overriding factor for                              Commercial energy supplies would not
competitiveness in business. Using every                         only contribute towards the biomass
available channel to identify viable options                     sustainability problem, but also reduce the
is necessary to determine best use of an                         burden of fuel-wood collection and
organisation's limited resources. Much                           provide health benefits of reduced indoor
could be learned from experiences of                             air pollution. Strategies are urgently

7                                                                8
  Ben Abdallah M: Improving Energy Efficiency in African           Murray J : Appropriate Energy Mix for Africa, Workshop
Countries, First Pan-African Energy Ministers' Conference,       of the Nigerian Institute of Engineers, Lagos, Nigeria, 22 March
Tunis, Tunisia, May 1995                                         2001

required to improve rural energy planning                           time, substantial amounts of money, and
and implementation. However, energy data                            industrious efforts over three decades. In
required to support these strategies is not                         South Africa about 63% of the population
freely available. Improving the biomass                             had grid supplied electricity by the end of
data collection system and incorporating                            2000. On the other hand, access to
biomass resources into the national energy                          electricity is below 10% in most Sub-
balance would enable the management and                             Saharan countries, which requires huge
efficient utilization of biomass resources.                         investment and a long implementation
                                                                    period to bridge the electrification gap.
Energy could be made a vital entry point
or "lever" for improving the position of                            It should be noted that regional
women in the household and society.                                 interconnections will bring optimum
Strategies are required to improve the rural                        solutions for generation and transmission.
situation by building on the existing                               However, reform of distribution at the
knowledge and expertise of women and by                             country level is critical for spreading the
improving upon traditional, well-tested                             benefits of efficient, low-cost energy to the
methods and practices. Rural energy                                 poor.
consumption and production revolve
around the household as the basic unit of                           It is difficult to reconcile the imperatives
economic activity and the vast majority of                          of rural electrification with those of
household roles, including those relating to                        maintaining the financial stability of
energy, fall disproportionately on women.                           organizations and keeping electricity
                                                                    tariffs at affordable levels. In many
3.4       Access to Affordable Energy                               countries rural electrification by means of
          Services                                                  grids and the sole intervention of
                                                                    electricity utilities may not be the best or
African energy consumption per capita has                           fastest means of providing a large number
been consistently lower than the world                              of households with electricity. For
average. In this regard, one of the                                 example, solar electrification of rural
important objectives of NEPAD’s regional                            households through joint ventures in
integration effort would be to increase                             renewables has been successful. New and
African energy consumption per capita.                              renewable sources of energy (NRSE)
Africa remains the continent in which the                           technologies must play an increasingly
rate of residential connections is the                              important role in fully harnessing Africa’s
lowest. In 1991, fewer than 22% of                                  extensive NRSE potential, as the provision
African households were connected to                                of clean, affordable, and reliable energy is
networks9. This figure presents a generally                         a key element of sustainable development.
poor picture, but it conceals wide
variations between the sub-regions and                              Diversity of commercial energy supplies
between countries within a sub-region.                              and of technologies must be considered
                                                                    and utilised. Balanced energy solutions
The pattern in North Africa is very clearly                         offer rural communities accelerated access
different. For example, in Egypt about                              to commercial energy and increased
99% of the rural inhabitants enjoy                                  economic opportunity. For example, using
electricity in daily life - this took a long                        the concept of "energisation" relates to
                                                                    matching (energy) supply-side resources
9                                                                   with (community) energy demand-side
  ADB : The Electricity Sub-Sector in Africa, African Energy
Program, Energy Sector Technical Paper No ES1, Abidjan,             requirements and optimising to form a
Côte d’Ivoire, 1996

combined least-cost energy solution10. The                     technical losses as part of NEPADs’
"energisation" concept provides essential                      initiatives in energy efficiency.
electricity by a range of methods (e.g. PV)
together with other alternative energy                         However, it will be necessary to bridge the
forms (e.g. LPG, biomass). Facilitating                        gap between the cost of providing energy
cooperation in rural energy in Africa as                       and making energy affordable for the poor.
part of the Facilitation Project would form                    Although poor nations cannot afford to
part of NEPAD’s role.                                          subsidize the poor entirely, they must be
                                                               committed enough to participate in the
The philosophy of providing energy                             effort, if that effort is to be successful. As
services using a least-cost approach is                        poor nations cannot do this alone,
fundamental. The approach should be one                        partnerships between nations will be
of moving towards basing energy pricing                        required. Energy subsidies must benefit
on the principle of full-cost recovery that                    those who really need them and enhance
includes     environmental     and    other                    the     accessibility,      availability   and
externalities. Such pricing will affect                        acceptability of energy services. Such
demand in the medium-long term, and will                       subsidies should be visible in terms of
contribute to rational energy use, an                          their size, transparent in terms of their
increase in economic efficiency, and                           sources and beneficiaries, and subject to
greater prosperity. Prices should be set at                    review within a prescribed time period.
levels that allow energy providers to                          Subsidies should be reserved for situations
recover the full cost of delivering the                        in which new strategies alone cannot make
service, including a fair return on                            modern energy widely available3, and
investment.                                                    should be time bound.

In order to accomplish this, governments,                      3.5    Reducing Risk
regulators and utilities (whether publicly
or privately owned) must implement cost                        Political Risk
of service determination to calculate the
actual cost of delivering energy to each                       There is a need in Africa to reduce the
customer category, based on usage                              political risk of energy sector investments.
patterns, in order to quantify tariffs for                     This requires good governance, including
each     category.    Lack    of    costing
                                                               fighting corruption by making ethics a
transparency and an inadequate costing                         strong component of energy. It also
structure are major hindrances to achieving                    requires using a holistic approach to a high
a sustainable energy system. It is essential                   standard of ethics in the energy industry
to develop effective ways and means of
                                                               encompassing personal standards and
ensuring that payments for energy services                     behaviour, corporate governance, gender
are timely and that the culture of non-                        equality, fair competition practices and,
payment for energy services rendered,
                                                               more generally, respect of the law.
which exists in varying degrees in many
countries, is changed. Consideration of this                   In order to attract more and less costly
aspect would form part of a program to                         private investment, NEPAD would take
address not only technical but also non-
                                                               the lead with initiatives designed to reduce
                                                               the risks and enhance the perceptions of
10                                                             investors with respect to private sector
   Laing CA; Rosselli G: Energisation: A Collaborative
Application of Conventional Energy Resources for Energy
                                                               investments in the continent. Supporting
Upliftment in Rural Communities, 17th WEC Congress,            the preparation of an Energy Protocol for
Houston, Texas, September 1998
                                                               the African continent is one such initiative.

Technical Risk                                      regulatory frameworks and institutional
                                                    set-ups in order to create a more conducive
                                                    environment for attracting private sector
To reduce technical risk and in order to
promote       energy     for     sustainable
development, there is a need for access to,
                                                    3.6    Capacity Building
and transfer of, environmentally sound
technologies to Africa under favourable
conditions. This could be done through              It is necessary to build the requisite human
supportive     measures     that    promote         and institutional capacities in the energy
technology cooperation and that enable              sector in the regional and sub-regional
transfer of necessary technological know-           organizations in Africa. Building capacity
how as well as building up of economic,             in Africa will do more for its investment
technical and managerial capabilities for           attractiveness than any political risk
                                                    insurance scheme8.
the efficient use and further development
of transferred technologies. Cooperation in
                                                    For many years, donors have supported
technology involves joint efforts by the
                                                    capacity building in public utilities with, in
enterprises and governments, suppliers and
recipients of technology. Successful long-          many cases, very limited results in terms
term      partnerships    in     technology         of services to customers, financial
                                                    sustainability and operational efficiency.
cooperation require continuous and
                                                    Incentives and the institutional culture
systematic training and capacity building
                                                    must be conducive to the optimal use of
at all levels over an extended period of
                                                    human capacity.

Financial Risk                                      The private sector has the capital and the
                                                    potential to raise additional capital easily
                                                    for investment. Furthermore, as the private
Financial resources and mechanisms play a           sector has skills and technology and its
key role in the implementation of energy            operation      is    profit-oriented,    the
programs and projects in Africa. In some            participation of the private sector would
countries, political risks, absence of the          lead to efficiencies in the allocation of
necessary institutional frameworks and              business resources. The participation of
effective legal remedies, and prevalence of         the private sector would also assist in the
arbitrary interventions pose powerful               transfer of technology and build local
barriers to investment and successful               capacity to improve the performance of the
project completion. Financing remains a             public sector and augment the participation
daunting challenge for many of the                  of local private sectors in the development
countries that need sustainable energy              of the energy sector. The participation of
systems the most. Market reforms and the            the local private sector would contribute to
creation of functioning legal frameworks            the socio-economic development of
are moving too slowly in many countries.            countries through employment generation
Renewed efforts are essential to ensure             and income generation.
that access is opened to all sources of
funding for energy programs in the                  AFREC
continent. This would in turn contribute to
Africa's economic and social development            The adoption of the Convention of the
and environmental protection in the                 African Energy Commission (AFREC) by
context of sustainable development.                 the Organization of African Unity (OAU)
African governments should initiate or              Assembly of Heads of State and
further implement reforms to improve                Government in July 2001 in Lusaka was a

big step forward in Africa's energy                 Using energy databases is necessary for
development. AFREC is a key component               informed planning and decision making to
of the institutional framework created by           optimise the energy mix and cross-border
African leaders to promote cooperation              integration of energy supplies. The
and regional integration in the African             development of a broad based "e-society"
energy sector.                                      should take place to spread the available
                                                    information on new energy technologies,
Under the Capacity Building Project and             including distribution, generation, new
through the assistance of NEPAD, AFREC              renewables and applicable cleaner fossil
will be operationalised through ratification        fuel technologies. Promotion of the
of the Convention, appointment of the               sharing of best practices should take place.
Board and Technical Advisory Body and               For example, lessons learned in the
staff of the Secretariat. The Capacity              establishment of the Southern African
Building Project will develop the                   Power Pool (SAPP) should be transferred
necessary human and institutional capacity          to the West Africa Power Pool (WAPP),
in AFREC to enable the Commission to                currently being established, in particular
discharge its mandate.                              regarding SAPP’s Short-Term Energy
                                                    Market (STEM). In addition, networking
RECS                                                should be encouraged to ensure the sharing
                                                    of extensive knowledge, information,
There is a need to build institutional and          expertise and experience available in the
managerial capacity in the energy sector in         international energy scene.
the Regional Economic Communities
(RECs) in order to enable them discharge            Training
their mandates. The Capacity Building
Project will provide technical support to           As part of the Capacity Building Project, a
develop human and institutional capacities          training    assessment     will    generate
in the RECs to assist them to promote               proposals for training African energy
regional integration in the energy sector           experts using existing sub-regional Energy
through the formulation of appropriate              Training Institutions or other centres of
policies and strategies and in the                  excellence. The assessment will identify
implementation of regional programs.                the sub-regional training institutions or
                                                    other centres of excellence by discipline
African Energy Information System and               and make proposals on how the centres
Planning Tools                                      would be strengthened and used for
                                                    continent-wide training, inter alia, in the
The Capacity Building Project will                  areas of strategic planning, project
establish an African Energy Database                management and operation.
Centre, and operationalise and disseminate
the Integrated Planning Tools (Information          3.7    Energy Policy and Planning
System,      Accounting     Model     and
Forecasting Model) developed by the                 It is clear that Africa needs to review its
African Energy Program (AEP) of the                 energy policy/strategy with a view to
African Development Bank (AfDB). The                enhancing the development of the
Planning Tools and the Energy Database              continent’s energy resources and advance
Centre will equip AFREC and the RECs                socio-economic development. Given the
with the necessary tools and energy                 imbalance between potential and demand,
database to plan and implement projects             players in Africa’s energy sector must
effectively at country, sub-regional and            work towards its integrated development.
regional levels.

At regional level, there is a need for              years following its management by the
integrated (least-cost) energy planning,            private sector.
which considers both energy supply-side
and energy demand-side management                   As part of the Facilitation Project,
options in order to meet the continent’s            continent-wide energy policy and strategy
energy needs. The African energy sector             frameworks will be formulated and
faces      financial    constraints      and        adopted in order to further regional
environmental         and      institutional        cooperation for effective development of
impediments, which it must address to               Africa’s energy resources and promote
meet the growing energy services needed             public-private partnerships.
for its population. Wrong decisions made
on either the formulation of energy policy          4.     VISION FOR REGIONAL
decisions or investments affect the energy                 INTEGRATION IN AFRICA’S
supply/demand situation at a later time,                   ENERGY SECTOR
which results in either energy supply
deficit or over investment.                         4.1    Regional Cooperation

It is, therefore, necessary to develop              Cooperation in energy development in
policies and planning capacity at all levels        Africa is essential in order to integrate
(countries and RECs) for drawing up                 long-term energy policy options with
realistic energy sector investment plans so         overall economic and other policy
that demand always matches supply in                considerations. The precondition for any
providing energy services. Providing                meaningful regional cooperation is
Integrated Energy Planning Tools that can           political stability coupled with a collective
be used at regional and sub-regional levels         political     will.     Enhancing      energy
will be particularly important to assist in         interdependence in Africa will enable
integrated energy planning.                         more efficient utilization of its vast energy
                                                    resources in line with least-cost investment
The      progress      in  energy    sector         strategies. Regional cooperation should
liberalization, privatisation, customer             therefore be made an integral part of
choice and regional trading, areas where            national policy making and planning
many African countries have already taken           processes, and countries should seek the
important steps, must be further                    opportunities       offered   by     regional
encouraged. There is a need to "level the           cooperation to enhance national economic
playing fields", as "uneven playing fields"         management and performance.
are one of the biggest barriers to the
widespread implementation of sustainable            4.2    Role of AFREC and RECs
energy       strategies3.   Where     some
competitors enjoy an unfair advantage,              As outlined in its Convention, AFREC’s
true competition is not occurring, new
                                                    principal functions include: establishing
entry is inhibited, and market forces               energy development policies, strategies
cannot operate effectively.                         and plans; developing a continental energy
                                                    database; developing of human resources;
In many African countries, energy utilities
                                                    and developing intra-African energy trade
and energy regulation are being re-                 and transit. Operationalisation of AFREC
organised in order to make markets more             will enable it to implement the Capacity
competitive. In Côte d’Ivoire, for example,         Building     and    Facilitation   Projects
the reformed state utility nearly doubled           identified for NEPAD’s Short-term Action
the number of its customers in the ten

The RECs function as important building                       goals. The focus will be on sector
blocks to achieve the overarching                             development       and     power      systems
infrastructural goals at continental level as                 integration targeted for completion
part of the new African Union (AU),                           initially at the sub-regional level in the
whilst forming frameworks for cooperative                     medium-term,         and       intra-regional
approaches for the growth of infrastructure                   interconnection completion in the long-
and the creation of larger energy markets.                    term with the development of Grand Inga
In the Short-term Action Program, the                         in the Democratic Republic of Congo
institutional capacity in key RECs will be                    (DRC) serving as the integrator of the sub-
strengthened.                                                 regions (see Fig. 2.4). Where appropriate,
                                                              gas and electricity export projects have
It is, however, worth noting that the                         been included to increase export earnings
proliferation of RECs has created                             and to serve as a practical basis for North-
problems, including, inter alia, those                        South technical and financial partnerships.
associated with overlapping membership                        In parallel, appropriate policies/strategies
of multiple RECs11. There is thus a                           will be developed and adopted under the
requirement to align these RECs so that                       Facilitation Project, and human and
they complement the AU, and mechanisms                        institutional capacities will be built as part
are needed to ensure coherence, reduce                        of the Capacity Building Project to assist
duplication    of   efforts,   rationalise                    in the development and operation of the
structures, and harmonise energy policies                     programs.
and programs.
                                                              The short-term projects identified can be
4.3      Philosophy, Strategy and
         Approach for Identification of                         Fig 2. 4. Strategy and Approach for
         Short-term Action Projects                           Integrated Energy Project Development

Projects and programs were identified in
consultation with regional and sub-                                                                               Middle East

                                                                                          North Sub-Region
regional organizations as well as countries,                                                                          Middle East

selected on the basis of their relevance to                       West Sub-Region
                                                                                           Grand Inga
                                                                                        Regional Integrator       East Sub-Region
the identified projects, with close
                                                                     Central Sub-Region
collaboration of the World Bank, the EU                                                                       Capacity Building

and UNECA. The consultations, which                                      Facilitation
                                                                                             South Sub-Region

included field missions, enabled the
integration of local inputs in the
prioritisation of the projects, studies and
initiatives. PARs for projects and TORs                       classified by discipline as,
for the studies and initiatives were then                     1) Physical Projects - power system
                                                                  interconnections, gas/oil
prepared as proposed in NEPAD’s Short-
                                                                  interconnections and hydropower
term Action Plan.
The regional energy projects, studies                         2) Studies for Physical Projects;
                                                              3) Capacity Building Project; and
and initiatives identified for the short-
                                                              4) Facilitation Project.
term action program are intended to
serve as building blocks for the
                                                              Whilst a large number of physical projects
realization of medium- to long-term
                                                              were identified during the field missions, a
                                                              prioritised list was formulated in
    UNECA: Consensus Statement on the Way Ahead,              accordance with criteria proposed in the
African Development Forum III, Addis Ababa, March 2002
                                                              NEPAD       Report     on     Infrastructure

Development as presented to the Extended             5.         SHORT-TERM ACTION
NEPAD Steering Committee Meeting in                             PROGRAM FOR NEPAD
March 2002 in Abuja, Nigeria. The criteria                      PROJECTS
used in the selection of the projects,
studies and initiatives are summarised in            The Short-term Action Program in energy
Box 2.1.                                             includes one hydropower project, eight
                                                     power system interconnection projects,
The Short-term Action Program will be                three gas/oil interconnection projects, six
linked to and complemented by a Medium-              studies for physical projects, a capacity
and Long-term Action Program that will               building project, and a facilitation project
take up projects and initiatives that require        selected in terms of the criteria indicated in
more     time     for    preparation     and         Box 2.1. The projects would be
development. The Short-term Action                   implemented under the umbrella of
Program does not contain all the projects            NEPAD's Short-term Action Program,
proposed by the RECs, nor does it set out            which would contribute to the realization
to achieve balance between sub-regions.              of the objectives and goals as outlined in
                                                     Section 1. Brief descriptions of the
It is to be interpreted rather as the first          projects are given below, and further
stage in a rolling action plan that will be          details are available in the PARs and
updated periodically as and when better              TORs in Appendix 2.
information becomes available. Under the
Short-term Action Program, an enabling                    Box 2.1 Criteria for Selection of Short-Term
                                                                          Energy Projects
environment will be created for the
                                                     -     Projects of a regional nature - projects
Medium- and Long-term Action Program.                      involving a number of countries, sub-regional
                                                           and regional organizations;
The philosophy of the approach for the               -     Projects whose studies are completed and/or
capacity and facilitation projects in                      their development initiated;
                                                     -     Non-complex projects - projects which do not
particular was to review and develop what
                                                           entail changes in national development plans,
was already there using existing structures                and can easily attract support;
where      available,   addressing      the          -     Projects that generate quick returns - to build
deficiencies and requesting the assistance                 confidence among countries, partners and
of partners in the developed/developing                    NEPAD;
world as appropriate.                                -     Projects that provide a high probability of
                                                           success, including low political risk;
                                                     -     Stalled projects which require direct political
After position papers have been prepared,                  intervention to comfort investors;
workshops will be organized to deliberate            -     Studies for physical projects, which would be
on the issues and ensure a participatory                   implemented for the realization of medium - to
approach in the development of Africa’s                    long - term objectives;
energy sector. Input will be sought not              -     Initiatives which offer solutions to pending
                                                           policy, regulatory or institutional constraints;
only from players in the African energy              -     For the Capacity Building Project, able to
scene, but also from the developing and                    operationalise AFREC and build human and
developed world, as well as energy experts                 institutional capacity in RECs to promote
in the international energy scene.                         regional cooperation; and
                                                     -     For the Facilitation Project, able to support the
                                                           preparation and adoption of policies/strategies
                                                           and preparation of proposals, which would
                                                           assist in the advancement of regional

5.1    Power Systems Projects                        The Nigeria – Benin interconnection is
                                                     earmarked for AfDB and West African
South Sub-Region: Mozambique                         Development Bank (BOAD) financing
Mepanda Uncua Hydropower Project                     while the financing for the rest of the
                                                     program will be mobilized through the
A 1,300 MW hydropower project will be                World Bank. The project will be
developed north of Maputo, on the                    completed in 2005.
Zambezi River downstream of the Cahora
Bassa hydropower plant, both for domestic            North Sub-Region: Algeria-Morocco-
demand and export to SAPP. The project               Spain Interconnection (Strengthening)
forms part of the recommended actions in
the SAPP's Integrated Electricity Plan, and          The project will upgrade the capacity of
will be developed through public-private             the existing interconnections among the
partnership involving Mozambique, South              three countries to enhance the exchange of
Africa and the private sector. The project           power. The project will be developed as a
is scheduled for completion in 2010, and             public sector program with each country
the investment cost is estimated at US$1.6           financing the works in its territory. The
billion.                                             Moroccan section of the project will cost
                                                     US$280 million and its financing is
East Sub-Region: Ethiopia-Sudan                      earmarked for AfDB and European
Interconnection                                      Investment Bank (EIB). The project will
                                                     be completed in 2005.
The      project   will    involve     the
interconnection of the power systems of              North    Sub-Region:    Algeria-Spain
Ethiopia and the Sudan primarily to                  Interconnection and Algeria Gas-Fired
replace thermal generation in the latter.            Power Station
Development is intended as a public sector
project.                                             The project will develop a gas-fired power
                                                     station in Algeria and transmit part of the
The investment cost of the project is                power generated to Europe through Spain
estimated at US$52 million and is                    by laying a submarine cable. The cost of
earmarked      for     multilateral/bilateral        the project is estimated at US$ 1.5 billion.
financing. The project will be completed in          The project will be developed through
2005.                                                private-public partnership, and is targeted
                                                     for completion in 2004.
West Sub-Region: West Africa Power
                                                     South Sub-Region: Mozambique-
                                                     Malawi Interconnection
The program would implement the
                                                     The project will transmit the surplus low
interconnections of Nigeria - Benin, Ghana
- Burkina Faso and Côte d’Ivoire - Mali;             cost Cahora Bassa hydropower to Malawi,
and reinforcing the Ghana-Togo-Benin                 improving system reliability in that
interconnection. The program also                    country. The project will be developed as a
                                                     public sector project. The investment in
includes institutional strengthening of
ECOWAS, and will be developed as a                   the project is estimated at US$52 million
public sector program. The project is                and is being considered for World
promoted by the World Bank.                          Bank/AfDB and Bilateral financing. The
                                                     project is targeted for completion in 2004.
The investment requirement for the
program is estimated at US$151 million.

5.2    Gas/Oil Transmission Projects                  and transmitting electricity to sub-
                                                      regions and neighbouring continents);
East Sub-Region: Kenya-Uganda Oil                  b) DRCANSA             (feasibility      of
Pipeline                                              interconnecting DRC, Angola and
                                                      Namibia; of transmitting hydropower
The pipeline will interconnect the existing           from DRC and Angola via Namibia to
Mombasa – Eldoret pipeline to Uganda to               South Africa; and utilizing gas in
enable the transport of refined oil from              Angola that is currently being flared);
Mombasa to Uganda. The project will be             c) Nigeria – Algeria Gas Pipeline (to
developed as a public-private partnership.            wheel the Nigerian natural gas through
The investment cost of the project is                 the Algerian gas networks to Europe,
estimated at US$90 million, and its                   and benefit to the countries en route
completion is targeted for 2004.                      e.g. Niger and Mali); and
                                                   d) Sub-regional interconnections (to
West Sub-Region: West African Gas                     complete the interconnections in the
Pipeline                                              East, West and Central sub-regions, in
                                                      the medium-term).
The pipeline will export low-cost Nigerian
natural gas to Benin, Togo and Ghana for           The cost of the studies is estimated at
power generation and direct utilization,           US$22.8 million, which is earmarked for
creating a sub-regional market for                 Multilateral and Bilateral financing. The
Nigeria’s gas. It will also contribute             studies will be implemented during the
towards solving the gas-flaring problem in         period 2003-2006.
Nigeria, as it will utilize gas that would
otherwise have been flared. It will be             5.4    Capacity Building Projects and
developed under public-private partnership                Studies (Regional)
with the involvement of Nigeria, Benin,
Togo, Ghana, Chevron and Shell. The                Under       the     Capacity     Building
investment cost of the project is estimated        Projects/Studies, the following initiatives
at US$450 million. The completion of the           will be implemented:
project is targeted for 2004/5.
                                                   AFREC Operationalisation and REC
North Sub-Region: Libya –Tunisia Gas               Capacity Building
                                                   The objective of the project is to
A gas pipeline will be constructed to              operationalise AFREC and strengthen the
transmit Libyan gas to Tunisia. A publicly         capacity of the main RECs through
owned Project Company formed by the                technical assistance. The project would
national energy utilities of Tunisia and           assist AFREC and the RECs to discharge
Libya will implement the project. The              their responsibilities to promote the
investment cost of the project is estimated        development of the African energy sector
at US$ 274 million, and its completion is          at sub-regional and regional levels
targeted for 2007.                                 respectively.

5.3    Studies for Physical Projects               Africa Energy Information System and
                                                   Planning Tools
Studies will be prepared on:
                                                   The objective is to formulate and
a) Grand Inga Integrator (the feasibility          implement proposals to establish and
   of developing the hydropower in DRC             maintain an energy information system

and database at regional and sub-regional           Tools and Training Assessment sub-
levels. These will be, amongst other                projects in line with its mandate.
things, valuable tools for integrated energy
planning and decision-making.                       The Capacity Building Project is seen to
                                                    be critical, as energy sector reforms are
As part of this process, the AfDB's AEP             taking place with increased competition
Planning Tools would be updated,                    and players.
operationalised, disseminated and used to
further develop planning capacity in the            5.5   Facilitation Projects and Studies
continent. At the same time issues                  (Regional)
pertaining to network building for data
collection,    training,   and    system            Under the Facilitation Projects/Studies, the
development and support would be                    following initiatives will be implemented:
                                                    Policies and Strategies
Knowledge Management concepts would
also be considered for incorporation where          In the project, continent-wide energy
feasible, in order to make African                  policy and strategy frameworks will be
organisations     intelligent-acting, thus          formulated and adopted in order to further
enabling best performance and improved              regional   cooperation    for    effective
positioning relative to competitors.                development of Africa’s energy resources.

Proposal    for   Training     of   Energy          Energy Protocol
                                                    A Protocol on Energy will facilitate
The institutional reforms needed to                 cooperation among RECs in the energy
develop the energy sector will provide              sector and promote NEPAD's initiatives. It
better results only if they are accompanied         will assist Member States to coordinate
by support measures where training and              and harmonize their energy policies and
information      are    fundamental.   The          programs. As the Energy Protocol will
objective of the study is therefore to              include establishing legal, regulatory and
generate proposals for training African             institutional frameworks, this would assist
energy experts using regional and sub-              in providing the necessary enabling
regional energy training institutions, or           environment to attract investors. An
other centres of excellence.                        Energy Protocol will thus be prepared and
                                                    adopted to assist in attracting more
The cost of the Capacity Building Project           investments.
is estimated at about US$7 million, which
is earmarked for Multilateral/Bilateral             NRSEs
financing. The project/study will be
implemented during the period 2003-2005.            A number of sub-regional/regional
                                                    institutions    as   well     as    research
The project will be implemented by                  organisations at the national level have
AFREC and sub-regional organizations                been established to promote capacity in,
(ECOWAS/UEMOA, COMESA, SADC,                        and use of, NRSEs in Africa. But such
UMA and ECCAS/CEMAC), where the                     efforts must be intensified alongside
initial   strengthening  is   targeted.             creating the right conditions for promoting
Specifically, AFREC will implement the              cooperation and integration throughout the
Energy Information System/Planning                  continent, together with working with
                                                    partners in the developed world - such as

the G8 Renewable Energy Task Force.                   conducted in 1993 showed that Sub-
Utilising NRSEs to their full potential will          Saharan African countries can reduce the
help to facilitate sustainable development            cost of hydrocarbon import through
for large numbers of people on the                    integrated procurement of petroleum
continent, in particular in rural areas.              products and reducing inefficiencies in the
                                                      utilisation of refineries 12. The study further
Activities would be furthered regarding the           revealed that through sub-regional
World Solar Program 1996-2005 (WSP) as                cooperation       in    petroleum      product
approved by the World Solar Commission                procurement, refining and distribution,
in June 1997 in line with the importance              annual potential savings estimated at over
that should be given to the implementation            US$1.4 billion or US$ 51 per ton of oil
of the African component (ASP) of the                 were possible in Sub-Saharan Africa.
                                                      The oil/gas cooperation assessment will
The NRSEs initiative would generate                   review existing intra-African oil/gas trade
proposals for cooperation among RECs,                 and the extent of sub-regional cooperation
African nations, multilateral and other               in petroleum product procurement, joint
organisations as well as the private sector           utilisation of refineries, and distribution
to further the development and use of                 aspects. These would serve as inputs for a
NRSEs in Africa.                                      draft position paper to establish modalities
                                                      for promoting cooperation in this regard.
Cooperation in Energy Efficiency and
Reliability of Energy Supply                          Cooperation in Rural Energy

Greater energy efficiency and optimum                 The study will generate proposals for
utilisation of plant assets will help to              cooperation among RECs, between
maintain secure energy supplies and bring             African nations and organisations in the
national economic benefits through energy             developed      and    developing     worlds
savings, reduced dependence on imported               regarding     furthering    rural    energy
fuels      and       increased      industrial        development in Africa. This will make a
competitiveness, apart from having                    contribution       to     the      effective
significant      environmental       benefits.        implementation of improved energy
Investments would also be able to be                  services for sustainable rural development
deferred through optimal utilization of               and lead to significant improvements in
existing facilities with application of               the quality of life for Africa's rural
energy efficiency programs using demand               population.
side management, improving plant
availability/reliability etc. Sharing of              The rural energy assessment will review
lessons learned within Africa and beyond              the rural energy programs within African
will be valuable in this initiative. A                regional      and   sub-regional     energy
proposal will be developed for a strategy             organisations, within African countries as
to enhance cooperation in energy                      well as relevant regional and international
efficiency and reliability in the continent.          initiatives, which may support rural energy
                                                      development in Africa. These would serve
Cooperation in Oil/Gas Trade

Reducing inefficiencies in petroleum                  12
                                                         Mayorga-Alba E: World Bank Activities in the Energy
product procurement, refining/processing              Sector: The Results of the Study on Rationalisation of
and distribution will have very significant           Downstream Petroleum Operations in Sub-Saharan Africa,
                                                      Ad Hoc Meeting of Senior Advisors on Energy Strategy and
financial benefits for Africa. A study                Policies, Addis Ababa, May, 1993

as inputs to formulate a strategy for rural          export the continent’s resources. The
energy provision in Africa.                          power interconnection studies will
                                                     generate     project     proposals     for
                                                     implementation in the medium- to long-
The Facilitation Project is considered, as in
the case of the Capacity Building Project,           term to complete regional integration e.g.
                                                     Eastern Corridor, for the SAPP to import
to be critical as energy sector reforms are
                                                     power from the DRC.
taking place with increased competition
and players, and the project will assist in
equipping the African energy sector to               Two gas pipeline projects and an oil
deal with these issues by supporting                 pipeline project will be implemented in the
regional cooperation.                                short-term. The gas pipelines will supply
                                                     part of the Nigerian and Libyan gas, which
The cost of the project/study is estimated           would otherwise have been flared, to West
                                                     African countries and Tunisia respectively,
at US$3 million, which is earmarked for
Multilateral/Bilateral   financing.   The            which are in short supply of energy
                                                     resources. This will have a positive global
project will be implemented during the
                                                     environmental impact. The Kenya-Uganda
period 2003- 2005.
                                                     oil pipeline will replace land transport of
The project will be implemented by                   oil from Eldoret in Kenya to Kampala in
                                                     Uganda, which is relatively expensive,
AFREC with close involvement of the
                                                     thus reducing the cost of oil products in
RECs, UNECA, OAU and AfDB. It is
                                                     Uganda and neighbouring countries.
imperative to operationalise AFREC in
order to implement the project.
                                                     The Capacity Building Project is intended
5.6    Summary of Outputs of the                     to operationalise and strengthen AFREC
       Proposals                                     and build capacity in the RECs. As regards
                                                     AFREC, it is intended to transform the
An important aspect of the projects and              institution into a legal entity through the
studies has been to develop further Africa's         ratification of the Convention and
energy resources potential such as the               operationalise it through the appointment of
enormous hydropower potential of Africa              the Board and the Technical Advisory
(e.g. study of Grand Inga in the DRC,                Body by providing the appropriate
                                                     technical support to discharge its
Mepanda Uncua project in Mozambique),
as well as to use gas which would                    responsibilities. The project would also
otherwise have been flared (e.g. West                provide technical support to the RECs to
African Gas Pipeline project), thus                  strengthen their capacity in the formulation
                                                     and implementation of regional policy, as
utilizing African energy resources
optimally. The Nigeria-Algeria gas                   well as strategy formulation, and
pipeline has been proposed for export of             preparation and implementation of regional
gas to Europe, thus strengthening the
North-South partnership. The project is
also expected to benefit the countries               The development of human capacity at all
along the route (e.g. Mali and Niger).               levels is key for the development of the
                                                     sector. It would therefore be necessary to
The sub-regional power interconnection               undertake a review of the specialized
projects will enable the sharing of                  African Training Institutions and develop
generation surpluses that become available           them to become regional centres of
in the integrated power systems. The                 excellence for training the continent’s
                                                     strategic energy experts. In parallel, the
Algeria-Spain power interconnection
                                                     existing capacities of the establishments
would serve as an alternative corridor to

could be utilized to train strategic energy         conclusion of agreements (Power Purchase
expertise for planning, design and operation        Agreements, Construction and Operation
of the energy systems.                              Agreements), and monitor the overall
                                                    implementation of the projects. Regarding
The furthering of an energy information             the Ethiopia-Sudan project, NEPAD
system and immediate operationalisation,            would, in addition, facilitate the resolution
dissemination and use of the Planning               of internal conflicts and the payment of
Tools developed by the AfDB would                   arrears on loans in Sudan to attract
contribute towards building energy                  investment for the project.
planning capacity on the continent.
                                                    6.2    Gas/Oil projects
The Facilitation Project will promote
cooperation among African countries,                As regards the West African Gas Pipeline
donors and the private sector for energy            (WAGP), a Project Company has been
infrastructure development.                         formed. However, as the Off-take
                                                    Agreements have not been finalized,
The preparation and adoption of an Energy           NEPAD would facilitate the conclusion of
Protocol will facilitate the attraction of          the Agreements and the mobilisation of
more investments, as it will include                resources for the public utilities’ shares in
establishing     legal,   regulatory   and          the Company, including assisting the
institutional frameworks, assisting in              institutions concerned to access global
providing     the     necessary    enabling         funding.
environment to attract investors. This will
help to reduce the risks and enhance the            As regards the Tunisia-Libya gas pipeline,
perceptions of investors with respect to            a publicly owned Project Company has
private sector investments.                         been formed and the Off-take Agreement
                                                    concluded. The Government of Libya will
6.     NEPAD INVOLVEMENT IN                         finance part of the project to be
       IMPLEMENTATION OF THE                        implemented in Libya. NEPAD would be
       PROJECTS                                     involved in facilitating the sourcing of
                                                    financing for the Tunisian share in the
The role of NEPAD in the implementation             Company.
of the recommended projects and
initiatives is discussed below:                     Regarding the Kenya-Uganda oil pipeline,
                                                    an Agreement is under consideration for
6.1    Power Systems Projects                       the formation of a Company to construct
                                                    and operate the proposed extension from
Regarding Mepanda Uncua (MU),                       Eldoret to Kampala. NEPAD would
NEPAD's assistance will be required in              expedite the conclusion of the Agreement
promoting the project, and facilitating the         in addition to facilitating the mobilisation
liberalization of the energy market in the          of funds for the project and monitoring the
sub-region in general and South Africa in           implementation of the project.
particular for the export of power from
MU. Furthermore, NEPAD would promote                Regarding oil and gas projects, NEPAD
the project to potential investors and              would act as a catalyst for unified action at
facilitate the mobilisation of financial            the continental level. NEPAD would also
resources for the project.                          encourage countries that flare gas to take a
                                                    continental approach to negotiations with
NEPAD would facilitate the mobilisation             the Global Environment Facility (GEF),
of financing for the projects, the                  the Carbon Fund, etc. with a view to

bettering the utilisation of this resource for         as well as substitution programs (such as
the common good of the continent. In this              LPG programs).
regard, NEPAD would encourage the
concerned countries to create a conducive              NEPAD has an important role to play in
environment for the participation of the               supporting existing institutions and in
private sector in the exploitation of this             building private-public sector partnerships.
resource. NEPAD would work with the                    Energy sector reforms are taking place
countries concerned to help generate                   with increased competition and players.
political support for the adjustments in               NEPAD would take the lead with
policy and regulatory frameworks that are              initiatives designed to reduce the risks and
needed.                                                the perceptions of investors with respect to
                                                       private sector investments, through
6.3    Studies for Physical Projects                   supporting the preparation and adoption of
                                                       appropriate energy policies and strategies,
The studies will be sponsored partly by                and an Energy Protocol.
countries and partly by the sub-regional
organizations. NEPAD would facilitate the              6.5      NEPAD Activity Matrix
mobilisation of funds for the studies.
                                                       NEPAD’s activities are presented in Box 2.2
6.4    Capacity Building and
       Facilitation                                         Box 2.2: NEPAD Activity Matrix for Energy Sector
                                                      Projects                                    NEPAD Action
                                                      Power Systems Projects
Given that the proposed Capacity Building             Mepanda Uncua Hydropower                        1,2,3,4
and Facilitation Projects are continent-              Ethiopia-Sudan Interconnection                  1,2,3,5
                                                      West Africa Power Pool (WAPP) Program           1,2,3,6
wide, it is proposed that the projects be             Algeria-Morocco-Spain Interconnection             1,2,3
implemented under the auspices of                     (Strengthening)
AFREC, in collaboration with the sub-                 Algeria-Spain Interconnection & Algeria           1,2,3
                                                      Gas-fired Power Station
regional organizations. However, as the               Mozambique-Malawi Interconnection                 1,2,3
Convention has not been ratified, AFREC               Gas/Oil Transmission Projects
has no legal entity. NEPAD's intervention             Kenya-Uganda Oil Pipeline                       1,2,3,7
is therefore required to get the Convention           West Africa Gas Pipeline (WAGP)              1,2,3,6,8,9,10
                                                      Libya-Tunisia-Gas Pipeline                        1,2,3
ratified to transform AFREC into a legal              Studies
entity, and operationalise the institution.           Grand Inga Integrator                             1,2,3
                                                      DRC-Angola-Namibia Interconnection                 1,3
                                                      Nigeria-Algeria Gas Pipeline                       1,3
In addition, NEPAD would facilitate the               Sub-Regional Interconnections (East, West,         1,3
mobilization     of     funds for    the              Central)
implementation of the projects. NEPAD                 Capacity Building (Regional)
                                                      AFREC Operationalisation & REC Capacity          1,3,11
would also monitor the implementation of              Building
the AFREC and RECs Capacity Building                  Africa Energy Information System &               1,3,12
and Facilitation Projects.                            Planning Tools
                                                      Training of Energy Experts                       1,3,12
                                                      Facilitation (Regional)
NEPAD would take an active role in                    Policies and Strategies                          1,3,12
facilitating the dissemination of the                 Energy Protocol                                  1,3,12
                                                      Cooperation in new and renewable energy          1,3,12
experiences and lessons learned in Africa             Cooperation in improving energy efficiency     1,3,12,13
and beyond regarding rural energy, energy             & reliability of supply
efficiency and reliability of energy supply,          Cooperation in Oil and Gas trade,                1,3,12
the protection and management of the                  Cooperation in rural energy                    1,3,12,13
environment, including those concerning
the protection and management of forestry
resources supplying wood-fuels, charcoal

             Legend (Activity Matrix)                      strategies must be put in place to further
1    Facilitating mobilization of resources                energy sector development. Active input,
2    Facilitating conclusion of agreements
3    Monitoring implementation of projects                 through a participatory workshop process
4    Facilitating liberalisation of energy markets         for the Facilitation and Capacity Building
5    Assist in resolving conflict and loan arrears         Projects from energy executives and
6    Help create conducive environment for                 operatives, not only in Africa, but also
     attracting investment                                 from the developed and developing world
7    Help finalise shareholding agreement                  will be required to make the Short-term
8    Facilitate adjustment of legal and regulatory
     frameworks                                            Action Program for energy infrastructure
9    Assist in developing a coordinated approach to        projects succeed.
     environmental negotiations
10   Catalyst for unified action in regional
     cooperation in oil/gas trade                          The Short-term Action Program for
11   Assisting in ratification of Convention and           regional projects will develop the
     appointing Supervisory Bodies                         continent’s rich energy resources, through
12   Facilitating adoption and/or implementation
13   Disseminating lessons learned                         regional cooperation, and contribute
                                                           towards poverty reduction and economic
                                                           development in the continent in line with
7.       CONCLUDING REMARKS                                the objectives of NEPAD. Under the
                                                           Capacity Building and Facilitation
NEPAD would begin delivery on                              Projects, an enabling environment will be
improving the quality of infrastructure,                   created for the Medium- and Long-term
including energy, whilst consulting with                   Action Program. For the successful
and encouraging the business enterprises                   implementation of Capacity Building and
that Africa possesses, and courting                        Facilitation Projects, the operationalisation
international investment.                                  of AFREC is considered critical.

The necessary energy institutions,
frameworks, structures, policies and

            CHAPTER 3                                catchments is becoming a widespread
                                                     environmental hazard with serious
                                                     ramifications on water quantity, quality
        WATER SECTOR                                 and on the continent’s ability to feed itself.

                                                     Further to its direct contribution to
                                                     sustainable development, water is linked to
1.     INTRODUCTION                                  the other development programmes being
                                                     considered under NEPAD. It is either used
Water is the basis of life, and its proper           as an input to achieve integration of
management and conservation is essential             strategies and activities between sectors, or
for all socio-economic developments. It              as a critical natural resource with
has been recognized that, due to its                 competing demands thus requiring
crosscutting nature, sustainable use of              judicious and equitable allocation. Its
available water resources is critical to             quality has also got to be acceptable. The
meeting the goal of eradicating poverty in           link between water development and most
Africa. Providing access to basic water              of the other programme sectors of NEPAD
supply and sanitation to a large number of           is demonstrated in Box 3.1.
Africa’s population, contributing to food
security through use of water for                    The critical issues which need to be
agriculture, and also developing the                 addressed in order to accelerate the
substantial untapped and renewable                   development of water resources in the
hydropower potential of the continent, are           continent are: strengthening governance in
some of the key areas which need to be               water resources, improving water wisdom,
addressed if the war against poverty is to           meeting urgent water needs and
be won.                                              strengthening the investment base for
                                                     desired water future.
Many countries in African have potentially
adequate water resources, despite the                Both regional and international efforts
continent’s temporal and spatial climate             have been and continue to be made to
variability.    However,      despite    this        address the various problems encountered
availability, it is estimated that of the            and which require to be resolved to enable
continent’s total population of 821 million,         rapid and effective development of the
only 62% of these have access to safe                sector.
water supply (with only 35% of the rural
population having access to safe water).             The latest initiative is the Africa Water
An even smaller percentage of the total              Vision (2000), which has reinforced the
population has adequate sanitation.                  general and broad consensus that,
Furthermore, despite widespread and                  appropriate policies, legal and institutional
deteriorating food insecurity on the                 frameworks are essential for any
continent, and the fact that agriculture is          sustainable development of the water
the main user of water in most African               sources.
countries, in two thirds of them, less than
20% of the irrigation potential has been             This Section of the report, elaborates on
utilised. In addition, the continent has also        the Short-Term Action Plan for
the lowest per capita energy consumption             developments in the water sector proposed
in the world, the huge hydropower                    for support under NEPAD. Chapter 2
potential notwithstanding. To complicate             provides an overview of the water
the situation, degradation of water                  resources in Africa describing its

occurrence,          distribution         and                             for support under NEPAD in the short-
characteristics. The current stage of                                     term are described under five broad
utilization, key issues and challenges are                                themes: a) Enabling Environment for
discussed in Chapter 3 and Chapter 4                                      Regional Co-operation, b) Support for the
describes some of the initiatives underway                                Development of National Integrated Water
at international, regional and national                                   Resources Management Policies; c)
levels. Chapter 5 introduces the strategy,                                Meeting Urgent Water Needs; d)
and short-term plan of action supported by                                Improving Water Wisdom; and e)
NEPAD, comprising 11 programmes and                                       Strengthening the Financial Base for the
initiatives. Detailed Project Briefs for each                             Desired Water Future.
initiative is provided in the Appendix 3.

Box3.1: Relationship Between Water and Other NEPAD                        2.      WATER RESOURCES OF
Selected           Demand          Actions for         Impact                     AFRICA
NEPAD             for Water        Sustainable       Considerati
Programme                            Supply              ons
                                                                          Africa is the second largest continent
Infrastructure-   Reliable      Construction of      Impact on            covering a total area of 30,330,000 km2.
Energy            water flow    impoundments         health
(Hydropower                                          Address
                                                                          According to their geographical position,
and other                       Management of        social issues        the countries of the continent present a
water using                     land and forestry    Job creation
sources)                        resources
                                                                          large diversity of climatic patterns. The
Infrastructure-   Planning      Continuous           Accessibility        Food and Agriculture Organisation (FAO)
Transport         for           supply of water      Cost
                  transport                          reduction
                                                                          has divided the continent into seven
                  on rivers,                                              climatic regions, namely Northern Africa,
                  and lakes
Infrastructure    Reliable      Storage and          Water
                                                                          the Sahel - Sudan, the Gulf of Guinea,
– Water &         water         conveyance           pollution            West Africa, Central Africa, Southern
Sanitation        supply                             Efficiency of        Africa and the Indian Ocean (see Box 3.2).
                                                     water use
Health            Hygienic      Sanitation           Productivity
                  sanitation    services             Family               Available water resources on the continent
                                Hygiene              income
                                education                                 (see Box 3.3) are presently about 5000
Agriculture       Water for     Irrigation works     Pollution            m3/per head/per annum on the average, but
                  crops,        Storage facilities   from
                  fishery,                           fertilizers          of uneven distribution. North Africa and
                  livestock                          Overgrazing          the Sahel regions experience the worst
Environmental     Water for                          Weeds                constraints in the resources compared to
Initiative        eco-                               Ecological           the demand. In contrast, regions like
                  systems,                           balance
                  aquatic                                                 Central Africa have more than adequate
                  resources,                                              resources, which still remain largely
                  wetlands                                                undeveloped. Renewable available water
Science and       Water for                          Contributes          resources (m 3 per head per annum) in each
Technology        research                           to cost
                                                     reduction,           sub-region regardless of cross border
                                                     water use            transfers (the Nile) are broken down as
Access to         Water                               Contributes         shown in Box 3.2.
Markets           Supply &                           to schemes
                  Sanitation                         viability                 Box 3.2: Available Renewable Water
Culture           Continuous    Storage works        Increased                      Resources (in m3/head/yr)
                  clean flows                        income from
                                                     tourism               North Africa           :    390
                                                                           Sudano–Sahel           :  1 940
                                                                           Gulf of Guinea          : 6 000
As part of the efforts being made to realise                               Central Africa         : 27 400
the Africa Water Vision and in line with                                   East Africa             : 1 800
                                                                           Southern Africa        :  3 000
the Framework for Action (FFA), the                                        Indian Ocean Islands   : 21 400
programmes and projects being proposed

Most of the water resources in Africa are                             poverty, environmental threats, poor
found in some 57 international river and                              access to clean water and provision of
lake basins the most significant of which                             sanitation are wide spread. There is
are described below:                                                  substantial   potential for  increased

                                  Box 3.3: Renewable Water Resources and their Use
      REGION                            Country                            Area      Renewable Resources   Level of Utilisation
                                                                        (1000 km2)       (km3/year)           (km3/year)
North Africa           Algeria, Egypt, Libya, Morocco, Tunisia             5 753             50                   76.3
                       Burkina-Faso, Cape-Verde, Djibouti, Eritrea,
Sudan-Sahel Region     Gambia, Mali, Mauritania, Niger, Senegal,          8 591             170                   24.1
                       Somalia, Sudan, Chad
                       Benin, Côte d’Ivoire, Ghana, Guinea, Guinea-
West Africa            Bissau, Liberia, Nigeria, Sierra Leone, Togo       2 106             952                    6.1
                       Angola, Cameroon, Central Africa Republic,
Central Africa         Congo, Gabon, Guinea Equatorial, Democratic        5 329             1946                   1.4
                       Republic of Congo (DRC), Sao Tome and
                       Burundi, Ethiopia, Kenya, Uganda, Rwanda,
East Africa            Tanzania                                           2 916             259                    6.5
                       South Africa, Botswana, Lesotho, Malawi,
                       Mozambique, Namibia, Swaziland, Zambia,            4 739             274                   18.9
Southern Africa        Zimbabwe
Indian Ocean Islands   Comoros, Madagascar, Mauritius, Seychelles          591              340                   16.6

The Congo River Basin: The River                                      development of reliable, low-cost power
Congo with an estimated total length of                               for example through expansion of
4,400km and draining a basin of 3.60                                  hydropower production and through
million km2 is the largest in Africa and                              exploring opportunities for regional power
contains 30% of Africa’s total water                                  trade. The long-term average annual
resources. The river, with a discharge of                             discharge is estimated at about 83km3.
approximately 1269 km3 per year at its
outlet, is shared by DRC, Central African                             The Niger Basin: The Niger River basin
Republic, Congo, Angola, Cameroon,                                    with a total area of 1,471,000km2 spreads
Burundi, Rwanda, Tanzania and Zambia.                                 over ten countries including Algeria,
Irrigation and hydropower potentials are                              Benin, Burkina Faso, Cameroon, Chad,
abundant, with great possibilities for co-                            Cote d’Ivoire, Guinea, Mali, Niger, and
operation in joint development. Existing                              Nigeria and has an estimated population of
irrigation development is less than 1% of                             90 million inhabitants.
the potentials.
                                                                      The Niger has immense potential, but the
Nile River Basin: The Nile River Basin                                river has significant variations both in
of approximately 3 million km2 accounts                               flows      and    water    levels.    Major
for about 10% of Africa’s total area. Ten                             developments are underway including
countries share the basin namely: Burundi,                            construction     of    new     dams      and
DRC, Rwanda, Tanzania, Kenya, Uganda,                                 development of new navigable waterways.
Ethiopia, Eritrea, Sudan and Egypt. The                               The Niger River has in general been
countries have different endowment in                                 affected by drought and soil degradation
water resources and throughout, the                                   resulting from population growth,
availability of water is highly variable both                         intensive agricultural activities, industrial
in space and in time. National approaches                             expansion and urbanization. The increased
to water resources planning and                                       growth of waterweeds has accentuated
management also differ from country to                                these problems in the past years and is in
country. However common issues                                        particular making navigation difficult.
including pressure on the resources due to                            The Lake Chad Basin: Lake Chad found
population growth, urbanization and                                   at the fringes of the southern part of Sahel

Region is a huge narrow fresh water lake            policies,    poor     coordination,    weak
shared by Cameroon, Niger, Nigeria, and             institutional and legal framework as well
Chad. Its volume is low and area varies             as insufficient human, material and
depending on rainfall patterns. More than           financial resources. Pressure is also
10,000,000 people live from the resources           growing on available resources as demand
of this lake. Its basin is affected by              increases, a situation that has the potential
intensive degradation due to population             for generating regional conflicts over
growth, economic activities and drought.            shared resources if the right measures are
In the last 15 years, water surface area has        not put in place to mitigate such
shrunk from 25,000 to 2,600 km2 because             eventualities. To address these problems,
of insufficient rainfall and extensive              there is today a general and common
exploitation. The ecosystem of the lake             consent worldwide, and particularly in
and its basin are today heavily degraded.           Africa, for the need to develop national
                                                    policies based on the principle of
The Zambezi River basin: The Zambezi                integrated water management, in order to
River basin is shared by eight countries            fostering sustainable development. In the
namely, Angola, Botswana, Zambia,                   context of this, Africa presented at the last
Zimbabwe,          Tanzania,      Malawi,           World Forum held at The Hague, a
Mozambique, and Namibia. The average                strategic vision on water resources
annual discharge of the system is                   management up to the year 2025.
estimated at 230 km3. Two man-made
lakes – the Kariba on the border between            This principle of integrated management
Zambia and Zimbabwe and the Cabora                  was again proclaimed at the Water
Bassa in Mozambique characterize the                Conference held in Abuja on 29 and 30
river’s main geographical features.                 April 2002, and also in particular called
Besides hydropower, the basin has also got          for the following: i) definition and setting
substantial irrigation potential which has          up of national and regional water resource
only been partially utilised.                       management        policies/strategies;    ii)
                                                    implementation of institutional reforms;
Other large river basins include the                iii) building of technical and human
Senegal River Basin, the Okavango River             capacities; and (iv) analysis and putting in
Basin, the Gambia River Basin, the Volta            place of new financial mechanisms to
River Basin, the Orange River Basin, the            guarantee cost recovery whilst facilitating
Limpopo River Basin, the Mano River                 access of water and sanitation to the
basin and the Shebelli- Juba River Basin.           underprivileged.

                                                    3.2    Current Status
                                                    The major opportunities and challenges
                                                    facing Africa are well elaborated by
3.1    Overview
                                                    following analysis of present-day sector
In some African countries, as is the case in        situation
many other regions of the world, water
                                                    3.3    Policies and Strategies
resources are becoming rare for manifold
reasons, among which are: population
growth, economic growth, drought,                   The formulation of water policies and
pollution and also due to climatic changes.         strategies is often inadequate and some of
The situation is particularly compounded            the existing policies or those in the process
                                                    of being developed are not always based
by the lack of reliable information on the
                                                    on the principles of integrated water
available resources, the inadequate sectoral

resources management. The importance of               Senegal River Basin Organisation
appropriate policies and strategies is now            (OMVS), Niger Basin Authority (ABN)
widely accepted and 15 countries in Africa            and Manu River Union (MRU), and Lake
are at an advanced stage of elaboration and           Chad Basin Commission (LCBC) in
implementation       of     such      policy          Central Africa. For the Southern African
frameworks.                                           Development Community (SADC) region,
                                                      formation of basin organisations is a
3.4    Information on Resources                       relatively new phenomenon where except
                                                      for the Zambezi River Authority, which
The World Meteorology Organisation                    was formed in the eighties, it is only now
(WMO) has found that in most African                  that new basin organisations for other
countries, physical data on river basins              basins including Okavango delta, the
such as mapping, pedology, hydrology,                 Limpopo, and Orange River are being
hydrogeology, etc., is insufficient to                formed.
enable accurate inventory and evaluation
of water resources to be made; data on the            To facilitate management of shared
quality of both surface and underground               resources, more new basin organisations
water is also limited. In fact, out of 40,000         need to be put in place to cover most of the
known data surveillance stations installed            significant 57 shared river basins. At the
in Africa, the greater majority is in poor            same time, the performance of most of the
running state, mainly due to institutional            existing river basin organizations leaves a
and financial constraints, making it                  lot to be desired. There is therefore an
impossible to provide minimal service                 urgent need to provide necessary support
requirements.      National       hydrological        to the existing organizations in order to
services also lack material and qualified             make them effective tools of managing the
personnel, with only a few having received            shared water resources.
further training in the last thirty years.
                                                      3.6    Access to Water Supply and
There is also a problem of harmonization,                    Sanitation
coordination and standardization of
information between the different bodies              Africa has a low percentage of access to
operating in the same country. It has                 clean water supply and sanitation services
equally been observed that in some of the             especially in the rural areas (around 35%)
countries,       important         historical         in spite of efforts made since the 1970s. It
hydrological data may be threatened and               is estimated that more than 300 million
could be lost forever. Institutional reforms          people in Africa do not have access to
are therefore indispensable if the                    clean drinking water and suitable
availability of accurate data and                     sanitation. Figures 3.1 and 3,2 show that
information on water, which is inevitable             the positive trend observed in the 1970s
for long-term planning, is to be improved.            remarkably declined as from 1990.
                                                      Therefore, a lot of effort and resources are
3.5    Management of Large River                      required in order to respond to the
       Basins                                         objective of improving the standard of
                                                      living of the people and hence foster
Regional cooperation in the development               poverty reduction.
and management of large river basins
shared by several countries has been in               Besides rural population, most of the
existence in Africa since the early sixties.          growing urban poor do not have access to
Most of the oldest basin organisations are            adequate water supply and sanitation
found in West Africa, including the                   services. The number of the poor living in

urban areas without these basic services is            accordance with FAO estimates. Irrigation
swelling as rural-urban drift continues with           is mainly well developed in the northern
people seeking better job opportunities in             regions of the continent as well as in the
towns and cities. While innovative                     Sudano-Sahel region that accounts for
methods of serving these people who                    about 70% of total irrigated land in Africa,
normally live in informal settlements are              estimated at 10,000,000 hectares.
being tried in different places, institutional
reforms for the urban utilities has been               Some of the major problems experienced
found to be an essential ingredient for                with irrigation include inefficient and
sustained success.                                     unsustainable use of water, inadequate cost
                                                       recovery measures, degradation of the soil
      Fig. 3.1: Access to Sanitation (%)               quality due to salinisation, and the risks of
                                                       water-borne diseases. As such, the
               Urban       Rural    Total              performance of the agriculture sector is
                                                       generally poor and reforms are necessary
                                                       in order to improve cost recovery and
                                                       conserve resources. In addition, there is a
                                                       need to introduce water saving techniques
 20                                                    through use of appropriate technology,
                                                       considering that the regions that rely on
        70     80      85           90       99        irrigation most are the same ones with the
                    Year                               least resources.

                                                       3.8    Degradation of River Basins
It is illustrative that nearly all surveys on          The degradation of river basins under the
poverty have shown that reliable access to             combined effect of intensive agriculture
safe water is among the top three priorities           and deforestation has become an
of the poor.                                           ecological    problem      with    negative
  Fig. 3.2: Access to Water Supply (%)                 repercussions on the quality and quantity
                                                       of available water resources. To arrest the
              Urban    Rural       Total               situation, many basin and sub-regional
 80                                                    organisations are initiating programmes to
                                                       address the growing problem.

 40                                                    3.9    Drought and Desertification
                                                       Some regions of Africa have been hit by
                                                       continuous drought, the causes of which
        70    80       85          90       99
                                                       include deforestation, over-grazing, soil
                                                       erosion,     and     over-exploitation   of
                                                       underground water in arid zones. It is now
3.7      Irrigation                                    acknowledged that desertification is
                                                       strongly linked to water resources
About 30 to 40% of the world’s food                    management methods. This situation that
comes from the irrigated 16% of the total              particularly affects the Sahel and Maghreb
cultivated land. The proportion of irrigated           regions, calls for an immediate study and
land in Asia in 38%, compared to Africa’s              implementation of control techniques in
8 to 10% in spite of the existence of the              the regions.
large potential of about 47 million ha, in

3.10   Water Quality                                 Conclusion

The degradation of water quality has                 To meet these current challenges and
become a cause for concern in some                   ensure sustainable development, African
countries in the region because of                   countries have agreed on the need to (i)
cultivation methods and inadequate                   initiate institutional reforms; (ii) build
treatment and management of domestic                 analytical and managerial capacity; (iii)
and industrial wastes. The situation is of           implement protection measures for the
great concern in certain international rivers        environment, in particular, the control of
like the Senegal, the Niger and Lake                 drought and desertification as well as the
Victoria, where the proliferation of water           erosion of river basins; (iv) improve access
weed has begun to negatively impact on               to clean water and sanitation; and (v) set
the river flow regimes, navigability,                up new financing mechanisms to ensure
hydropower plants, irrigation in the rice-           the financing of infrastructure.
fields, etc. In some cases, positive steps
have been or are being undertaken e.g.
Lake Kariba on the Zambezi River and for             4.       INITIATIVES
Lake Victoria to control the problem of
aquatic weeds.                                       4.1      Africa Water Vision for 2025

3.11   Fishery and Recreation                        Over the past several decades, a lot of
                                                     important international initiatives have
Fishing activities have been reduced or              been initiated to help achieve sectoral
disturbed for various reasons like drought           objectives such as: provision of safe
that is reducing the capacities of some              drinking water and adequate sanitation,
rivers and lakes, and the proliferation of           expansion of areas under irrigated in order
aquatic plants, as in Lake Victoria.                 to improve food production, increasing
                                                     energy supply through hydropower
3.12   River Transport                               development and protection of the
                                                     environment. The most recent, most
River transport in some water ways like              comprehensive and most important water
the Senegal, Niger and the Congo rivers is           initiative for Africa is the Africa Water
not practicable on all sections and at all           Vision for 2025, presented in the last
times due to irregular discharge, silting            World Forum held at the Hague in 2000.
and massive presence of aquatic plants,
etc.                                                          Box 3.4: AFRICA WATER VISION:

3.13   Hydropower                                           “An Africa where there is an equitable and
                                                           sustainable use and management of water
                                                           resources for poverty alleviation, socio-economic
It is estimated that only 4-5% of Africa’s                 development, regional integration, and the
energy demands are met through                             environment”.
hydropower in spite of proven large
potential.      Small-scale      hydropower          The Vision has an associated Framework
potential particularly for rural energy              for Action (FFA) and a set of milestones
supply is hardly exploited. Future                   and targets for actions needed in Africa. It
prospects include integrated planning and            has identified a set of key challenges: 1)
development of multi-purpose schemes                 how to meet the water supply and
that take into account power generation,             sanitation needs, 2) how to arrest the
irrigation, fishery, recreation and transport        growing water scarcity in parts of the
together with ecological considerations.             continent, and 3) how to ensure water

security for life, development and                                     intergovernmental and regional co-
environment. Refer to Box 3.4 and 3.5 for                              operation in the management of shared
the Vision Statement and Messages.                                     waters, and devise common strategies.
                                                                       Other on-going initiatives include: the
Some of the targets set for 2005 include:                              UNDP-World Bank Water and Sanitation
proportion of people without access to safe                            Programme (WSP), and the Water Utilities
water supply and adequate sanitation to be                             Partnership attached to the Union of
reduced by 25% and achievement of food                                 African Water Distributors.
security of 60%.
                                                                       Initiatives in the water sector proposed for
    Box 3.5: Africa Water Vision Messages
                                                                       support under NEPAD are described
-   Provide safe and adequate water and sanitation for all,            below. Some of these are either planned or
    urgently                                                           are at various stages of implementation,
-   Make equitable and sustainable use of Africa’s water
    resources                                                          and it is expected that NEPAD would lend
-   Ensure sustainable development and management of                   support either for their fruition, or for
    water resources for all
-   Use water resources wisely to promote agricultural                 replication in other regions of the
    development and food security                                      continent.
-   Develop water resources to stimulate socio-economic
-   Treat water as natural asset for all in Africa                     4.2    Regional Initiatives
-   Share management of international water basins to
    stimulate efficient mutual regional economic
    development.                                                       MAGHREB
-   Ensure adequate water for life-supporting ecosystems.
-   Manage watersheds and flood plains to safeguard lives,
    land and water resources.                                          Efforts made or underway need to be
-   Price   water     to   promote   equity,   efficiency   and        pursued, especially with regard to water
    sustainability.                                                    saving     and    desertification control
                                                                       measures. Taking into account severe
It has also been noted that the level of                               water resources shortages in these
investment in agricultural water use in                                countries, reforms on water-saving
Sub-Saharan Africa (SSA) has been on the                               devices, protection of water quality and
decline in the last 10 to 15 years causing                             soils are indispensable to guarantee a
negative impact on food security and                                   sustainable development of available
generally on the agricultural based                                    resources.
economies of many countries. There is an
urgent need for reviewing the endogenous                               Niger River Basin
and exogenous factors with a view to
revitalizing the sector. The collaboration                             A number of global initiatives and
of ADB, FAO, IFAD, IWMI and World                                      programmes undertaken or on-going are
Bank is aimed at the development of a                                  aimed at strengthening hydrological data
strategy for investment in agricultural                                measurement and observations system,
water use in SSA.                                                      improving management of the resources
                                                                       and the provision of potable water for the
In order to accelerate development of the                              under privileged population, protection of
sector, African Water Ministers have                                   the river basin catchments, and control of
established an African Ministerial                                     the proliferation of aquatic plants. It is
Conference on Water (AMCOW) and a                                      expected that these measures would go a
Secretariat (Abuja, 29-30 April 2002) to                               long way in educating the populations and
guarantee sustained political will and                                 building        managerial      capacities.
commitment, exchange experiences such                                  Nevertheless, the actions taken remain
as best practices in key areas as policy                               inadequate, in view of the multiplicity of
reforms,     enhance      and    solidify                              problems and weaknesses in the capacities

of the agencies responsible for the                    integrated water-resources management
management of the resources.                           for the whole region. The realization of
                                                       this action plan is subject to the
Lake Chad Basin                                        mobilization of the requisite financing.

Faced with the problem of severe                       SADC
degradation of the ecosystems of the Lake
Chad Basin, and considering the risks of               In order to meet the challenges of
pollution posed by the development of oil              providing adequate water service and
and mining industries, and the use of                  supply and protection of the environment,
pesticides in agriculture, a programme of              and in recognition of the need for regional
protection was drawn by the Lake Chad                  integrated water resources development
Basin Commission (LCBC) in 1998 with                   and management in the shared water
UN support. The purpose of this plan                   courses, the SADC region has adopted the
spanning a period of twenty years is to                Regional Strategic Action Plan for
establish concerted, integrated and                    Integrated Water Resources Development
sustainable management of natural and                  and Management (1999-2004). The
water resources within the basin. The plan             majority of the member states have signed
also aims at transferring water form the               the “Protocol on Shared Watercourse
Congo River Basin to the Lake Chad. This               Systems”. A number of supportive
action plan requires building of LCBC                  programmes and projects have been
capacity to enable it to fully play its role in        identified in support of the strategic
the implementation and monitoring of                   objectives and are at various stages of
these projects.                                        implementation.

Central Africa                                         Nile Basin Initiative (NBI)

Central Africa countries - Angola,                     The ten countries of the Nile, representing
Cameroon, Gabon, Chad, Central African                 more than 300 million people, have come
Republic, Congo and the Democratic                     together within the Nile Basin Initiative
Republic of Congo are preparing to                     and developed a common vision “to
implement and integrate water resources                achieve     sustainable     socio-economic
management policy through the creation of              development through the equitable
a new joint institution. This initiative               utilization of, and benefit from, the
should be backed by assistance in the                  common Nile Basin water resources”. To
conduct of a study on the harmonisation of             translate the shared vision into reality
policies and legal framework as well as the            parallel programs namely: the Shared
financing mechanisms to be provided to                 Vision Program (to build confidence and
secure the institution’s viability.                    capacity across the basin) and Subsidiary
                                                       Action Programs (to initiate investments
West Africa                                            and action on the ground at “local levels)
                                                       have been prepared. Implementation is in
In the past few years, countries in West               progress for those activities where finance
Africa have conducted a regional water                 has been secured.
management study. This process was                     IGAD
crowned by the adoption in December
2000 by the Heads of State and                         In order to address the challenges posed by
Government of the Economic Community                   climate extremities in the region, the
of West African States (ECOWAS) of an                  member countries of IGAD have identified
action plan based on the principle of                  the    need     to    cooperate    in   the

implementation of water resources                    development of water resources; ii) to
assessment and capacity building. In                 develop the water resources through
particular, as the region is exposed to              cooperative efforts based on both national
recurrent drought and flooding, knowledge            regional initiatives in order to meet the
of water resources (data generation,                 basic service needs and promote food
assessment and dissemination) is an                  security through effective and efficient use
important input for disaster prevention,             of water for irrigation; iii) strengthen the
and management. Cooperation of the                   necessary knowledge base required for
riparian states is essential for the prudent         effective management of the resources.
management of shared watersheds and
water bodies. Accordingly, the IGAD                  In addition, the interventions proposed for
HYCOS project is under an advanced                   NEPAD support are those that support
stage of preparation, with the first stage of        regional co-operation, are ready for
situation and need survey to be                      implementation or have already started,
commenced as soon as project financing is            require financial support, and can be
arranged.                                            replicated in other regions.

4.3    National Programmes                           5.2        Short-term Action Plan

In line with their regular programmes, and           As indicated above, the proposed
with the support of the international                programmes and initiatives are selected on
partnership, some African countries have             the basis of their contribution in
embarked on national sector reforms                  addressing the main issues and challenges
deemed       necessary      for   effective          in the water sector and fall within the
development of the sector. A total of 15             context of the Africa Water Vision and its
countries are at an advanced stage of                Framework for Action. The proposed
implementation of sector reforms based on            projects and programmes are described
the principle of integrated water resource           under the five broad themes (see Box 3.6).
management. This process will need to be             The total financing required for these
replicated by other member states within             short-term action plan is estimated as US$
same regions to facilitate effective                 135.2 million. Detailed Project Briefs for
management of shared water resources.                each of the projects is attached in the
                                                     Appendix 3.
                                                                 Box: 3.6: Short-Term Action Plan
5.     PROPOSED ACTIONS                                                 Programme Themes
                                                           Theme A: Enabling Environment for Regional Co-
5.1    Strategic Approach and                                       operation;
                                                           Theme B: Support for the Development of National
       Planning.                                                    Integrated Water Resources Management
                                                                   (IWRM) Policies;
Besides the common selection criteria for                  Theme C: Meeting Urgent Water Needs;
                                                           Theme D: Improving Water Wisdom, and
the short-term action programme, for the                   Theme E: Strengthening the Financial Base for the
water sector, the areas identified for                             Desired Water Future
support under NEPAD are those
considered essential to advance the                  Theme A: Enabling Environment for
achievement of the Africa Water Vision               Regional Cooperation
for 2025. The proposed approach has a
number of objectives: i) to prepare the              The multiplicity of shared water resources
enabling environment conducive to full               in Africa pose a significant challenge for
participation by both the public and the             integrated management of these resources.
private sectors in the sustainable                   NEPAD will align itself with and support

riparian-led initiatives that enhance their
cooperation in the planning, development            Water Resources Management in
and management of shared water systems.             Central Africa
Effective institutions are essential for
efficient management of shared water                It is estimated that the total available
resources and provide effective tools for           renewable water resources for Central
regional integration and economic                   Africa region amounts to about 2,000
development.       Accordingly,    existing         billion m3/year, of which only a minute
river/lake basin organizations need to be           portion (about 1.5 billion m3) is actually
strengthened and new ones created as                utilised.
necessary. Three projects are proposed that
support such initiatives.                           Central Africa Countries:            Angola,
                                                    Cameroon, Gabon, Chad, Central African
Water      Resource     Planning      and           Republic, and the DRC, took in 2001, the
Management Nile Basin: This project                 decision to set up a sub-regional institution
will enhance capacity of member states of           to be responsible for integrated
the Nile Basin Initiative to implement              management of water resources. The
integrated water resources management               mission of this institution will be to: (i) set
policies and capacity building necessary            up of a hydro-climatic observation and
for the development and management of               measurement system; harmonization of
multi-country projects. The total cost of           national policies and legal framework; (iii)
the project is US$ 28 million with a                explore the viability of and financing
financing gap of US$ 8.2 million. The               required for water transfer projects, and for
project will be implemented over a 6 years          navigation on the Congo River; (iv) study
period.                                             and put in place protection measures for
                                                    water resources and the ecosystems; and
Support of Other New and Existing                   (v) educate and solicit participation of all
River Basin Organizations: The project              water users. It is proposed to carryout a
will provide a review and support two               study to define appropriate institution
selected existing river basin organizations,        arrangements and analyse the financing
in order to make them more effective                mechanisms of its activities. The total cost
institutions of efficient management of             of the study is estimated at US$ 6.5
shared water resources. It is expected that         million.
there will be future replication of the
                                                    Theme B: Support to Development of
project for other basin organisations. The
                                                    National IWRM Policies
estimated cost of the project is US$ 11.5
million with a project implementation
                                                    The basin wide interventions described
period of 5 years.
                                                    above will only be successful if they are
                                                    supported by appropriate policies and
Action Plan for the Integrated Water
                                                    regulations at the national level. While
Resources Management in West Africa:
                                                    some countries have gone a long way
The project has the objective of promoting
                                                    towards meeting this goal, others are
regional co-operation, creating and/or
                                                    lagging behind. Recognizing this, the
revitalizing    cooperative    frameworks
                                                    Africa Water Vision has set as a priority
between riparian countries through
                                                    the need for all countries to develop
capacity     building      and     through
                                                    national IWRM policies and institutional
implementing integrated water resources
                                                    reforms including capacity building by
management. The project will cost US$
                                                    2005, in order to improve governance of
24.0 million and planned for completion
                                                    water resources. This will enable the
within 5 years.
                                                    exploitation   of    synergies    between

strategies and programmes at the national          successful, these types of operations could
and water basin levels and will provide the        be replicated in other basins as part of the
building blocks for the programmes of the          medium and long-term action plan of
water basin organizations as they seek to          NEPAD. Two projects are:
establish appropriate cooperative water
management and development agreements.             Rural Water Supply and Sanitation
In the quest for improved governance in            Programme in the Niger Basin: The
water resource management, an analysis             project will promote regional cooperation
will be carried out using the example of           through assistance in the provision of basic
the SADC REC to examine the extent to              water supply and sanitation services, for
which harmonised national water resource           drought affected large rural communities
management policies support regional               in the member states of the Niger river
efforts, to identify constraints and to            basin. The project cost is US$ 30 million
propose a support programme for countries          and to be implemented over a 3 years
that have yet to put in place appropriate          period.
national policies. Some aspects of the
project could be applied to other countries        Combating Drought and Desertification
and RECs in the medium-term.                       in the Maghreb: The project will promote
                                                   regional        co-operation       through
Support for the Development and                    implementing frontier pilot schemes in an
Implementation of National Water                   effort to combat against sand invasion,
Sector Policies and Strategies – SADC              techniques for water mobilization, and
Region: The project will support the               information system on desertification and
development,        harmonization    and           the environment. The project cost is US$
implementation of national water policies          6.25 million and will be implemented over
and strategies in preparation of                   in an estimated period of 5 years.
coordinated management of river basin
organizations and implementation of the            Theme D: Improving Water Wisdom
provisions in the Protocol on Shared
Watercourses. The project cost is US$ 5            In many parts of Africa, data on the
million and scheduled to be completed              quantity, quality and temporal variation of
within a period of 8 years.                        ground and surface water resources is
                                                   either unavailable or inaccessible. This
Theme C: Meeting Urgent Basic                      makes it difficult to plan and develop
Services                                           available water resources in a sustainable
                                                   manner, and also makes it difficult to
Substantial efforts will be required to            resolve water related issues such as flood
implement the Framework of Action of the           warning, water scarcity and quality
Africa Water Vision if the challenges of           deterioration on sub-regional scale. Based
the Vision have to be overcome.                    on the Sub-Saharan Africa Hydrological
Particularly important will be the need to         Assessment, the African Conference on
translate water resource management                Water Resources: Policy and Assessment
agreements into micro-level, on-the-               had prepared the African Water Resources
ground improvements in access to basic             Strategy and Action Plan for water
water supply and sanitation services,              resources assessment in Africa, which was
improve the environment, and complement            later endorsed by the Council of Ministers
the macro-level agreements on hydro                during the Twelfth World Meteorological
power, flood control and irrigation. Two           Organisation (WMO) meeting. The
projects have been identified for                  strategy provided concrete measures for
implementation on the pilot basis. If              development and sustainable water

resources assessment and recommended                project cost is US$ 2.1 million, and will be
that implementation of the actions                  completed within 4 years of its
proposed be carried on a sub-regional               commencement.
basis. The Accra Statement on Water and
Sustainable Development of May 2002                 Strengthening of the ABN Inter-state
recommended similar measures.                       Forecast Centre (CIP): The programme
                                                    will consolidate the advances made under
It is known that most of the monitoring             the HYDRO NIGER project in West and
networks are in a poor state, are often             Central Africa by supporting data
incompatible, and historical databases are          generation, processing and creating
not well maintained and some of the                 favourable condition for the CIP self
information is no longer accessible. This is        financing. The programme cost is US$ 10
attributed to lack of recurrent budgets for         million with completion envisaged in 3
operation and maintenance of the                    years.
networks, and lack of capacity in the
responsible institutions. In order to               Theme E: Strengthening Financial Base
overcome these shortcomings, there is a             for Desired Water Future
need for urgent rehabilitation of the
network, capacity building for the                  As mentioned in the introduction,
responsible institutions, as well as                substantial financial resources are required
adequate allocation of financial resources          to realise the Africa Water Vision. It is
by national governments.                            estimated that approximately US$ 20
                                                    billion per year to provide the required
The objectives of these programmes are to           services. This level of financing requires a
assist member states and their sub-regional         renewed, bold commitment and approach
organizations to co-operatively improve             by all stakeholders. The bulk of these
and expand the ground and surface water             resources will have to be generated locally
knowledge base, and build capacity at both          from governments, communities and the
national and sub-regional institutions, for         private sector. Substantive support by the
information generation, assessment, and             international community shall also be
dissemination. The proposed projects are:           required. However, considering that most
                                                    of the investment will go to finance basic
Water Resources Assessment in SADC:                 services for the continent’s very poor,
The programme will support assessment of            which makes it difficult to attract the
both ground and surface water resources in          private sector and the inability of most
the region, processing and dissemination            governments to raise public funding for
of information in sustainable manner, and           these services, innovative ways of raising
support information exchange for co-                the financing required are required. There
operative management of shared aquifers             are increasing calls to establish an African
and river basins. The project cost for the          Water Facility or African Water Fund (as
pilot programme is US$ 30.8 million, with           recently articulated by the Ministers of
project being implemented over a 4 years            Water at their meeting in Abuja (29-30
period.                                             April 2002). In the short term, the
Implementation of IGAD-HYCOS: The                   NEPAD Short-term Action Program will
project        will       support      the          support a study to identify modalities for
rehabilitation/construction    of     data          raising the huge funding required as well
collection platforms, processing, and               as mechanisms for its administration in
development of sustainable information              order to achieve the targets set by the
system in support of co-operative                   Africa Water Vision.
management of shared river basins. The

Study to Improve Financing Mechanism                to meet the basic, economic, agricultural
for Development of the Water Sector:                and environmental needs of water.
The study will assess mechanism for                 NEPAD support is also required for
identifying and administering the large             enhancement of national and regional co-
financing needed to meet the Millennium             operation for effective planning and
targets of the water sector, including the          integrated management of shared water
possible establishment of a sector fund.            resources, as well as lend support for the
The study is estimated to cost US$ 0.6              mobilization of increased financial
million with planned completion in 9                investment required to meet the Africa’s
months.                                             Water Vision targets.

5.3    Implementation                               6.1    Water Sector Governance
Implementation of projects to be supported
                                                    One of NEPAD’s commitments is to
by NEPAD is mostly through the co-                  strengthen good governance in all sectors.
ordination of sub-regional organizations
                                                    For the water sector, this translates into
with the co-operation of water sector
                                                    instituting mechanisms and relationships
national agencies. The implementation               that are rule based, transparent,
agency for each project is identified in the        accountable and participatory. In the first
respective detailed brief. NEPAD will not
                                                    place, public sector institutions will be
have an executive role but will monitor
                                                    encouraged to continue building on and
progress through agreed indicators. Most
                                                    improving their policies to facilitate
of the projects proposed for the short-term
                                                    integrated and co-operational management
action plan will be completed within a              of these resources. Public sector
period of 5 years. Those projects that are          organizations will need to build their
piloted in selected countries will continue         capacities to review and implement such
to the second phase taking into account
                                                    supportive policies, strategies and
best      practices      achieved.       The        regulations, with special emphasis on
implementation period for this group of             creating the enabling environment for
projects will extend by at least the                public-private partnership, and for
equivalent duration taken by the first phase        empowerment of communities. NEPAD
projects.                                           will advocate capacity building and
                                                    promotion of good practices through
5.4    Mechanism for Monitoring                     focussed     reviews     and      statistical
                                                    publications and country status reports.
Peer review will be brought to bear by the
proposed Peer Review Committee set-up
                                                    6.2    Improve Access
for this purpose. Review reports on
progress made on project implementation             Political support is important in providing
and highlighting agreed monitoring
                                                    increased resources and commitment to
benchmarks should be the basis of the Peer          improve access to basic water services for
Review process.                                     the many millions still unserved as well as
                                                    for socio-economic development. The
6.     THE ROLE OF NEPAD                            urgency of increased service provision is
                                                    amplified by the fact that over half of
In the context of the developments                  Africa’s population is food insecure and
proposed in the water sector, the role of           has no access to basic water supply and
NEPAD comprise support to improve                   sanitation. NEPAD will lend its support to
water governance necessary for the full             get both national governments as well as
development of the this resource in order

the international partners to accord high           of policies that encourage community
priority for the development of this sector.        empowerment        and    private   sector
                                                    participation,        together        with
6.3    Partnership for Managing                     decentralisation of the management of the
       Shared Watercourses                          resources at the lowest appropriate level.
                                                    In addition, NEPAD would persuade each
In order to advance the principle of                country to minimise and manage risks in
cooperation in the joint management of              order to attract private financing in the
shared water resources for the benefit of           sector. NEPAD would also use its
all riparian countries, NEPAD support will          influence to mobilise additional funding
be required to engage co-basin countries in         (US$135.2 million) through international
dialogue aimed at addressing any                    partnership. NEPAD will facilitate in the
differences and adoption of win-win                 identification of the right mechanism for
approaches. Sharing of good practices will          sourcing and administration of the large
be encouraged towards adopting protocols            financial outlay, required to meet the
on shared water systems, water sharing              Millennium targets for Africa.
agreements, and the establishment or
strengthening of river basin organizations.

6.4    Enhancing Knowledge Base,
       Sustainability of Installations,
       and Capacity to Manage
       Extreme Events

In order to utilize and manage water
effectively and efficiently, the need to
improve the water knowledge is
overriding.   NEPAD        support   will
contribute to the promotion of best
practices and ensuring fulfilment of
national commitments in installing and
maintaining data gathering networks as
well as adopting unified information

6.5    Mobilizing the Financial

In spite of the key and central role water
plays in socio-economic development, this
awareness is not matched with the
requisite financial resource allocation.
Budgetary allocations would need to be
increased as well as the support by
Africa’s development partners for the
sector in commensurate with the demand.
NEPAD would influence the high priority
that should be alluded to water through
increased budgetary allocations by
governments, and also facilitate adoption

            CHAPTER 4                               -      supporting regional cooperation and
                                                           the integration of markets for transport
                                                               Fig. 4.1: Transport and Insurance Cost
                                                                  as a Percentage Value of Exports
1.      OVERVIEW                                               Malawi
Transport infrastructure and services are at                  Uganda
the heart of regional integration as they                Burkina Faso
support the movements of people and                           Ethiopia
goods across borders. Africa’s internal and                   Zambia
international trade flows through its roads,                  Lesotho
railways, inland waterways, ports and                   Dev. Countries

airports.                                                                0   10   20   30    40     50    60
                                                                                   Percent (%)

                                                        Source: UNCTAD-Report on Transit Systems of Land Locked and
Africa’s transport systems are poorly                   Transit Countries, 2001
integrated and inefficient. They impose a
high cost premium on trade, travel and
                                                    Underpinning development activities in all
business and have a crippling effect on
                                                    sub-sectors      is     the    objective    of
Africa’s trade competitiveness and its
                                                    strengthening         sector      governance
ability to participate in the world economy.
                                                    arrangements        that    are    rule-based,
High transport and insurance costs add to
                                                    predictable, transparent and participatory.
the cost of imports and cut into the net
                                                    As governments complete their withdrawal
income from exports. Fig. 4.1, based on
                                                    from the direct provision of services, they
UNCTAD 2001 reports, shows that for a
                                                    face the challenge of developing their
number of landlocked African countries
                                                    capacity for policy making, effective
transport and insurance represent more
                                                    regulatory oversight and monitoring. A
than 30% of the total value of exports,
                                                    critical aspect is to secure the participation
compared with an average of 14.6 % for
                                                    of stakeholders, including users and
all landlocked countries and 8.6% for
                                                    service providers, in policy development
developing countries as a whole.
                                                    and overall planning. Another challenge is
                                                    to establish regulatory frameworks that
To reduce poverty and reverse the
                                                    foster competition and support the
economic marginalisation of Africa there
                                                    emergence of regional markets for
is the need to address infrastructural,
                                                    transport services.
operational and facilitation deficiencies in
transport. The goal is to close Africa’s gap
                                                    Africa’s plan of action in transport will
in transport infrastructure and services, by
                                                    focus on issues whose solutions depend on
                                                    regional cooperation and implementation
-    reducing the costs and improving the
                                                    of regional projects. However, since the
     quality of services;
                                                    majority of the target group, the poor, lives
-    increasing both public and private
                                                    in rural areas, a general concern is also
     financial investment in transport
                                                    about what individual countries do to
                                                    improve access, quality and affordability
-    improving       the   maintenance  of
                                                    of rural transport and, hence, to effectively
     transport infrastructure assets;
                                                    link the communities with national and
-    removing formal and informal barriers
                                                    regional transport systems and markets. In
     to the movements of goods and people
                                                    this respect, the regional plan of action

will promote knowledge sharing and the                3) selected physical projects included in
dissemination of good practice regarding                 the REC’s programs and for which
rural transport development strategies                   studies are available. These are
drawing on the global and regional                       regional projects in the sense that they
experience and working through ongoing                   deal with air and maritime gateways,
initiatives in particular the RTTP (Rural                or serve transit corridors either by
Travel and Transport Program) of the                     supporting         upgrading         and
SSATP.                                                   improvements or by removing
                                                         bottlenecks and filling gaps
NEPAD Transport Programs                              4) studies to prepare additional further
                                                         projects; and
The above goals and objectives will be                5) monitoring, knowledge sharing, peer
pursued under programs targeting specific                review through REC’s and relevant
sub-sectors          and         institutional           technical organizations to develop
constituencies. The short-term action plan               benchmarks and targets, and to
is primarily based on the programs of the                facilitate the exchange of experiences
RECs, and have been grouped by sub-                      and good practices. The objective
sector and institutional constituencies; they            being to accelerate the pace of
include: facilitation of traffic flow along              innovation, to track progress, and to
corridors including multi-modal transport,               identify and help the remediation of
roads, railways, ports, maritime safety,                 constraints.
inland waterways and aviation.
                                                      NEPAD will provide strategic leadership
Regional and national institutions, under             by mobilizing political action and financial
the coordination umbrella of the relevant             resources in order to secure completion of
RECs, will implement NEPAD’s short-                   needed reforms and to facilitate planning
term transport action programs in each                and implementation of critical sector
sub-sector.   NEPAD       will    facilitate          development programs and projects by
collaboration and exchanges between                   countries, RECs and other designated
REC’s and will help muster political                  regional institutions. NEPAD’s success
support for needed reforms and joint                  will depend on its ability to accelerate the
actions. NEPAD will support bench                     pace of reforms that will create the
marking and progress monitoring using                 enabling environment for stepping up the
appropriate indicators. NEPAD will                    flow of investments in transport
challenge and assist countries, REC’s and             infrastructure and services.
other organizations concerned to expedite
the implement international conventions               NEPAD will help to develop a common
and regional protocols. The sub-sector                vision for transport among Africa
programs include the following elements:              development institutions and partners, on
                                                      the policy changes and institutional
1) supporting policy and institutional                reforms needed to ensure that better
   reform to complete the reform agenda               maintenance and the expansion of physical
   in the various sub-sectors and to                  capacity as well as better management,
   strengthen sector governance so as to              resulting from institutional reforms and
   create an enabling environment for                 increases in investments, are effectively
   competition and investment;                        translated into better and cheaper services
2) capacity building related to regulatory            for all.
   oversight,    monitoring     and    the
   participation of business organization             All transport programs will focus on ways
   and professional associations.                     to enlarge the participation of the private

sector in operations as well as in financing         programmatic approach outlined above,
through concessions, BOT, maintenance                NEPAD will foster support for
and management contracts, etc., with the             comprehensive          and       sustained
overarching objectives of broadening                 infrastructure reconstruction programs in
competition among private service                    post conflict countries: DRC, Angola,
providers and facilitating access to                 Congo, Sierra Leone and Guinea Bissau.
commercial financing from domestic,                  NEPAD will also support exchange of
regional or international sources. NEPAD             experience to draw lessons from emerging
will in particular promote the use of                experiences.
mechanisms to cover perceived political
and country risks such as the Africa Trade           In order to accelerate the flow of
Insurance Agency, as well as guarantee               investment into the transport sector,
schemes set up by the AfDB and the                   NEPAD will work with REC’s, countries
World Bank Group.                                    and their development partners as well as
                                                     private stakeholders, to define guiding
Knowledge sharing, networking and                    principles and planning framework for
dissemination of good practices among                investments     in    regional   transport
countries, REC’s and technical agencies is           corridors. A recurrent problem has been
essential to ensure a sustainable                    the difficulty of forecasting the role of
development and integration of transport             transport infrastructures as generator of
systems in the continent. The experience             economic activities, and their ability to
gained by African countries and RECs                 open-up the potential of hitherto isolated
over the last ten years provides a wealth of         regions.
lessons and good practices. NEPAD will
target its support at strengthening the              To succeed in mobilising the large amount
capacity for knowledge sharing and                   of investments required for facilitating
networking at the sub-regional and                   increased trade and unlocking Africa’s
regional levels, working through ongoing             vast dormant or under-exploited economic
initiatives in particular the SSATP                  potential, NEPAD will promote innovative
program (Sub-Saharan Africa Transport                approaches to planning and resource
Policy).                                             mobilisation.

The restoration of infrastructure services           From recent experience, particularly in
in post-conflict situations is always a high         Southern Africa, mobilising resources for
priority and raises particular challenges. It        infrastructure projects can be more
is important to start as soon as possible to         effectively achieved when the projects are
prepare the transition from the initial              presented and marketed in the context of
emergency phase to the reconstruction and            overall        economic       development
development phases. An early focus on                perspectives of a specific corridor. This
policies and institutional structures is             multi-sectoral economic development
necessary to impart coherence to capacity            corridors (DC) or spatial development
building initiatives and to address                  initiatives (SDI) approach places emphasis
sustainability issues. Infrastructure repairs        on simultaneous exploitation of the variety
and reconstruction programs are a source             of        interdependent      development
of employment and can help to strengthen             opportunities arising within the various
the social fabric through community                  sectors. The adoption of this approach in
involvement and, to contribute to overall            most of the traditional transport corridors
stability. The challenge is to organize them         in Southern Africa has been spearheaded
at sufficient scale in the face of severe            by the success of the Maputo Development
capacity constraints. In addition to the             Corridor program (Box 4.1). NEPAD will

promote exchange of knowledge on such                political support and the sense of urgency
initiatives and as appropriate support their         and collective responsibility for results.
                                                     In order to alleviate this constraint,
NEPAD will also ensure that the measures             NEPAD will pursue the establishment of a
for control and prevention of HIV/AIDS               facility to provide technical support and
are mainstreamed in all its programs,                facilitation services to REC’s and the
particularly those dealing with transport            technical implementing agencies.
corridors. This will be achieved in
coordination with other organizations                The proposed Regional Transport Reform
involved in HIV/AIDS programs.                       and Integration Support Facility for Africa
                                                     (TRISFA) would be a trust fund modelled
                                                     along the lines of the Private Participation
Projects in Short-term Action Plan                   in Infrastructure Advisory Facility
                                                     (PPIAF) of the World Bank Group or the
                                                     recently established EC funded capacity
The short-term action plan has been
                                                     building project for Southern Africa (the
developed with the objective of
ascertaining that there are enough ready-            component targeted specifically at the
made opportunities for interventions and             implementation of protocols on transport
                                                     and trade facilitation). Both of which are
projects to kick start the sub-sectoral
                                                     structured to provide just-in-time demand
programs outlined below. At this stage the
                                                     responsive      support     to     agencies
list of projects is not exhaustive. Ports and
                                                     spearheading reforms and changes.
railway investments would be linked with
PPP reform; their ability to attract private
interests would therefore be the decisive            Summary of Short-term Actions
factor for their financing. In that sense the
                                                     Over the next year, NEPAD will support
list for ports and railway are open ended.
The situation for roads is different, as most        the REC’s in the preparation of action
of the regional roads will be financed by            plans to deal with the challenges targeted
public funds and therefore subject to                by NEPAD transport programs; the
rationing and prioritisation on the basis of         purpose would to set targets for
economic criteria. The review of the                 improvement and review roadmaps to
                                                     reach them. NEPAD will also support
available road programs by the RECs has
shown that the pipeline of regional                  exchanges between REC’s, countries and
projects, which have been studied at least           technical agencies on important sub-
to the feasibility study level, is well in           sectoral programs (e.g. facilitation) and
                                                     cross-cutting themes (e.g. Development
excess of US$1.2 billion. The road
projects to be included in the short-term            Corridors and the planning of regional
program will be determined later in                  projects). The overall medium to long-
                                                     term infrastructure strategy to be prepared
consultation with the RECs.
                                                     by NEPAD will provide a framework for
Implementation Support                               further review of their programs. A
                                                     summary of components of the short-term
                                                     actions and resource requirements is
Most of NEPAD work in transport will be
to accelerate the response to familiar               presented in the Box 4.2. Further details
problems. NEPAD objectives in transport              are provided in the subsequent sections of
are not new, they deal with long-standing            the report.
challenges and they support approaches
that have already been tested in Africa.
What will be new under NEPAD are the

                          Box 4.1 SADC Regional Development Corridors Programme

The Maputo Development Corridor (MDC) initiative was launched in 1995, as a joint undertaking of the governments of
Mozambique and RSA, with the support of SADC. The Maputo corridor links the South Africa’s Northern and Gauteng
provinces with their closest ocean gateway: i.e. the port of Maputo. The initiative was established to primarily facilitate broad
based economic growth along the corridor and was guided by the following broad objectives:
-    To rehabilitate the core infrastructure along the corridor with minimum call on public funds;
-    To maximize investment in opportunities along the corridor;
-    To ensure that the development impact on neighbouring local communities is maximized.

                         Components & Interdependence of SDI/DCs program and projects

                                Facilitation (policy, peace, security, legal, regulatory,
                                        judiciary, tax incentives, procedures)


                                       Econ growth
                                       .& incentive
                                        for reforms

                                                                                    GDP growth

                                                                                    for reforms
                                                                                    & incentive
                Economic potential                    Revenue Streams
               exploitation projects                                           Infrastructure projects
              (agriculture, forestry,                                       (transport, telecoms, posts,
                 manufacturing,                                                 energy/power, water)
                                                      Low prod/operation cost
               tourism, mining, etc


                                                                              Low living
                                 & wealth

                                                                               cost &


             Human development/social services projects (education, health, community,
                     cultural, environmental, gender, other poverty alleviation)

To date, the road link has been reconstructed under a $250 million BOT toll road project. Maputo port is being rehabilitated
and under a 15-year management concession agreement. Concessions have also been awarded for the rail links. The capacity
of the power link between RSA’s grid and Mozambique has been expanded to meet the demand from the MOZAL aluminium
smelter established just outside Maputo. The telecommunications links have been improved including the commissioning of
the first mobile phone service in Mozambique. An industrial park is being developed in Maputo. Further industrial projects are
planned including iron and steel, gas and chemical industries.

The private sector has so far invested more than US$ 6 billion in the MDC projects, out of which US$ 600 million has been
committed to key infrastructure projects. These investments in new industry or processing ventures and infrastructure are
estimated to have created more 15 000 jobs. The MDC is considered to have contributed significantly to make Mozambique
one of the fastest growing economies in Africa. The success of the Maputo Development Corridor has boosted support within
SADC for the concept of multi-sectoral economic development corridors. The approach, also referred to as spatial
development initiatives (SDI), is now being widely used by SADC countries. Some of the key principles and strategic
objectives underpinning the DC-SDI approach are:

-    focus on existing transportation development corridors with proven under-utilized economic development potential
-    greater regional competitiveness via regional integration and collaboration
-    emphasis on the role of the private through direct investment and partnerships
-    local beneficiation of resources and linkages with development in neighbouring regions and communities.

Based on: SATCC: An overview of Southern African Regional Development Corridors Vol. 2, April 2001
The Regional Spatial development Initiative Support Programme: Creating New Wealth in Southern Africa, December 2001

     Box 4.2: Summary of Transport          US$            economic opportunity cost. For example, a
           Short-term Action Plan         (million)        road trip between the port of Mombasa and
Trade corridors without borders and          38            Bujumbura still takes an average of
barriers (Transit facilitation)
Better and safe roads (Institutional,      1,250           between 12 to 15 days to cover 2042 km.
physical works and studies – only                          Assuming ideal conditions, this trip could
illustrative of possible global finance                    be covered in one third of this time.
needs for programs/projects ready for                      Similarly, in mainland SADC, excluding
implementation)                                            Angola and DRC, the total cost of border
Competitive and seamless railways           196
systems                                                    delays has been estimated at some US$ 48
Efficient ports                             258            – 60 million annually. Furthermore, in
Safe seas and ports                         6.9            most countries, transport services and
Inland waterways                            8.2            related matters (including customs
Liberalization of air transport and         244            clearances, insurance, security, licensing,
upgrading of air safety and security                       safety and overload control) are heavily
 Regional Transport Reform and               20
Integration Support Facility
                                                           regulated by fragmented and generally
                 Total-Transport Sector    2,021           weak public institutions and personnel,
                                                           some of few whom are prone to rent
                                                           seeking and illegal practices, with no
2.       TRADE CORRIDORS                                   effective monitoring and control.
         BARRIERS                                          2.3    Response

2.1      Objective                                         Notable efforts are emerging in specific
                                                           corridors to address these problems. The
The overall objective is to minimize transit               best examples where concerted practical
times and associated transit costs along the               actions are being taken or are to begin
main trading routes of Africa, particularly                soon, include the Northern Corridor (NC-
those linking the landlocked countries with                linking the Great Lakes countries and
external trade gateways, principally the                   Mombasa), the Trans-Kalahari corridor
seaports. The specific objectives of the                   (TKH-linking Walvis Bay with Botswana
programs are to i) eliminate causes of                     and South Africa) and the Maputo corridor
delays at all components of the transport or               (MC - linking Maputo with South Africa,
logistic chains including ports, along                     Swaziland and Zimbabwe), Beira corridor
surface transport modes, at borders and the                (BC–linking Beira with Zimbabwe and
inland customs clearance depots; and ii)                   Malawi), plus corridors in UEMOA (Box
promote the development and use of multi-                  4.3). The specific actions being taken
modal transport and develop capacity for                   include:
efficient logistic chain management                        − Streamlining                 regulations,
                                                               documentation and procedures such as
2.2      Challenges                                            implementation         of            the
                                                               COMESA/SADC Customs Document
Transit traffic along trading routes faces a                   (CD) along TKH and NC.
myriad of non-physical barriers, including                 − Concluding          and         initiating
cumbersome and unpredictable clearance                         implementation    of    bilateral     or
procedures in the ports, at border                             multilateral agreements to move
crossings, and at inland terminals, as well                    towards one-stop border operations
as inefficient operations within modes and                     (TKH and MC).
at modal interchange points. The cost of                   − Training and facilitating consultations
such delays is huge in terms of idle time or                   of stakeholders (including customs,
sub-optimal utilization of vehicles and                        transport   operators,   immigration,

    security and clearing and forwarding                            A very positive trend is emerging of the
    agents) at specific borders and ports,                          involvement of the private sector in
    with    a    view      to    facilitating                       public-private partnership stakeholders’
    implementation of agreed various                                forums and associations to give weight to
    regional trade facilitation instruments                         resolving the non-physical barriers. This is
                                                                    notable in all the above examples of
                                                                    emerging corridor best practices.
  Box 4.3 Facilitation of Inter-State Road Transit
                    in UEMOA                                        2.4    Benefits
 The road infrastructure and transport program adopted by
 UEMOA member states in 2001 illustrates the range of               The main benefits associated with the
 measures to be considered in drawing up regional road
 programs:                                                          elimination of delays will be the reduction
 Regulatory:                                                        of transport costs, enhanced predictability
 −   utilization of a uniform custom declaration form in            and elimination of frustration, all of which
     replacement of national documents;                             deter the expansion of competitive and
 −   harmonization of regulations and related documents
     concerning cross-border movements of vehicles:                 efficient transport services that are
     certification, registry inspection norms etc.                  necessary to boost economic development
 −   agreement on scope and frequencies of road-side checks
     concerning trucks and cargo by various administrative
                                                                    of the African countries.
     services (e.g. customs, police, security/gendarmerie,
     forestry) and harmonization of applicable penalties for        Improving overload control and safety will
 −   harmonisation of road users charges.                           lead to the reduction of loss of lives and
 Institutional:                                                     property, as well as significantly
 −     establishment of joint one-stop border posts (two pilots:    contribute to the sustainability of
       Cote d’Ivoire-Burkina border and Togo-Burkina border)
                                                                    infrastructure. This will, in turn, provide
 −   regional observatories of abnormal practices on inter-
                                                                    reassurance to development partners and
     state roads undertaken by a private sponsors, the West         the private sector to invest in the
     Africa Enterprise Network.                                     expansion of infrastructure and industry
                                                                    and trade.
  (NC and TKH).
− Establishment of an ICT based                                     2.5    Program
  information system for tracking and
  monitoring cargo and vehicles, as well                            The major program component will be to
  as “observatories” for monitoring                                 support and accelerate ongoing efforts and
  illegal barriers and putting pressure on                          emerging best practices in specific
  governments       to    remove     them                           corridors, including the conversion to one-
  (UEMOA, NC and TKH).                                              stop border post operations. The program
− Promoting improvement of overload                                 will also support the replicating of these
  control enforcement through the                                   best practices to other corridors and in
  participation of the private sector in                            capacity building for private sector
  weighbridge management (NC, TKH                                   associations, to enable them to effectively
  and East African Community).                                      lobby governments to make the required
− Promoting       and   facilitating   the                          changes. The other related program
  establishing of ICDs and multi-modal                              component will be the establishment of
  transport operations (NC).                                        benchmarks to be used to assess the
− Controlling the spread of HIV/AIDS                                progress being made and quantify the
  along corridors, by implementing                                  impact against targets, as well as
  targeted      programs,       conducting                          pinpointing problems and specific actions
  awareness campaigns, and providing                                that need to be taken to resolve them.
  preventive and counselling facilities
  along the corridor (MC).

                        Box 4.4: Summary of Short-term programs/projects – Trade Corridors
                         Title                         Country/ Sub-region       Cost in         Sponsor
 Implementation of transit facilitation, joint (one                                   20     ECOWAS, UEMOA
 stop) borders and observatory in the corridors:
 (a) Abidjan – Ouaga – Niamey; and
 (b) Abidjan – Accra – Lome - Lagos West Africa        West Africa
                                                       Central Africa                        ECCAS
 (c) Douala – N’djamena – Bangui corridor.
 Implementation of overload control along corridors:   West, Central, Southern,       5      ECOWAS,
                                                       Eastern and North Eastern             UEMOA,
 -    at least 2 main corridors in each sub-region     and Northern Africa                   COMESA, SADC,
                                                       corridors                             EAC, IGAD, NC
 Implementation of harmonized COMESA/SADC              Main transit corridors in      3      COMESA, SADC,
 CD & regional bond guarantee scheme                   East and Southern Africa              EAC, IGAD, NC
 Strengthening/Establishment of private sector         At least for 2 main transit    8      NC, SADC, EAC,
 associations and stakeholder forums                   corridors each for West,              COMESA,
                                                       Central, Southern, Eastern            ECOWAS,
                                                       and North Eastern Africa              UEMOA, IGAD
 Implementation of one-stop border posts along NC      Northern (Mombasa)             2      NC, SADC,
 and two other SADC corridors                          corridor, Beira & Dar –               COMESA
                                                       Malawi and Zambia
                                                                            TOTAL     38

Typical benchmarks would include, for                            3.       BETTER AND SAFER ROADS
example, the reduction by 50% of vehicle                                  TO BRING TOGETHER
turn around or transit times in five years                                AFRICA
up to 2007. The proposed short-term
programs/projects to be pursued under the                        3.1      Objective
NEPAD initiative are indicated in the table
below.                                                           Better roads are central to NEPAD’s broad
                                                                 goals of reducing transport time and costs
2.6      The Role of NEPAD                                       for people and goods, enhancing Africa’s
                                                                 competitiveness       and     strengthening
The first role of NEPAD is to support and                        regional integration. NEPAD objective for
accelerate the implementation, by member                         roads will be to accelerate the
States, of the sub-regional, regional and                        development of road infrastructure and the
international agreements and protocols that                      build up and strengthening of related
have been already entered into to eliminate                      maintenance capacity with particular focus
non-physical barriers. Secondly, NEPAD                           on regional transport corridors.
will assist in mobilizing financial
resources in support of implementation of                        3.2      Challenges
the programs, through high profile fora
and consultations with international and                         One of the reasons for Africa’s economic
regional development partners and the                            marginalization is the poor performance of
private sector. Thirdly, NEPAD will                              its trade links and inland distribution
foster and facilitate networking, sharing
                                                                 chains, which rely overwhelmingly on
experience among RECs and replicating                            road transport. Missing links in highway
best practices. Fourthly, NEPAD will,                            networks, the endemic deficiency of
through a peer review mechanism, set                             maintenance as well as formal and
Africa-wide benchmarks for monitoring                            informal barriers all contribute to high
the performance of RECs and specific                             costs, delays and unreliability.
countries and challenge those lagging
behind to move more quickly in                                   While the problem is serious across the
implementing the programs.                                       board, it is particularly so for Africa’s 15
                                                                 landlocked countries whose distance from

the sea ranges from 220 km for Swaziland            conscious engineering and contracting
to 1735 km for Chad. This is one reason             professions. Road construction costs in
why attention is being focused more and             Africa are estimated to be 20 and 30
more on Development Corridors, which,               percent higher than in Asia and Latin
while not exclusively aimed at landlocked           America. In many countries the
countries play a major role in opening up           procurement and contract administration
their economies.                                    functions are poorly organized and open to
                                                    corruption. While large projects will be
Africa as a whole lags considerably behind          able to attract international engineers and
Asia and Latin America in road coverage             contractors at a cost, medium size projects
and density (Fig. 4.2), however for many            and the all important maintenance works
African countries the maintenance of their          will have to rely on local firms.
limited road assets constitute a heavy
burden given low average income and the                    Fig. 4.2: Percent of Paved Roads
narrow and precarious fiscal base.
                                                         Europe/Central Asia

 A number of challenges have to be                        Mid. East/Nth. Afric
addressed to accelerate the pace of
                                                                  South Asia
development of Africa’s road networks.
The first requirement is to ensure that new              Latin America/Carrib

roads as well as existing ones are
                                                           Sub-Sahara Africa
maintained.      Investments      in    road
investments cannot be undertaken in                                              0   20   40   60   80   100

isolation but have to fit in the framework
of national road programs that ensure a
proper balance between maintenance,                 The ultimate challenge is to ensure an
rehabilitation and upgrading and within             adequate balance between activities that
policies and institutional arrangements that        help to meet each challenge. Building and
provide secure funding for maintenance.             rehabilitating roads without taking care of
Sound road management requires control              maintenance or reducing barriers to trade
of axle-loads, which is particularly                will be fruitless. Building regional roads
relevant for heavy trucks used for long-            that do not support trade at the expense of
haul services along regional corridors.             those that do will have a detrimental effect
                                                    on a country’s economy.
The second challenge is one of planning
and prioritisation of regional roads links          Response
to obtain maximum impact in terms of
reduction of transport costs on existing            Over the last ten years many African
trade and travel flows and, on the other            countries have adopted policies and carried
hand, to open up of the economic potential          out institutional reforms to ensure the
of heretofore isolated regions.                     reliable funding of road maintenance. The
                                                    guiding principle of these reforms is to put
The third challenge is to make African              road management on a fee for service
roads safer. The high accident rate along           model by involving users in decision
Africa’s roads is a source of loss and              concerning financing and by strengthening
damage to trade and one of the major                the accountability of road agencies.
causes of injury and death.                         Reliable funding for maintenance is
                                                    typically ensured by channelling a share of
The fourth challenge concerns the                   the fuel levy and of other road user
development of efficient and quality                charges into a road fund placed under the

oversight of a board with strong                                               existing roads should provide more
representation of users. The Road                                              confidence to countries and their partners
Management Initiative (RMI/SSATP)                                              and allow them to support the regional
(Box 4.5) has since 1988 provided a                                            integration agenda by completing an
framework for exchanges and policy                                             agreed network of regional roads to an
analysis on these issues.                                                      appropriate standard.

In many cases these reforms have been                                          Some of these roads will already be
supported by large programs based on the                                       included in the set of roads that support
network management approach and                                                established trade flows; others will have a
including a mix of reconstruction,                                             more regional, even political vocation. The
rehabilitation, upgrading as well as well-                                     critical issue is to develop a coherent
defined schedules of maintenance works                                         planning framework to set priorities within
and capacity building measures.                                                agreed resource envelopes.

This approach embodied in the so-called                                        Several REC’s (SADC, UEMOA,
Road Sector Development Program                                                ECOWAS) have developed coordinated
(RSDP) (sometimes comprised in broad                                           programs for road management and
Transport Sector Programs) has allowed                                         improvement       in    their    sub-region,
countries to mobilize and coordinate                                           integrating    investment     in    regional
considerable funding from a large number                                       corridors within each country’s road
of partners. In countries where it has taken                                   program and, defining accompanying
root the deterioration of road networks has                                    measures concerning facilitation, road
been halted.                                                                   safety and axle load control. As mentioned
                                                                               in the overview to the transport section,
The drive to put road networks on a                                            the SADC approach is based on the
sustainable footing and to gradually                                           concept of Development Corridor (Box
upgrade them should be consolidated and                                        4.1), which combines improvement in
extended to all countries. This is the single                                  transport infrastructure and services with
most important priority for the transport                                      investment in industry, commerce and
sector and NEPAD will support it.                                              agriculture and seeks private sector
The advances in the capacity to manage

                              Box 4.5 The Road Management Initiative (RMI/SSATP)
The RMI was launched as a response to the poor performance of traditional public work agencies in road maintenance. Phase 1
which unfolded over the period 1988-91 raised awareness among policy makers and built a consensus on the need for changes.
Country level implementation efforts undertaken under Phase 2 led to a coherent vision of the steps needed to ”commercialise” road
services and put them on a fee-for-service basis and manage them according to business principles. This requires actions in four
complementary areas, known as RMI building blocks, namely:

     -     creating ownership and pressure for efficiency by involving road users and transport operators in the management of
           roads thereby gaining public support for adequate road financing;
     -     stabilizing road financing in particular for maintenance through earmarked share of fuel levies and user charges
           channelled through a road fund;
     -     clarifying responsibilities and accountabilities of road agencies
     -     strengthening the management of roads by introducing effective private sector management systems and enforcing
           managerial accountability.

The RMI also developed specific recommendations for improving the operations of road agencies dealing with staffing reform,
contracting of maintenance, and use of labour-based methods and privatisation of plant pools.
The RMI has provided support to individual countries and organized periodic meeting of country coordinators to take stock and
share their experience and draw a common analytical agenda. RMI strengthened donor coordination; it was one of the factors that
lead to the Code of Conduct to guide road sector operations signed by most members of the African development communities.
SADC on its part has prepared model legislation and guidelines for the establishment of road authorities and road funds and related
oversight boards which are the institutional pillars of the road sector reform. The RMI illustrates the value of regional initiatives for
advocacy and knowledge sharing to tackle critical issues in transport as well as in other sectors.
Source: T. Triche: Road Policy Reform in SSA 1991-1995, SSATP Paper 25.

In order to meet the demand for road                   1230 km developed through BOT
works arising from their RSDP, several                 including in particular the Maputo
countries (e.g. Ethiopia, Tanzania,                    Development Corridor road. The South
Uganda) have launched programs to                      African National Road Agency has
strengthen      their     engineering       and        instituted a procedure for receiving and
contracting industry. Such programs                    assessing unsolicited bids for privately
typically deals with reform of procurement             financed toll roads. Further north, a
and      contract     administration,      firm        feasibility study for the concessioning of
registries,       certification,      training,        sections of the Mombasa-Uganda corridors
professional associations and universities.            is being undertaken. Other possible
                                                       candidates         include:       Abidjan-
Awareness of the gravity of the road                   Yamoussoukro and Douala-Yaounde. The
accident problems is widespread, however               Trans-Maghreb highway is another major
few of the road safety programs launched               road concessioning program being pursued
in African countries have been effective.              in Africa.
The difficulties arise from the large
number of agencies involved, the problem               3.3    Benefits
of enforcement and the many factors that
lead to accidents (road conditions, design             Roads are the dominant form of transport
standards      especially   sidewalk     and           accounting for up to 80 % of cross-border
amenities for pedestrian and cyclist,                  freight and for most of the passenger
vehicles conditions, drivers skills and                traffic. The starting point of any reflection
attitude, etc.). Lessons have been learned             on the economics of roads has to focus on
and several countries have promising                   the imperative of maintenance. Neglect
program        underway      with      broad           and disrepair of Africa’s fragile road
involvement of civil society organizations             networks have a very high cost; one dollar
and      private     stakeholders,    strong           “saved” in road maintenance causes
communication and advocacy function                    roughly three dollars of additional costs to
(e.g. South Africa’s “arrive alive”                    users. Without maintenance and repair
campaign), well-defined objectives and                 road pavement break down and eventually
continuous monitoring and evaluation.                  disappear. The economic losses imposed
Road safety is a serious problem along                 by insufficient maintenance are estimated
transit corridors, which are among the                 at about US$12 billion over the last
most heavily travelled roads. Several                  decade.
REC’s have included coordinated action
on roads safety in their regional road                 The combination of improved maintenance
programs concerning in particular vehicle              with stepped up investment in upgrading
inspection and registration, drivers                   and rehabilitation of priority links and
certification, insurance, accident response            facilitation could reduce transport costs to
capacity etc. NEPAD will support this                  landlocked countries by as much as 50 %.
trend and foster advocacy and exchange on              Total transit time could be cut down by the
effective approaches to road safety.                   same proportion considering the long
                                                       delays at borders crossings.         For a
As trade and travel flows continue to                  landlocked country like Rwanda the
grow, some corridors will attain levels of             savings could amount to 10 to 15 % of the
traffic that could justify PPP in the form of          annual import bill, i.e. US$20 to 30
concessions or enhanced leases. This is                millions. More reliable and cheaper
already a reality in South Africa where                transport services between ports and their
1950 km of road are tolled, of which 720               hinterland and between capital cities will
km under the State Toll Road system and                enlarge regional markets and open up

opportunities for economic diversification          term strategy. Considering the scope of
and regional development.                           ongoing programs the order of magnitude
                                                    of the funding requirements (for SSA
The economic cost to African countries              without RSA) totals about US$ 5 billion
accruing from road accidents is estimated           annually of which as much as 60 %, i.e.
in the range of 2 % of GNP with a high              about US$ 3 billion would have to be
foreign currency component; a recent                funded externally.
estimate for Uganda yielded a figure of
2.3%. As road safety programs get more              The second objective concerning roads
effective the relatively small resource             will be to support increased investment in
involved will prevent disabilities, save            regional roads. The sub-regional programs
lives and check related medical costs and           prepared by the REC’s would constitute
material damage to cargo and equipment.             the framework for planning and
                                                    coordinating investments in regional roads.
The mobilization of private financing will          The critical task will be to develop guiding
contribute to accelerate road infrastructure        principles and criteria for assessing the
development along densely trafficked                appropriate scope of regional road
corridors.                                          programs and for setting priorities. Such
                                                    criteria would focus on sections of transit
3.4      Program                                    corridors serving landlocked countries
                                                    with a regional ocean ports and would
The first objective concerning roads will           consider:
be to support the preparation and
implementation       of     road      sector        -   cost reductions on existing traffic as
development programs (RSDP) based on                    well as the development impact
network management approach and                         through      the    opening    up    of
appropriate institutional arrangements to               opportunities for trade and investment;
ensure reliable funding of maintenance and          -   the road policies of the countries
accountability to users. This will involve a            concerned; and
combination of the following:                       -   accompanying measures related to
                                                        facilitation and safety.
-     policy analysis and advice to define
      funding and institutional options,            The program to be supported by NEPAD
      manage the reform process, draft              would involve:
      legislation etc;
-     preparation and evaluation of programs        -   exchanges among REC’s on planning
      and related capacity requirements                 approaches including the Corridor
      concerning program management etc.                Development Initiative developed by
      and;                                              SADC;
-     mobilising funds                              -   preparation and review of regional
                                                        road programs by the respective REC’s
The goal is to consolidate and extend                   and their member countries;
RSDP in the maximum number of                       -   resource mobilization; and,
countries with the expectation that by 2006         -   monitoring.
the number of countries that are either
implementing or preparing RSDP would                The third objective concerning the
have increased from 15 at present to at             engineering and contracting industry will
least 25. The implications in terms of              be to help countries develop strategies
levels of funding and possible source will          covering policies and institutional issues
be worked out under the medium and long-            (procurement, contract administration,

registry, etc) as well as capacity building          costs and improvement in services, such
with the participation of the professional           investments will need to be
associations concerned. Work is needed to
develop guidance documents and good                  -   undertaken under the framework of
practices        concerning        industry              national road sector policies and
assessments/surveys, registries, program                 programs that ensure the proper
management systems etc. NEPAD will                       balance       between     upgrading,
foster the emergence of regional markets                 rehabilitation and maintenance with
for engineering services and contracting.                secure funding and capacity for the
                                                         latter; and,
Road safety is primarily a national
responsibility. Countries have much to               -   to be accompanied with coordinated
gain by sharing experience and                           measures in the areas of facilitation,
coordinating their efforts especially in                 safety and axle-load control.
areas like advocacy and communication,
technical innovations, monitoring and                Road policy reform and institutional
evaluation, insurance, certification etc. The        development: NEPAD will promote and
program will support joint planning and              support the RSDP approach and the
coordination at the level of the REC’s to            underpinning policies and the related
ensure that road safety is addressed in              institutional reforms for managing the road
regional road programs, as it is already the         network under commercial principles with
case for the programs prepared by                    users’ oversight. NEPAD will support
UEMOA and SADC. The Road Safety                      assessments, exchanges and policy
Congresses organized periodically by ECA             research to pursue and further develop
will continue to provide valuable                    what has evolved as a truly homegrown
opportunity for stock taking at the level of         initiative.
the continent and will be an important
component of the road safety program.                 Box 4.6: Short-term Program             Cost
                                                                  for Roads               (US$ million)
3.5    The role of NEPAD                             Institutional, policy advice, road        20
                                                     safety (estimated).
                                                     Studies (estimated on the basis of        80
NEPAD objectives will be twofold: (i) to             regional programs)
support in all countries the build up of             Regional roads upgrading and            1,150
institutions and capacity to manage and              construction
develop road networks; and (ii) to                   (Based on projects included in
                                                     REC’s programs, which meet the
accelerate the development of regional
                                                     criteria mentioned above and for
road networks.                                       which studies are available at
                                                     least to feasibility level).
At the political level NEPAD will stress                                          Total      1,250
the need to consider regional roads under
the framework of sound road policies and             Regional road networks: NEPAD will
programs and to combine them with                    support the development of a set guiding
coordinated measures in the areas of                 principle and criteria for planning the
facilitation, safety and axle-load control.          upgrading of roads along regional
                                                     corridors. NEPAD will seek agreement
While pointing the need for additional               among countries, REC’s and external
investment to close what is one of the most          support agencies that within an agreed
glaring aspects of Africa’s infrastructure           framework, additional financial support for
gap, NEPAD will stress that in order to              up to say 10 to 15 % of the road
yield sustainable reductions in transport            investment programs of the respective

countries would be mobilized for regional               institutional support for post-conflict
roads. This program, combining policy                   countries: DRC, Angola, Guinea-Bissau,
support with additional resources for                   and Sierra Leone.
regional roads, would build on the                      PPP opportunities: PSP transactions in
initiatives already in place at AfDB and                road are new in Africa. NEPAD will
EU, to earmark funds for regional projects.             monitor opportunities and help the
                                                        countries involved to develop financing
NEPAD will support the development of a                 package combining public funds with
programmatic framework to put the                       private investment and including existing
planning and financing of regional roads                sections in the concession to enlarge the
on a more predictable footing and move                  revenue basis.
away from the “vision without action”
                                                        4.           COMPETITIVE AND
The review of available programs prepared                            SEAMLESS RAIL SERVICES
by the various REC’s has shown that the
estimated value of the inventory of                     4.1          Objective
projects that prima-facie meet the above
criteria, is well above US$ 1,2 billion. It             To implement a package of improvements
would be reasonable to set the objective of             of the management of the railway systems,
the regional roads program outlined above               with a view to improving the efficiency,
at about US$ 1 billion annually for the first           cost-effectiveness and reliability of
four years 2003-2006.                                   services and rehabilitating the weak or
                                                        poor links as well as ensuring their
Engineering and Construction Industry:                  sustained maintenance.
At the political level, NEPAD will call
attention to the need to strengthen the local                    Box 4.7: Performance of Selected Railway Corridors
                                                                                 (July – Dec 2000)
engineering and contracting professions.                     Route           Distance     Transit   Ton-Kms      Ton-Kms/     Locomotive
NEPAD would support exchanges and                                                          Time                  Route-Km
                                                                                (Km)      (Days)    (Million)   (Thousands)   (Km/Day)
good practice.                                   Dares Salaam–Zambia            1,975       18        308           156         N/A
                                                 DRC (Tazara)

At the regional level NEPAD will support         Maputo-South Africa             274         12       336          1,226         530
                                                 (Ressano Garcia)
the REC’s and regional grouping of
                                                 Maputo-Zimbabwe                1,246        19        9            7            523
professional associations in their efforts to    (Limpopo)
harmonize regulations and procedures             Maputo-Swaziland                193         3         11           60           154
concerning certification, registration,          (Goba)

partnerships, taxation etc.                      Nacala-Malawi (Nacala)          803         3         40           50           N/A

                                                 Beira-Zimbabwe (Beira)          600         4        120          200           154
Road safety: NEPAD will ensure that
                                                 Dar es Salaam–Great            1,300        4        650          500           310
regional road programs include measures          Lakes (Central)
                                                     Source: SATCCc Annual Report for 2000-2001
concerning road safety and will support
networking       and     exchanges       and
                                                        4.2          Challenges
dissemination of good practices. The
emphasis will be on broadened
                                                        The immediate major challenge is to
participation of civil society organizations
                                                        reverse the historical poor management of
and private stakeholders.
                                                        most national public railways, which has
                                                        led to a huge maintenance backlog
Urgent reconstruction: NEPAD would
                                                        (estimated at some US$ 300 million in
facilitate the mobilization of support for
                                                        SADC alone) and inefficient (Box 4.7) and
road maintenance /rehabilitation and
                                                        high cost operations, with a view to

exposing them to private sector discipline.          concessioning of their formerly unified
A related challenge is to finance the                system. In West Africa, rail services
rehabilitation of sections of railway                between Burkina Faso and Cote d’Ivoire
infrastructure. The aim is to enable the             were concessioned to a single operator
railways to offer effective competition to           providing seamless services between the
the relatively more expensive road                   two countries. The same mechanism is
transport, with a view to lowering the total         used in the design for the concessioning of
transport cost of trade, particularly for            rail services between Senegal and Mali.
container and long distance bulk traffic.
There is also the challenge of improving             Many railways in Eastern, Southern and
rail interchange and inter-rail operations           West Africa have installed or are installing
across borders so that customers receive a           cargo tracking and rolling stock
seamless service. The improvement of                 information systems, primarily to provide
cargo tracking systems is also critical since        customers with real-time information
the lack of it deters potential customers,           about the location of their cargo. A major
who are unwilling to send cargo into a               ECOWAS interconnecting railways study
black hole where it cannot be traced until           for West Africa is about to commence,
it reappears at its destination at an                which     will    produce      a   railways
unpredictable time.                                  development strategy for West Africa,
                                                     comprising regulatory and institutional
4.3    Response                                      aspects and physical investment projects.

 The main response is the restructuring of           4.4          Benefits
the railways by having private sector
participation in their management and                 The major benefit of efficient restructured
some      financing,     typically    through        railways will be the reduction in total
concessioning. Several countries in west             transport cost through more effective
and southern Africa have concessioned                competition between railways and roads.
their railways and many more are either in           Efficiency improvements will also
the process of or are planning to do so. In          drastically reduce wagon turn around and
SADC, a Southern Africa Railways                     transit times of rail cargo (Fig. 4.3).
Association (SARA) has been established              Successful restructuring and privatisation
to, among other things, accelerate the               of railways, through concessioning, will
integration of the rail services to provide a        open doors for a possibility of further
seamless service along the main corridors,           investment to fill missing links and expand
especially which are served by more than             the network.
one railway company.
                                                           Fig. 4.3: Performance of Malawi Railways (MR)
Furthermore,      some       countries   are                        and CEAR (MR Concessionaire)
implementing arrangements that permit
joint or shared interest in the concessioned                       TKS (Mill.)

railways between the coastal states and
users in the landlocked countries. In this                        ETKS (Mill.)
                                                                                                1998 (MR)
                                                                                                1999 (MR)
respect, Mozambique is implementing a                  ETKS/Staff (Thousand
                                                                                                2000 (CEAR)

policy of allocating shares, up to 16
percent, in its concessioned port and rail                 Operating Ratio (%)

infrastructure to principal users or                                             0   50   100        150

investors within the landlocked user                   TKS = Tonne-Kms; ETKS= Equiv TKS (TKS + Pass
countries. The EAC countries are also                  Kms/2.25); Operating Ratio = Expenses/Revenue
considering      joint     or    coordinated           Source: SATCC Annual Report, 2000/2001

    4.5    Program                                       accelerated reform and improvement and
                                                         the railway system.
    The principal program elements support
    restructuring and concessioning efforts by:               Box 4.8: Short-Term Projects/Programs for Railways
                                                                      Title                  Country/      Cost US$    Possible
                                                                                            Sub-region     (million)   Sources
-   Providing technical assistance and                   Institutional
                                                         Support for concessioning of       Kenya,            10       Countries
    capacity to manage the change process                railways:                          Uganda,
    including strategy development, regulatory           -     Technical assistance for     Tanzania-
                                                               strategy formulation;        Zambia
    frameworks       and    selection    of     a        -     regulatory capacity          (TAZARA)
    concessionaire.                                            building; and                and
                                                         -     provision of transaction     Swaziland
-   Taking stock of experiences with private                   advisors.
    participation in railways to learn and make          Physical
    necessary adjustments to mitigate bad                Rehabilitation of Railways in
                                                         support of concessioning:                                     Uganda,
    practices and failures and create a basis for        Uganda Railways                                               NC, EAC
    monitoring                                           -     Malaba – Kampala              East Africa      35
                                                               railway (part of 250 kms),
-   Where needed, mobilising funds for                         including bridges
    retrenchment. Several countries or                   -     Port Bell and Jinja wagon                      25
                                                               ferry terminals rehab.;
    railways (Malawi, Mozambique, Zambia                       and                                                     Kenya,
    and Senegal) have benefited from such                -     improving Port Bell –                                   NC, EAC
                                                               Kampala rail section
-   Mobilising investment funds in a PPP                 Kenya Railways                      East Africa               Tanzania,
                                                         -   Nakuru – Kisumu rail                             13       EAC
    arrangement, where necessary, for critical               section rehabilitation (part
    infrastructure improvement.                              of 250 kms), including
-   Assisting countries with contiguous
    railways to undertake a joint or                     Tanzania Railways                   East Africa               Mozambi
                                                         -    Track rehabilitation,                           68       que,
    coordinated concession and promoting                      upgrading signals                                        SADC
    cross-border shareholdings in privatised                  telecoms for Dodoma –
                                                              Tabora – Mwanza section
                                                         Nacala Corridor Railway
                                                         -      Rehabilitation of 77 Kms      Southern        30
    4.6    The Role of NEPAD                                    (Cuamba – Entre Lagos).        Africa
                                                         Feasibility study for railways
    The first role of NEPAD is to assist in              interconnection:
    political issues especially where a joint or         -      West Africa                                   3        ECOWAS
                                                         -      Central Africa                                3        ECCAS
    coordinated concessioning is envisaged or            Feasibility study of the           Central sub-      1        ECCAS
    where quick action is needed to improve              Brazzaville – Kinshasa             region
                                                         rail/road bridge
    the performance of the railways through              Feasibility study of Trans-        North sub-        3        UMA
    private sector participation. Secondly,              Maghreb railway system             region
                                                         Undertake needs assessment         Angola &          5        SADC,
    NEPAD will also assist in mobilizing                 study for Angola and D.R.          D.R. Congo                 COMESA
    financial resources in support of                    Congo for rehabilitation of the
                                                         Benguela railway corridor
    implementation of the various components             system
    of the restructuring process as explained                                                    TOTAL       196
    above. Thirdly, NEPAD will foster and
    facilitate networking, sharing experience            5.         EFFICIENT PORTS
    among RECs and replicating best
    practices. Fourthly, NEPAD will, through             5.1     Objective
    a peer review mechanism, set Africa-wide             To improve the performance and
    benchmarks        for     monitoring     the         modernize regional ports to allow them
    performance of railway systems and                   fulfil their role as Africa’s gateway to
    corridors within RECs and specific                   worldwide logistic chains.
    countries, and support and facilitate

                                                             geography and country contexts explain
5.2         Challenges                                       some differences, it is clear that high
                                                             charges reflect also low productivity and
Containerisation has driven the evolution                    inflated cost structures. They impede the
of world shipping and by extension the                       competitiveness of entire sub-regions.
African port industry over the last twenty-
five years. Containers allow much faster                     Many ports are facing the need for large
and safer movement of cargo through ports                    investment to expand their container
and open the way for the emergence of                        handling capacity and pursue their
worldwide multi-modal logistic chains.                       modernization. While the private sector
However, these developments requires                         should be expected to mobilize the
large investments in specialized terminals                   resource needed for elements directly
as well as a high degree of efficiency and                   linked to their operations (equipment,
coordination among the whole array of                        aprons, sheds and berth space etc.), public
agents and administrative services                           funding may be the only alternative for
involved in containers handling, clearance                   other essential components of port
and removal.                                                 modernization programs like rehabilitation
                                                             dredging, road access and bypass etc.
While some African ports have been able
to realize the efficiency gains and the                      5.3    Response
opportunities for multi-modal integration
offered by containerisation, a good number                   African ports are moving, albeit at
of them are lagging. The operational                         different pace, toward the world-wide
performances of African ports varies                         model of “landlord port” whereby the
greatly; container clearing time which is a                  public port authority owns the land and
good measure of overall efficiency, ranges                   regulates port administration and planning
from best scores of four days to as much as                  while private operators are responsible for
twenty five days and above (Box 4.9). It                     all operational tasks under leases or long-
has been more difficult for publicly                         term concessions.
operated ports to keep up with the
evolving requirements of the shipping                        Institutional reforms, covering the port as a
industry and to obtain efficiency gains due                  whole or limited to their container
to the familiar combination of lack of                       terminal, have demonstrated their potential
incentives, poor maintenance and weak                        to effect rapid gains in efficiency; e.g. in
finance.                                                     Dar Es Salaam container clearing time
                                                             went down from an average of 27 days to
      Box 4.9: Container Handling Performance                11 days within a year after the container
   Country       Dwelling   Customs        Physical
                   Time     Clearance     Inspection         terminal was concessioned to a private
                  (Days)      Time      (Percent - %)        operator. A collaborative effort undertaken
Cameroon-           22         2-3           80              in the port of Mombasa has brought
Douala                                                       container clearing time from more than 20
Ghana - Tema        20        3-5           100
Tunisia             15         5             80              days to less than 7 days. A key measure
Morocco             12         1             30              was to co-locate all document vetting
Cote d’Ivoire       7         2-3            20
Mauritius           5         1-2            10              officers in one single room and cut down
South Africa        4          1         Sample (+/-         the number of separate stamps to from
Argentina          4-5       3 Hours         30              more than 25 to less than 10.

Port charges in Africa are, on average,
comparatively high and in some cases, e.g.
Matadi, exceptionally high. While

5.4    Benefits                                        administrative services etc. and iii)
                                                       benchmarking and efficiency audits and
In an era of ever-shorter logistic chains              dissemination of good practices on
and tight inventory management, faster                 efficiency enhancement.
and more reliable transit through ports will
contribute to Africa’s competitiveness.                             Box 4.10: Short-Term projects for Ports
Modernization and upgrading are critical                                                        US$          Sponsors,
to enable ports to offer multi-modal                                                          (mllion)       countries
services and integrate their operations in            Mombasa Port: expansion of the             66      KPA, Kenya, PP
the logistic chains of their customers.               capacity of the container terminal                 EAC; Northern
                                                      and berth conversion.                              Corridor (NC)
Improved port performance will benefit
                                                      Nacala Port: rehabilitation in             28      Mozambique-
landlocked countries either by giving them            support of concessioning                           Malawi: SADC; PP
better services on their traditional routes or        Lobito Port: rehabilitation,               30      Angola; Lobito-
by increasing the competitiveness of                  transhipment facilities                            Benguela
alternative routes. Competition for transit                                                              Corridor; PP
traffic, is a powerful driver for                     Abidjan Port: container terminal,         150      Cote d’Ivoire, PAA,
                                                      dredging of Vridi Canal.                           ECOWAS, PPP
improvements and innovations in port                  Dakar Port: rehabilitation and             68      Senegal, UEMOA,
operations and, more broadly, for overall             construction of container terminal                 ECOWAS
                                                      Djibouti Port: container handling          15      Djibouti, Ethiopia,
corridor efficiency. It should be                     facilities                                         IGAD, PPP
encouraged as a matter of policy by                   Sub-Total                                 257
countries and REC’s.                                  Mayumba Port pre-feasibility study        1.0      Gabon, ECCAS
                                                                                      Total     258
5.5    Program

NEPAD port program will focus on a                     5.6         The Role of NEPAD
continent-wide drive to align the
performance of all African ports with the              At the political level NEPAD will call the
best among them specifically by reducing               attention of policy makers to the critical
container-clearing time by half or to the              importance of port performance for
four-day benchmark by year 2006. Ports                 competitiveness and regional cooperation.
operators and managers will have to                    Specifically, NEPAD will advocate a
provide the leadership; they will have to              concerted effort to reduce container
work closely with the whole range of                   clearing time by half by 2006 at the latest.
agents involved in cargo handling,                     NEPAD will support institutional reform
clearance and removal: freight forwarders,             and facilitate the mobilization of resource
custom inspectors, security and quality                for accompanying measures concerning in
standard assessors etc. The drive for                  particular retrenchment and accesses to the
efficiency will prompt governments to                  ports. NEPAD will engage port
accelerate or initiate institutional reforms.          associations in the efficiency drive and
                                                       will foster knowledge sharing especially
The drive for efficiency of ports will be              on institutional options and coordination
supported by i) technical assistance and               with administrative services and freight
advice to manage the change process                    forwarders.
including: assessments, institutional and
financing strategies, transaction advice               6.          SAFE SEAS AND PORTS
etc.; ii) resource mobilization for PPP-
based reform and development programs                  6.1         Objective
with strategic use of public funds:
retrenchment, port access from land and                To build Africa’s capacity to protect its
sea,      modernization     of     related             seaboard from the risks of maritime

pollution and to ensure the safety of its            environment which is a source of
ports.                                               livelihood for a substantial proportion of
                                                     the population of the countries concerned
6.2    Challenges                                    and one of the main basis of their tourism
                                                     industry. Compliance with safety and
Most African countries have acceded to               security conventions and availability of
the major conventions regulating maritime            waste treatment facilities will ensure that
pollution (MARPOL), maritime safety                  Eastern and Southern African ports retain
(e.g. ISM Code) and work conditions at               and expand their access to shipping
sea. However, many countries have yet to             services and their linkages with the global
incorporate these texts into their national          maritime industry.
laws and regulations. More importantly,
few countries have developed the capacity            6.5         Program
to     implement     these     conventions
concerning in particular the monitoring of            The initial actions will comprise steps
ship movements, the handling of ship                 planned by IMO, SADC and MOWCA
waste, and the response to emergencies.              (Maritime Organization of West and
Oil spill preparedness is a priority                 Central Africa) to support multi-country
especially on the coast of the Indian                approaches to capacity building and
Ocean. About 30% of the world petroleum              environmental preparedness. These initial
production of about 60 million tons is               actions would be lead to the further
transported through waters of the Indian             coordinated capacity building initiatives
Ocean representing roughly 5000 tanker               and projects involving individual countries
voyages per year.                                    as well as joint facilities at the sub-
                                                     regional level. The experience gained with
6.3    Response                                      the project undertaken by the Indian Ocean
                                                     Commission, would be used to plan further
The above challenges can be best                     oil spills preparedness programs in
addressed through regional collaboration             particular for Eastern and Southern
and pooling of resource among ports and              seaboard as well as for Western and
maritime administrations along major                 Central Africa.
seaboards. In fact, SADC has developed
regional projects for the implementation of          Box 4.11: Short-Term Projects for Safe Seas and
international maritime conventions and for                               Ports
                                                     Short-term            Country/      Cost in US$   Possible
handling of ship waste, an activity that is          Action Plan          Sub-region      (million)    Sponsor
suitable for private contracting as it is            Institutional
                                                     Advisory             Southern           1.8       SADC,
already the case for some ports. The Indian          services       for   sub-region                   IMO
Ocean      Commission        is     currently        maritime affairs
                                                     Development of       Southern           1.5       SADC,
implementing a regional oil spill                    a         regional   sub-region                   IMO
contingency planning project with GEF                strategy for ship
                                                     waste reception
funding and technical support from IMO.              facilities
The project will organize and set up an oil          Maritime safety      West     and       3.6       MOWCA,
                                                     and prevention       East Coast,                  SADC,
spill preparedness capability at the national        and control of                                    IMO
and regional levels.                                 marine
                                                     pollution and
                                                     provision       of
6.4    Benefits                                      adequate port
                                                                                 Total       6.9

The development of Africa’s capacity to
deal with maritime pollution risks will
help   protect   the  coastal    marine

6.6    The Role of NEPAD                            integration of lake and river shipping into
                                                    multi-modal transport chains through
At the political level NEPAD will draw              modern trans-shipment stations linking
attention to the importance of aligning             them with roads and rail networks. The
national laws and regulations with                  governance of navigational aid services
international conventions and protocols             would have to be organized so as to
concerning the prevention of maritime               respond to the need of shippers, and be
pollution and ships safety. NEPAD will              managed efficiently and sustained.
foster collaboration among coastal groups
to support coordinated approaches and,              7.3    Response
where appropriate, the development of
joint or pooled capacities.                         Progress on these objectives will require
                                                    coordination and joint action as African
NEPAD will help to mobilize resource for            lakes and navigable rivers are shared by
program concerning maritime pollution               two or more countries, Although
and safety working with coastal groupings           governments have taken steps to
and technical organizations in particular           strengthen cooperation and to build up
IMO. NEPAD will foster exchanges                    joint capacity in the areas of safety and
among professional associations (e.g.               pollution control, they have a long way to
MOWCA, regional port associations) in               go and stand to benefit greatly from
particular on collaborative approaches to           NEPAD support. Regional organizations
the     implementation     of    maritime           (EAC, CEPGL, OMVS) and countries
conventions, handling of ship waste and             have undertaken actions to facilitate inland
environmental preparedness.                         shipping and to rehabilitate and modernize
                                                    lake and river ports. As traffic developed,
                                                    safety emerged as a growing problem due
                                                    to poor ship condition and operation,
                                                    overloading and lack of navigation aids.
7.1    Objective
                                                    Institutional reforms underway throughout
To establish the regulatory framework and
                                                    the transport sector are being extended to
the basic infrastructure to support the full
                                                    inland shipping. Shipping is becoming
development of commercially viable and
                                                    fully liberalized. Several countries have
safe transport services on inland
                                                    concessioned public ports; this is the case
                                                    of Bujumbura (Burundi), Mzamba Bay
                                                    (Malawi) and Mpulungu (Zambia). Ship
7.2    Challenges
                                                    repair facilities have also been put in
                                                    private hands.
Africa’s inland waterways, consisting
primarily of the Great Lakes and the
                                                    7.4    Benefits
Congo-Ubangui river system, are a source
of livelihood for millions of people and
                                                    Increased safety and security through
traditional channels of exchanges and
                                                    vessel and operator certification and
communication.        However         their
                                                    through preparedness will save lives,
contribution to regional transport has
                                                    vessels and cargo by preventing accidents
generally remained below their potential.
                                                    and improving response capacity.         A
                                                    modern regulatory framework will
The challenges for governments are to
                                                    encourage investment in ships and
develop the regulatory framework and the
                                                    transhipment facilities and will facilitate
capacity to maintain appropriate safety and
                                                    the integration of inland waterways in
security standards and to foster the

transit corridors (insurance, cargo tracking                              Lakes and on the Congo-Ubangui river
etc.). Rehabilitated and modernized                                       system.
navigational aid services will reduce risk
and extend navigation periods.                                      7.6      The Role of NEPAD

    Box 4.12: Short-Term Action Plan for Inland Waters               At the political level NEPAD will build
                           Country     Cost in US$   Sponsor        support for collaboration and joint action
                             Sub-       (million)
                            region                                  among riverine countries in particular
Institutional                                                       concerning:
Lake          Victoria:    Tanzania,
improvement           of   Uganda,         1.0                      i)    regulation dealing and capacity
maritime safety on         Kenya                     SADC                 safety and environmental protection;
Status     (legislation,                             SADC,
safety, search and         Malawi,                   EAC            ii)   policies        and       institutional
rescue capacity)           Tanzania,       0.6                            arrangements for navigational aid
Lake Malawi-Nyassa-        que                                            services including governance and
Niassa needs                                                              financing of O&M; and
assessment on safety       DRC,
(similar to the one        Tanzania,       0.6                      iii) enabling framework for competitive
already carried out for    Burundi,                                       commercial services with efficient
Lake Victoria)             Zambia
                                                                          multi-modal interface. NEPAD will
Lake Tanganyika:                                                          also assist to mobilize resource for
need assessment
Congo           River:     DRC,            6.0       ECCAS                rehabilitation and investments and
assessment and urgent      CAR,                                           capacity building as well as facilitate
rehabilitation:  ports,    Congo
navaids, institutional                                                    PPP’s for inland lake and river ports
support.                                                                  and trans-shipment facilities.
                               Total       8.2

The development of navigation on the
Great Lakes will support the economic                               8.       SAFE, SECURE AND
integration of bordering areas and will be                                   EFFICIENT SKIES AND
an enabling factor for the environmental                                     AIRPORTS
protection of lake and rivers in particular
through joint actions for the prevention                            8.1      Objective
and control of pollution risks (ship waste,
oil spills etc.).                                                   The objective is to lower the cost of air
                                                                    travel and air freight and to reduce the
7.5        Program                                                  isolation of Africa in the air transport
                                                                    market, by supporting the implementation
 The inland navigation program covers                               of the Yamoussoukro Decision for the
three distinct but related themes, namely,                          liberalization and restructuring of Africa’s
                                                                    air transport services and by improving
-     regulatory framework and related                              aviation safety and airport security.
      institutional capacity for safety and
      environmental risks;                                          8.2      Challenges
-     development      and    financing    of
      navigational aid services that are                            Up to now Africa has maintained a
      responsive to users demand; and                               severely restrictive regime of traffic rights
-     enabling environment for commercial                           to protect principally public owned and
      services and for integration of inland                        managed national airlines, which has
      water transport in multi-modal logistic                       stifled competition and sustained very high
      chain along trade corridors. Initial                          costs compared to more liberalised and
      actions will be focused on the Great                          competitive routes in other parts of the
                                                                    World particularly within and between

Europe and America (Fig. 4.4). The                    premium and added costs of security
market is also fragmented and airlines are            personnel. Several RECs are either
too small to be efficient with                        considering or in the process of
underdeveloped and expensive intra-Africa             establishing consolidated or unified sub-
and international links. Furthermore,                 regional Upper Airspace Control Centres
current air navigation and traffic control            (UACC), whose revenues will also assist
services are expensive and not up to the              in financing implementation of requisite
standards of modern technology.                       national safety measures for the lower
                                                      airspace. Furthermore, the African and
8.3    Response                                       Indian Ocean states have, with the
                                                      assistance of ICAO, adopted a plan to
Market Liberalisation and “Open Skies”:               modernise their terrestrial air navigation
African       countries,      through      the        facilities with the global navigation
Yamoussoukro Decision of 1999, have                   satellite system (GNSS). Implementation
committed to and are implementing the                 of the plan is in two parts: (a) the
liberalisation of scheduled and non-                  implementation of a test bed to validate
schedule airlines on the continent, with              procedures and (b) the installation of the
planned total liberalisation for all eligible         ground infrastructure necessary to cover
African airlines by August 2002. This                 the AFI region.
process will stimulate the rapid growth of
the sector, as has been the case in USA,                     Fig 4.4: Comparative Air Fare Levels
Europe and East Asia where there was a                                 for Selected Routes
major increase in the frequency of flights                Abidjan-Paris
and passengers as well as a major decrease                 Dakar-Paris
in fares after liberalization. Many                      Accra-Douala

countries are taking measures to strengthen              Bamako-Lome

and streamline their regulatory regimes to               Abidjan-Dakar

be able to manage and facilitate                       Singapore-Tokyo
appropriately the anticipated growth of the
                                                        Paris-New York
market and the sector, resulting from the
                                                                          0   10   20    30      40    50   60
implementation of the Yamoussoukro                                                 US Cents per Mile

Decision. The two-fold transition toward               Source: AfDB/OAU/ECA Joint Secretariat: Report on Air
private carriers and liberalization of traffic         Transport Liberalisation, Oct. 2001
rights is progressing albeit at varied speed.
While some restructured airlines, with                ICAO has recently completed carrying out
private      sector     participation     and         safety oversight audits for all the African
management, are developing, many small                countries. The audits have identified
public airlines have come under pressure              common deficiencies, which can be
and have difficulties in charting their               resolved jointly through the formulation of
future     individually     in    the    new          projects (COSCAP) including building up
environment.                                          a pool of inspectors and preparing training
                                                      and inspection manuals to guide the
Safety and Security: The lack of modern               inspectors. Many countries have formed
equipment, facilities, skills and other               airport security committees and are
ICAO-specified security measures at                   gradually installing security measures
airports has resulted in the low                      according to ICAO recommendations and
classification of most of the African                 norms. These include fencing of airports,
airports, with less than ten having the               improved screening and inspection,
status of category one. The aftermath of 11           training and deployment of requisite
September has lead to higher insurance                personnel. However, significant further

improvement in most airports is required,          8.5    Program
including establishment of appropriate
legislation, contingency plans and                 First, the programme will include a
effective organisational framework for             regional initiative to consolidate the gains
carrying out security functions.                   from the implementation of the
                                                   Yamoussoukro         Decision,     including
Efficient Airports: Operations at airports         support for liberalisation, concession of
are generally inefficient with poor                airports and enhancing private sector
facilitation. However, there is already an         participation in airline ownership and
ongoing movement in Africa towards                 operations, as well as upgrading of
commercialisation of airports, including           aviation infrastructure. Several RECs are
the increasing participation of the private        pursuing or implementing such programs.
sector in airports infrastructure provision        Several countries in West Africa are
and management. The process ranges                 implementing such a program, with
from establishment of autonomous airport           support of the World Bank. Similar
companies to entering into long-term               programs could be extended to other sub-
strategic partnership or concession                regions.
agreements with private operators.
                                                   Based on the experience of the West
8.4    Benefits                                    African project, the cost of the support
                                                   program outlined above is estimated at
The benefits of the restructuring and              about US$ 3 to 4 million per country with
modernization of air transport services in         an additional US$1.5 million for
Africa will consist of cheaper and more            coordination at the sub-regional level.
efficient services through competition and         Support to the liberalization process will
stronger regional groupings as well as an          also include the establishment of an
expanded       market     including     the        appropriate regulatory and effective
development of lucrative industries such as        enforcement framework, which will ensure
horticulture. The other important benefits         that customers and countries do get
will be to maintain security standards             benefits expected from implementation of
necessary to ensure direct links with the          the Yamoussoukro Decision. The objective
global air transport network with resulting        will be to deter unfair competition or
savings     in    insurance    costs   and         commercial     practices    and    market
opportunities to participate in global             domination of any one or too few
alliances and, thus, capture an increased          monopolistic carriers.
share of the global aviation industry’s
revenues.                                          Second, support will be given for the
                                                   implementation of a regional UACC
The programs will contribute significantly         project, which is estimated to cost over
to more frequent and reliable direct               US$        200       million,     assuming
connectivity of Africa with the                    implementation in sub-regions of the
international community, which, in turn,           continent. According to the level of
provides an opportunity for increased              preparations         and       sub-regional
business operations and investment in              consultations, an UACC project for the
Africa and a bigger share of the global            SADC and EAC regions will be
tourism market, with a significant                 implemented in the near term. However,
contribution to more job and wealth                close coordination of the UACC project
creation.                                          implementation in the sub-regions will be
                                                   instituted or strengthened in order to gain
                                                   potential economies of scale.

Third, the implementation of the two                Thirdly, NEPAD will foster and facilitate
identified components of AFI region                 networking and sharing of experience
GNSS project would be supported. The                among RECs and other similar
first component of implementation of a              organisations. Fourthly, NEPAD will,
test bed is estimated to cost US$ 4.5               through a peer review mechanism, monitor
million, while installation of the ground           the performance of RECs and challenge
infrastructure is estimated to cost US$ 11          those lagging behind to move faster in
million.                                            implementing the programs.

Fourth, support will be given to the                The mechanism should include the
ongoing      improvement      of    security        empowerment        of     the    monitoring
measures in individual countries to enable          institutions to perform their functions
them to attain the ICAO specified                   effectively     especially    by    clearly
international standards. At sub-regional            identifying and pointing out problem areas
level, the establishment of self-sustaining         as well as fulfilling assigned regulatory
joint    safety     oversight    inspection         functions at sub-regional and regional
mechanisms, including organisations or              level. Such institutions include the
units (COSCAP), will be pursued.                    Executive Agency and Monitoring Agency
ASECNA, UEMOA and SADC are                          set up to monitor the implementation of
considering commencing implementation               the Yamoussoukro Decision at regional
of such projects in the near term. The cost         level, and the RECs Secretariats at sub-
for the program for the 20 ECOWAS                   regional level.
countries is US$ 13.7 million.

8.6    The Role of NEPAD

The first role of NEPAD will be to assist
in securing commitment and support of all
the partners for accelerating the reforms,
liberalisation and restructuring, which will
rapidly change and improve the African
aviation industry. NEPAD will also assist
in resolving the political or sovereign
considerations that may delay the joint
implementation of some programs such as
the     UACC,      which      requires  the
surrendering of upper airspace for joint
sub-regional control. In the case of West
Africa, a specific NEPAD action will be to
encourage the ASECNA members and the
Banjul group (Anglophone) countries to
consolidate their airspaces in order to
implement one UACC for the sub-region.
Second, NEPAD assist in mobilizing of
resources for implementation of the
programs, through high profile forums and
consultations with international and
regional developing partners and the
private sector.

                                           Box 4.13: Short-Term Program for Air Transport
                          Title                                          Location                 Cost in US$                Sponsor
Institutional and physical
Support for implementation of the Yamoussoukro
Decision (liberalisation) and aviation restructuring:
-     Regional coordination and exchange of information     All five sub-regions (North,              8         ECOWAS, SADC, COMESA, EAC,
      and best practices                                    West, Central, East and South)                      ECCAS, IGAD, UMA and countries
-     Regulatory capacity building                          All countries, especially the least       45
                                                            developed                                           (As above)
-     Upgrading airport security

-     Upgrading airport infrastructure     and    related   Selected two non category 1               50
      facilities to category 1 standard,                    major airports per sub-region
                                                            (total 10)
Establishment of Upper Airspace Control Centres             SADC & EAC                                70        SADC, EAC
GNSS project                                                Africa & Indian Ocean region                        All RECs (led by ASECNA)
- Implementation of test bed                                                                           5
- Installation of ground infrastructure                                                               11
Establishment of joint safety oversight units (COSCAP)      West, Southern & East sub-                25        ECOWAS, ASECNA, COMESA,
                                                            regions                                             SADC, EAC

                                                            Central, North-East, North                25        ECCAS, COMESA, IGAD, UMA
Establishment of Upper Airspace Control Centres             Study to cover other sub-regions          3         ASECNAECOWASECCAS
(UACC) -                                                    (West, Central, North-East,                         COMESA, IGAD, UMA
Aviation infrastructure needs assessment study              Angola and D.R. Congo                     2         SADC, Angola, D.R. Congo
                                                                                     TOTAL           244

9.         IMPLEMENTATION                                                   meeting this challenge will be its ability to
           SUPPORT                                                          mobilize the high level political
                                                                            commitment needed to accelerate reforms
Objective                                                                   and carry out joint action.

To facilitate and expedite the preparation,                                 A second pre-requisite for success will be
implementation and monitoring of                                            to define the implementation framework
NEPAD transport program by providing                                        for NEPAD transport programs setting
timely technical and institutional support                                  clear allocations of responsibilities and
to the REC’s and the technical agencies                                     coordination arrangements among REC’s
concerned.                                                                  and technical agencies. The NEPAD
                                                                            implementation framework should foster
9.1        Challenges                                                       the progress of the most advanced and help
                                                                            those that are lagging to catch up.
NEPAD transport programs and short-term
actions are meant essentially to accelerate                                 A third success factor for a strong
the pace of development of transport                                        implementation performance will be the
services and infrastructure. They draw                                      provision of implementation support and
mostly on existing programs and on                                          technical assistance to the REC’s and the
approaches that have already been                                           technical agencies engaged in the
developed and tested in Africa. NEPAD                                       implementation of NEPAD’s transport
success will depend on its capacity to                                      programs. Such support will be critical to
speed up the pace and step up the scale at                                  overcome the delays and the problems that
which known solutions are disseminated                                      have plagued the implementation of
and implemented. The challenge is                                           regional initiatives. The REC’s as well as
primarily    one    of    implementation.                                   the technical organizations concerned are
NEPAD’s most important success factor in                                    severely constrained by limited budgets

and the lack of capacity to respond to              develop and maintain the commitment of a
demand and opportunities. Most of them              large number of actors. The interventions
are not in the position to act timely on the        intended under the proposed facility will
many small steps involved in the                    cover: technical advice on emerging
realization of the larger undertakings that         issues, process facilitation, consensus
are their raison d’etre.                            building and resolution of difference etc.
                                                    Such support will also apply to exchanges
NEPAD will also need a vehicle to                   and knowledge sharing complementing
intensify coordination and exchanges                existing initiatives. The benefits will be to
between REC’s. The capacity, experience             empower the REC’s and to alleviate the
and focus of the REC’s vary greatly. They           risk that the high expectations raised by
have much to learn from each other’s in             NEPAD in the area of regional transport
transport facilitation, policy reform and           integration will flounder on the limitations
planning. Coordination between REC’s,               of the REC’s.
especially those made of contiguous
groups of countries is important and will           9.4    Program
need to be facilitated.
                                                    The proposed Transport Reform and
9.2    Response                                     Integration Support Facility for Africa
                                                    (TRISFA) would be modelled along the
The need to support REC’s and technical             lines of the Private Participation in
agencies has been addressed through                 Infrastructure Advisory Facility (PPIAF)
capacity building programs. The evolution           of the World Bank Group or the recently
has been away from thematic support and             established EC funded capacity building
direct secondment to programs that are              project for Southern Africa (targeted
targeted at specific outcome and                    specifically at the implementation of
objectives. Their inputs consist in                 protocols on transport and trade
assessments, surveys and analysis,                  facilitation). Both of which are structured
workshops, communication, training etc.             to provide just-in-time demand responsive
                                                    support to agencies spearheading reforms
The implementation of NEPAD transport               and changes.
programs will call on REC’s and on
technical agencies to take actions: to              TRISFA would respond to demands
prepare programs, coordinate programs,              directly related to NEPAD programs for
assess situations, set benchmarks, etc.             the transport sub-sectors emanating from
Some of these demands will be met                   the relevant REC’s and technical
through existing support mechanisms, but            implementation agencies designated in the
many will be additional and will require            implementation framework. TRISFA
direct support to be addressed timely. In           would fund limited, timely interventions to
order to meet this need, NEPAD will                 speed     up    project   planning     and
pursue the establishment of a facility to           implementation, to develop consensus,
provide technical support and facilitation          broker partnerships, and foster exchanges
services to REC’s and the technical                 between REC’s and technical agencies.
implementing agencies.
                                                    Each of the NEPAD sub-sectoral programs
9.3    Benefits                                     has shown the need for the type of
                                                    interventions mentioned above. TRISFA
The benefits of just in time and on-demand          would typically support: Regional
support for regional undertakings and               coordination and joint action: exchanges
change process arises from the need to              among REC’s and within REC’s,

consensus     building,    brokering     of        operational autonomy. Its financing would
agreements;        Technical        advice:        be shared between development partners
implementation of conventions/protocols,           and African governments.
assessments, program planning and
implementation, institutional capacity             9.5    Role of NEPAD
building; and Knowledge sharing and
networking: benchmarking, policy agenda,           NEPAD will mobilize support for the
good practices, exchanges, study tours.            establishment of an implementation
                                                   support facility for NEPAD transport
TRISFA would be set up rapidly with an             programs and organize consultations
initial budget of, say, US$20 million for          among partners on the modalities for its
the initial four years: FY03-06. It would          implementation.      NEPAD     Steering
be demand driven. Its management and its           Committee would provide guidance on the
operational procedures should be simple            overall governance arrangements and
and transparent. It could be set up as             accountability for TRISFA.
AfDB trust fund with a large degree of

            CHAPTER 5                             networks, (iii) broadcasting networks
                                                  including radio and TV network
                                                  infrastructure and (iv) the Internet
     Information and                              infrastructure that incorporates elements of
 Communications Technologies                      (i), (ii) and (iii) to form an integrated
          (ICTs)                                  multimedia transmission, delivery and
                                                  communications infrastructure at the
                                                  national, regional and global level.
1.     INTRODUCTION                               The ICT infrastructure also takes into
                                                  account the hardware and software
The goal of the wide deployment and               components of the transmission and
exploitation of ICTs in many countries of         communications infrastructure. Unlike in
the world is to facilitate socio-economic         the case of traditional infrastructures like
development. The threat posed by the              those of transport or energy, which focus
digital divide to the rapid development of        solely on the physical infrastructure (e.g.
most LDC’s and Africa in particular can           road/rail networks, hydroelectric power
be attributed to the inability of these           plants, electricity networks), the ICT
countries to deploy, harness and exploit          infrastructure goes beyond the physical
the developmental opportunities of ICTs to        communications network infrastructure to
advance         their       socio-economic        incorporate elements of the information
development.      Rapid     socio-economic        infrastructure.    This     includes     the
development in Africa cannot take place           information and database systems as well
without the necessary infrastructure:             as      applications     platforms      e.g.,
transport, energy, water and ICT. The             teleducation, telemedicine, e-commerce, e-
common view is that: African countries            government and governance application
like those in other regions of the world          platforms,      which     are     normally,
cannot afford not to be part of the               implemented on the physical transmission,
communications and global connectivity            delivery and communications networks.
revolution. There is now a consensus that
in what is increasingly becoming a highly         3.        PROGRESS MADE BY
competitive information-driven world                        AFRICAN COUNTRIES
economy, development without a sound
ICT      infrastructure     and     modern        African countries, in recent years have
communication services is not feasible.           made some efforts to facilitate the ICT
                                                  infrastructure deployment, rollout and
                                                  exploitation process in their respective
       INFRASTRUCTURE                              Box 5.1       African Countries with Independent
                                                                  Regulatory Authorities
The ICT infrastructure by definition cut           Angola                 Botswana                Burkina Faso
across a variety of technologies and               Burundi                Cameroon                Cape Verde
                                                   Cote d’Ivoire          C.A.R                   Egypt
delivery media for supporting the                  Eritrea                Ethiopia                Gabon
transmission of voice, data and video,             Ghana                  Guinea                  Guinea-Bissau
namely;        (i)      telecommunication          Kenya                  Madagascar              Malawi
                                                   Mali                   Mauritania              Mauritius
infrastructure: fixed line, wireless,              Morocco                Mozambique              Namibia
satellite-based and mobile infrastructure          Nigeria                Reunion                 South Africa
(ii)     communication      and  network           Sudan                  Tanzania                Togo
                                                   Uganda                 Zambia
infrastructure including local and wide            Source: African Telecom Indicators 2001, ITU
area communications and computer

A number of African countries have                              In parallel with this, a number of African
liberalized their telecommunication sector,                     countries in the last five years have under
introduced      reforms    to     facilitate                    African Information Society Initiative
competition in the ICT sector and set-up                        (AISI), embarked on the process of
regulatory institutions to monitor and                          developing their national information and
facilitate developments in the sector. The                      communications policies and plans.
majority of African countries have either                       The AISI serves as a framework for a
partially or fully liberalized their                            radical socio-economic transformation of
telecommunications sector (See Box 5.1).                        African countries through the deployment
                                                                and the exploitation of ICTs. On the basis
Fig. 5.1: Cumulative Number of Regulatory Agencies              of work done since the adoption of the
                      in Africa                                 AISI, there is now an extensive body of
35                                                              knowledge and accumulated experience in
                                                                the formulation and development of the
                                      30                        relevant policies and plans to facilitate the
                                                                process     of     accelerated    economic
                                                                development through the deployment and
                                                                exploitation of ICTs in African countries.

                                                                   Box 5.2: Status of Development of ICT National
                                                                       Policies and Plans in African Countries
15                                                              Stage of the Process                   Countries
                                                                Countries in the process of   Algeria,    Angola,    Burundi,
                                                                developing their national     Cameroon,      Central    Africa
  1996       1997        1998       1999       2000             policies and plans            Republic, Chad, Comoros, Congo,
                                                                                              Cote d’Ivoire, Djibouti, D.R
 Source: ITU: African Telecommunication Indicators, 2001                                      Congo,     Equatorial   Guinea,
                                                                                              Eritrea, Guinea, Guinea Bissau,
                                                                                              Lesotho,     Liberia,     Libya,
It is estimated that African countries are                                                    Madagascar, Niger, Reunion, S.
more likely as Asian or Arab countries to                                                     Tome & Principe, Sierra Leone,
                                                                                              Seychelles, Somalia, Swaziland,
have independent regulatory agencies.                                                         Tanzania,     Togo,    Zambia,
Starting from 1996 with only 15 African                                                       Zimbabwe

countries having independent regulatory                         Countries    who    have      Botswana,    Ethiopia,    Kenya,
                                                                partially completed the       Gabon, Ghana, Nigeria, Cape
agencies, this figure more than doubled by                      policy      and     plan      Verde, Mali, Mauritania, Malawi,
2000. A number of African countries have                        development process and       Namibia, Sudan, Seychelles,
                                                                are implementing specific     Uganda
also put in place and implemented policies                      initiatives and sectoral
on creating the necessary enabling                              projects
regulatory framework and environment to                         Countries    who      have    Burkina Faso, Gambia, Egypt,
facilitate the deployment, exploitation and                     completed their policy and    Morocco, Mozambique, Senegal,
                                                                plan development process      Mauritius, Rwanda, South Africa,
the development of ICT infrastructure and                       and have embarked on the      Tunisia
services. A number of these countries                           implementation process

have: completed the separation of
Government regulatory and operator                              In addition to the AISI, other initiatives
duties; put in place policies and                               like the UN-ICT Task Force launched by
mechanisms to facilitate universal service                      the UN Secretary General and the Digital
and access to basic and value added                             Opportunities Task Force (DOT Force),
telecommunications services; created                            and others are contributing to the
conditions for an investor friendly                             development of national policies, plans
telecommunications environment and the                          and initiatives directed at ICT deployment
development of local communications                             and exploitation to facilitate the socio-
industry towards competitiveness.                               economic development process in African

countries. On the whole, in the areas of                               of Africa as a whole in comparison to
developing policies and plans to support                               other regions of the world and (ii) the ICT
ICT        infrastructure        development,                          status within the different regions of
deployment, roll-out and exploitation,                                 Africa (inter-regional comparison).
African countries can be divided into three
broad categories: (i) those who are either                             Comparison of ICT status in Africa
yet to start the process or are in the process                         with Other Regions of the World
of developing their national policies and
plans (ii) those who have partially                                    Despite evidence of the important role that
completed their policy and plan                                        ICTs can play in facilitating rapid socio-
development process and are in some                                    economic development, and the progress
cases implementing specific initiatives or                             made by African countries to facilitate the
sectoral projects and (iii) those who have                             deployment, roll-out and exploitation of
completed their policy and plan                                        ICTs, Africa still remains the continent
development process and have embarked                                  with the least capability in ICTs and least
on the implementation process.                                         served by telecommunication and other
                                                                       communications facilities. Poor ICT
Irrespective of the progress made to date                              infrastructure, combined with weak and
by most African countries to create the                                disparate     policy     and     regulatory
necessary      environment      for    ICT                             frameworks and limited human resources,
development, Africa stills lag behind other                            has led to inadequate access to affordable
regions of the world in the deployment and                             telephones,      broadcasting      services,
exploitation of ICTs.                                                  computers and the Internet in a number of
                                                                       African countries.

4.         CURRENT STATUS OF ICTS                                      Africa’s performance in terms of key ICT
           IN AFRICA                                                   indicators is poor in comparison with other
                                                                       regions of the world. Africa has the lowest
The overview of the ICT status in Africa is                            telephone subscriber base, teledensity, and
carried out at two levels namely: (i) a                                tele-accessibility (number public phones
comparative overview of the performance                                and the installed-base of residential

                                  Box 5.3: Comparison of Key ICT Infrastructure Indicators
                                                              Africa        Americas     Asia      Europe     Oceania
Basic Data
Population (millions)                                           812            844       3,677       800        31
Tel. Subscribers (per 100 inhabitants)                          5.54          61.20      19.74      84.28      84.99
Teledensity (Tel. Lines per 100 inhabitants)                    2.62          35.14      10.68      40.54      40.04
Telephone Demand
Total Demand (millions)                                         23.04        288.76     192.23     321.20      12.22
Waiting time (years)                                             2.4           0.3       0.9         1.2         -
Teleaccessibility (2000)
Residential Main lines (% of total main lines)                   62             64         61         72        71
Public Telephones (per 1000 inhabitants)                        0.49           5.05       2.48       2.32      2.90
Telephone Tariffs (US$)
3 minutes local call                                             0.08          0.07       0.04       0.10      0.07
Average Connection Charge (res. + business) (% of GDP)          19.79          0.78       5.3        0.88      0.45
Information Technology
No. of Internet users (per 1000 inhabitants)                    8.5          216.2        42.6      180.5      274.4
No. of Internet hosts (per 1000 inhabitants)                    0.34         133.30       2.90      19.20       88.0
Estimated No. of PCs (per 1000 inhabitants)                     9.40         258.6        21.0      175.7      383.2
Other Indicators (2000)
Telecom Sector Investment (US$ mill.)                          3,476.2       53,972.8   88,163.8   53,056.9   4,113.2
Source: ITU World Telecommunication Development Report 2002

telephone lines). It is the continent with a          Tariffs: Africa has high investment cost
comparatively      high     percentage    of          that translates into high service costs for
unsatisfied demand for telephone access;              users of ICT services especially residential
long waiting list for access to telephone             users. The telephone connection cost in
services; and a long waiting time, which in           Africa averages 20% of GDP per capita
some countries run into years. Africa                 compared to other regions of the world,
compared with other regions has relatively            where excluding Asia with an average
higher tariffs for communication services             connection cost of about 5% of GDP per
for both business and residential                     capita, connection costs for telephone
customers. Compared to other regions,                 services are less than 1% of GDP per
Africa has the poorest Internet access and            capita. On its own, this figure does not
records by far the lowest level of computer           mean much, but linked to the fact that
penetration. In addition to this, investment          Africa has the lowest GDP per capita in
in the telecommunication sector and the               the world, it amplifies the magnitude of
rate of deployment of value added                     the possible marginalisation of the
advanced communication services like                  continent without the institution of drastic
ISDN has been low in Africa compared to               measures.
other regions of the world. Also Africa’s
performance       in      the     area    of                    Fig. 5.2: Average Connection Charge
telecommunication and communications                                    (% of GDP per Capita)
human resources is also not encouraging.
Telephone Subscribers and Teledensity:
Africa with about 13% of the world's
population, accounts for only 2.3% of the
World’s total number of telephone
subscribers (fixed-line and cellular) and
about 2% of the World’s total main
telephone lines compared to other regions                5

of the world. Although Africa’s average
teledensity (number of main telephone                    0
                                                             Oceania Americas       Europe      Asia   Africa
lines per 100 people), in recent years is
above the benchmark value of 1.0 and now              Source: ITU: World Telecom Indicators, 2002

stands at 2.62, it is still by far very low in
comparison with other regions of the                  Typically, African countries on the
world and the world average of about                  average pay almost 10 times more for
17.19. Based on this comparatively low                basic services compared to high-income
teledensity rate, goals such as universal             countries. In relation to Internet access
service (a telephone line per household)              charges, the subscription and 20 hours
and universal access (a line within easy              usage cost averages US$63 a month for
reach of every household) are difficult to            African countries, compared to about
attain by a number of African countries.              US$29 for the US. This comparatively
Although the average teledensity for                  high cost of telephone and Internet
Africa is above 1.0, the teledensity for              services in Africa is hampering the ability
most African countries and regions are                of most African economies' to capitalize
below the benchmark value of 1.0 and                  on ICTs as tools for enhancing livelihoods,
there is a significant variation between the          creating new opportunities as well as
sub-regions of the continent as well                  creating the requisite linkages of their
between urban and rural areas.                        economies.

Information Technology: Regarding the                                              telemedicine, electronic governance etc,
broad area of the information technology                                           Africa’s comparatively low Internet access
infrastructure measured in terms of                                                and PC penetration compared to other
personal computer (PC) penetration and                                             regions of the world seriously undermines
the number of Internet users and host,                                             African’s effort to bridge the digital gap
Africa’s performance in comparison to                                              and transform its subsistence agriculture
other regions of the world is very poor. For                                       dominated economies into information and
example, while in Africa on the average,                                           knowledge-based economies.
there are only about 9 PC’s per 1000
inhabitants, there are about 21 PC’s per                                           Finally, investment in the sector, a
1000 inhabitants in Asia and 259 PCs per                                           measure of the rate of deployment and
1000 inhabitants in the Americas. Internet                                         exploitation of ICTs is considerably low in
penetration in Africa in 2001 stood at less                                        Africa compared to the level in other
than 0.5% with a value of 0.2% in Sub-                                             regions of the world. For example, in
Sahara Africa.                                                                     2001, Africa accounted for about 1.71% of
                                                                                   the global total investments in the sector
                                                                                   (estimated at about US$21 billion)
 Fig 5.3: Internet Users (per 1000 Inhabitants)
                                                                                   compared to 27% for the Americas, 44%
                                                                                   for Asia, and 26% for Europe. The
                                      Oceania   274.4                              inability of African countries to attract
       Asia    42.5                                                                both domestic and foreign direct
                                                                                   investment (FDI) to facilitate their ICT
                                                                                   infrastructure deployment and rollout
                                                  Africa        8.5
                                                                                   initiatives is a major constraint to Africa’s
Americas      216.2
                                           Europe    180.5
                                                                                   developmental efforts in this area.

                                                                                   Comparison of the Status of ICTs in the
Source: ITU African Telecommunication Indicators, 2001                             different Regions of Africa

                                                                                   In the previous section, a comparative
                                                                                   analysis of the state of ICTs in Africa
    Fig 5.4: Internet Hosts (per 1000 Inhabitants)                                 compared to other regions of the world
                                                                                   was carried out based on averaged data.
                                                                                   The state of ICTs in the different regions
                                          Oceania        88.1
                                                                                   of Africa (North, South, East, West and
              Asia    2.9
                                                                                   Central) varies tremendously from the
                                                                                   continental averages and therefore gives a
                                                                                   better picture of the state of ICTs in the
                                                         Africa       0.34         continent. In this section, the nature and
                                                         Europe        19.2
                                                                                   the extent of this inter-Africa regional
     Americas         133.3                                                        variations in ICT status is reviewed and
                                                                                   analysed in terms of main telephone line
                                                                                   distribution; teledensity; telephone tariffs;
Source: ITU African Telecommunication Indicators, 2001
                                                                                   information technology and the degree of
                                                                                   penetration of ICTs into the rural areas.

Given that the Internet is increasingly                                            Main Telephone Line Distribution:
becoming the dominant delivery platform                                            There is a wide inter-regional disparity in
for community-based applications like e-                                           terms of main telephone line distributions
commerce,     e-trade,   tele-education,                                           as illustrated in the Figure 5.5.

                                                                               Teledensity: In parallel with the
            Fig. 5.5: Regional Population and                                  distribution of main telephone lines in the
                 Main Lines Distribution                                       continent, the accessibility of the
                                                                               population to these services measured in
                            East   27%                                         terms of teledensity - number of main
                                                                               telephone lines per 100 inhabitants, gives a
                                                      Central     12%
                                                                               good measure of the accessibility to basic
                                                                               telephone and by extension ICT services.
         West   28%                                                            Within Africa, there is a huge disparity in
                                                     North    17%              teledensity between the five regions.
                                     South   15%                               While the Northern and Southern regions
                                                                               of the continent have relatively high
                                                                               teledensities, well above the continental
Main Lines
Distribution      South   32%                                                  average of 2.62, the Eastern, Central and
                                                   West      8%
                                                                               Western regions of the continent have on
                                                          East 7%              average teledensities less than the
                                                           Central   1%
                                                                               benchmark teledensity of 1.0. These
                                                                               figures again reinforces the evidence that
                                                                               the North and the South have comparably
                           North   52%
                                                                               better access to telecommunication and
Source: ITU: African Telecommunication Indicators, 2001
                                                                               communications services compared to the
                                                                               other regions of the continent.

                                                                                      Fig. 5.6: African Regional Teledensities
 The Northern region of the continent with
 about 17% of the total population accounts
 for more than half the total number of
                                                                                  8                                            7.34
 telephone lines in the entire continent,
 while the Western region with the highest
                                                                                  6                                   5.37
 population accounts for only 8% of the
 total telephone lines in the continent.
 Examining the distribution of main
 telephone lines by region further, the
 Northern and Southern regions of the                                                              0.62     0.72
 continent with about one third of the total
 population of the continent account for                                              Central   East      West     South     North
 about 85% of the total telephone lines in                                     Source: ITU: African Telecommunication Indicators, 2001

 the continent. In other words, the Western,
 Eastern and Central regions of the
 continent where about two thirds of the                                       Telephone Tariffs: The cost of a 3-minute
 peoples of Africa live have access to only                                    local call varies tremendously between the
 15% of the total main telephone lines on                                      different regions of the continent. For
 the continent. This wide disparity in the                                     example, while a 3-minute local call on
 distribution of main telephone lines                                          average costs only about 3.5 cents in
 between the regions amplifies the extent                                      Northern region of the continent, the same
 and the depth of the connectivity problem                                     call in the Central region on average costs
 and the limited access to basic telephone                                     16 cents, more than four times more
 services in African countries compared to                                     expensive. Overall, on the average, it is
 other regions of the world.                                                   twice more expensive for a three minute
                                                                               local call in the Eastern Region and three
                                                                               times more expensive in the Western

region compared to the Northern region of                                     of    factors     including                           availability,
the continent.                                                                affordability and relevance.

                                                                              With respect to the penetration of personal
Fig. 5.7: Average Regional Cost of Telephone Services
                                                                              computers measured in terms of the
                                                                              number of PCs per 1,000 inhabitants,
           3 Min Local Call (US Cents)
           Connection Cost-Residential (% GDP)                                average regional figures although more
                                                                              encouraging are still very low compared to
                                                                              other regions of the world.

  30           28.3                                                           Typically, in the Southern region of the
                                                                              continent, on the average, 30 out of every
  20                                                                          1000 of the population are more likely to
                                                                              own and use personal computers while in
                                    9.0                                       the other regions less than 20 out of 1000

                                                                   4.9        of the population are more likely to own
                                                                              and use personal computers.
        Central       West          East         South       North

Source: ITU: African Telecommunication Indicators, 2001                       The inter-regional disparity with respect to
                                                                              IT penetration further illustrates the extent
Regarding residential connection charge as                                    and magnitude of the digital divide that the
a percentage of GDP per capita, while the                                     continent faces.
Northern and Southern regions have                                             Fig 5.8: Average Regional Internet/IT Penetration
average figures below 5%, in the other
regions of the continent, the average                                                             Internet Users per 1000
residential connection cost for basic                                                             PC’s per 1000

telephone services is in excess of 20% of                                     35
GDP per capita. As seen earlier, the                                          30
Eastern, Western and Central regions
where about two-thirds of the peoples of
Africa live and also the regions with the                                     20                                    18.0
                                                                                                                                 16.0   15.8
lowest GDP per capita figures, have the
most expensive telephone services.
                                                                                      6.6               6.1
Information Technology (IT): Africa as a                                       5            3.6
whole has the lowest Internet penetration
access and PC penetration compared to                                               Central       West        East         North        South
other regions of the world. As seen earlier,                                       Source: ITU: African Telecommunication Indicators, 2001
the averaged data for the continent tends to
eclipse the true picture in the regions of                                    Examining the number of Internet host per
the continent.                                                                1,000 inhabitants – a measure of the
                                                                              availability of Internet services within the
On the whole, excluding the countries of                                      different regions of the continent,
the Southern region where the number of                                       countries in the Southern region on the
Internet users per 1,000 of the population                                    average have about 98 hosts per 1,000
on the average exceeds 10, the data for the                                   inhabitants compared to the other regions
other regions of the continent shows that                                     of the continent where on the average, the
for every 1,000 of the population less than                                   number of Internet hosts per 1,000
10 people readily use the Internet. The                                       inhabitants is below 4. The implications
reasons for this may be linked to a variety                                   and impact of this to the wider

development of the economies of African                        the consequence of this is that the majority
countries is enormous and thus calls for a                     of the peoples of the continent do not have
concerted effort to address these                              access to basic telephone services. The
imbalances.                                                    overall implication of this to the effort of
                                                               the different African countries to enhance
Rural versus Urban Disparity: Apart                            the development of agriculture, ensure
from the inter-Africa regional disparities in                  wider education and development of
the overall development and penetration of                     indigenous private sector may not be
basic telephony and IT services, another                       sustainable in the long term. Furthermore,
area of major disparity within the                             this huge disparity between the access of
continent is the level of penetration of                       the urban and rural areas to basic services
these services in the rural areas. For                         further compounds the magnitude of the
example, taking the case of access to basic                    digital divide in the continent.
telephone services, the largest cities and
towns which account for about 12%-22%                          Conclusions
of the total population, have access to
more than 75% of the total main telephone                      The analyses carried out in this session in
lines in most of the regions of the                            relation to the ICT status of Africa in
continent.                                                     terms of key indicators, show that Africa is
                                                               faced with a major challenge to bridge the
           Fig 5.9: Largest Cities Share of                    enormous ICT infrastructure, deployment
        Population and Main Telephone Lines
                                                               roll-out and exploitation gap that exist
                   % Total Main Lines
                   % of Total Population                       between African countries on one hand
                                                               and between Africa as a whole and the rest
                                                               of the world. Efforts to bridge the digital
                                                               divide as it relates to Africa, should
                                                               therefore be directed at four levels namely:
                                                               (i) bridging the within country divide
                                                               between the rural and urban areas; (ii)
                                                               bridging the within sub-region gap
             22        22                            22        between countries of a given sub-region;
  20                             15        14
                                                               (iii) bridging the inter-regional gap, which
                                                               is pronounced as per the analysis carried
       Central    East      West      South     North          out above and (iv) bridging the gap
Source: ITU: African Telecommunication Indicators, 2001        between Africa and other regions of the
As an example, in the Central region, on
average, 77% of the total main telephone                       5.     CHALLENGES FOR ICT
lines are concentrated in the largest cities                          INFRASTRUCTURE
that account for about 22% of the                                     DEPLOYMENT AND
population. Excluding the Northern and                                EXPLOITATION IN AFRICA
Southern regions where there is a
relatively more balanced distribution of                       The poor state of Africa’s ICT
telephone lines, the distribution in other                     infrastructure and services is seriously
regions of the continent is skewed towards                     undermining Africa’s socio-economic
the largest cities.                                            development process. African countries on
                                                               the whole face a number of ICT
Given that the population distribution of                      Infrastructure       development      and
Africa is such that, on average, more than                     exploitation bottlenecks including:
75% of the population live in rural areas,

Access to Capital: The development of                development, deployment and rollout
ICTs in Africa is seriously constrained by           initiatives and projects. There is a need for
lack of access to capital to support major           African governments to acknowledge the
sub-regional      and      regional      ICT         need for the creation and sustenance of the
infrastructure    rollout    projects    and         necessary enabling regulatory framework
initiatives. As established earlier, Africa’s        for facilitating the deployment and
share of the total investment in the                 exploitation ICT infrastructure, services
telecommunication industry is very low               and systems.
compared to other regions of the world.
                                                     To address the above challenges, African
Policies: Restrictive government policies            countries will need to take action in three
that inhibit or make it very expensive to            broad areas, namely actions directed at: (i)
procure, deploy and rollout the                      ICT infrastructure development and Roll-
infrastructure. For example, the imposition          Out; (ii) facilitating the ICT infrastructure
of heavy import duties on computer and               deployment process and (iii) facilitating
communications equipment or the refusal              the exploitation and utilization of the ICT
to grant a license for the operation of a            infrastructure.
satellite ground station; and similar other
obstacles could invariably retard the ICT            ICT Infrastructure Development and
infrastructure       development        and          Rollout
exploitation process in African countries.
                                                     Studies have shown that there is a direct
Human Resource Capacity: The lack of                 link      between        telecommunications
human resource capacity in key technical             infrastructure and per capita growth in a
skill areas to support the design,                   given country. For example, taking the
deployment,      installation,   operation,          Internet and its usage as key indicators of
maintenance and utilization of the                   telecommunications and communication
infrastructure networks and the systems              infrastructure deployment and utilization
built on these networks is a serious                 within a given country, the ITU has shown
challenge for the development of ICTs in             that there is a relationship between Internet
the      continent.     Numerous       ICT           penetration and GNP per capita (see Fig.
infrastructure development projects in               5.10).
African countries are either seriously
constrained to the extent of being delayed,          It is now widely accepted that
postponed or poorly implemented simply               telecommunications and communications
because there is no enough expertise with            infrastructure deployment and usage is a
the requisite skill to support the                   necessary precondition for sustained
development and exploitation of these                economic growth. Connectivity and access
infrastructures.                                     to these facilities presents a window of
                                                     opportunity through which African
Reforms and Regulatory Framework:                    countries can leapfrog their ailing
Lack of harmonization of the regulatory              economies into information driven
framework across countries within a given            economies, which could deliver the goods
sub-region is a major challenge for the              that eluded their citizens for many years.
effective development and exploitation of
ICTs in the continent. Sub-regional and
regional level cooperation in the area of
harmonisation of regulatory frameworks
will be necessary to speed up sub-regional
and continental ICT infrastructure

                                                                  infrastructure development process in
   Fig. 5.10: Internet Penetration and GDP per                    Africa includes: (i) the creation of the
                       Capita                                     necessary enabling and regulatory
                                                                  environment and framework to facilitate
                                                                  the      deployment,       utilization      and
                                                                  exploitation of the ICT infrastructure; (ii)
                                                                  the development of the required human
                                                                  resource capacity to facilitate the ICT
                                                                  infrastructure deployment roll-out and
                                                                  utilization; (iii) the development of sub-
                                                                  regional and regional capacity for the
                                                                  development,         manufacturing,         and
                                                                  distribution of ICT Infrastructure related
                                                                  equipment, systems and services required
                                                                  for     wider      infrastructure      roll-out,
Source: International Telecommunications Union, 2000              deployment        and      utilization;     (iv)
                                                                  developing and strengthening the capacity
The ICT Infrastructure deployment and                             of sub-regional and regional institutions
rollout will need to be targeted at: sub-                         mandated to address policy, regulatory and
regional     connectivity      and   inter-                       human       resource     development;        (v)
connectivity projects and initiatives                             development of the institutional and
directed at building and rolling-out the                          regulatory framework and structures
physical      telecommunications       and                        required for supporting the deployment,
communication network including: fixed-                           utilization and development of ICT; and
line, wireless, satellite-based and mobile                        (vi) the development and promotion of the
telecommunications and communication                              necessary standards, best practices and
network systems infrastructure.                                   guidelines to support the deployment and
                                                                  exploitation of ICT infrastructure and
Facilitating the ICT                      Infrastructure          systems.
Development Process
                                                                  Facilitating    the   Utilization   and
There is the need to support programs and                         Exploitation of the ICT Infrastructure
initiatives aimed at facilitating the
development, deployment and rollout of
ICT       infrastructure.     The       Africa                    The ultimate aim of NEPAD is to bridge
Development        Forum      on      regional                    the digital divide and facilitate Africa’s
integration (ADF-III, 2002) organized by                          socio-economic development in the digital
the ECA, AU and AFDB in collaboration                             age.     Facilitating   the     deployment,
with the RECs, emphasized the need for                            exploitation and utilization of ICTs within
the implementation of regional initiatives                        the societies and economies of African
aimed at the harmonization of ICT policies                        countries is therefore crucial for the
and strategies to achieve economies of                            realization of the goal to initiate and
scale for building regional ICT                                   sustain Africa’s rapid socio-economic
infrastructure. In addition to this, the need                     development. For ICTs to assist in the
to create and facilitate indigenous                               developmental process and make its
research,      and     increased      Africa’s                    impact felt in African countries, it is
participation in global ICT governance                            important to implement a number of
were also highlighted.                                            national, sub-regional and regional ICT
                                                                  application initiatives and projects across
Initiatives          to       facilitate         the   ICT        all sectors of the economy. Therefore apart

from facilitating the development,                   The need for wide availability of
deployment and the rollout of the physical           telecommunications systems, networks
ICT      infrastructure   and     supporting         and infrastructure to support ICT
initiatives directed at facilitating the             developments       cannot    therefore   be
infrastructure rollout process, there is also        overstated. Furthermore, African countries
the need to support ‘last-mile’ initiatives          are virtually not interconnected; there is
for spreading the utilization and                    therefore a need to implement sub-regional
exploitation of ICTs within the society and          and regional infrastructure deployment and
the economy.                                         roll-out interconnectivity initiatives to
                                                     ensure that African countries are well
6.     TYPES OF PROJECTS AND                         interconnected to limit among other things
       PROGRAMS PROPOSED FOR                         transit charges incurred through the use of
       THE NEPAD SHORT TERM                          transit points outside the continent.
                                                         Box 5.4: Short-Term Plan: ICT Infrastructure
                                                               Deployment and Roll-out Projects
The projects for the Short Term Plan fall                     Project              Region(s)      Sponsors
                                                      COMTEL PROJECT              COMESA       COMESA
into the three broad categories namely,               ECOWAS Regional             West         ECOWAS
ICT Infrastructure Deployment and Roll-               Interconnection Project
out      Projects;   ICT     Infrastructure           The SADC Regional           Southern     SADC
                                                      Infrastructure Initiative
Deployment Facilitation Projects; and ICT             (SRII)
Infrastructure Exploitation and Utilization           The RASCOM Project          Whole        RASCOM
Initiatives.                                          SAT-3/WASC/SAFE-            South,       SAT3/WASC/SA
                                                      Utilisation to Improve      Central,     FE
                                                      Interconnectivity           West, East
ICT   Infrastructure        Rollout     and
Deployment Projects
                                                     ICT   Infrastructure     Rollout                   and
This includes sub-regional projects and              Deployment Facilitation Projects
initiatives directed at building and rolling-
out the physical telecommunications and              This includes sub-regional and regional
communication network including: fixed-              projects directed at facilitating the
line, wireless, satellite-based and mobile           deployment and exploitation of ICT
telecommunications and communication                 infrastructure including initiatives relating
network systems infrastructure.                      to: reforms and the harmonization of the
                                                     regulatory framework and environment
This also encompasses major sub-regional             across the sub-regions; human resource
and regional connectivity and inter-                 development initiatives (in areas like
connectivity initiatives directed at building        telecommunications and communication.
the ICT infrastructure and communications            network engineering, installation and
networks and systems. On the issue of                maintenance and management; system
connectivity and inter-connectivity within           integration, software development and
the continent; although there has been an            enhancement); facilitating the effective
explosion of mobile telephony in the                 participation of African countries in the
continent      which       has     improved          global ICT policy and decision making
connectivity, connectivity and inter-                fora; institutional capacity building and
connectivity still remains a major set back          strengthening (building and strengthening
in the penetration of telephony and of ICT           the capacity of regional institutions
in the continent. Internet service provision         mandated to support infrastructure
still depends solely on fixed line systems           development, roll-out and deployment
on account of cost and network set up.               activities in areas like regulation, policy,
                                                     standards etc).

                                                                        ICT deployment initiatives as well as
   Box 5.5: Short-Term Plan: ICT Infrastructure                         initiatives directed at utilisation of the
         Deployment Facilitation Projects                               underlying     systems    of     the   ICT
    Project        Region(s)       Sponsors                             infrastructure to support key activities of
Telecommunications      Whole       ITU-Africa Regional
Equipment               Continent   Office                              the various sectors of the economy (e.g.,
Manufacturing in                                                        agriculture, education, health, industrial,
Africa Study
ICT Policy and          Whole       ATU and the RECs                    and service sectors) and to support service
Regulatory              Continent                                       delivery within the public and private
Harmonization at                                                        sectors.
Regional Level
Strengthening of        Whole       Identified Institutions will
African                 Continent   own its component of the            In addition to this, a specific initiative will
Telecommunications                  project                             need to be directed at content development
and ICT Institutions
Programme to            Whole       ATU, the RECs and NTOs              to take into account the issue of language,
Enhance Africa’s        Continent                                       capturing of indigenous knowledge,
Participation in the
Global ICT Policy                                                       improving Africa’s presence on the Web,
and Decision Making                                                     sharing of Africa’s scientific and research
For a
The ICT Human           Whole       ATU/ITU-Africa Regional             output and development of content-
Resource Capacity       Continent   Office                              specific applications relevant to sectors
Initiative for Africa                                                   such as health, education, agriculture and
                                                                        culture. On the whole, a total of six
                                                                        continental umbrella initiatives have been
For example, in the areas of reforms and                                identified for implementation under the
regulatory framework: in the past decade,                               Short-Term Action Plan for NEPAD (See
a number of countries in Africa have                                    Box 5.6).
embarked on policy reforms in the ICT
                                                                         Box 5.6: Short-Term Plan: ICT Infrastructure
sector reflecting a growing belief in the                                   Exploitation and Utilisation Initiatives
potential of ICT as a key driver for                                            Project          Region(s) Sponsors
economic development, poverty reduction                                 The African SCAN-ICT and E-     Whole       UNECA
                                                                        Readiness Initiative            Continent
and regional integration. Countries that                                The African Regional            Whole       RECs
have instituted meaningful reforms are                                  Telemedicine Initiative         Continent
reaping the benefits of improved                                        The Electronic Governance &     Whole       RECs
                                                                        Government Initiative for       Continent   AfDB
infrastructure,     accessibility      and                              Africa
affordability of ICT services. Nonetheless                              The African Electronic          Whole       RECs
                                                                        Commerce and Trade Initiative   Continent   AfDB
the reforms have not been co-ordinated                                  The African Regional Tele-      Whole       RECs
across countries and there is no collective                             education Initiative            Continent
                                                                        The Africa Content              Whole       RECs
strategy to attract investment capital.                                 Development Promotion           Continent
These reforms have not yet led to                                       Initiative.
significant improvements in service
penetration and coverage, service quality                               7.         IMPLEMENTATION
and      tariffs.  Facilitation    projects                                        ARRANGEMENTS AND THE
recommended for implementation in the                                              ROLE OF NEPAD
short-term are shown in Box 5.5
                                                                        This section provides an outline of the
ICT Infrastructure Exploitation and                                     broad institutional arrangements for
Utilization Initiatives                                                 facilitating the implementation of the
                                                                        NEPAD ICT Short-Term Action Plan.
 This includes initiatives like: e-                                     Three broad areas of projects have been
governance, e-commerce, tele-education,                                 identified for the implementation under
telemedicine, multi-purposed community                                  this Plan: ICT Infrastructure Development
telecenters and other community-based                                   and Roll-out Projects; ICT Infrastructure

Development and Roll-out Facilitation                infrastructure roll-out initiatives without
Projects      and     ICT      Infrastructure        putting in place and implementing
Exploitation and Utilization Initiatives. A          initiatives aimed at creating the enabling
number or projects and initiatives have              environment      for     facilitating   the
been identified for implementation under             infrastructure development and roll-out
each of these three broad project headings.          process.
The institutional arrangement for the
implementation of these projects are                 The Role of NEPAD: NEPAD will as
outlined in the Table below in terms of:             soon as possible begin the process of
project ownership entities, project                  consultation with the identified key owners
implementation agencies and details                  or stakeholders of each of the initiatives
relating to specific cooperating and                 with the view to facilitate and speed-up
collaborative institutional arrangements at          their implementation. NEPAD will, (i)
the national, regional or the continental            promote of the projects and initiatives both
level required for facilitating and                  within and outside Africa at different fora
supporting the implementation of each of             (ii) facilitate and speed up the decision and
the projects. Also elaborated under each of          policy making process and where
the broad project headings are issues                necessary the signing of required protocols
relating to risks and on the next steps to be        and agreements by the relevant African
taken to move the process forward.                   member states and other stakeholders
                                                     involved in each of the projects and
ICT Infrastructure Deployment and                    initiatives and (iii) facilitate where
Roll Out Projects                                    appropriate the mobilization of the
                                                     required financial resources from both
Risks: The implementation of the                     domestic and external sources to speed up
infrastructure deployment and roll-out               the process of the implementation of each
initiatives identified in the short-term             of the projects.
action plan will be crucial for speeding up
the process of bridging the infrastructure           ICT Infrastructure Deployment
gap that exist both within and between               Facilitation Projects
African countries. A number of these
projects will address the connectivity,              Risks: There is a need to support
universal access and service as well as the          initiatives aimed at facilitating the ICT
inter-connectivity problem that now exists           infrastructure development, deployment
within and between the main sub-regions              and rollout process in Africa. These
of the continent. Currently Africa’s                 initiatives include those aimed at the
physical ICT infrastructure base is the              creation of the necessary enabling and
weakest compared to other regions of the             regulatory environment and framework;
world. This limitation is adversely                  the development of the required human
affecting the pace of Africa’s socio-                resource capacity to facilitate the ICT
economic development. Africa on the                  infrastructure deployment rollout and
whole is at risk of being further                    utilization initiatives; and initiatives
marginalized if efforts are not directed at          directed at strengthening the sub-regional
facilitating the implementation of the               and regional ICT-mandated bodies and
infrastructure development, deployment               institutions. The initiatives directed the
and rollout initiatives identified in the            ICT infrastructure development and roll-
NEPAD short-term plan. Another areas of              out projects to speed up the connectivity
risk which need to be taken on board,                and inter-connectivity of African countries
relates to risk associated with going ahead          could risk being either delayed or
with the implementation of the identified            abandoned if the identified facilitating

initiatives are not taken on board and              The Role of NEPAD: NEPAD will be a
implemented. A major risk factor can                major player in promoting and facilitating
therefore be associated with the lack of            the implementation of the key initiatives
action on these initiatives. To limit these         identified, for spreading the exploitation
perceived risks, NEPAD will facilitate the          and utilization of ICTs within the society
implementation of these initiatives.                and the economy in African countries. As
                                                    a next step, NEPAD, will be promoting
The Role of NEPAD: NEPAD will serve                 and       seeking      support     for     the
as a vehicle for promoting and facilitating         implementation        of     the     proposed
the implementation of the identified                continental umbrella initiatives at major
initiatives. Specifically, NEPAD will start         meetings of donors, bilateral and
the process of the promoting the initiatives        multilateral agencies as well as at meetings
at relevant fora to gain support for their          of major economic blocs like the G8 and
implementation and generate the required            the EU. NEPAD will also play a key role
momentum         to     speed  up      their        in initiating a number of the proposed
implementation. NEPAD will also consult             continental facilitating and partnership
with the various sub-regional and regional          frameworks within which the various
stakeholders of each of the initiatives to          relevant national, sub-regional and
identify the ways and the effective means           regional initiatives can be coordinated,
by which to support and speed up the                facilitated and supported to speed up their
implementation of each of these initiatives         implementation        and     ensure     their
within the time frame of the Short-Term             sustainability. Another key next step
Action Plan. NEPAD will facilitate the              action to be taken by NEPAD as part of its
mobilization of financial resources                 effort to facilitate the mobilization the
required for effective implementation of            necessary       financial    resources     for
the identified initiatives.                         implementing of the projects under these
                                                    initiatives will involve setting up the
ICT Infrastructure Exploitation and                 African ICT for Development Trust
Utilisation Initiatives                             Fund. This Trust Fund to be set-up and
                                                    operated by NEPAD on behalf of African
Risks: The wide spread deployment,                  countries will be aimed at attracting and
exploitation and utilization of the ICTs            mobilizing major donor funding to support
within the societies and economies of               the     implementation      of    ICT      for
Africa countries will be necessary for the          Development (ICTfDev) initiatives in
realization of the ultimate goal of NEPAD,          Africa       including     supporting      the
to bridge the digital divide and facilitate         implementation of the projects identified
Africa’s socio-economic development. It is          under the continental umbrella initiatives.
acknowledged that African countries are at
a risk of being further marginalized in the
emerging new global economic order to be
dominated by information and knowledge-
based economies if efforts are not made to
speed up the process of the deployment
and exploitation of ICTs. There is
therefore a high risk factor associated with
not implementing the identified initiatives.
NEPAD’s role in facilitating the
implementation of these initiatives is
therefore paramount if this element of risk
is to be minimized or eliminated.

 Box 5.7: Institutional Arrangements for Implementation of ICT Infrastructure Deployment and Roll-Out Projects
   Projects /Initiatives         Ownership           Implementing Agencies                    Institutional Arrangements
COMTEL Project              COMESA Member            COMESA                             COMESA will coordinate the
                            States                                                      implementation of the project through its
                                                                                        existing institutional arrangements
ECOWAS Regional             ECOWAS Member            ECOWAS                             ECOWAS will coordinate the
Interconnection Project     States                                                      implementation of the project through its
                                                                                        existing institutional arrangements
The SADC Regional           SADC Member States       SADC                               SADC will coordinate the
Infrastructure Initiative                                                               implementation of the project through its
(SRII)                                                                                  existing institutional arrangements
The RASCOM Project          RASCOM                   RASCOM in collaboration with       RASCOM will coordinate the
                                                     national entities                  implementation of the project through its
                                                                                        RASPAC initiative

SAT-3/WASC/SAFE-            The SAT-                 RECs responsible for regional      N.A
Utilisation to Improve      3/WASC/SAFE              interconnectivity network
Interconnectivity           Grouping                 projects which could link to the
                                                     and complement the SAT-
                                                     3/WASC /SAFE system

           Box 5.8: Institutional Arrangements for Implementation of ICT Infrastructure Facilitation Projects
  Projects /Initiatives             Ownership             Implementing Agencies               Institutional Arrangements
Telecommunications             ITU-Africa Regional        ITU-Africa Regional Office      ITU-Africa Regional Office will be
Equipment Manufacturing        Office                     in collaboration with ATU,      the main institutional focal point for
in Africa Study                                           AFDB and ECA                    facilitating the coordination of the
ICT Policy and Regulatory      ATU and the RECs           Each REC will be                The coordination of the project at
Framework Harmonization                                   responsible for the             each sub-regional level will be
at Regional Level                                         implementation it its           carried out by the RECs through
                                                          component of the project        their existing institutional
                                                          among its member states.        arrangements. ATU will coordinate
                                                                                          the work of the RECs at the
                                                                                          continental level
Strengthening of African       Each of the identified     Each of the identified          Each of the identified Institutions
Telecommunications and         Institutions will own      Institutions will have the      will coordinate the implementation
ICT Institutions               its component of the       responsibility for              of their component of the project
                               project                    implementing their
                                                          component of the project
Programme to Enhance           ATU, the RECs and          The ATU in collaboration        ATU with the NTOs will collaborate
Africa’s Participation in      NTOs                       with the RECs, NTOs and         on components of the initiatives that
the Global ICT Policy and                                 UNECA will each have the        relate to the global
Decision Making Fora                                      responsibility for              telecommunication fora;
                                                          implementing relevant
                                                          components of the projects.
                                                                                          The UNECA in collaboration with
                                                                                          RECs will coordinate other global
                                                                                          fora participation initiatives in
                                                                                          particular those relating to the WTO,
                                                                                          ICANN, ISOC, etc. The continental
                                                                                          focal point for the project will be the
The ICT Human Resource         Each of the identified     Each of the identified          Each of the identified Institutions
Capacity Development           Institutions will own      Institutions will have the      will coordinate the implementing
Initiative for Africa          its component of the       responsibility for              their component of the project
                               project                    implementing their
                                                          component of the project

  Box 5.9: Institutional Arrangements for Implementation of ICT Infrastructure Utilisation and Exploitation Projects
      Projects                  Ownership               Implementing Agencies                 Institutional Arrangements
The African SCAN-       UNECA                           National nodes or agencies will      The continental focal point for
ICT and E-                                              implement national components        this initiative will be UNECA.
Readiness Initiative                                    of the SCAN-ICT and e-readiness      The continental coordination of
                                                        initiative.         Sub-regional     the project will be carried out by
                                                        collaborative   efforts    where     UNECA working in collaboration
                                                        necessary will be carried out by     with national implementation
                                                        the RECs.                            nodes and the REC (where
The African             National components of this     National components of this          The coordination of the
Regional                initiative will be owned by     initiative will be implemented by    implementation of each of the
Telemedicine            the appropriate national        the appropriate national entities.   national components of this
Initiative              implementation entities or                                           initiative will be done by relevant
                        agencies. Respective RECs       Where the project has a regional     national entities.
                        will implement projects with    focus, it will be implemented by
                        a regional focus under the      the relevant REC.                    Where member states within a
                        initiative.                                                          given REC cooperate on a project
                                                                                             the relevant REC will serve
The Electronic          National components of this     National components of this          The coordination of the
Governance &            initiative will be owned by     initiative will be implemented by    implementation of each of the
Government              the appropriate national        the appropriate national entities    national components of this
Initiative for Africa   entities                                                             initiative will be done by relevant
                                                                                             national entities.

                                                                                             Where member states within a
                                                                                             given REC cooperate in a specific
                                                                                             area, the relevant REC will
The African             National components of this     National components of this          The coordination of the
Electronic              initiative will be owned by     initiative will be implemented by    implementation of each of the
Commerce and            the appropriate national        the appropriate national entities    national components of this
Trade Initiative        entities                                                             initiative will be done by relevant
                                                                                             national entities.

                                                                                             Where member states within a
                                                                                             given REC cooperate in a specific
                                                                                             area, the relevant REC will
The African             National components of this     Implementation of national           Coordination of national
Regional Tele-          initiative will be owned by     components of the initiative will    components of the project will be
education Initiative    the appropriate national        be carried out by designated         by the relevant national entities.
                        entities.                       national entities.
                                                                                             Projects with regional a focus will
                        Ownership of projects with a    Implementation of Projects with a    be coordinated by the relevant
                        regional or continental focus   regional focus will be coordinated   regional groupings, consortia,
                        will rest with the relevant     by the relevant project regional     association or secretariat set up to
                        agency. (e.g. the Africa        groupings, consortia, association    implement the project.
                        Virtual University Group of     or secretariat.
                        Institutions or Secretariat).
The Africa Content      National components of this     National components of this          Coordination of the
Development             initiative will be owned by     initiative will be implemented by    implementation of each of the
Promotion Initiative.   the appropriate national        the appropriate national entities    national components of this
                        entities                                                             initiative will be by relevant
                                                                                             national entities.

                                                                                             Where member states within a
                                                                                             given REC cooperate in a specific
                                                                                             area, the relevant REC will

        PARTNERSHIP (PPP) IN                       Over the 1990-98 period, Africa accounted
         INFRASTRUCTURE                            for about US$14 billion of the total
           DEVELOPMENT                             investment of US$ 496 billion made in
                                                   PPP projects in developing countries, as
1.      ROLE OF PPPS IN                            compared to US$ 237 billion for Latin
        DEVELOPMENT                                America and Caribbean region

Public-Private Partnerships (PPP’s) have           PPP’s usually take the form of a contract
emerged over the last decade as one of the         between a private sector entity and the
best ways to foster development, fuelled           government that calls for the private
by insufficient investment, growing                sponsor to deliver a desired service and
pressures on government budgets and a              assume the associated risks. The
general concern about service provision by         government may be currently providing
state enterprises and agencies. PPP’s have         that service, or it may be a service that
taken place mainly in economic (physical)          would benefit the country and economy
infrastructure, such as power, water and           but is not currently being provided.
sanitation     and     telecommunications.
Recently, attention has also turned to             The nature of the partnership can range
social infrastructure, such as health,             from       fairly    simple      contractual
education, and other services traditionally        arrangements to supply a specific service,
provided by the public sector. This is             to complex arrangements to design,
mainly because most of them entail large           construct operate, maintain, finance, and
capital outlays and have long gestation            provide an infrastructure service. The
periods. In many cases, however, public            various forms of these include:
provision of these services has been               management          contract,       leasing,
characterised by unreliable services, high         concessions, build-operate-transfer (BOT),
costs, and lack of coverage and poor               rehabilitate-operate-transfer (ROT), build-
maintenance. The desire for greater                own-operate-transfer (BOOT). The role of
efficiency and better services, as well as         government’s in PPP’s is vital, especially
the limited volume of public resources             in providing the necessary legal and
available to finance such services are now         regulatory framework that provides
increasingly leading governments to                confidence to the private sector while
embrace       public-private    partnership        safeguarding the interests of consumers.
                                                   The benefits associated with PPP’s include
On a global level, Public-Private                  increase in economic growth, efficiency in
Partnerships have been growing fast. In            service delivery and service expansion,
developing countries, the total level of           and reduction of financing burden on
PPP’s in infrastructure grew from US$              government budget and poverty reduction.
16.6 billions in 1990 to over us$95 billion        Efficient       infrastructure        creates
by 1998. However, in Africa, the value of          employment, develops human capital,
transactions and number of countries with          promotes local and foreign investment and
PPP projects, though grew over the                 trade, fuels business productivity and
decade, are only a fraction of what other          expansion, and helps to raise standards of
regions were able to accomplish over the           living and access to critical services. Also,
same period.                                       efficient infrastructure services reduce
                                                   various forms of losses (line losses, theft
                                                   of power, poor collection leading to loss of

revenues, power outages and its implied              (Cameroon, Morocco, Chad and South
cost to the economy, water leaks and their           Africa) and more are anticipated to be
implications on availability of water health         concluded in the forthcoming years.
problems etc). Private sector participation
in the provision of economic and social              The case of water shows how PPP could
services avails the local economy access to          help better the response to the basic needs
private    sector     finance,   managerial          of people. In the case of Côte d’Ivoire for
expertise, access to new markets, new                example, from its original concession to
technology, better project design and                supply water in Abidjan 30 years ago to
implementation, and more efficient use of            very limited areas, the local company
resources.                                           –SODECI- has increased substantially the
                                                     number of its customers, not only in
When correctly structured, PPP’s can                 Abidjan but also in the rest of the country,
improve access to basic services such as             covering today the needs of 70 % of the
potable water, sanitation, electricity, solid        urban residents.
waste collection, health care, and
education. They can also play a vital role           This success in providing potable water is
in agricultural and rural development,               a result of leasing arrangements in the
sectors where most of the poor in Africa             production and distribution of water in
are found.                                           major municipalities. It is a result of the
                                                     privatisation of SODECI which is 51%
PPP’s in Africa                                      owned by private Ivoirian investors, 46%
                                                     owned by a strategic investor (a French
Africa faces an urgent need to invest more           water company) and 2% owned by the
in infrastructure and other services and to          Government; and today its worthy to note
operate them more efficiently. Africa’s              that SODECI bonds are one of the main
poor stock of infrastructure is mainly due           items traded on the Abidjan financial
to a collapse in investment over the past 20         market.
years. Estimates suggest that Africa
require infrastructure investment of 5-6             Other examples of success stories may
percent of GDP per year.                             also be provided in the health and
                                                     education sectors such as the Albert
The level of PPP’s in Africa, which was              Luthuli Hospital in KwaZulu-Natal in
negligible at the beginning of the 1990s,            South Africa.
has since then grown steadily to about $
4.1 billion by 1998. Still that level                2.     CHALLENGES AND
represented only 6.1 percent of the $66.3                   OPPORTUNITIES
billion in PPP’s in Latin America that
year. Where PPP’s have taken place in                In order for more PPP’s to take place in
Africa, they have followed global trends,            Africa, there is the need to improve the
with the telecommunications and in social            business environment in the countries and
infrastructure, agricultural and rural               regions of the continent. As international
development, and other services are still in         experience demonstrates, an enabling
the early stages of development. However,            environment for PPP’s consists of three
there are signs that the use of PPPs in              principal    elements:    an     attractive
some sectors such as power and water are             environment for business; an adequate
substantially growing.                               legal and regulatory framework for PPP’s
                                                     and access to the technical skills to
In 2000, six major PPP contracts were                manage PPP programs and projects.
awarded in water in four countries

Presently serious constraints exist in many          governments to undertake needed reforms
countries of the continent for the effective         to improve the business climate. This
development        of     PPP’s      namely:         would include liberalization of investment,
unfavourable investor perception of                  trade, and prices, promoting competition,
country risk, Africa’s limited role in global        creating deeper and broader financial
trade and investment, small market size,             markets, tax reforms, ensuring that
need for enhanced reforms, limited                   commercial law protects property rights.
infrastructure, and limited financial
markets.     Other      equally    important         Furthermore, NEPAD should encourage
constraints include inadequate legal and             and assist African governments to create
regulatory framework for PPPs, and lack              the necessary legal and regulatory
of technical skills to manage PPP                    framework for PPPs at the regional level
programmes and projects. In this context it          by assessing and harmonising existing
is important to put in place PPP Technical           laws and regulation affecting PPPs.
Unit for project activities with adequate            NEPAD should also encourage and assist
skills    (legal,    financial,   economic,          countries to establish Regulatory bodies in
procurement and technical). An overview              countries where they are absent as well as
of countries with successful PPP                     facilitating networking and sharing of
programs, such as Egypt and South Africa             experience among regulatory agencies and
clearly indicates the importance of PPP              other similar organizations within regions.
Technical Units in achieving the objectives
of attracting private financing for public           The ability of countries to execute good
utilities while responding to the needs of           PPP projects depends on the skills of
potential customers.                                 country PPP technical units. A PPP
                                                     technical unit plans and executes projects
The process of identifying PPP projects              and program activities. In this regard,
and taking them through the project life             NEPAD should encourage and assist
cycle is a long and complex process. Co-             countries to create PPPs technical units
operation among African countries to                 staffed with relevant and skilled personnel
share experiences and accumulated                    (with      legal,   financial,   economic,
knowledge is crucial.                                procurement and technical expertise) with
                                                     capabilities to plan and execute PPPs
The scope for further development of                 programs. In addition, NEPAD should
PPP’s in most African countries is                   facilitate collaboration and exchange of
promising provided that the constraints              experience in PPP’s between technical
mentioned above are addressed. The action            units of countries as well as the
needed to reduce constraints to PPP’s                dissemination of information on good
entail improving the environment for                 practices.
business, creating the necessary legal and
regulatory framework for PPP’s, and
establishing PPP technical units staffed by
experts with the needed skills for project
and program activities.


To encourage the wider development of
PPP in Africa, NEPAD should encourage

             CHAPTER 7                                 areas requiring specific intervention
                                                       to speed up action.

         WAY FORWARD                              The       NEPAD         programme      in
                                                  infrastructure is not a new invention or
                                                  an additional source of funds. What
1.     INTRODUCTION                               NEPAD brings is a new vigour to
                                                  accelerate response to familiar issues
The identified NEPAD short-term                   and problems and implementation of
programmes of action for the                      tested policies and good practices. The
infrastructure sectors have four common           new sense of urgency is embodied in the
broad      areas:     (i) facilitation   –        Africa        leadership’s     collective
establishment of policy, regulatory and           commitment and determination to
institutional framework to create a               urgently mobilise and harness all
suitable environment for investment and           resources available to speed up
efficient operations; (ii) capacity               economic and social development and,
building      initiatives  to     empower         thus, eradicate poverty.
particularly         the     implementing
institutions to meet their mandates; (iii)        The main challenge therefore is to
physical or capital investment projects;          ensure     implementation        of   the
and (iv) studies to prepare new critical          programmes by establishing how this is
projects. The role of NEPAD in ensuring           going to proceed, including the
implementation of the programmes                  allocation    of     responsibilities  to
comprises the following four main areas           implementing       agencies    and    the
of intervention:                                  timeframe for implementation. These are
- Mobilising political will and actions           presented in the following sections.
    to implement reforms, including
    harmonising regulatory systems, and           2.      NEPAD INSTITUTONAL
    regional projects particularly those                  FRAMEWORK
    requiring pooling of resources of
    countries concerned and those where           The first challenge concerns the
    some sovereignty needs to be ceded            institutional framework and capacity for
    such as in the establishment of               planning and implementation.
    regional or sub-regional upper air
    control centres.                              Institutional Framework
- Facilitating the mobilisation of
    resources, particularly financing, for        The individual countries constitute the
    implementation of the programmes.             nuclei of all programmes and
- Coordination and facilitating sharing           implementation actions. Central actors at
    and exchange of experiences and               this level are the governments, acting
    good practices among the principal            through their relevant departments or
    implementation agencies including             designated     agencies.    They      are
    countries, RECs and specialised               responsible for mobilising civil society
    agencies.                                     and the private sector to participate and
- Peer          review     to      monitor        see NEPAD as relevant to their effort
    implementation and identify any               against poverty. These three parties –

government, civil society and private             institutional framework of the AU when
sector – are expected to internalise the          established.
NEPAD       programmes       in     their
development strategies such as the                NEPAD and RECs have designated or
PRSPs.                                            established specialised institutions to
                                                  assist in the development of specific
The RECs as building blocks of the                initiatives or programmes. These include
OAU/AU, the parent body of the                    the AfDB, ECA, sub-regional and
NEPAD initiative, form the sub-regional           national       development     financing
level planning, coordination and                  institutions,    the   Africa     Energy
monitoring the integration process. As            Commission, the various water basin
the owner and executing agencies, the             organisations, RASCOM and UN
RECs       will   have    the    primary          technical organisations such as IMO,
responsibility     of    seeking      full        ICAO and ITU.
participation of all stakeholders in the
planning,         development        and          NEPAD will use the existing
implementation stages of their respective         institutional framework to implement the
projects.     The     RECs      comprise          short-term infrastructure programme,
intergovernmental institutions, working           however, better coordination of the
with associations or other sub-regional           various implementing institutions will be
organisations representing civil society          instituted so as to avoid duplication and,
and the private sector operating in               hence, wastage of resources.
infrastructure and provision of related
services.                                         The OAU/AU has identified a need to
                                                  rationalise the functions of some of the
The RECs operate through their                    institutions to optimise the use of
secretariats, commissions or technical            available resources. This is particularly
units to coordinate and facilitate                so at sub-regional level, where there is a
development and implementation of                 proliferation of RECs and specialised
programmes.                                       agencies. One way to deal with this
                                                  problem would be the designation, by
The OAU/AU is the apex body at                    the sub-regions concerned, of major
continental level. For NEPAD, the                 RECs        to    coordinate      specific
OAU/AU has designated special                     programmes, on the basis of relative
committees, the Steering Committee                strengths, mandates and ability to deliver
(SC) and Heads of State Implementation            the expected outputs and results. West
Committee (HSIC), to drive the process.           Africa has recently done so by
The partnership at this level would               designating ECOWAS as its coordinator
benefit greatly from a stronger                   of the NEPAD programme. In the case
interaction of the Government leaders             of infrastructure, the institutional and
and officials with the African business           implementation framework will be
leaders and representatives of civil              further examined in the medium-long
society. An interim secretariat currently         term perspectives study.
coordinates the NEPAD programme.
This function will in future be
undertaken within the permanent

Institutional Capacity                            Securing Endorsement of the Short-
                                                  Term Programme
Many key institutions, especially their
operational units, the secretariats,              Among the major activities to be
technical units or departments, are               undertaken is consultation with RECs
severely constrained in financial and             and other designated agencies, who are
human resources, particularly for taking          the originators of most of the
the needed many quick actions. To begin           programmes and projects included in the
with, the NEPAD interim secretariat,              proposed       short-term     plan.   This
and later its successor within the AU             consultation will provide an initial
framework, will require enhanced                  opportunity to secure buy-in of these
financial and human resources capacity            organisations, which is critical for
for coordinating the infrastructure               successful implementation of the
programme. Similarly, the RECs and                programme. The consultation will also
other implementing agencies as well as            assist to refine some of the programmes
countries also need an increase in                that could not be fully developed. In
resources.                                        addition, the consultation will provide an
                                                  opportunity to clarify the role of NEPAD
Empowering these critical operational             as a facilitator and not a financier or the
units will require dedicated financial            owner or sponsor of developments
support to facilitate quick responses to          within the jurisdiction of a REC’s
emerging needs. While Africa will need            initiated projects. It is proposed that the
to harness and better manage its                  consultation be held as soon as possible
resources     for    capacity    building,        but before the forthcoming OAU/AU
assistance      from      NEPAD        and        Summit.
development partners will be critical.
Such support would in particular aim at           Mobilising RECs and Implementation
developing Africa’s capacity to sustain           Agencies
its key institutions in the long term. An
example of the type of support that will          The first activity will be to determine
be needed is the proposal to establish a          and mobilise financial and human
Transport Reform and Integration                  resources          for         coordinating
Support Facility for Africa (TRIFSA).             implementation of the programme. The
Such an initiative could be extended to           main target initially will be to ensure
other infrastructure sub-sectors or indeed        that the NEPAD interim secretariat has
other sectors.                                    the capacity or is able to get assistance to
                                                  kick-start and drive the implementation
3.     NEXT STEPS                                 process.

The action steps envisaged are classified
into six thematic areas (Table 7.1). A
brief overview of main aspects of each
theme is presented in the following

Table 7.3 Implementation Actions and Time Schedule

                                                                                                                   Period in Year and Quarters
                                Action Item                                      Final Date      2002       2003             2004            2005           2005         Responsible
                                                                                                2 3 4   1   2 3    4 1 2 3 4 1 2 3                  4   1   2 3    4      Institution
     V.           Endorsement of Short-term Programme & TORs
                  for Long-term Study
1. Printing and submission to NEPAD Secretariat                                  31.05.02                                                                              AfDB
2. Presentation and endorsement by the SC and HSIC                               10.06.02                                                                              Secretariat, AfDB
3. Consultation with G8                                                          30.06.02                                                                              SC
4. Consultation with RECs and other key implementing agencies                    06.07.02                                                                              Secretariat, AfDB
5. Consideration and endorsement by the OAU/AU Summit                            10.07.02                                                                              SC, HSIC
Mobilising RECs & Other Implementing Agencies
1. Preparation of sub-sectoral implementation guidelines                         20.08.02                                                                              Secretariat , AfDB
2. Disseminate short-term programme report & implementation guidelines           31.08.02                                                                              Secretariat, AfDB
3. Establish benchmarks and targets for sub-sectoral programmes                  30.11.02                                                                              RECs, Secretariat
4. Preparation of sub-regional implementation action plans& timetable            30.11.02                                                                              RECs
5. Discuss with RECs & compile coordinated action plan & timetable               15.12.02                                                                              Secretariat, AfDB
Mobilising Finance
1. Consultation with G8 through SC & other meetings                              Continuous                                                                            SC, HSIC
2. Organise road shows to seek finance from prospective financiers               Intermittent                                                                          SC, HSIC
3. Organise sub-region and international sectoral investment forums              Intermittent                                                                          RECs
4. Establishing TRISFA                                                           30.11.02                                                                              DFIs, AfDB, Secr.
Implement the NEPAD Infrastructure Short-term Action Plan
1. Facilitation/sector governance: (policy, regulation, institutional reforms)   31.12.05                                                                              Countries, RECs
2. Establishing/strengthening institutional capacity (regulatory, etc)           31.12.05                                                                              Countries, RECs
3. Implementing physical or capital projects                                     Continuous                                                                            RECS/ Agencies
4. Carrying out identified studies to prepare new projects                       30.6.04                                                                               RECs/Agencies
     VI.          Sector Monitoring and Peer Review Mechanism
1. Establish sub-sectoral & sectoral Peer review committee                       30.09.02                                                                              SC
2. Establish indicators to evaluate implementation progress & impact             30.11.02                                                                              Secretariat, AfDB
3. Establish knowledge sharing and experience exchange mechanism                 30.11.02                                                                              Secretariat, AfDB
4. Production of half-year & yearly progress reports and indicators              Periodic                                                                              RECs
5. Conducting sector Peer reviews and reporting to NEPAD Secr.                   Periodic                                                                              Secretariat
6. Taking needed action by SC & HSIC (arising from Peer review)                  Continuous                                                                            SC, HSIC
                      Long-term Perspectives Study
1. Procure consultants                                                           31.12.02                                                                              Secretariat, AfDB
2. Carry out study                                                               30.06.04                                                                              Consultant, AfDB
3. Secure endorsement of recommendations on long-term programme                  30.09.04                                                                              Secretariat, AfDB
4. Implement the long-term programmes                                            Continuous                                                                            Countries/Agenci

After endorsement of the programme by               Mobilising Finance.
the OAU/AU, the RECs and other
designated implementing agencies will be            The responsibility to mobilise finance will
given implementation guidelines and                 be shared between countries, RECs and the
instructions. The main aspect of the                NEPAD apex institutions. They will set in
guidelines will be a list of the programmes         motion a fund raising machinery, which
and projects included in the short-term             will include intermittent road shows, round
plan and the allocation of responsibilities.        tables or investment forums to seek
Each REC will coordinate the elaboration            financial commitment by prospective
of targets and key activities and time              financiers (bilateral, multilaterals and
schedules for implementing programmes               private sector). A critical factor in these
or projects it is involved with. For                consultations will be to listen to and
example, in case of facilitation typical            address the concerns and needs of
targets will be completion of the policy,           prospective financiers.
regulatory and institutional reform in the
telecommunications sector by end of 2005,           Implementing NEPAD Infrastructure
or reducing procedures related delays or            Short-term Action Plan
transit times along trade corridors by 50%
(from e.g. 16 days to 8 days) within two            The timing of implementation of the short-
years.                                              term programmes depends on the
                                                    availability of funds, speed of preparing
The interim NEPAD Secretariat, or an                projects and capacity of the implementing
agency it will designate to assist in               institution. The proposed timing of
coordination,    will   synthesise   the            implementation of the main components of
submissions of the RECs in order to                 the programme will thus be reviewed,
harmonise them. The comparative analysis            according to availability of funds.
of the common programmes will help to
identify the planned extreme slow                   Establishing a Peer          review    and
implementation. NEPAD will then draw                monitoring system
the attention and engage the RECs and
countries concerned on the need to speed            The first action will be to appoint a sector
up the process.                                     Peer Review Committee, which will work
                                                    in conjunction with the overall NEPAD
The process will also facilitate the                Peer review framework. The appointment
determination of the need for and provide           of the Committee members will be based
any assistance that may be required from            on criteria to be set for the overall
NEPAD. Furthermore, the benchmarks,                 framework. Nonetheless, the committee
targets and timetable will be critical in           should comprise members and be in a
facilitating the monitoring and peer review         position to act independently, without
process. They will provide a basis for              undue influence from any interested party
strengthening accountability, particularly          in governments, RECs or other
by RECs and other coordinating                      implementing agencies. The sector
institutions, which will be able to enter           committee should be in place by end of
into result-based contract with the                 September to assist in the determination of
executives of key implementing agencies             the indicators to be used in the monitoring
as well as easily monitor them.                     process.

                                                    Secondly, among the indicators to be
                                                    developed for monitoring progress and
                                                    impact of implementation of the

programmes, will be those linking this             intensive activities, the best option is to
progress to the overall NEPAD goal of              have a trust fund that will facilitate
poverty eradication and economic                   addressing the quick and critical actions
development. Thirdly, NEPAD will                   needed particularly in dealing with
establish a forum for knowledge sharing            governance or facilitation matters, which
and exchange of experiences in order to            will, in turn, open doors for increased flow
replicate successful cases elsewhere, and          of finance.
also avoid some of the problems
encountered or mistakes made.                      Third is the financial risk that adequate
                                                   funds will not be available to facilitate
Long-Term Infrastructure Perspective               timely implementation of projects.
Study                                              NEPAD will mitigate this risk by
                                                   addressing matters that may lead to the
The undertaking of the long-term                   delay of flow of funds from both public
perspective study is planned to overlap            and private sector sources. NEPAD will
with the implementation of the short-term          also institute a better Africa marketing
programme. The study process will thus             strategy and deep engagement of the
also provide an opportunity to review and          prospective     financiers.    Furthermore,
refine elements of the short-term plan,            NEPAD will mobilise as much finance as
including the criteria for selection of            possible     from      internal     sources.
projects, benchmarks and targets.

4.     RISKS

First, there is a political risk that some
countries may not pursue or delay
implementation of NEPAD endorsed
programmes and action plans on key
issues that will unlock any barriers to the
flow of investment and financial assistance
into infrastructure, from both within and
outside Africa. Such issues concern in
particular the establishment of good sector
governance and countries not co-operating
to undertake joint projects. NEPAD will
mitigate this risk through intensive
engagement and actions to be determined
within the framework of Peer review.

Second is an institutional risk that the
institutional framework may lead to delays
in project implementation as a result of
elongated process, or that the capacity
constraints will not be solved. The
interfacing of all institutions concerned
with the planning and implementation of
NEPAD will be clearly streamlined to
avoid additional layers of bureaucracy.
The capacity constraint will also require
specific attention. At this early stage of

               APPENDIX 1

              CONCEPT NOTE

     Medium-Long Term Action Plan for               participating actively in the world
          Africa’s Infrastructure                   economy and politics. Envisaged as a
      Concept Note and Study Outline                long-term vision for an African-owned and
                                                    African-led       development       program,
1.       INTRODUCTION                               NEPAD aims at giving impetus to Africa’s
                                                    development by bridging existing gaps in
This document outlines the objectives, the          priority sectors including infrastructure.
products and the organization of the study
mandated under NEPAD on the long-term               Infrastructure, defined as energy, water
perspectives and programs for the                   and sanitation, transport and, information
accelerated development of infrastructure           and communication technologies (ICT),
services and facilities in Africa.                  stands at the heart of NEPAD objectives of
                                                    poverty reduction through growth and full
The proposed structure will accommodate             participation in the world economy. The
each of the main sectors: transport, water          development of regional infrastructure is
and sanitation, energy and ICT                      important because African economies are
(Information       and     Communication            typically too small to generate the
Technologies) and, at the same time,                economies of scale that can be found in
provide the coherence and the coordination          larger markets. Infrastructure development
necessary to prepare synthesis and deal             is a driver for regional integration and
with crosscutting themes. The four sectoral         trade       competitiveness.       Regional
components as well as the synthesis and             collaboration is, in turn, a necessary basis
the review crosscutting issues, will                for the development of infrastructure to
progress along a common schedule and                allow economies of scale through pooling
will share a common database.                       and joint facilities, and to overcome the
                                                    limitation of small markets and enhance
The outlined approach is designed to                competition. The potential for promoting
ensure adequate coordination on process as          regional integration through the sharing of
well as on substance, in the relationship           the     production,     management      and
with the RECs. The common schedule will             operations of infrastructure facilities and
allow the preparation of a synthesis as well        through hubs, development corridors or
as the review of crosscutting themes.               poles is considerable.

Finally the note indicates options for              In order to initiate early action and set the
regrouping the various contracts and for            foundation for a sustained approach
overseeing the study. It provides an order          towards bridging the infrastructure gap,
of magnitude of the inputs required, their          the NEPAD Steering Committee (Benoni,
costs and the overall budget including              January 2002) adopted a two-pronged
agency costs.                                       approach including: (i) a short term action
                                                    plan to fast track the implementation of
2. BACKGROUND                                       projects and programs already identified
                                                    by various organizations; and (ii) a
The New Partnership for Africa’s                    medium-long term action plan that would
Development (NEPAD) is a pledge by                  articulate strategies, prioritize programs
African leaders, based on a common vision           and forms of partnerships that can best
and a shared conviction, that they have a           promote economic integration and support
pressing duty to eradicate poverty and to           trade development.
place their countries, both individually and
collectively, on a path of sustainable              The guidance for the Short-Term Action
growth      and     development,       while        Plan was that it should focus on projects or

initiatives that are well prepared have a            Africa, private sector financing domestic
regional character, stand to benefit from            and external will be required to
NEPAD intervention at the political level;           complement public resources and external
offer solution to regional policy issues;            aid.
and, involve the private sector. The short-
term action plan was prepared in light of            NEPAD broad objectives for infrastructure
these criteria over the period April-May             development are: to improve access to and
2002 for submission to the June 2002                 affordability      and     reliability     of
meeting of the NEPAD Steering                        infrastructure services for both firms and
Committee. The short-term action plan                households;      to    enhance       regional
does not contain all the projects proposed           co-operation and trade through the
by the RECs, nor does it achieve regional            development         of       inter-connected
balance. It is to be considered as the first         infrastructure and harmonized transit
stage of a rolling action plan that will be          procedures; to increase the size of African
periodically updated.                                markets through regional integration; to
                                                     increase     financial    investments      in
The preparation of the Short-Term Action             infrastructure by lowering risks facing
Plan has shown the need for a                        private investors, especially in the area of
programmatic framework to set objectives             policy and regulatory frameworks; and to
against      benchmarks       and      define        build adequate knowledge and skills in
institutional strategies and policies. Many          technology and engineering with a view to
of the interventions retained under the              installing, operating and maintaining
short-term action plan are in fact elements          "hard" infrastructure networks in Africa.
of broader programs and comprise a
combination       of    policy    measures,          NEPAD infrastructure programs will be
investment and capacity building.                    guided by the International Development
                                                     Goals, in particular reducing the
The preparation has also showed the                  proportion of people living in extreme
potential value of exchanges between the             poverty by half between 1990 and 2015.
RECs to foster the dissemination of good             Sectoral components will take into account
practices and innovations. The Medium-               vision statements specific to their sector;
Long Term Action Plan (MLTAP) would                  e.g. Africa Water Vision 2025.
complement and supplement efforts
undertaken within the Short-Term Action              Regional Focus
                                                     The individual countries constitute the
3.   INFRASTRUCTURE                                  nuclei of all programs and implementation
     DEVELOPMENT IN THE                              actions. NEPAD objectives of improved
     CONTEXT OF NEPAD                                access, quality and affordability for
                                                     infrastructure services, will be internalised
Objectives                                           in the development programs of individual
                                                     countries, in particular in their PRSP
Bridging the infrastructure gap has been             (Poverty Reduction Strategy).
identified as one of the main priorities of
NEPAD. NEPAD recognizes that the                     In the case of actions that are essentially
structural gap in infrastructure constitutes         country-based, e.g. rural roads, water
a serious handicap to economic growth                supply and power services, etc. NEPAD’s
and      poverty    reduction.     NEPAD             role will be to promote knowledge sharing
infrastructure program also acknowledges             and the dissemination of good practices.
that if infrastructure is to improve in              NEPAD will foster benchmarking and the

definition of targets in line with medium             and accelerate the pace of reforms needed
and long-term goals (e.g. service coverage            to create the enabling environment for
for access to safe water supply and annual            stepping up the flow of the investments.
increase in connections). NEPAD will                  As governments withdraw from direct
support related regional capacity building            provision of services, they face the
initiatives.                                          challenge of establishing policies and
                                                      regulatory frameworks that foster level-
NEPAD projects will focus specifically on             playing competition and support the
areas for which regional cooperation and              emergence of regional markets while
joint action are critical. This concerns: a)          ensuring that the end users obtain the
actions that are the responsibility of a              expected benefits. Issues of sector
specific country (like maintaining roads              governance and regulation are of concern
serving regional transport corridors or               to all infrastructure sectors and the study
providing efficient transit through ports, or         will address them as a crosscutting theme.
protecting a trans-boundary river from
pollution); b) actions that depend on                 All infrastructure sectors face a financing
coordinated interventions by a group of               gap. The investments necessary to update
countries (e.g. air transport liberalization),        and expand capacity are considerably
and c) actions that are the responsibility of         above current level of expenditure. The
regional entities established jointly by a            MLTAP for each sector will have to
group of countries (e.g. upper space                  develop a financing strategy considering
control centers)                                      users charges and tariffs, the leveraging of
                                                      limited public funds and the funding of
The typology outlined above will help to              programs targeted toward services for the
define the focus of the programs to be                poor. In addition, the study will address
reviewed and developed under the                      financing as a crosscutting theme in order
MLTAP.                                                to distill common principles and formulate
                                                      recommendations       to     facilitate  the
Crosscutting Themes                                   mobilization of private financing.

Underpinning NEPAD’s infrastructure                   Measures to overcome the capacity gap
program is the recognition that the                   will be part of each sector plans. In
infrastructure gap is as much a policy and            addition the study will address capacity
capacity gap as it is an investment gap.              building as a crosscutting themes focusing
While the situation of infrastructure                 on good practices and policies concerning:
services is still typically one of lagging            (i) knowledge sharing and networking; (ii)
coverage, poor maintenance and weak                   regional training centers; and,         (iii)
finance, many countries have been able to             increased involvement universities and
upgrade and expand their infrastructure               research organizations in policy work.
assets and to improve services through a              Only a few sectors have successful
combination       of    policy    changes,            membership organizations, e.g. water,
institutional reforms and investments.                ports. As a rule sector professionals have
Over the last decade, the movement of                 limited access to knowledge networks. The
reform to decentralize and to move away               experience gained by African countries
from the public sector monopoly model                 over the last ten years provides a wealth of
has gained momentum in all infrastructure             lessons and good practices. The capacity to
sectors.                                              create and disseminate knowledge faster
                                                      and more broadly will be a powerful
NEPAD role will be to help develop a                  catalyst    for     NEPAD        goals    in
common vision for infrastructure policies             infrastructure.

4. THE MEDIUM-LONG TERM                             b) To develop for each sub-region and
   ACTION PLAN                                         each sector, medium-term programs to
                                                       implement the sector plans/roadmaps
OBJECTIVES                                             with measures in the three areas of
                                                       sector policies and institutional
The goal of the Medium-Long Term                       structure, investments and sector
Action Plan (MLTAP) is the steady and                  financing, and capacity building. These
sustained development of infrastructure                programs will be developed at the level
and related services on the continent. The             of sub-regions or the relevant regional
broad objective of the MLTAP process                   groupings for pooled capacity and joint
will be to foster the adoption of a coherent           actions. The medium-term programs
set of concepts and indicators as well as a            will pay particular attention to the
common planning framework across the                   implementation of the Short-Term
sub-regions. The MLTAP process will                    Action Plan and related follow-up
allow cross-fertilization between RECs                 measures.
and across sectors. The MLTAP will deal
with three inter-related areas of: (i)                 The medium-term programs will be
policies, regulation and institutional                 developed jointly with the relevant
structures; (ii) investment requirements               RECs. They will be based on existing
and financing; and, (iii) capacity                     programs, which will be reviewed and
utilization and development as well as                 supplemented as needed in light of the
knowledge sharing and networking.                      sector strategy and targets. They will
                                                       include the identification of relevant
The specific objectives of the MLTAP                   sectoral programs in the countries
will be:                                               concerned       (e.g.     road   sector
                                                       development programs) as well as
At the sub-regional level:                             large projects (e.g. hydropower
                                                       generation) and sub-regional capacity
a) To develop for each sub-regions and                 building initiatives. The medium term
   sector or sub-sectors, medium to long               programs will also review institutional
   term plans to attain specific targets               arrangements for follow-up and
   concerning: coverage, quality and                   recommend          related     measures
   capacity. The targets will assume                   concerning the capacity of the RECs
   reasonable progress in alleviating                  and the governance of the sub-regional
   policy and capacity constraints based               programs.
   on good practices emerging from the
   experience of African countries. The                 At the regional Africa-wide level
   plans will also take into account the
   macro-economic          and        fiscal        a) To prepare Africa-wide sectoral
   frameworks of each country. The                     overviews for each sector on the basis
   plans/roadmaps will provide an                      of the sub-regional programs. The
   estimate of aggregate levels of                     sectoral overviews will aggregate sub-
   investment and test financing strategies            regional long-term plans and programs
   with varying level of internal cash                 and provide a synthesis of common
   generation, private financing and                   directions and good practices and
   public funding (domestic and aid).                  innovations especially concerning
   The strategies will also deal with the              financing and institutional approaches.
   enabling factors to mobilize resource               The sectoral overviews will also
   and attract investors.                              review continent-wide sectoral issues

   related in particular to trade facilitation        Action plan as well as the mandates of the
   and international conventions and                  various RECs and the scope of their
   protocols.                                         programs will also guide the definition of
                                                      the scope of the study.
b) To prepare issues/options papers on
   three cut-crossing themes: governance              Guiding principles
   and regulation, financing and pricing,
   capacity building and knowledge                    The study has been designed to reconcile
   networks. The underlying rationale for             two basic requirements:
   these papers is outlined above. Their
   focus and coverage will be detailed in             a) Coherence between RECs and between
   separate TORs.                                        sectors to allow an overview and foster
                                                         cross-fertilization. This will be
   The sectoral overviews will serve as a                achieved       by     using    common
   base to prepare a synthesis, the Africa               frameworks        and     methodologies
   Infrastructure Plan, aggregating the                  (medium-long term targets, strategies,
   outcome of the sectoral overviews and                 medium term programs), and through
   the key findings of the crosscutting                  the crosscutting thematic papers. One
   issues/options papers. The purpose of                 of the outcomes of the study will be
   the Africa-wide synthesis is: (i) to                  the development of evaluation
   indicate stretched but achievable                     frameworks for prioritizing regional
   targets      for     service      access,             projects.
   affordability/cost and quality; (ii) to
   map out what it will take to get there in          b) Customization of products to best
   terms of policies, investment and                     serve the needs of sub-regional
   capacity. The Africa-wide synthesis                   audiences, i.e. the RECs and sectoral
   will also review support measures and                 agencies. The sub-regional products
   initiatives to speed-up implementation                will be adjusted to the specific needs of
   and facilitate coordination among                     the RECs to fit in their planning cycle.
   NEPAD partners.                                       In some cases, the study will provide
                                                         them with the opportunity to develop a
c) To establish an Africa Infrastructure                 programming framework for their
   Data Base and develop a plan for its                  activities. In other cases, e.g. SADC
   upkeep.                                               and ECOWAS, the study will consist
                                                         of a guided review and will focus on
Time Frame and Scope                                     areas in need of attention (e.g. criteria
                                                         for regional investment, knowledge
The proposed time frames would be 2015                   management).
for medium term targets and programs and
2025 for the long-term targets and plans.             The study will foster exchanges of
The plans and programs that will be the               experience and good practice between
object of the MLTAP will be focused on                RECs and across sectors. The study will
infrastructure services and assets that are           interact first with the RECs, which have
regional in their nature or in their impact.          the longest experience; i.e. East and
This implies (i) infrastructure services and          Southern Africa (ESA) and ECOWAS.
assets    that    depend      on    regional
collaboration and joint action; and, (ii)             Organization and Methodology
infrastructure services and assets needed to
promote economic integration and support              The study will progress through the
trade competitiveness. The Short-Term                 following phases:

                                                       indicate information gaps and case
Phase 1: Planning and development of                   studies to be prepared during Phase 2.
assessment frameworks (Month 1 to 3).               f) Partnership agreements with regional
                                                       programs (WUP, AWRMF, CAPNET,
a) Detailed planning of work program                   SSATP, professional associations,
   and preliminary assessment of RECs                  ISTED, SITRASS etc.).
   and        technical partners;
b) Compilation of databases covering                Products of Phase 1.
   status and trends:
   - common elements: population,                   Phase 1 would lead to the preparation of
       urbanization (cities, small towns,           the Inception Report with sectoral
       rural). Characteristics of the               appendix (month 3). The Inception report
       economy, GDP, trade, public                  will be reviewed at a workshop with the
       finance,     investment,     PRSP’s          RECs and regional technical organizations.
       (status, coverage)                           The outcome of the workshop will be: (i)
   - sectoral: coverage, density, stock,            agreed assessment frameworks and
       access,     quality,     investment,         indicators; (ii) agreed schedule of visits for
       policies, available performance              the    five      sub-regions;   and,      (iii)
       indicators,           benchmarking           customization of the work programs to be
       indicators for NEPAD Short-term              carried with the respective RECs and
       Action Plan                                  technical organizations concerned.

c) Development          of     assessment           Phase 2. Preparation of sub-regional
   frameworks       and     benchmarking            plans and programs (month 4 to 13).
   indicators: i) for RECs programs,
   policy, capacity, good practices; ii) for        -   Assessments of RECs and regional
   regional technical organizations; iii)               technical organizations
   for sectors in countries: covering key           -   Review of the existing regional
   elements of policies and institutional               programs of the RECs and country
   structures based on relevant policy                  programs        against      assessment
   review and NEPAD the short-term                      frameworks and NEPAD Short-Term
   action plan, investment/financing,                   Action Plan.
   benchmarking, coverage/cost/quality              -   Definition of performance and
   of services; and iv) for corridors or                development targets and preparation of
   shared      systems:    benchmarking,                long-term plans/roadmap to reach them
   coverage/cost/quality of services,                   covering policy/institutional aspects,
   facilitation programs, and institutional             investments and capacity building.
   arrangements.                                        Long-term plans developed iteratively
                                                        to take into account sector and country
d) Initial definition of long and medium                constraints.
   term targets.                                    -   Development of medium term
                                                        programs including actions at country
e) First drafts of issues/options papers on             and sub-regional levels.
   crosscutting themes: governance and              -   Preparation     of     medium      term
   regulation, financing and pricing,                   institutional    plans    for    RECs:
   capacity building and knowledge                      institutional mandate/oversight (private
   networking. This initial draft will                  sector stakeholders), capacity building,
   identify key issues to be reviewed at                financing.
   the sub-regional level and will also

Phase 2 would cover five sub-regions and                              Phase 3. Synthesis and Review (Month
would unfold over three quarters in line                              14 to 18)
with the following schematic schedule.
The last quarter will include a review of                             -    Preparation of Africa-wide (regional)
the sectoral outcome with the professional                                 sectoral overviews on the basis of the
and technical organizations (Ports                                         long-term      plans/roadmaps     and
Associations, AFREC, UAWD, Railways                                        medium-term programs of the sub-
etc,)                                                                      regions.
Study Phases                         Sub-regions                                           2003               2004
                                                                                1      2          3   4   5          6
Phase 1. Data base, assessment frameworks, planning
Inception report
Workshop with REC's and tech, agencies
Phase 2. Sub-regional plans/roadmaps and medium-term   ESA
programs for sub-regions by RECs and regional          ECOWAS
organization                                           UAM-N Africa
                                                       Central Africa
                                                       Reg tech. organisation
Phase 3: Synthesis and cross-cutting themes
-     Africa Infrastructure Plan
-     Africa Infrastructure Outlook
-     Issue/option papers on crosscutting themes
Final documents

Products of Phase 2.
At end of Phase 2 each sub-region will                                -    Preparation of Issue/Option papers on
hold a workshop with the relevant RECs                                     crosscutting themes, namely, sector
and technical agencies with the                                            governance and regulatory functions,
participation of country representatives to                                pricing of financing of infrastructure
review the draft of: a) the long-term plans                                for poverty reduction, and capacity
and roadmaps; b) the medium term-                                          building and knowledge networks for
programs (policy, investment, capacity);                                   excellence and innovations in African
and, c) the medium-term institutional plans                                institutions.
for the RECs and other regional agencies.
                                                                      -    Preparation of the Africa Infrastructure
One representative of other neighbouring                                   Plan summarizing sectoral overviews.
RECs would be invited to the sub-regional                                  The overall program will analyse the
workshop. The work with each REC (or                                       aggregates resulting from the sectoral
sub-region) would last three months at the                                 overviews;      assess      implications
maximum in line with the work program                                      concerning overall funding and
agreed at the launch workshop. During the                                  policies for regional, bilateral and
fieldwork with the RECs (or sub-regional                                   multilateral     institutions,     make
entities) the study team will assess data                                  recommendation        concerning     aid
base capacity for future networking into                                   coordination and leveraging of public
the NEPAD Infrastructure Database                                          funds to mobilize private finance, and
Network.                                                                   identify policy and institutional gaps
                                                                           and propose options

                                                                      -    Preparation of the first edition of
                                                                           Africa Infrastructure Outlook based on

-   Recommendation for upkeep of the                     The Coordination Unit will: i) provide
    Africa Infrastructure Database.                      support to the SC and follow-up on its
                                                         decisions; ii) ensure the operational liaison
The Issue/Option papers would be based                   with the RECs; and iii) administer the
on cases reviewed during the work with                   consultants contracts
RECs- as well as consultations with
learned    persons     and   knowledge                   The quality assurance would be provided
management specialists.                                  by an advisory panel that would: i) review
                                                         the TORs and evaluate the consultant
Phase 3 would unfold as follows: two                     proposals; ii) review products at critical
months (month 15 and 16) for preparing                   juncture: inception report, RECs programs
synthesis reports, one month (17) for                    and draft final report; and iii) act as
review and workshop(s) and one month                     resource persons for the secretariat and the
(18) for preparing the final reports.                    SC and handle special assignments related
                                                         to methodology or special issues.
Implementation and Management
                                                         Coordination with other studies
Teams of consultants will carry out the
study. One firm will be assigned to deal                 The MLTAP would have to be closely
with overall coordination, and crosscutting              coordinated with other similar parallel
issues and the database. Other firms would               efforts in particular: i) The Euro Med
deal with the various sectors: transport,                Transport Study covering the Maghreb and
water, energy and ICT. Specific TOR’s                    the Makrech managed by the EC; ii) The
will be prepared for each sector and for the             study concerning the updating of the
overall coordination and crosscutting and                Trans-African Highway Network funded
synthesis tasks. The option of regrouping                and managed by the AfDB. The TORs
sectoral assignments under a common                      would be adjusted to ensure that the
contract will be considered. The sectoral                NEPAD MLTAP takes their output into
teams will be lead by senior experts with                account.
strong experience in strategy formulation
and policy assessments. They will also                   Cost Estimates
include: i) financial/institutional specialists
with experience in the relevant sector; and             MLTAP Components                   Expert      Estimated
                                                                                           Months        Cost
ii) planners/engineers as well as more                                                 Long   Short    US$ (‘000)
specialized experts as needed. The                                                     Term   Term
                                                        Overall coordination,           70        25     1,400
consultant teams will not be involved in                synthesis and cross-cutting
project preparation and implementation;                 Issues and Options papers
                                                        Energy                           50      10      1,150
such requirements related to the Short-                 Water and sanitation             50      10      1,000
Term Action Plan will be met separately.                Transport                        70      20      1,350
                                                        ICT                              50      10      1,100
                                                                               Total    290      75      6,000
The study would be placed under the
oversight of a Steering Committee and a
Coordination Unit at the AfDB. The                       Study costs: The MLTAP as outlined
Steering Committee will: i) oversee the                  above     would      require    considerable
procurement and the coordination among                   expertise and travel. Its budget is estimated
the consultants and between the                          at about 365 staff months and a budget of
consultants and the RECs; ii) ensure that                US$6.0 million
quality assurance measures are in place;                 Agency costs. The coordination and the
and iii) liaise with the NEPAD partners.                 management of the MLTAP study will
                                                         require a well staffed Coordination Unit as

well as resource to establish and maintain             Next Steps
partnerships and to ensure quality                     The immediate next steps will be to
                                                       prepare coordinated TORs for the various
                                                       sectors and regroup them by contracts and
The Coordination Unit will need three                  prepare detailed budget and timetables.
staff to ensure the following functions:
                                                       Once the Steering Committee of NEPAD
                                                       have endorsed the principle of the MLTAP
-   Head of Coordination Unit: liaison                 the following steps will be pursued:
    with consultant teams, substantive
    oversight, quality assurance, liaisons
                                                       a) hold consultations with the RECs. The
    with the SC and external partners,
                                                          goal of these consultations will be to
    management of the Unit.
                                                          develop a consensus on the MLTAP
-   Regional Coordination: liaison and
                                                          and ensure ownership by the RECs.
    coordination with sub-regions and
                                                          The specific objectives will be: to seek
    regional    technical   organizations,
                                                          their comments and suggestions and
    communication, workshops.
                                                          adjust the TORs as appropriate; to
-   Project    management/administration:
                                                          gather information on existing and
    contract   administration,   financial
                                                          planned studies, databases etc; to
    management, support to Unit Head.
                                                          review tentative schedule for the
                                                          launch workshop (Phase 1) and the
The budget for the launch and
                                                          Phase 2 planning and programming
management of the study would total
                                                          exercise in each sub-region.
about US$1.05 million as follows:
                                                       b) hold consultations with NEPAD
                Agency Costs           US$                partners to seek their views and ensure
                                     (million)            appropriate coordination and identify
    Coordination Unit; Staff Cost,     0.65               opportunities for partnerships in the
    Office Support, Travel                                various sectors and for cross-cutting
    Steering Committee, Quality        0.30
    Assurance, Advisory Aervices
    Publications                       0.10            c) finalise the preparation by developing
    Total                              1.05               a financing plan for the study;
                                                          establishing the Coordination Unit;
                                                          establishing the quality assurance
Partnerships                                              group; finalising the TORs (to take
                                                          into account other studies and
One of the important steps in the further                 partnership       arrangements),      and
preparation of the MLTAP will be to                       developing a detailed procurement
explore and possibly conclude partnerships                plan and implementation program
agreements with organizations that are                    (grouping of contracts, evaluation
engaged in policy analysis, benchmarking                  criteria, coordination with other studies
and knowledge networking in Africa.                       and partnerships) etc.
These would include inter alia: a)                     d) launch the pre-qualification process
Transport sector: SITRASS, ISTED,                         (expressions of interest, evaluation)
SSATP; b) Water and sanitation: Africa
                                                       e) establish short list and invite proposals
Water     Task    Force,    UAWS-WUP,
                                                       f) evaluate proposals and select firms
AWRMF, WSP; c) Energy: AFREC;
Financing: DBSA, PPIAF; d) ICTs Sector,                g) negotiate and sign contracts
ITU, ACP, ECA, etc                                     h) launch Phase 1.

        APPENDIX 2

     MEPANDA UNCUA HYDROPOWER                                     experienced during 2001 in this country has
              PROJECT                                             resulted in a decrease in the system operating
     PROJECT ASSESSMENT REPORT                                    reserve margin from 22% in 2000 to 18% in
                                                                  2001. This challenge calls for Eskom to
1)   Introduction: Mepanda Uncua (MU)                             continue to research and generate data on a
     hydropower project will be situated in the                   variety of options, including regional power
     lower reaches of the Zambesi River about 60                  options. In 2001, Eskom's peak demand on
     km downstream from the Cahora Bassa Dam                      the integrated power system reached 30,599
     (CB) in Mozambique in Tete.                                  MW. When adding other countries, the
                                                                  Southern African Power Pool's (SAPP)
2)   Background: In order to accelerate the                       estimated annual maximum demand is
     development of the Zambesi River valley, the                 expected to reach 47,400 MW by 2010. MU
     area has been established as a special fiscal                forms part of the recommended actions in the
     and customs region with extensive                            Southern African Power Pool's (SAPP)
     exemptions from import duties and taxes for                  Integrated Electricity Plan, known as the
     activities such as production, transport, and                SAPP Pool Plan. According to most recent
     distribution of electricity.                                 estimates, existing capacity in the sub-region
                                                                  will be fully utilised by about 2007-2008.
     The Government also assures the investors the
     security and legal protection of property over               Development Strategy and Sponsor: The
     goods and rights in connection with the                      Government of Mozambique (GRM) intends
     investments made, export of foreign investors'               to award a Build, Own, Operate and Transfer
     profits and repatriation of capital upon                     (BOOT) concession to a developer through
     liquidation or sale.                                         companies established in Mozambique
                                                                  specifically for the implementation and
     The Mozambican Government Unit for                           operation of the project. The concession
     Implementation of Hydroelectric Projects                     period of the project can be expected to be 25
     (UTIP) is a governmental body reporting to                   to 30 years starting at commissioning. Two
     the Minister of Mineral Resources and Energy                 Project Companies are envisaged, one for
     (MMRE). UTIP was established in 1996 to                      generation and one for transmission. The two
     safeguard the country's interests in the                     companies can have different ownership and
     Zambesi River hydropower potential and to                    financing arrangements, but will be organised
     assist in its development. Using finance from                so that coordination of the project
     Germany, Norway and France, UTIP carried                     implementation is secured.
     out a comprehensive feasibility study of the
     various development alternatives in the lower                GRM and RSA have signed a general
     reaches of the Zambesi River downstream of                   agreement on cooperation for the project. The
     the Cahora Bassa Dam. It developed the most                  agreement secures the project open access to
     promising alternative (the MU Project) into a                transmission within RSA and a limited and
     detailed feasibility study.                                  equitable ownership in the Project Companies
                                                                  by each of the two governments. This
3)   Need for the Project: The non-industrial                     Agreement serves to underscore the
     electricity demand of Mozambique has                         commitment by each of the two governments.
     increased substantially in recent years, and is              In terms of this agreement, 10% of the shares
     forecast to require some 400 to 450 MW at an                 of the Project Companies are reserved for
     average load factor of 0.62 by the year 2010.                each of the two governments. Another 20%
     With the MOZAL Aluminium smelter and                         are intended to be taken by private and/or
     other major industrial projects, the total                   public investors of the two countries. This
     demand of the country is forecast to reach                   concerns in particular the electricity utilities
     some 1,700 MW in 2010.                                       Eskom of RSA and Electricidade de
                                                                  Mozambique (EdM) of Mozambique. For the
     The main market for electricity from the                     remaining 60% share of the Project
     project, however, will be in the Republic of                 Companies, an international investor, who has
     South Africa (RSA). In RSA, with moderate                    the necessary financial strength, project
     growth in demand for electricity and a                       management skills, and proven hydropower
     moderate reserve margin, new supply-side                     experience, will be identified and engaged.
     management options are required for
     commercial service from 2006 and new                    4)   Project Objectives: The hydropower sector is
     demand-side     options     have    to    be                 an important part of the Mozambican
     commissioned. The higher energy demand                       economy and the GRM attaches great

     importance to the involvement of foreign                             industry, the intention is to implement it
     investment in the development and operation                          through a privately funded BOOT scheme. It
     of new hydropower plants. The objectives of                          is intended to finance the project through
     the project are to: (a) generate revenue to                          bank debt and Export Credit Agencies (ECAs)
     Mozambique and create employment through                             facilities to be raised by various shareholders
     the development of the country’s hydropower                          of the Project Companies.
     resources which would be invested in projects
     with a poverty reduction dimension, and (b)                     7)   Feasibility of the Project: In 1999, UTIP
     promote regional cooperation through power                           commissioned the joint venture Lahmeyer
     exchange with countries in the sub-region.                           International-Electricité de France-Knight
                                                                          Piésold to carry out a comprehensive study of
5)   Project Description: Following studies, a                            certain promising development options in the
     staged development of the hydropower                                 Zambesi River downstream of Cahora Bassa.
     potential in the Mozambican section of the                           The study has been reviewed by UTIP's in-
     Zambesi has been defined. The first stage of                         house consultants, including a Panel of
     this development concerns the MU                                     Experts contracted by UTIP.
     Hydropower Project. Subsequent stages could
     include Cahora Bassa North (CBN) and                                 The project has been shown to be technically
     expansion of MU with Boroma dam and                                  viable. The study included extensive
     power plant downstream for re-regulation.                            geological investigations such as drilling,
     The installed capacity of the plant will be                          water pressure tests, and laboratory tests. The
     1,300 MW (4x325 MW vertical Francis                                  conclusions of all these investigations were
     turbines).                                                           that the geological conditions are excellent.
                                                                          Hydrological data from 1907 through 1999
     Energy generated by the new power plant is to                        were used to determine the main parameters
     be supplied to the 400 kV substation near                            of the project, such as flood levels, firm
     Maputo (about 1,450 km of transmission).                             power, etc. Since the project will be part of a
     Due to a number of industrial projects that are                      major interconnection grid, 95% reliability
     envisaged in various parts of Mozambique, it                         was adopted for energy calculations.
     is too early to predict the grid configuration
     encountered in 8 to 10 years time. The                               Alternative solutions of transmitting power
     feasibility studies conclude that the                                from the MU plant have been studied,
     recommended transmission solution for the                            including upgrading of the existing HVDC
     first stage development of the project                               line from Cahora Bassa. The transmission
     comprises two single circuit 400 kV AC                               solution studied will create a backbone of the
     overhead transmission lines between MU and                           integrated power network in Mozambique and
     the 400 kV substation near Maputo (about                             provides the added advantage of facilitating
     1,540 km of transmission). At the same time,                         electrification of Mozambique without
     MU power plant should be linked to Songo                             significant additional cost.
     switchyard (Cahora Bassa) through two 60
     km single circuit lines at 400 kV. The link                          The MU Project is a highly attractive
     with Songo will facilitate, inter alia, power                        financial proposition. Based on a best guess
     flow from MU to Zimbabwe.                                            of future values for key input variables, the
                                                                          so-called base case set of assumptions in the
6)   Investment Cost and Sources of Financing:                            financial and economic analyses, the
     Estimated cost including physical and price                          Financial Internal Rate of Return (FIRR) and
     contingencies but excluding Interest During                          Economic Internal Rate of Return (EIRR) are
     Construction (IDC) in 2001 is given below.                           calculated at 17% and 15.3 % at discount rate
                                                                          of 12%.
     Dam and power plant                 US$767million
     Transmission lines                  US$853million                    Quantifiable environmental costs associated
     Environmental management            US$15 million                    with the project have been included both in
     Total                               US$1.6 billion                   the economic and the financial assessment,
                                                                          except impacts downstream of the dam. The
     [Totalcapital cost of generation plant, without IDC, is              potential environmental benefits and revenues
     782/1300 = US$602/kW; Exchange Rate: EUR 1 = US$                     resulting from reduction in emission of
     0.9]                                                                 greenhouse gases relative to thermal
                                                                          alternatives have not been factored in.
     Given the size and complexity of the project,                        Dependent on the development in tradable
     as well as the general development of the                            emission permits, the project provides

     significant potential for an upside return on                The number of people likely to be displaced by the MU
     investment.                                                  reservoir is evaluated at about 260 households or, in other
                                                                  terms, 1,400 people and some livestock. The project is
                                                                  exceptional in displacing so few people compared with
     The average price of electricity delivered to
                                                                  the size of the project.
     the grid of the SAPP in the Maputo and
                                                                                               MU         CB         Kariba
     Johannesburg areas will be around US cents
     5.4 per kWh in 2010. The prices of electricity               Resettlements               1.08        12.0       42.2
     applied are based on estimates of the cost of                (Persons/MW)
     thermal power replaced by the project, ie base               Catchment Area              97          2,675      5,577
     load coal-fired thermal power, mid-merit                     Catchment Area/MW           0.075       1.29       4.13
     combined cycle gas turbines and peak load                    (km2/MW)
     open cycle gas turbines. It is assumed
     implicitly that the present excess generating                  It is envisaged that the Project Companies
     capacity available in RSA would have been                     need to investigate the EIA impacts of the
     absorbed by the time the project is ready for                 downstream river fluctuations due to mid-
     commissioning. Gross market prices for                        merit operation and peaking, and undertake an
     energy delivered to the power purchaser,                      EIA/SIA on the power transmission line route
     inclusive of wheeling charges in the base                     once the final layout of the transmission
     case, is estimated at 3.4 US cents per kWh.                   system has been determined.

8)   Socio-Economic Benefits: As a result of tax              10) Issues and Proposed Actions: Donors, for
     agreements, significant taxes, (custom) duties               their involvement in the project, expect that
     and dividends will become available to GRM                   investors be selected through fair competition
     for development of a very poor country. A                    of potential investors. Therefore, UTIP will
     large number of jobs will be created, in                     have to involve key multinational financing
     particular during the construction stages, for               institutions during the preparation of pre-
     local    workers     in   an     impoverished                qualification documents and pre-qualification
     environment.                                                 of investors.

     There will be accelerated development of the                  Furthermore, the success of the project
     Zambesi valley, which has been established as                 depends on the liberalization of energy market
     a special fiscal and customs region. The                      in the SAPP in general and RSA in particular.
     project will be a step forward to realising the               UPIT should liaise with the SAPP
     full hydroelectric potential of Mozambique.                   Coordination Centre and potential importing
     Electricity at competitive prices will be                     countries to conclude a Memorandum of
     provided to the SAPP.                                         Understanding      (MOU)         before    the
                                                                   commencement of negotiations for the
9)   Environmental Sustainability: For the                         formation of the Project Companies.
     generation part of the project, an
     Environmental Impact Assessment (EIA)/                   11) Proposed       Involvement       of    NEPAD:
     Social Impact Assessment (SIA) has been                      NEPAD's assistance will be required in
     undertaken as part of the feasibility study. The             promoting the project, in addition to the effort
     area consists mainly of fairly steep woodland                made by GRM, to ensure that project
     and a mosaic of shrub-land with small                        development proceeds. Specifically, NEPAD
     farmland patches. The shrub-land provides                    would assist in the liberalization of the energy
     relatively low quality grazing, and the                      market in the sub-region in general and RSA
     woodland has no commercial value. Crop                       in particular for the export of power from
     losses at MU are estimated at US$ 112,500                    MU. Furthermore, NEPAD is expected to
     annually.                                                    bring the project to the attention of potential
                                                                  investors/facilitators to mobilize financial
      Similarly, the ratio of inundated area to                   resources for the project. Once the Project
     installed capacity of 7.7 ha/MW is relatively                Companies are formed, NEPAD will regularly
     low by international standards. The table                    monitor the implementation of the project to
     above compares the environmental impacts of                  ensure its successful completion, and on
     MU against comparable hydropower projects                    completion make an assessment of its impacts
     in the region. The EIA/SIA study thus                        on poverty reduction in the continent.
     concluded that the environmental and social
     impacts of MU are quite limited in                       12) Plan of Action for Project Implementation:
     comparison with the size of the project.                     The implementation of the project can be
                                                                  grouped into three main phases and includes

     development, financial resource mobilization           potential in terms of NEPAD's poverty
     and construction. Substantial time is required         reduction goals. The implementation of the
     before construction can start. The project             project is therefore to be supported for
     needs to be defined, investors have to be              immediate implementation.
     identified and selected, and a host of
     agreements have to be concluded in order to
     secure financing. The current status of the
     four phases is summarized below.

§    Development: The feasibility study of the
     project has been completed and the GRM will
     soon approve the study. The process for the
     pre-qualification of investors has started by
     drafting the pre-qualification document and
     consultation with key multilateral financing
     institutions. Consultation has also started on
     the conclusion of the MOU between the GRM
     and RSA covering the involvement of the two
     countries in the development of the project
     and the export of the power to RSA. The
     Project Companies are scheduled to be in
     place in the 3rd Quarter of 2003.

§    Financial Resource Mobilization: Following
     the formation of the Project Company,
     resources for the project will be mobilized.
     The possible sources of financing are bank
     debt and ECAs facilities. The financing plan
     is expected to be completed towards the end
     of 2005.

§    Construction: It is planned that construction
     of the project will commence in the 1st
     Quarter of 2006 and be completed and
     commissioned by the end of 2010.

13) Conclusions: The project is technically
    feasible and economically viable with
    minimum environmental impact. The political
    climate and the measures taken by GRM to
    liberalise the economy would attract investors
    to develop MU.

     The project would generate revenue for the
     GRM, which could be utilized for projects
     that would contribute towards poverty
     reduction and providing basic services to the
     population. The project would create
     employment for the population that would
     improve their welfare. Furthermore, the
     project would have very low environmental
     impacts, which could be mitigated through
     implementing appropriate measures. The
     project would also provide cheap hydropower
     to the sub-regional countries, specifically to
     RSA, as opposed to developing generation
     capacity from new coal-fired power stations,
     thus reducing greenhouse gas emissions. The
     project will be a significant step forward in
     addressing such issues, thus having enormous

                                                                 reduces generation, which could be exported
     ETHIOPIA-SUDAN POWER SYSTEMS                                to the neighbouring countries. The project is
           INTERCONNECTION                                       formulated to enable the two countries to
      PROJECT ASSESSMENT REPORT                                  optimize the operation of their systems and
                                                                 support each other during emergencies.
1.   Introduction: The proposed Ethiopia - Sudan
     Interconnection will link Debre Markos                 3.   Need For the Project: It has been recognised
     substation, located north west of Addis                     that the Ethiopian and Sudanese power
     Ababa, to Roseires Power Station switchyard                 systems are quite complementary and a tie-
     located in eastern Sudan.                                   line between the two countries could generate
                                                                 clear benefits in the intermediate future and
2.   Background: The idea of interconnecting the                 long-term. Generation capacity expansion in
     Ethiopian and Sudanese grids was introduced                 Ethiopia was foreseen to rely on the
     in the 1982 Master Plan Study (ACRES                        construction of relatively large hydropower
     International) focusing on expansion of the                 plants. Even though it has good potential in
     Ethiopian power system. The original                        some large hydropower projects, the Sudan
     feasibility study was prepared in 1988 by the               would continue to need thermal power to
     consultant IVO International with financial                 satisfy projected consumption growth, given
     assistance from the Government of Finland.                  the recent discoveries of hydrocarbon in the
     Unfortunately, the implementation of the                    country. Due to step-by-step capacity
     project could not proceed immediately. The                  additions in Ethiopia, surplus hydro energy
     two governments, however, pursued the                       was planned to be transmitted to the Sudan to
     development of the project by updating the                  replace fuel oil in thermal power generation to
     feasibility study in 1995, which was financed               save the oil for export. Besides, the project
     by the African Development Bank (AfDB).                     would enable the two countries to support
                                                                 each other during emergencies and optimize
     Ethiopia’s technically exploitable hydropower               the operation of their power systems.
     capability is estimated at 30,000 MW. In
     October 2001, the Ethiopian Electric Power             4.   Development Strategies and Sponsor: The
     Corporation (EEPCO) launched the Ethiopian                  project would be developed by governments
     Power System Expansion Master Plan                          of the Sudan and Ethiopia (the sponsors of the
     (EPSEMP) that will be used as a guideline for               project)        with      financing      from
     the next 25 years for all activities of the                 multilateral/bilateral sources. It is expected
     Corporation. Developing new hydropower                      that each country will borrow funds for the
     sources as well as generation from                          network to be constructed in their respective
     combustion turbines are amongst the strategic               countries. The two countries would share the
     actions of the Master Plan. Five hydroelectric              benefits equally, including the saving in
     plants with an installed capacity of 665 MW                 thermal generation, which accrue as a result
     have been planned for construction over a                   of the project implementation.
     period of five years to 2005. The proposed
     Ethiopia - Sudan Interconnection forms an                   The governments of the Sudan and Ethiopia
     integral part of this Master Plan.                          would need to start negotiations on signing a
                                                                 Memorandum of Understanding (MOU) to
     Sudan has an installed electric generation                  declare their intent to develop, operate and
     capacity of about 500 MW, managed by the                    maintain the tie-line. Following the signing of
     state owned National Electricity Corporation                the MOU, the national power utilities of the
     (NEC). Of this, around 60% is accounted for                 two countries, NEC and EEPCO, need to sign
     by thermal generation (mainly from oil/gas)                 a Power Purchase Agreement (PPA), a
     and 40% by hydropower. Faced with a power                   Construction Agreement and an Operation
     shortage, Sudan has plans to add additional                 Agreement. The signature of the various
     hydropower generating capacity. The largest                 Agreements is a pre-requisite for sourcing
     projects are the proposed Kajbar (300 MW)                   financing for the development of the project.
     and Merowe (1250 MW).
                                                            5.   Project Objectives: The project has been
     In line with normal generation expansion plan               formulated on a common understanding by
     principles, the generation expansion plans in               the two countries that they would continue to
     the two countries have been formulated to                   implement their national power development
     meet demand for the next 5-10 years. These                  plans irrespective of the implementation of
     separate plans would result in continuous                   the interconnection project. The objective of
     excess capacity in the systems, unless drought              the project is to transmit the Ethiopian surplus

     hydropower to the Sudan to replace thermal                     The telecommunication system will include
     generation in the Sudan and sharing equally                    one dual channel phase-to-phase connected
     the benefits realized as a result of oil and                   PLC-link that will be installed into the high
     spare parts savings from thermal generation.                   voltage tie line.
     The interconnection supports the least-cost
     supply principle, where the Ethiopian hydro-            7.     Investment Cost and Sources of Financing:
     energy, which otherwise would have been                        The cost of the project including
     spilled, is sold to Sudan. Furthermore, the                    contingencies but without interest during
     interconnection would make two-way                             Construction (IDC) is estimated at US$51.6
     operations of the tie-line possible, thus                      million. It is assumed that the project will be
     providing mutual assistance during system                      implemented as one package jointly by the
     disturbances, the sharing of reserves for                      government of Ethiopia and the Sudan. 95%
     improved system reliability and optimization                   of the investment will be financed from
     of the two power systems. An additional                        Multilateral/Bilateral sources, and the
     objective is to prepare a framework for                        remaining 5% by the Government of Ethiopia
     realizing other joint operation possibilities,                 (GRE) and the Government of Sudan (GRS).
     such as opportunities for short-term
     emergency deliveries of power in both                                      Source                    US$ (Million)
     directions, export of thermal power from one                 Multilateral/Bilateral-Ethiopia              36.8
                                                                  Multilateral/Bilateral-Sudan                 12.2
     country to the other during unfavourable                     GRE                                           1.9
     hydrological conditions, and optimisation of                 GRS                                           0.7
     use of reservoirs.                                           Total                                        51.6
                                                                  The financing will then be divided between the two
6.   Project Description: The project consists of                 countries in accordance with the volume of work
                                                                  implemented in their respective countries. Accordingly,
     the construction of 428 km of 230 kV single                  GRE and GRS will finance 75% and 25% respectively from
     circuit line with 80% in Ethiopia and 20% in                 loans and internal sources. The adjacent table presents an
     the Sudan. The line will be constructed in                   indicative financing plan.
     lattice steel towers and all aluminium alloy
     conductors (AAAC) of 2x315 mm2 cross
                                                             8.     Feasibility of the Project: Technical viability
     section per phase from Debre Markos
                                                                    of the tie-line options has been analysed,
     substation in Ethiopia to the Roseires
                                                                    using load flow, fault current and stability
     substation in the Sudan, which is the least-
                                                                    calculations. The aim of this task was to
     cost interconnection solution, to transmit
                                                                    recognise possible needs of network
     power of 100 MW. The towers would be self-
                                                                    reinforcements, in cases with and without the
     supported steel lattice towers, with the height
                                                                    interconnector. The least cost interconnection
     of the towers being defined according to the
                                                                    solution was then selected, relying on
     ground contour on the line route. The
                                                                    estimates of the total costs, including
     foundations would be mostly steel grillage
                                                                    investments, cost of losses and operational
     type for the suspension towers but concrete
     foundations will be used in special conditions.
                                                                    The financial analysis of the interconnection
     Debre Markos is a new 220 kV substation
                                                                    has been done using the following principles.
     where all reservations for the tie line to the
                                                                    The main, measurable economic benefits of
     Sudan have been made. The Ethiopian line
                                                                    the project originate from oil and spare part
     will be connected to the existing 230 kV line
                                                                    savings in thermal generation in the Sudan.
     with a complete line bay at the Roseires
                                                                    The savings result from transmitting the
     switchyard. The line bays for the
                                                                    available surplus hydropower from Ethiopia
     interconnector at both substations will consist
                                                                    to the Sudan. The savings volume has been
     of     switching    equipment,      measuring
                                                                    calculated by comparing the present situation
     transformers, power line carrier (PLC)
                                                                    with the project with the best alternative
     coupling devices and line traps, surge
                                                                    electricity mix in the Sudan. The costs of the
     arrestors and compensating reactors.
                                                                    interconnection project consist of the
                                                                    investment costs and the operation and
     A small scale Supervisory Control and Data
                                                                    maintenance (O&M) costs over the lifetime of
     Acquisition (SCADA) computer system will
                                                                    the project and the incremental operation and
     be used to monitor and control the tie line
                                                                    maintenance in hydropower generation in
     operation. The SCADA system will include
                                                                    Ethiopia. The local material and labour are
     master station, uninterruptible power supply,
                                                                    shadow priced and the avoided environmental
     and remote terminal units (RTU) with DC
                                                                    costs are taken into account in the economic
     power supply.

     The Financial Internal Rate of Return (FIRR)                 addressing issues related to governance,
     and Economic Internal Rate of Return (EIRR)                  internal conflict and on loan arrears.
     of the project are estimated at 12.9% and                    Furthermore, NEPAD would assist in
     14.9% respectively.                                          expediting the conclusion of the various
                                                                  Agreements and mobilization of funds for the
9.   Socio-Economic Benefits: The project,                        project. NEPAD would regularly monitor the
     through replacing some of thermal generation                 implementation of the project to ensure its
     in the Sudan with Ethiopian hydropower, will                 successful completion, and on completion
     generate savings as a result of avoided fuel                 make an assessment of its impacts on poverty
     and spare parts costs in the thermal                         reduction in the continent.
     generation. Furthermore, savings would be
     realized through reduced reserve requirements           13. Plan of Action for Project Implementation:
     and higher system reliability. The savings                  GRS should address the issues related to
     thus realized would enable GRE and GRS to                   internal conflict and loan arrears. In parallel,
     make additional investments on projects that                the two countries should conclude the Power
     would contribute to economic development                    Purchasing, Construction and Operation
     and poverty reduction. Besides, a number of                 Agreements, and review the feasibility study.
     jobs will also be created, in particular during             Once the outstanding issues are resolved and
     the construction stages, for local workers in               the various agreements are concluded, the
     impoverished environments.                                  countries will approach financial institutions
                                                                 to source financing for the project. The
10. Environmental Sustainability: The tie-line                   implementation of the project will be
    will start from Debre Markos in Ethiopia and                 completed in 24-30 months after securing
    follow the main roads to Injibara, Mambuk,                   financing.
    Guba and Bumbabi towns on the border
    between the two countries, and continue to               14. Conclusions: The project is technically
    Roseires in the Sudan. The line would be a                   feasible and economically viable with
    single circuit 230 kV line, erected on lattice               minimum environmental impact. The savings
    steel towers and the line will be constructed in             resulting, mainly through the replacement of
    the outskirts of the towns.           No new                 thermal generation by hydro generation,
    substations are constructed, but the line is                 would be shared equally by the Sudan and
    connected to existing substations, namely                    Ethiopia. Such savings are expected to be
    Debre Markos and Roseires. The project has,                  utilized for development/poverty reduction
    therefore, low environmental impacts and will                projects to create employment and provide
    be mitigated by employing appropriate                        basic services to the population of the two
    measures during its construction and                         countries. Furthermore, the project would
    operation.                                                   have very low environmental impacts. The
                                                                 project will be a significant step forward in
     As the basic idea is to replace oil-based                   addressing such issues, thus having
     thermal generation in the Sudan by                          significant potential in terms of NEPAD's
     hydropower imports from Ethiopia, the                       poverty reduction goals.
     decrease in flue gas releases from thermal
     power plants in Khartoum would have                          However, the political climate and the civil
     positive impacts on the environment.                         war in the Sudan, and its arrears with loan
                                                                  repayments       to    development      finance
11. Issues and Proposed Actions: The financing                    institutions might make it difficult for the
    agencies, to support projects in the Sudan,                   Sudan to raise its share of the investments.
    may require that the country’s internal                       The conflict related issues would have to be
    conflict and its default on loans is resolved                 resolved in order for the full investment of the
    which would require NEPAD’s assistance. In                    project to be raised and the project
    parallel, NEC and EEPCO, with a mandate                       implemented. The implementation of the
    from their respective Governments, need to                    project is therefore to be supported contingent
    start negotiations, first on the MOU, and then                on the resolution of issues related to the
    on the Construction Agreement, PPA and                        conflict and loan arrears.
    Operation Agreement in order that the project
    is initiated.

12. Proposed Involvement of NEPAD: The
    assistance of NEPAD will be required to
    assist the Government of the Sudan in

               PROGRAM                                        3.   Need for the Project: The ECOWAS region
      PROJECT ASSESSMENT REPORT                                    is short of capacity to supply adequate and
                                                                   reliable power to its users. In order to meet
1.    Introduction: The West Africa Power Pool                     the growing power requirement, the
      (WAPP) project will integrate national power                 ECOWAS Master Plan approved by its
      grids of five coastal countries (Benin, Côte                 members in September 2000 recommended
      d'Ivoire, Ghana, Nigeria, and Togo) and three                construction of several new power plants and
      land-locked countries (Burkina Faso, Mali,                   high voltage transmission lines. It was
      and Niger).                                                  estimated that the construction of power
                                                                   plants and transmission lines as needed by
2.    Background: The ECOWAS Master Plan                           2010 would cost about US$ 13 billion.
      recommended development of power                             However, the ECOWAS countries, due to
      production plants and interconnection of                     various factors are unable to mobilize
      electricity grids of the ECOWAS member                       resources from their internal cash generation
      countries. It also suggested the following                   and/or external borrowing. The lack of cash
      measures to convert the Master Plan into a                   and credit is an impediment towards realizing
      WAPP Project: a) adopting the Master Plan                    the objectives of the ECOWAS Master Plan,
      by ECOWAS Ministers of Energy; b)                            and private finance will be needed to
      establishing the legal and regulatory                        implement the recommended power plants
      framework for power pooling in West Africa;                  and transmission line interconnections.
      c) having a Memorandum of Understanding                      However, in terms of raising private capital in
      (MOU) for the electricity companies, fixing a                the near future, West Africa's power sector
      framework for cooperation, regulating power                  faces two critical constraints, namely, its
      pooling and determining the level of                         small size and investors' perception of the
      participation by each country; d) preparing the              region's high risk.
      WAPP project document; e) preparing and
      organizing of a donors meeting; and f)                       Potential lenders and investors will view the
      resolving such trade related problems as                     implementation of the WAPP Project as a key
      billing disputes and long-standing account                   step towards mitigating these risks. The
      payables that have marred electricity trade in               WAPP, by integrating the region's power
      countries in the past, namely in Côte d'Ivoire,              sector, will result in increasing the size of
      Ghana, Togo, Benin, and Nigeria.                             West Africa's power sector, and in turn, West
                                                                   Africa will be able to lure potential investors
      In November 1999, ECOWAS Energy                              into the power sector. Regarding country risk,
      Ministers in a meeting held in Accra, whilst                 the implementation of the WAPP, through its
      recognizing the need for better integrating the              well-managed and transparent energy trading
      region’s    unevenly     distributed    energy               across borders, will help alleviate investor
      resources to support its development,                        concerns about country risks.
      approved the formation of the WAPP as well
      as an indicative plan for developing new                     Thus the project is justified on the basis of the
      generation plants and high voltage                           above considerations. It will promote private
      transmission line interconnections within the                investment in the power sector as needed for
      region.                                                      creating    additional       generation      and
                                                                   transmission capacity to meet the demand for
      In September 2000, in a meeting held in                      electricity in the ECOWAS member
      Lome, ECOWAS Ministers approved the                          countries.
      Master Plan and adopted a MOU to establish
      the WAPP Project. The MOU included                      4.   Development Strategies and Sponsor: West
      mutual obligations of the parties concerned to               Africa as a sub-region is endowed with
      create an oversight, coordination, and                       energy resources. However, energy resources
      administrative apparatus to develop the                      are unevenly distributed among the fourteen
      WAPP under the aegis of ECOWAS. The                          ECOWAS member countries. If West Africa
      Administrative apparatus was later created                   were able to raise significant amounts of
      under ECOWAS.                                                private capital, it would be able to develop its
                                                                   energy resources adequately. However, the
      Further, the Steering Committee during its                   West African States face critical constraints in
      meeting held in Accra on 5 April 2002,                       raising huge amounts of capital due to small
      approved the WAPP's objectives, organization                 country size and high country risk perceived
      structure, and regulatory arrangements.                      by investors. In order to address the above

     problems and raise investor confidence,                      Component A: critical infrastructure to
     ECOWAS has sponsored the WAPP project.                       expand cross border power trade as given
     The project will be developed by the
     governments of ECOWAS member countries                       a)   Cote       d’Ivoire   (CI)    –    Mali
     with funding from multilateral and bilateral                      Interconnection: The project involves
     donors. It is expected that each of the                           construction of 234 km of 225 kV line,
     ECOWAS member countries concerned                                 installation of 225 kV outgoing bay at
     would borrow funds for the transmission line                      Ferkesedougou (CI) and erection of 225
     interconnection to be constructed in its                          kV substation at Sikasso (Mali).
     country.                                                     b)   Ghana–Burkina           Faso        (BF)
                                                                       Interconnection: The project involves
5.   Project Objectives: The objectives of the                         construction of 198 km of 225 kV line,
     project are:                                                      erection of 225 kV substation at
                                                                       Bolgatanga (Ghana) and Ouagadougou
a)   to institutionalize more formal and extensive                     (BF).
     regional cooperation in the development of                   c)   Ghana-Togo-Benin (reinforcement): The
     cost effective electricity infrastructure and                     project involves construction of 280 km
     energy trading networks in order to increase                      330 kV line and erection of 330 kV
     energy supply and energy security within the                      substations at Prestea/Tema (Ghana) and
     region;                                                           Lome (Togo).
b)   to improve electricity system reliability and                d)   330 kV Ikeja West (Nigeria) to Sakete
     power quality throughout the region;                              (Benin) Interconnection: The project
c)   to lower electricity system costs by:                             involves construction of 70 km of 330
     increasing economic trading of both power &                       kV line, and erection of 330 kV
     energy within the region; optimizing the                          outgoing bay in Nigeria and new 330 kV
     utilization of energy resources in the region;                    substation in Benin; and
     managing more efficiently and effectively the                e)   other equipment.
     region's seasonal and weather related
     imbalances; and reducing the overall amount                  Component B: Policy and capacity building:
     of capital needed for electricity system
     expansion in the region by promoting                         a) establishment of website;
     implementation of bankable projects on a                     b) harmonization and implementation         of
     least cost basis;                                                 appropriate legal, regulatory,        and
d)   to create an investment environment for the                       institutional policies; and
     region's power sector that will facilitate the               c) establishment       of     Regulator,   and
     financing of priority generation and                              Installation of Load Dispatch         and
     transmission projects;                                            Communication System.
e)   to create an ongoing forum in which regional
     power issues can be discussed and worked out                 The financing for components A & B will be
     within an agreed policy framework and set of                 mobilized through promotion by the World
     operating principles;                                        Bank except for Ikeja West (Nigeria) to
f)   to create a transparent and reliable mechanism               Sakete (Benin) interconnection, which is
     for the prompt settlement of commercial                      earmarked for AfDB and West African
     electricity transactions; and                                Development Bank (BOAD).
g)   to increase the overall level of electricity
     service      within    the    region    through         7.   Investment Costs and Sources of
     implementation of priority generation and                    Financing: The project components expected
     transmission projects as the basis for                       to be funded by the World Bank are estimated
     economic development.                                        to cost about US$ 151 million including 15%
                                                                  contingencies, whilst the project component
6.   Project Description: The project, as                         to be funded by the AfDB and the West
     conceptualized, will be implemented in                       Africa Development Bank is estimated to cost
     several phases. Phase I of the project is                    about US$ 41 million including 8.5%
     termed the West Africa Power Market                          contingencies.
     Development Project (2002-2006). The
     project components are given below:                          The World Bank, the AfDB, and West
                                                                  African Development Bank are possible
                                                                  financiers of the project. Other donors
                                                                  supporting this project are: Japan (US$

     829,500 to finance project preparation) and                  mechanism, will help alleviate investor
     French Cooperation (Euro 1.1 Million for                     concerns about country risks.
     institutional support to ECOWAS).
                                                             12. Involvement       of     NEPAD:       NEPAD's
8.   Feasibility of the Project: Currently, the                  assistance is required to ensure that project
     project is under preparation by the World                   development      proceeds,     that    financial
     Bank. A preparatory Study is underway                       resources are mobilised for the project,
     involving (a) Environmental and Social                      including     facilitating    private     sector
     Impact Assessment of each of the high                       participation in the implementation of this
     voltage transmission line interconnections                  project in consultation with ECOWAS.
     described in Section 6; (b) IT System Design
     Activities, and (c) Economic and Financial                   Recently, the ECOWAS Energy Ministers
     Analysis of the high voltage transmission                    meeting held in Accra, Ghana, has agreed on
     lines. In addition, ECOWAS is also                           the projects and their objectives, organization
     undertaking a Stability Study concerning the                 structure, and regulatory arrangements.
     project.                                                     However, agreement on the Energy
                                                                  Charter/Energy Protocol as drafted by the
9.   Socio-Economic Benefits: The deteriorating                   Consultant could not be reached. NEPAD’s
     power quality and inadequate supply are                      support will be necessary to facilitate
     critical economic issues for governments of                  countries’ agreement on the Energy Charter/
     the ECOWAS region. Poor quality has been                     Protocol-a key to facilitate private sector
     marked by power surges and low voltages,                     investment in the West Africa.
     damaged       appliances   and     equipment.
     Consumers and industries spend huge sums of                  NEPAD will regularly monitor the
     money on repairing them. Consumers also                      implementation of the project to ensure its
     spend money in acquiring back-up generation                  successful completion, and on its completion
     facilities and imported fuels. This increases                make an assessment of its impacts on poverty
     the cost of production and slows down the                    alleviation in the continent.
     economic growth. The implementation of the
     WAPP, as demonstrated by the ECOWAS                     13. Plan of Action for Project Implementation:
     Master Plan, will render benefits to the states             The project implementation path as indicated
     concerned in terms of higher availability of                by the World Bank is: Environmental Study -
     electricity and reduced cost of supply. The                 by end November 2002; Economic
     benefits will arise due to efficiency gains                 Justification of the Investments - by
     derived from: reduced reserve margins due to                September 2002; Project Appraisal - by
     pooling of resources; economies of scale;                   December 2002; and Board Presentation of
     better management of daily and seasonal peak                the Project - by June 2002.
     demands, better management of hydrological
     regimes and risks; and expansion of the                      The AfDB launched a mission to Nigeria,
     supply market thereby attracting potential                   Benin and Togo in March 2002 to prepare the
     international investors.                                     project for construction of the transmission
                                                                  line interconnection from Ikeja West
10. Environmental Sustainability: The EIA                         (Nigeria) to Sakete (Benin). An Appraisal
    Study of the Project is progressing.                          Mission will be undertaken in July 2002.
                                                                  After approval, the project will be
11. Issues & Proposed Actions: Investors                          implemented over a period of 48 months. The
    perceive West Africa as risky due to the small                ECOWAS Secretariat, the Division of
    size of economies and high political risk. The                Infrastructure & Industry, will be the Project
    implementation of the WAPP Project will be                    Implementing Agency.
    viewed by potential investors as a key step
    toward mitigating these risks. The WAPP, by              14. Conclusions: The principles of an ECOWAS
    integrating the region's power sector, will                  energy exchange program or power pool will
    result in increasing the size of West Africa's               facilitate the production and exchange of
    power sector, and in turn; West Africa will be               electrical energy between the countries with
    able to lure potential investors into the power              surplus supply and the countries in short
    sector. Regarding country risk, the                          supply. ECOWAS member countries have
    implementation of the WAPP including the                     already agreed to implement the WAPP
    establishment of the institutions, the Energy                project in order to develop the electricity
    Charter/Protocol      and     the     regulatory             market in the West Africa.

The project will help drive down the
electricity prices and improve electricity
system reliability and power quality
throughout the sub-region, to the benefit of
consumers of member countries of
ECOWAS. It has great potential in terms of
NEPAD’s poverty reduction goals, and thus
deserves NEPAD’s full support.

      STRENGTHENING OF THE ALGERIA-                                 higher than that of the Maghreb. The
     MOROCCO-SPAIN INTERCONNECTION                                  interconnection between European and
        PROJECT ASSESSMENT REPORT                                   Maghreb networks has supported the latter in
                                                                    the improvement of its supply security,
1)     Introduction: The Algeria-Morocco-Spain                      reliability and stability.
       power systems inter-connection strengthening
       project involves (a) laying of a second 400 kV               As regards Morocco-Algeria Interconnection,
       submarine cable between Fardioua 400 kV                      the interconnection has enabled the two
       substation (north of Morocco), and 400 kV                    countries to optimise the operations of their
       Tarifa substation (south of Spain); (b)                      networks through exchange of electricity. As
       erection of 400 kV substations at Toula II                   regards Spain-Morocco Interconnection, it has
       (east of Morocco) and Hassin Ameur (west                     enabled Morocco to make savings on
       of Algeria), and construction of 400 kV                      generation costs by partly replacing domestic
       overhead line to interconnect the two                        thermal power generation, which are run
       substations; and (c) strengthening of the                    using heavy fuel and gas oil, by importing
       transmission networks inside Morocco.                        less costly electricity from Spain. However, at
                                                                    present, the existing interconnections are
2)     Background: The power systems of                             exploited to maximum capacities and can no
       Moroccan and Algeria are interconnected at a                 longer allow further power exchange as
       voltage of 225 kV in two circuits with a total               stipulated in the framework of the
       capacity of 500 MW, commissioned in 1988                     strengthening of the Euro-Mediterranean
       and1992. The power systems of Morocco and                    energy cooperation.
       Spain are interconnected through a 400 kV
       submarine cable with a 700 MW capacity,                 4)   Development Strategy and Sponsors: The
       commission in 1997. These interconnections                   governments of Morocco, Spain and Algeria
       have enabled the Office National de                          are the leading promoters of the project,
       l’Electricity (ONE), the national power utility              which is part of the regional construction
       of Morocco, to diversify its source of power                 project of the Euro-Mediterranean Electric
       supply and specifically benefit from the                     Loop as well as the strengthening of power
       advantages offered by the free Spanish                       connections of North African countries from
       market. Presently, the interconnections are                  Morocco to Egypt, in their bid to set up a
       utilized to their full capacities.                           North African Power Pool (NAPP). The
                                                                    proposed project will be implemented by the
       The Euro-Mediterranean Power Loop Study                      power utilities of the three countries: ONE of
       identified weaknesses in the existing 225 kV                 Morocco, Red Electrica of Spain and
       power interconnections in North Africa and                   SONELGAZ of Algeria. The project will be
       recommended their upgrading. In this regard,                 implemented as a public-sector project with
       the fifth Ministerial Conference on Energy                   each country mobilizing the required
       Cooperation in the Mediterranean held in                     financing for works to be implemented in
       Casablanca, Morocco in February 2001,                        their respective territories. There is effective
       realized the perspective of the emergence of a               coordination between the electricity boards of
       regional market for electricity, and decided to              the power utilities for the realization of the
       strengthen the power interconnection among                   project.
       North African countries in 400 kV networks.
                                                               5)   Project Objectives: The project would enable
       The strengthening of Spain-Morocco-Algeria                   to increase the volume of electric power
       and Algeria-Tunisia interconnections, which                  exchange between the Maghreb and Europe
       were initiated in 2001, are part of                          with the view to integrating the Maghreb
       strengthening     the     North      African                 market into the European electric power
       interconnections, which would eventually                     market. Specifically, the project aims at
       extend to Egypt.                                             providing Morocco a reliable and low cost
                                                                    electricity supply through strengthening its
3)     Need for the Project: The commissioning in                   interconnections with the neighbouring
       1998 of the first 400 kV inter-connection                    countries. The project would replace the
       between Morocco and Spain made it possible                   expensive domestic thermal power generation
       to link the whole power network in the                       by importing low cost electricity from Spain
       Maghreb (Morocco, Algeria and Tunisia),                      and thus reducing the country’s oil bill. It will
       which has an overall installed capacity of                   also increase the volume of electricity
       around 13,000 MW to the European network,                    exchange between Morocco and Algeria.
       which has an installed capacity 20 times

6)   Project Description: The project will involve           11) Issues and Proposed Measures: The
     (a) laying of a 400 kV submarine cable                      Algerian and Spanish part of the project will
     between Morocco and Spain; (b) erection of                  be financed from internal sources. However,
     400 KV stations at Toula II and Bourdim in                  the Moroccan part of the project is earmarked
     Morocco, and at Hassi Ameur in Algeria; (c)                 for AfDB, EIB and AFD financing. Effort
     construction of 400 kV overhead line between                should be made by the Government of
     Toula II and Hassi Ameur through Bourdim;                   Morocco to secure the funding before the end
     and (d) installation of fibre optic cables with             of the year in order to complete the project on
     the 400 kV tie-line; and (e) strengthening of               schedule.
     transmission networks within Morocco.
                                                             12) Proposal for involvement of NEPAD:
7)   Investment Cost and Sources of Financing:                   NEPAD would assist in mobilizing financial
     The cost of the project (on the Moroccan                    resources for the project and monitor the
     side), excluding Interest During Construction               implementation of the project.
     (IDC), taxes and customs, is estimated at US$
     280 million. The Government of Morocco has              13) Action      Plan     and     Schedule      of
     requested African Development Bank                          Implementation: The realization of the
     (AfDB), European Investment Bank (EIB)                      electric power interconnections in 400 KV
     and French Development Agency (FDA) to                      between Morocco and Spain, and Morocco
     jointly finance the Moroccan part of the                    and Algeria was launched in October 2001.
     project. The financing is expected to be                    Invitations to bid for the realization of the
     secured before the end of 2002.                             Moroccan part of the project were sent out
                                                                 during the 2nd half of 2001. With the
8)   Project Feasibility: A project techno-                      financing for the Moroccan part put in place
     economic feasibility study determined the                   towards the end of 2002, the completion of
     proposed      interconnection    system     is              the interconnection project is scheduled for
     technically the best and financially the least              the end of 2005.
     cost. The study also determined the Financial
     Internal Rate of Return (FIRR), with and                14) Conclusions: The project is technically
     without export of power from Algeria to                     feasible and financially profitable. It will
     Spain, as 17.3% and 25.7% respectively. The                 enable ONE to make savings on the cost of
     study further determined the Internal                       fuel for domestic thermal power production
     Economic Rate of Return (EIRR) of the                       through import of low cost electricity from
     project, corresponding to export of power                   Spain. The strong network is expected to
     from Algeria to Spain, as 32.5%.                            diversify sources of power supply and
                                                                 encourage free electricity market in Morocco,
9)   Socio-Economic Benefits: The project would                  which would then enable consumers to access
     benefit the Government of Morocco, the                      power at competitive prices directly from the
     households, the industries and businesses in                source of supply. The supply of low cost
     the country. The project would enable ONE to                electricity would in turn contribute to the
     generate savings on the cost of fuel through                competitiveness of the industrial and business
     replacing domestic thermal power generation                 sectors and promote access of affordable
     by low cost electricity imported from Spain                 power to the household sector.
     and thus reducing the country’s oil bill. With
     the existing interconnections, ONE makes                     The project is the first part of the electric
     savings on the production of electricity                     power network to be provided for
     amounting to about US$ 30 million a year.                    strengthening the Euro Mediterranean Energy
     The project will further generate job                        Cooperation. It will encourage private sector
     opportunities.                                               investments in independent power production
                                                                  in North African countries whilst facilitating
10) Environmental Aspects/Sustainability: The                     exports of part of the energy produced to
    line routes and substation sites have been                    Europe. Furthermore, it will go a long way in
    selected in such a way that they will not cause               generating benefits through optimally
    major resettlements, and damage to properties                 operating the Northern African and European
    and natural resources. Notwithstanding the                    power systems in an integrated from.
    above, measures stipulated in the recently
    completed Environmental Impact Assessment                     The project would strengthen regional
    (EIA) study, will be implemented, both                        cooperation and contribute towards poverty
    during construction and operations, to                        reduction. The project therefore deserves
    mitigate the negative impacts of the project.                 NEPAD’s full support.

 ALGERIA GAS-FIRED POWER STATION                                   for domestic and external markets. It is also
AND ALGERIA-SPAIN INTERCONNECTION                                  mandated to develop desalination plants,
    PROJECT ASSESSMENT REPORT                                      along with power generation, to produce
                                                                   potable water for domestic consumption.
1.   Introduction: The project will develop 2000                   AEC will, therefore, represent Government in
     MW of Combined Cycle Gas Turbine                              dealing with the execution of the proposed
     (CCGT) power plant in Algeria of which 800                    project. At the request of SONELGAS
     MW (40%) is intended for domestic                             (Algeria) and RED ELECTRICA (Spain),
     consumption and the balance of 1200 MW                        AEC carried out a feasibility study for
     (60%) for export to Europe through Spain.                     developing 2000 MW of CCGT power plant
     The CCGT plant will be sited in two places                    to cater for domestic demand and exports to
     viz. 800 MW at SKIKDA (located east of                        Europe.
     Algeria) and 1200 MW at d’ARZEW (located
     west of Algeria).                                             GOA intends to award a Build, Own, Operate
                                                                   and Transfer (BOOT) Concession to a
2.   Background: As part of the Government                         developer through companies established in
     policy to liberalize the energy sector, a law                 Algeria specifically for the implementation
     was promulgated in February 2002 to allow                     and operation of the project. Two Project
     participation of the various operators,                       Companies        are    envisaged,  including
     including private sector operators, in power                  Generation and Transmission Companies. The
     generation both for domestic demand and                       two companies can have different ownership
     export. As part of this strategy, the                         and financing arrangements, but shall be
     Government of Algeria (GOA) intends to                        organized so that coordination of project
     develop a 2000 MW CCGT Power Station                          implementation is secured. Ownership of the
     with involvement of the private sector                        project will be vested in the Project
     operators. The project will be implemented                    Companies for a limited period of time
     through the formation of two Project                          (concession period), after which the project
     Companies including a Power Generation                        will be transferred back to GOA. In terms of
     Project Company and Power Transmission                        this agreement, 30% of the shares of the
     Company. The Companies will be established                    Project Companies are reserved for GOA and
     under a Build, Own, Operate and Transfer                      the rest for the Private Operators.
     (BOOT) Concession arrangement. The Power
     Generation Company will negotiate the sale               5.   Project Objectives: The objectives of the
     of 800 MW directly to SONELGAS and                            project are to promote the development of the
     export the 1200 MW to Europe by wheeling                      huge Algerian gas potential through its
     the power through the network of the                          transformation     into      electricity    to
     Transmission Company.                                         accommodate the domestic demand as well as
                                                                   exports to Europe. The project will generate
3.   Need For the Project: Algeria is one of the                   revenue for Algeria, and the development of
     African countries, which is a main supplier of                the power station in Algeria would save
     gas to Europe. Algeria accounted for one-fifth                Europe from developing a power station in an
     of EU natural gas imports in 2000 (Russia                     environment where space is at a premium.
     accounted for 39% in that year). As of 2001,                  The project would also strengthen cooperation
     Algeria's total natural gas export capacity, via              between North Africa and Europe in the
     pipeline and LNG tanker, was over 2 Tcf per                   energy sector.
                                                              6.   Project Description: The project will
     Through the proposed project, Algeria will                    comprise the development of 2000 MW of
     utilise its excessively high gas reserves                     CCGT plant at two power stations viz. 800
     through exports to Europe using electricity as                MW at SKIKDA and 1200 MW at d’
     an energy carrier, whilst the power generation                ARZEW. The former power station is
     on African soil would avoid the construction                  intended for domestic use and the latter for
     of a power plant in the congested European                    exports to Europe. A 400 kV submarine cable
     environment. The project would thus benefit                   will be laid and the associated substations, in
     both Algeria and Europe.                                      Algeria and Spain, will be erected to transfer
                                                                   the 1200 MW of power to Europe.
4.   Development Strategies and Sponsor: GOA
     has established an Algerian Energy Company               7.   Investment Cost and Sources of Financing:
     (AEC) to assist in the development and                        The cost of developing the 2000 MW power
     commercialization of electricity and gas both                 plant at the two locations, as well as the

     extension of the transmission networks to               12. Involvement      of    NEPAD:        NEPAD's
     Spain, is estimated at US$ 1.5 billion. The                 assistance will be required in promoting the
     project will be financed via shareholders                   project, in addition to the effort made by
     contribution to the Project Companies. Given                GOA, to ensure that project development
     that the project would be implemented                       proceeds. Furthermore, NEPAD is expected
     through a private-public funded BOOT                        to bring the project to the attention of
     scheme, the project is intended to be financed              potential investors/facilitators to mobilize
     through equity participation, bank debts and                financial resources for the project. Once the
     Export Credit Agencies (ECAs) facilities to                 Project Companies are formed, NEPAD will
     be raised by various shareholders of the                    regularly monitor the implementation of the
     Project Companies.                                          project to ensure its successful completion,
                                                                 and on completion make an assessment of its
8.   Feasibility of the Project: The feasibility                 impacts on poverty reduction in the continent.
     study undertaken by AEC proved that the
     proposed project, with transmission of power            13. Plan of Action for Project Implementation:
     through a direct link between Algeria and                   The Project Promotion has started, with
     Spain, would cost EURO 6/MWh, and is                        issuance of Pre-qualification Documents to 26
     cheaper than transmitting the energy to                     shortlisted potential investors in May 2000.
     Europe through the Moroccan networks, but                   Of the 26 Potential Investors invited, 5
     is higher than the transmission cost of EURO                submitted the relevant documents for pre-
     2/MWh in Europe. However, with other                        qualification and all of them qualified in the
     factors,      including       concerns     on               Technical and Economic Evaluations. The 2nd
     environment/nuclear power stations and                      phase of the pre-qualification exercise will
     availability of space for power stations                    involve the evaluation of Commercial
     factored into the project cost, the Europeans               Proposals and the selection of groups of
     are expected to support the relatively high                 investors for competitive negotiations, which
     tariff to make the project viable.                          is targeted for the 2nd quarter of 2002.

9.   Socio-Economic Benefits: As a result of tax                  The successful investors are expected to
     agreements, significant taxes, (custom) duties               require some time to establish agreements, etc
     and dividends will become available to GOA                   among their own investor groups and to
     for development of a very poor country. A                    incorporate Project Companies in Algeria.
     large number of jobs will be created, in                     The implementation of the project would take
     particular during the construction stages, for               two years after the project companies are put
     local    workers     in   an     impoverished                in place. With the Concession Agreements
     environment.                                                 signed and the financing arrangement in place
                                                                  by the 4th quarter 2002. It is expected that the
10. Environmental Sustainability: The project                     project will be completed by the end of 2004.
    involves the construction of gas-fired power
    stations with negligible pollutant emissions,            14. Conclusions: The project is technically
    and the transmission line will mainly traverse               feasible      and     financially/economically
    under the sea, which would not result in any                 justifiable. Furthermore, the project would
    population displacement. Notwithstanding the                 have a balance of significant environmental
    above, an Environmental Assessment will be                   benefits. The measures taken by GOA to
    undertaken to identify possible negative                     liberalize the economy would attract investors
    impacts of the project and to implement                      to develop the project.
    mitigating measures during construction and
    operation.                                                    The project would generate revenue for the
                                                                  GOA, which could be utilized for projects
11. Issues and Proposed Actions: The                              that would contribute towards poverty
    generation and transmission cost of electricity               reduction, and providing basic services to the
    generated from the project is higher relative to              population. The project would create
    the tariff for power generated from European                  employment for the population that would
    sources. However, when environmental and                      improve their welfare. The development of
    other benefits are factored into the project                  the power station in Algeria would strengthen
    cost, the associated electricity tariff could be              the regional cooperation between North
    justified. GOA should promote the viability of                Africa and Europe (north-south partnership).
    the project mentioning the additional benefits
    indicated above.                                              The project would have enormous potential in
                                                                  terms of NEPAD's poverty reduction goals.
The implementation of the project is,
therefore, to be supported as a priority project
for immediate implementation.

         MOZAMBIQUE-MALAWI                                        regulation of the output from the power plants
      INTERCONNECTION PROJECT                                     on the Shire River are quite limited, as
     PROJECT ASSESSMENT REPORT                                    variations of the water level would cause
                                                                  serous flooding of cultivated land. This
1.   Introduction: The proposed Mozambique-                       means that water has to bypass the stations as
     Malawi interconnection will link the                         spilling at times when the demand is low. The
     Matambo Substation, 20km from the town of                    power supply situation in Malawi is currently
     Tete in Mozambique, to the Phombeya                          critical. Silt has depleted the main head pond
     Substation near Blantyre in Malawi. It was                   capacity at the major power plant of Nkula
     previously planned to terminate the line at the              falls, which accounts for a substantial part of
     Blantyre West Substation, 5 km from                          the total generation. As a result ESCOM has
     Blantyre, but due to congestion there, the line              difficulties in meeting the peak demand. The
     will now terminate at Phombeya Substation.                   Malawi Master Power Plan of December
     About 60% of the line route preliminarily                    1998, recommended that the Mozambique-
     selected will be located in Mozambique.                      Malawi interconnection be built as a matter of
2.   Background: The power systems of Malawi
     and Mozambique show some significant                         Mozambique has a vast hydropower capacity
     differences in terms of costs and availability,              with excellent short-time regulation facilities
     which constitute the prerequisites for making                that may be used for meeting the increasing
     an interconnection beneficial to both parties.               demand in Malawi. Considering the
     Since 1966 Electricidade de Mocambique                       difference in generation cost and also the
     (EdM) of Mozambique and the Electricity                      difference in respect of the capabilities for
     Supply Commission of Malawi (ESCOM)                          short-term regulation, the exchange of power
     have studied the possibility of establishing an              between Mozambique and Malawi would be
     interconnection between the power systems in                 economically attractive for both parties. An
     the two countries. A study on the subject was                interconnection between the two countries
     made in 1986 under the auspices of the                       thus constitutes a valuable project
     Southern African Development Community
     (SADC) and funded by SIDA. The study                    4.   Development Strategies and Sponsor: The
     proved the feasibility of constructing a                     project will be implemented as a public sector
     transmission system at 132 kV between Tete                   project sponsored by the government of
     in Mozambique and Nkula Falls in Malawi,                     Malawi and Mozambique. In February 1998,
     transferring about 50 MW. In June 1996 an                    the Mozambican and Malawian Governments
     update study, funded again by SIDA, was                      signed an Inter-Governmental Memorandum
     carried out by SwedPower and proposed a                      of Understanding in order to implement the
     220kV line between Tete and Blantyre West                    project. It was agreed that Malawi would
     for the interconnection.                                     import 50 MW initially (and thereafter up to
                                                                  100 MW) from Mozambique or any power
     However, considering possible future                         utility signatory of the Southern African
     interconnections to Zambia and Tanzania, and                 Power Pool (SAPP).
     interconnecting the extreme northern area of
     Mozambique through the Malawian network,                     It was also agreed that all transmission
     EdM and ESCOM wish to design and                             equipment in Mozambique and Malawi
     construct the transmission line at 400 kV to                 should be owned, operated and maintained by
     meet the future requirements, but operate it                 the respective utilities (EdM of Mozambique
     initially at 220 kV.                                         and ESCOM of Malawi). The terms for the
                                                                  power import will be contained in a detailed
3.   Need for the Project: Malawi currently                       contract, involving the two utilities EdM and
     constitutes an island in SADC in that it is not              ESCOM. There would also have to be a
     electrically interconnected to any of its                    Power Purchase Agreement (PPA) between
     neighbours. All major power plants are                       the parties concerned on how to make
     located on the Shire River, which flows out of               available a suitable quantity of power from
     Lake Malawi. The Shire River also provides                   Cahora Bassa for export to ESCOM.
     most of the future prospects for additional
     hydropower generation. The development of               5.   Project Objectives: The interconnection
     additional hydropower is found to be rather                  would allow an exchange of power between
     costly, as the fall of the river is moderate.                Malawi and Mozambique and with any other
     Furthermore, the possibilities for short-term                power utility signatory of the SAPP. The
                                                                  project would also strengthen the regional
     power grid enabling both parties to benefit                   in Malawi and connected into the 132 kV
     from increased reliability of supply. In                      national grid.
     particular,    the    interconnection would
     significantly improve the reliability of the             7.   Investment Cost and Sources of Financing:
     Malawian power system. The Loss of Load                       The cost of the project, including
     Expectancy will be reduced to the                             contingencies but without interest during
     recommended level at a fraction of the cost                   Construction (IDC) is estimated at US$ 51.6
     that otherwise would be required for the                      million. It is assumed that the project will be
     installation of thermal power.                                implemented as one package jointly by the
                                                                   government of Mozambique and Malawi, and
     The interconnection would also reduce the                     they acquire the financing package for the
     impact of prolonged droughts in Malawi and                    whole project.
     ESCOM's ability to meet its demand. The
     power import via the interconnection may                                     Source                   US$ (Million)
     allow Malawi to defer certain heavy                           Multilateral/Bilateral-Mozambique           27.9
     investments for indigenous power. The                         Multilateral/Bilateral-Malawi               21.1
     interconnection will also allow Malawi to                     GRM                                          1.5
                                                                   GRMA                                         1.1
     export surplus energy generated during low                    Total                                        51.6
     load conditions when water otherwise would                    The financing will then be divided between the two
     have been spilled.                                            countries in accordance with the volume of work
                                                                   implemented in their respective countries. Accordingly,
6.   Project Description Consultancy services                      GRM and GRMA will finance 57% and 43% respectively
                                                                   from loans and internal sources. The adjacent table
     will include technical support to review the                  presents an indicative financing plan.
     existing feasibility study against recent
     developments and newly proposed network
     configuration. The review shall include
                                                                   It is also assumed that the governments will
     updating the network configuration, stability
                                                                   approach multilateral/bilateral donors and
     and load flow analyses, updating of costs, and
                                                                   meet the financing gap with long-term loans.
     elaboration on social and environmental
                                                                   The World Bank, as a lead partner, is
     impacts, and firming up the project’s
                                                                   promoting the project. Candidate funding
                                                                   institutions include the World Bank, SIDA
                                                                   (Sweden), NORAD (Norway), NORDIC
     The project will consist of the construction of
                                                                   Development Fund and the African
     220 km of 400kV line, with conductor size
                                                                   Development Bank (AfDB). The local costs
     and other parameters to be determined as part
                                                                   will most likely be covered from own
     of the updated feasibility study. The single
                                                                   resources of EdM and ESCOM. 95% of the
     circuit overhead line will initially be operated
                                                                   investment     will    be   financed   from
     at 220 kV. The line will be constructed from
                                                                   Multilateral/Bilateral sources, and the
     Matambo Substation at Tete in Mozambique
                                                                   remaining 5% by the Government of
     to Phombeya Substation in Malawi. The
                                                                   Mozambique (GRM) as well as the
     project will include stringing of a fibre optic
                                                                   Government of Malawi (GRMA).
     cable for telecommunications, which will
     eventually be extended to other cross-border
                                                              8.   Feasibility of the Project: In the 1996
     links to improve telecommunication services
                                                                   feasibility study, the behaviour of the
     in the sub-region.
                                                                   interconnected system was studied by
                                                                   simulating contingencies involving network
     The Matambo Substation at Tete in
                                                                   faults and generator unit trips, and the
     Mozambique will be extended by a new 220
                                                                   dynamic response of the power system was
     kV bay connected to the existing 220 kV
                                                                   reviewed. The interconnection is technically
     substation. The bay is to be located within the
                                                                   feasible. A limiting factor for power transfer
     existing substation area. The control facilities
                                                                   over the interconnection will be some internal
     for the 220 kV system will be installed in the
                                                                   network constraints rather than the thermal
     existing Control Building by an extension of
                                                                   capacity of the interconnection.
     control panels for the 220 kV system. Whilst
     design has to be finalised as part of the
                                                                   Technical viability of the tie-line options has
     updated feasibility study, it would be feasible
                                                                   been analysed, using load flow, fault current
     to install a 220/132 kV transformer with rated
                                                                   and stability calculations. The aim of this task
     capacity of 350 MVA (as per previous
                                                                   was to recognise possible needs of network
     feasibility study) at the Phombeya Substation
                                                                   reinforcements, in cases with and without the
                                                                   interconnection.       The       least      cost

     interconnection solution was then selected,                 existing roads in Malawi and Mozambique,
     relying on estimates of the total costs,                    which limits the encroachment on the
     including investments, cost of losses and                   environment and utilisation of virgin ground.
     operational costs. The economic analysis for                The need for new access roads is thus reduced
     the selected interconnector determined the net              considerably. The line will be connected to
     present worth (NPW) benefit at US$96                        one existing substation, namely Matambo and
     million at 10% discount.                                    one new substation at Phombeya. The project
                                                                 has, therefore, relatively low environmental
     The proposed interconnection, where the tie-                impacts, which will be mitigated by
     line would be designed for 400 kV, would                    employing appropriate measures during its
     improve the technical performance of the                    construction and operation.
     interconnection system, and provide facilities
     for future extension of the interconnection to              As the Environmental Impact Assessment
     Tanzania and Zambia. The Engineering                        (EIA) undertaken in the 1996 feasibility study
     consultant will review the system and                       was preliminary, it has been found necessary
     economic analyses before proceeding with the                to carry out a full environmental assessment.
     detailed design of the project.                             EDM and ESCOM have elaborated the Terms
                                                                 of Reference (TOR) for the EIA and will soon
9.   Socio-Economic Benefits: Electricity trade                  undertake the study.
     between Mozambique and Malawi will ensure
     adequate supply of power in Malawi at the              11. Issues and Proposed Actions: Regarding the
     least cost to meet the growing needs of the                initial power import needed by Malawi,
     economy, seeing that Malawi is not yet                     ESKOM of South Africa has offered to
     interconnected to the Southern African Power               allocate part of its Cahora Bassa power
     Pool. Furthermore, savings would be realized               allocation to EdM to supply Malawi.
     through reduced reserve requirements and                   Furthermore, HCB has offered to supply
     higher system reliability.                                 ESCOM directly with the power available
                                                                from its stand-by unit. ESCOM of Malawi
     The savings thus realized would enable                     has to respond to this offer and choose the
     GRMA in particular to make additional                      alternative that suits the utility the best and
     investments on projects that would contribute              conclude the PPA. In addition, ESCOM and
     to economic development and poverty                        EdM need to conclude Construction and
     reduction. Besides, a number of jobs will also             Operation Agreements for wheeling the
     be created, in particular during the                       power through EdM’s network.
     construction stages, for local workers in
     impoverished environments.                             12. Involvement of NEPAD: NEPAD would
                                                                follow up to ensure that the various
10. Environmental         Sustainability:     The               agreements       are   concluded.     NEPAD's
    interconnection of the power systems of                     assistance will be required in promoting the
    Malawi and Mozambique constitutes the most                  project, in addition to the efforts to be made
    viable solution to Malawi's current problems                by the Governments of Malawi and
    in reducing the risk of power shortages due to              Mozambique to ensure that project
    the receding level of Lake Malawi. The                      development proceeds. NEPAD would bring
    alternative solution to the interconnection is              the project to the attention of potential
    the installation of gas turbines as soon as                 investors/facilitators to mobilize financial
    possible. The operation of gas turbines has,                resources for the project. NEPAD will
    however, the inherent disadvantage that it                  regularly monitor the implementation of the
    entails transportation of fuel on land and                  project to ensure its successful completion,
    subsequent emission of pollutants to the                    and on completion make an assessment of its
    environment, which needs to be mitigated                    impacts on poverty alleviation in the
    through costly measures.                                    continent.

     In the 1996 feasibility study, a preliminary           13. Plan of Action for Project Implementation:
     line route for the interconnection has been                The various agreements including the Power
     established with due consideration to                      Purchase Agreement, the Construction and
     environmental constraints. Accordingly, the                Operation Agreements, are expected to be
     Michiru and Thambani forest reserves as well               concluded towards the end of 2002. With the
     as the Majete game reserve in Malawi and                   consultants in place by the 4 th quarter of 2002,
     Mozambique have been avoided in the route                  the detailed design tender documents and the
     selection. Furthermore, the route follows                  EIA report will be ready in the 2nd quarter of
     2003. It is expected that the donors will
     approve the financing for the project in the 3rd
     quarter of 2003. With the work contracts
     awarded in 1st quarter 2004, the project will
     be completed by the end of 2005.

14. Conclusions: The project is technically
    feasible and economically viable with
    minimum environmental impact.             The
    political climate and the measures taken by
    GRM to liberalise the economy would attract
    investors to develop the interconnection.

     The project would generate revenue for GRM
     and significant savings for GRMA, which
     could be utilized for projects that would
     contribute towards poverty reduction,
     providing basic services to the population.
     The project would create local employment
     for the population that would improve their
     welfare. The project is, therefore, to be
     supported for immediate implementation.

     KENYA-UGANDA OIL PIPELINE                                    steadily and the long-term security of supply
     PROJECT ASSESSMENT REPORT                                    of petroleum products is vital for the
                                                                  continued development of the region. The
1)    Introduction: The proposed Kenya-                           reliability of the supply of oil products will
      Uganda Pipeline extension will link                         also be improved. The cost of transporting
      Eldoret, the current terminal of the pipeline               oil products from Mombassa to Kampala is
      from Mombassa, and Kampala, the capital                     high and is reflected in the high cost at the
      of Uganda, over a distance of 320 km.                       pump in the latter. The proposed new
                                                                  extension of the pipeline would lead to
2)    Background: The proposed Kenya-Uganda                       substantial savings in Uganda and
      Oil Pipeline will form an extension to the                  neighbouring countries that depend on the
      existing Western Kenya Pipeline System,                     supply of oil products from Kampala.
      owned and operated by the Kenya Pipeline
      Company. The Western Kenya System                           There would be need to construct a new
      (encompassing       Nairobi-Kisumu    and                   common oil product terminal at Kampala,
      Nairobi-Eldoret) was commissioned in                        Uganda to be used by all oil marketing
      1994, while the Mombassa-Nairobi pipeline                   companies in Uganda. The oil companies'
      is about 25 years old.                                      existing storage and distribution depots in
                                                                  central Kampala are old and unsuitably
      At present an estimated 90% of the oil                      located.
      products are moved from Eldoret or Kisumu
      pipe-head to Uganda by road. A number of               4)   Development Strategy and Sponsors: The
      alternative transport options for transporting              project would be developed by the
      the oil products from the Indian Ocean coast                governments of Kenya and Uganda (the
      to Kampala were also evaluated. These                       sponsors). This would be a public/private
      included pipeline from Mombassa to                          sector partnership and it is expected that a
      Eldoret/Kisumu and then road to Kampala;                    new pipeline company would be established
      pipeline from Mombassa to Eldoret and then                  with Kenyan and Ugandan public and private
      rail to Kampala; pipeline from Mobs to                      interests. Project financing would be required
      Kisumu and marine to Port Bell; rail from                   for both sections of the proposed pipeline.
      Mombassa to Kampala; and rail from                          Funding would be through multilateral
      Mombassa to Mwanza, on Lake Victoria,                       sources as well as bank debts and export
      and then marine to Port Bell. The proposed                  credits. It is expected that each country
      new pipeline from Eldoret to Kampala, as an                 would borrow funds for the portion of the
      extension of the existing Mombassa-                         proposed extension in the country. It is
      Eldoret/Kisumu pipeline, would be the least                 envisaged that both countries will actively
      cost route.                                                 participate in the mobilisation of the
                                                                  necessary funds for the pipeline.
      The Governments of Kenya and Uganda
      jointly commissioned a feasibility study               5)   Project Objectives: The objective of the
      in1996 for the extension of the pipeline; the               project is to provide an efficient and safe
      final report of the study was submitted to the              mode of transport between Eldoret, in Kenya
      two Governments in May 1999. That study                     and Kampala, in Uganda of petroleum
      has since been updated, the report of which                 (white) products, including diesel, kerosene
      was completed in October 2001.                              and gasoline, through the construction of a
                                                                  pipeline between the two towns.
3)    Need for the project: Uganda, Rwanda,
      Burundi and the Democratic Republic of                 6)   Project Description: The project involves
      the Congo rely upon Kenya and Tanzania                      (a) the construction of a pipeline between
      for the import and delivery of petroleum                    Eldoret, Kenya and Kampala, Uganda, over a
      products. These markets are currently                       distance of approximately 320 km, of which
      served by a combination of routes and                       118km is within Kenya and 202 km within
      modes of transportation: by a pipeline from                 Uganda; (b) adjustments to the current
      Mombassa to Kisumu and/or Eldoret in                        terminal at Eldoret, (c) installation of
      Kenya and then by road to Kampala and                       intermediate pumping stations, at Eldoret and
      beyond, or by rail from Dar Es Salaam in                    between Eldoret and Kampala and (d)
      Tanzania via Mwanza, on Lake Victoria                       construction of a new common user terminal
      onto Port Bell in Uganda. The markets in                    in Kampala.
      the above mentioned countries are growing
                                                             7)   Investment     Costs    and     Sources    of
     Financing: The cost estimate of the                         over a 20-year period. Yearly operating costs
     proposed, including 10% contingencies, is                   of the proposed pipeline have been estimated
     estimated at US $ 90.5 million at 2001                      at 1.5 % of the capital costs (of the pipeline
     price level and the breakdown of the costs                  and Kampala terminal, given in Section 6
     are given below.                                            above, equivalent to $US1.23 million, at 2001
                                                                 prices. The Economic Internal Rate of return
                                                                 (EIRR) of the project is 21% and the project’s
       Pipeline                   US$ 46.5                       Net Present Value is US$43 million. The
       Eldoret Terminal           US$ 3.9                        financial viability of the project was also
       Pumping stations           US$ 5.8
                                                                 examined. Assuming a tariff of US$37 per
       Kampala Terminal           US$26.1
       Sub-total                  US$82.3                        cubic metre the Financial Internal Rate of
       Contingencies (10%)        US$8.2                         Return (FIRR) is estimated at 25% with a Net
       Total                      US$90.5                        Present Value of US$55 million.

                                                            9)   Socio-economic Benefits: Kenya would
                                                                 benefit from the additional revenues received
                                                                 from transporting the products and from the
                                                                 improved pipeline infrastructure all of which
                                                                 would enhance economic and social
                                                                 development in the immediate areas and the
                                                                 country as a whole and contribute to poverty
                                                                 reduction. A potential benefit is reduced cost
                                                                 of tariff for the transport of oil products
                                                                 between Kenya and Uganda, which would, in
                                                                 turn be reflected in cheaper supply to the
                                                                 growing markets and thereby spur economic
     The project is expected to be financed from                 and social development, not only in the
     bank debts, export credit agencies and                      respective countries, but also in the sub-
     multilateral sources. It is assumed that the                region as a whole.
     project will be implemented as one package.
     It envisaged that in the new entity to be                   There are also potential fiscal benefits to both
     established, the majority shares would be                   countries. Currently, there is, at Eldoret, a
     held by the private sector.                                 significant number of incidents of smuggling
                                                                 of duty free oil products across the border
8)   Feasibility    of    the    Project:    The                 between Kenya and Uganda. With the
     construction of a new pipeline between                      construction and operation of the pipeline
     Eldoret and Kampala has been found to be                    such smuggling will be reduced considerably.
     technically feasible. Demand for oil                        There would also be reduced road accidents,
     products in Uganda, Rwanda Burundi and                      and with it lower accident costs. Of major
     Democratic Republic of Congo is expected                    importance to both Kenya and Uganda will be
     to grow. From hydraulic analysis, an 8-inch                 less damage to the roads; the cost of annual
     bore nominal pipe between the two towns                     periodic maintenance will go down by as
     has been found to be most suitable. The                     much as 50%. The savings would be used for
     proposed route presents no technical                        providing better road infrastructure and for
     difficulty; however the crossing of the Nile                general economic and social development,
     will require specialist techniques. It has                  including poverty reduction.
     been determined that the most economic
     solution of the proposed pipeline is the               10) Environmental      Sustainability:        The
     construction of a new common oil product                   environment review in the feasibility study is
     terminal at Kampala, to be used by all the                 preliminary. Consequently, prior to the
     oil marketing companies in Uganda.                         construction of the proposed pipeline, a
                                                                detailed Environmental Impact Assessment
     The economic viability of the project has                  will be required.
     been     determined    using      appropriate
     indicators. The economic analysis is based             11) Issues and Proposed Action: Pipeline
     on the assumption that construction will                   Integrity International (PII) conducted an
     commence in 2002 and take two and a half                   extensive survey of the existing pipeline and
     years to complete, with the first full year of             made a number of key recommendations
     operation in 2005. The comparative analysis                with a schedule for their implementation in
     of alternative modes of transport is done                  order to maintain the integrity of the existing

     pipeline and prevent further deterioration in
     its condition. The progress in the
     implementation        of       the        PII
     recommendations has been slow. These
     proposals should be adequately addressed
     as the potential investors would view the
     issue unfavourably.

    The two Governments should conclude an
    Agreement on the formation of a new
    company to construct and operate the
    proposed pipeline extension from Eldoret to
    Kampala. They should also conclude a Host
    Government/Concession Agreement with
    the developer of the pipeline. There is also
    need to negotiate and conclude Wheeling
    Agreements between the parties concerned.

12) Involvement of NEPAD: Assistance of
    NEPAD would be sought in expediting the
    conclusion of the above-mentioned
    agreements, in facilitating the mobilisation
    of funds for the project as well as in
    monitoring the implementation of the

13) Plan of Action for the Implementation of
    the Project: The countries should, as
    noted, conclude the above-mentioned
    agreements and decide on the most
    appropriate      public/private    sector
    partnership arrangements for the new
    entity. Meanwhile, once the framework for
    implementing the project has been agreed
    upon, the front-end engineering design
    should be undertaken to provide overall,
    detailed design.

14) Conclusions: The project is technically
    suitable,    economically     viable    and
    financially attractive. Kenya would gain in
    increased       revenues      from      the
    implementation of the project. At the same
    time Uganda, Rwanda, Burundi and eastern
    Democratic Republic of Congo would
    benefit from reduced tariffs for the oil
    products, and more reliable supplies of
    these to meet the expected growth in
    demand. The increased revenues and
    savings would be used for further economic
    and social development, including poverty
    reduction in those countries. The project,
    therefore, deserves NEPAD’s full support.

     WEST AFRICAN GAS PIPELINE (WAGP)                            The IGA includes the governments' commitments
                PROJECT                                          to the pipeline owners and gas distributors on the
       PROJECT ASSESSMENT REPORT                                 conditions for development, construction and
                                                                 operation of the WAGP, as well as fiscal and
1.    Introduction: The Proposed West African Gas                customs policies for the venture. The project has
      Pipeline (WAGP) project will deliver natural               received administrative support from the
      gas from the Western Niger delta to Takoradi,              ECOWAS Secretariat.
      Ghana and to Cotonou (Benin), Lome (Togo)
      and Tema (Ghana) through pipeline spurs.              3.   Need for the Project: The project is needed for
                                                                 ensuring the economic growth in Nigeria, Benin,
2.    Background: In 1982, the Economic                          Togo, and Ghana. The World Bank estimates that
      Community of West African States (ECOWAS)                  Benin, Togo and Ghana can save nearly US$500
      proposed the construction of a natural gas                 million in energy costs over a 20-year period as
      pipeline throughout West Africa. ECOWAS's                  WAGP-supplied gas is substituted for more
      regional energy distribution plan (1991) and a             expensive fuels in power generation. Ghana
      feasibility study on the supply of Nigerian gas            estimates that it will save between 15 000-20 000
      to Ghanaian markets (1992) further supported               barrels per day of crude oil by taking gas from
      the need for developing a regional pipeline. A             the WAGP to run its power plants. Natural gas
      feasibility report (1990), prepared for the World          will be a cheaper alternative to the crude oil used
      Bank, confirmed the commercial viability of a              in the Takoradi Power Plant. The gas supplied via
      pipeline to transport Nigerian natural gas to              the WAGP could also be used for strategic
      Benin, Togo and Ghana. In September 1995, the              projects such as Ghana's bauxite and iron ore
      governments of the four nations signed a Heads             development, phosphate development in Togo,
      of Agreement (HOA), broadly outlining the                  and other industries in Benin.
      fiscal and legal framework for construction and
      operation of the gas pipeline across the four         4.   Development Strategies and Sponsor: The
      countries.                                                 project will be developed by a consortium
                                                                 consisting of public and private enterprises
      An energy shortage the region experienced in               namely, Chevron, Shell, Nigeria National
      1997-1998 rekindled interest in the gas pipeline           Petroleum Corporation, SOBEGAZ, SOTOGAZ,
      project. In August 1998, a consortium led by               and Ghana National Petroleum Corporation/Volta
      Chevron, Shell, Nigerian National Petroleum                River Authority.
      Corporation    (NNPC),      Ghana      National
      Petroleum Corp. (GNPC) - now replaced by              5.   Project Objectives: The objective of the project
      Volta River Authority (VRA), Société                       is to optimise the energy resources of West
      Beninoise de Gaz (SoBeGaz), and Société                    Africa by promoting the utilization of natural gas
      Togolaise de Gaz (SoToGaz) signed an                       by industries, oil-fired power plants, and
      agreement for commissioning a feasibility study            domestic consumers in Nigeria, Benin, Togo, and
      on the West Africa Gas Pipeline (WAGP). The                Ghana. The utilization of natural gas, which
      study, which was completed in March 1999,                  would otherwise have been flared, will also lead
      concluded that the project is technically and              to benefits to the local and global environment.
      commercially feasible due to the potential
      demand of natural gas that exists in the              6.   Project Description: The WAGP will traverse a
      countries concerned. The feasibility study                 distance of about 660 km both onshore and
      further saw no major legal issues affecting the            offshore before reaching its final planned
      project implementation.                                    terminus at Takoradi in Ghana. The first portion
                                                                 of the pipeline will deliver gas to the existing
      On August 11, 1999, in Cotonou, Benin, a                   Escravos-Lagos pipeline (ELP), commissioned in
      Memorandum of Understanding was signed by                  1989, for supplying natural gas to Nigeria's Egbin
      the four countries covering the legal framework            power plant and other industrial consumers in
      for     establishing     the    consortium  for            Lagos and Ogun States. A 57 km onshore portion
      implementing the WAGP. Furthermore, a Joint                of the WAGP will run from Alagbado to Seme
      Venture Agreement naming Chevron as the                    beach in Lagos State. The WAGP will continue
      WAGP project manager was signed on August                  offshore (560 km), with proposed landfall spurs
      16, 1999 in Abuja, Nigeria. In February 2000,              at Cotonou (Benin) - 15 km, Lome (Togo) - 15
      the four nations signed an Inter-Governmental              km, Tema (Ghana) - 15 km, and Takoradi
      Agreement (IGA) establishing the framework                 (Ghana). The initial capacity of the WAGP will
      for realizing the pipeline project.                        be 200 Mmcf/d, with a possibility of expanding it
                                                                 to 400 Mmcf/d as demand grows.

7.   Investment Costs Source of Financing: The                   impacts, an EIA Study of the Project is
     project is estimated to cost about US$ 450                  underway.
     million. The project will be funded by the
     consortium led by Chevron as indicated in              11. Issues & Proposed Actions: The outstanding
     Sections 2 and 4. The project is expected to be            issues are: a) Concession Agreement; b) Off-take
     financed through Bank debts and Export Credit              Agreements; and c) Ratification of the concerned
     Agencies (ECAs) facilities.                                agreements by respective parliaments.

8.   Feasibility of the Project: The WAGP will                   The governments concerned should hold
     initially transport 120 Mmcf/d of gas to Ghana,             negotiations with developers to finalize the above
     Benin and Togo beginning in 2004. Gas                       agreements and seek approvals from respective
     deliveries are expected to increase to                      legislatures soon in order to prevent further
     150 Mmcf/d in 2005, 210 MMcf/d in 2010 and                  increases in the cost of the project.
     be 400 Mmcf/d by the end of 2020. There is
     also a possibility of extending the WAGP to                 The risks associated with the construction of the
     markets in Côte d'Ivoire. Similarly, it is also             WAGP concern the likelihood of under funding
     conceived that it may eventually terminate in               by the governments of Nigeria, Ghana, Togo, and
     Senegal. This concept is being hindered by the              Benin because of participation of the Government
     current regional instability in several countries           undertakings in the consortium established for
     (Liberia, Sierra Leone, Guinea, and Guinea-                 development of the pipeline. Nigerian National
     Bissau) that lie on the route to Senegal.                   Petroleum Company (NNPC), Ghana National
                                                                 Petroleum Corp. (GNPC)/Volta River Authority
9.   Socio-Economic Benefits: The WAGP will                      (VRA), Société Beninoise de Gaz (SoBeGaz),
     result in the creation of tens of thousands of              and Société Togolaise de Gaz (SoToGaz) are
     jobs in the sub-region. The supply of gas will              partners in the Consortium led by Chevron and
     render enormous benefits to millions of                     Shell. All the four companies are obliged to meet
     unserved consumers in Ghana, Benin and Togo.                their funding obligations to the Consortium.
     New power supplies, fueled by gas from the                  Under consortium terms, the NNPC, GNPC,
     project, will stimulate the growth of new                   SoBeGaz, and SoToGaz share costs with its
     industry. In broad terms, the utilities concerned           foreign partners namely, Shell and Chevron. The
     operate about 700 MW of diesel/crude oil fired              budgetary constraints on NNPC, GNPC/VRA,
     power plants. These will be renovated to utilize            SoBeGaz, and SoToGaz will result in delays.
     gas. It is estimated that about US$ 600 million
     will be spent on the development of new and                 The governments should ensure that they make
     renovated power facilities to utilize the gas.              adequate budgetary provisions for their
     Furthermore, the utilities will benefit from the            undertakings in accordance with obligations
     efficiency gains, which will be passed on to                under the consortium.
     consumers in terms of a reduced price of
     electricity. The substitution of natural gas will      12. Involvement of NEPAD: NEPAD would work
     reduce greenhouse gases significantly in West              with the governments concerned to help generate
     Africa. The sub-region will benefit from                   political support for the adjustments in policy and
     suppliers that catalyse direct foreign investment          regulatory frameworks that are needed for this
     in new West African industries and accelerate              regional project initiative. NEPAD would also
     regional economic growth and development.                  help the institutions concerned to access global
                                                                funding. Since the project will require substantial
10. Environmental Sustainability: The major                     private sector involvement, NEPAD would
    positive environmental impact of WAGP will                  encourage the governments concerned to ensure
    be the development and use of gas currently                 that the environment for the private sector is as
    flared in Nigeria. Thus the utilization of natural          attractive as possible.
    gas, which would otherwise have been flared,
    will lead to benefits to the local and global                NEPAD would also be instrumental in helping
    environment due to reduced emission of                       countries that flare gas to take a continental
    greenhouse gases and heat. Research by                       approach to negotiations with the Global
    ecologists suggests that routine flaring of gas at           Environment Facility (GEF), the Carbon Fund,
    the Niger Delta facilities has stunted plant                 etc.
    growth and reduced crop yields in the sub-
    region. Cleaner-burning gas supplied by the                  NEPAD's assistance is required to facilitate the
    WAGP will replace petroleum products used in                 realization of agreements and approvals to ensure
    the generation of electricity. In order to quantify          that the project proceeds, and that financial
    both positive and negative environmental                     resources for the project are mobilised. NEPAD

     will monitor the implementation of the project
     to ensure its successful completion, and on
     completion make an assessment of its impacts
     on poverty reduction in the continent.

13. Plan of Action for Project Implementation:
    The commencement of the development phase
    depends on decisions and approvals indicated in
    Section 11 above. The developer will take about
    24 months to construct the pipeline from the
    date of approval of the project and the
    completion of the project is scheduled for

14. Conclusions: The project is technically feasible
    and economically viable, with significant
    environmental benefits. The project is also
    important to harness the energy resources in
    West Africa. The project offers regional energy
    security at an attractive cost and therefore
    stimulates industrial development at a faster
    pace - it is a catalyst for regional integration.

     The WAGP Project is one of the signposts for
     ECOWAS integration, and will support
     significant regional economic integration
     resulting in greater inter-linked efforts by the
     governments to pursue sustainable economic
     development. It has great potential in terms of
     NEPAD's poverty reduction goals, and thus
     deserves NEPAD's full support.

       TUNISIA-LIBYA GAS PIPELINE                               the Tunisian Electricity and Gas Utility (STEG)
      PROJECT ASSESSMENT REPORT                                 and the National Oil Company (NOC) of Libya.
                                                                These utilities will create a joint service company
1)   Introduction: The proposed Tunisia-Libya Gas               called Joint Gas for the implementation and
     Pipeline extension will link Mellita terminal              operation of the gas pipeline. Agreement has
     (Libya) and Gabes terminal (Tunisia) over a                been reached for the two countries to equally
     distance of 275 km. The pipeline will enable               share the investment cost of the project. The
     Tunisia to import natural gas from Libya.                  Company will reserve the right of ownership of
                                                                all the infrastructures in the Tunisian-Libya gas
2)   Background: Since the commissioning in 1983                pipeline.
     of the Trans-Mediterranean (Transmed) Gas
     Pipeline, which links the Rassi R’mel gas field       5)   Project Objectives: The project will guarantee
     in Algeria to Italy through Tunisia, natural gas           the supply reliable energy to Tunisia by
     consumption in Tunisia has developed                       diversifying the supply sources through stepping
     considerably. The consumption reached 2.88                 up regional cooperation. As specific objective,
     million tonne oil equivalent (mtoe) in 2001                the project will supply low cost and
     against a supply of 3.06 mtoe including 2.30               environmentally clean natural gas to the Tunisian
     mtoe of local production. The demand for gas               households, power stations and industries. It is
     is forecast to each 5 mtoe in 2006 and 11 mtoe             expected that, on commissioning of the project,
     in 2020. The country will be able to meet its              the rate of penetration of natural gas supply to the
     natural gas demand up to 2006 from the present             households would double the penetration level of
     arrangement of import from Algeria and the                 2001 recorded at 21%.
     development of local production. The proposed
     project will enable Tunisia to import natural gas     6)   Project Description: The project involves (a)
     from Libya to bridge the forecast supply                   the construction of a pipeline between Mellita in
     shortfall in 2006-2007 and beyond.                         Libya and Gabes in Tunisia, over a distance of
                                                                approximately 275 km, of which 70km is within
     The Governments of Tunisia and Libya jointly               Libya and 205 km within Tunisia; (b)
     commissioned a feasibility study in1996 to                 compression arrangement at Mellita and Gabes;
     1998 for the extension of the pipeline. The                and (c) installation of intermediate inspection
     study determined that the project is technically           stations.
     feasible and financially attractive. The two
     Governments signed a Memorandum of                    7)   Investment Costs and Sources of Financing:
     Understanding (MOU) in February 2002 to                    The cost of the proposed project, excluding
     implement the project as a public sector project.          Interest During Construction (IDC), taxes and
                                                                duties, is estimated at US$280 million at 2001
3)   Need for the project: Tunisia is less endowed              price level and the breakdown of the costs are
     with oil and gas resources compared with its               given below.
     neighbouring countries.       The country is
     presently shifting from a situation of self-                 Item                              Cost Estimate
                                                                                                    US$ (million)
     sufficiency in energy in 2000 to a situation of
                                                                  Pipeline                                241
     shortfall following the depletion of its oil                 Compression Station                      33
     reserves. A shortfall of 0.16 mtoe energy was                Sub-total                               274
     recorded in 2001.         Energy consumption                 Contingencies                             6
     dominated by petroleum products (59.1%) and                  Total                                   280
     natural gas (39.4%) was about 6.86 mtoe as
     against a supply of 6.70 mtoe. To meet growing
     energy demands, the Government Tunisia has                 The project is earmarked for African
     defined a policy, which among other things,                Development Bank (AfDB), and Arab Fund for
     seeks guaranteed energy supply by diversifying             Economic and Social Development (AFESD)
     its sources of supply through enhancing                    financing. The loan will equally be shared by the
     regional cooperation to increase the share of gas          Governments of Tunisia and Libya.
     consumption to 44% in 2006. The proposed
     new extension of the pipeline would enable            8)   Feasibility of the Project: A techno-economic
     Tunisia to accommodate the forecast demand.                feasibility study was undertaken in 1996-1998.
                                                                The study determined, among others, (a) the
4)   Development Strategy and Sponsors: The                     quantity of the gas to be transmitted; (b) the
     project would be developed by the Governments              parameters of the gas pipeline and compression
     of Tunisia and Libya (the sponsors of the                  stations, and the routes of the pipeline; and (c) the
     project). The project’s executing agencies are

     investment and operational cost of the project.            Once the MOU is ratified, the Company will be
     The study found the project financially                    formed. The utilities of the two countries will
     attractive.                                                sign Gas Conveyance Agreement with the
                                                                Company and between themselves Gas Purchase
9)   Socio-economic Benefits: The project will                  Agreement. Following the formation of the Joint
     benefit both Tunisia and Libya. The project will           Gas Company, the two governments will
     guarantee the supply of natural gas, which is              approach financiers for securing funding for the
     cheap compared to petroleum products, to                   project. The project will be implemented between
     power stations, industries, businesses and                 2003-2007, over 42 months after the funding is
     households in Tunisia. Specifically, the project           put in place.
     will increase the penetration of commercial
     energy in households. It will also reduce the oil     14) Conclusions: The project is technically suitable
     bill of the country, which has adversely affected         and financially attractive. The project would
     the country’s balance of payment, through                 reduce pollution by the use natural gas, in place
     substitution of heavy fuel and gas oil by low             of petroleum products, in power stations,
     cost and environmentally clean natural gas. The           industries and households in Tunisia. The project
     sales of the natural gas, which might otherwise           will also contribute in reduction of Tunisian oil
     be flared, would generate revenue to the                  bills and promote competitiveness in the Tunisian
     Government of Libya.                                      industry through supply of low cost natural gas.
                                                               The project will create employment opportunities
10) Environmental Sustainability: The project,                 and contribute to the living conditions of the
    through substitution of heavy fuel and gas oil by          population in Tunisia. Furthermore, the project
    natural gas in Tunisia, would contribute to the            will generate revenue to Libya through export of
    reduction of pollution. As the project would not           the natural gas, which otherwise might have been
    involve manufacturing processes, it will not               flared. The project, therefore, deserves NEPAD’s
    produce effluents discharged to the air or soil.           full support.
    Apart from terminal stations, which will be
    incorporated in the existing industrial zones, the
    project major works involves laying a pipeline
    underground that does not generate noise.
    Notwithstanding the above, a process has been
    started to undertake an Environmental Impact
    Assessment of the project, which would allow
    instituting measures to mitigate the negative
    impacts of the project both during construction
    and operation.

11) Issues and Proposed Action: In February
    2002, MOU has been signed between the
    governments of Tunisia and Libya for the
    implementation of the project. The MOU is still
    to be ratified by the Parliaments of the two
    countries, which is a requirement for the
    formation of the Joint Gas Company. The two
    governments should therefore expedite the
    ratification of the MOU and prepare the legal
    statue and organizational framework of Joint
    Gas in order to establish and operationalize the
    Company immediately after ratification.

12) Proposed involvement of NEPAD: NEPAD
    would promote the project. Specifically,
    NEPAD would facilitate the ratification of the
    MOU, conclusion of the various agreements, the
    mobilisation of funds for the project as well as
    monitor the implementation of the project.

13) Plan of Action for the Implementation of the
    Project: The countries should have the MOU
    ratified by Parliament of the two countries.

     DRC-GRAND INGA INTEGRATOR STUDY                              integrate the power systems of the African sub-
           TERMS OF REFERENCE                                     regions and the neighbouring continents.

1.    Introduction: The Grand Inga Integrator Study         4.    Study Description
      is intended to investigate the possibility of
      developing the hydropower potential at Grand          (a)   Technical Study: The consultant will initially
      Inga and transmitting the power to the                      review the various studies undertaken related to
      continent’s sub-regions (east, west, north, south           the development of Grand Inga, including the
      and central). The study will also look into                 Preliminary Investigation on the Development of
      wheeling of the power through the North                     Inga prepared by EDF (France) in 1974, and the
      African interconnection to Europe and the                   DRC-Egypt Interconnection Study conducted by
      Middle East. Once the sub-regional power                    EDF/Lahmeyer in 1997.
      interconnection is complete, Grand Inga would
      serve as an integrator of the sub-regional                  During the DRC-Egypt Interconnection study, the
      interconnections.                                           consultants had advanced the Grand Inga
                                                                  generation study to pre-feasibility study level.
2.    Background: The Republic of Congo (DRC)                     During the present study the consultants will
      has extensive hydropower resources. When                    undertake additional investigations, including
      considering the average potential hydropower                geological, hydrological, and optimization studies
      output of 774 TWh per annum, the DRC stands                 on dams and electromechanical equipment, and
      third behind China and Russia, which can                    determine the best scheme to exploit Grand Inga's
      produce 1,320 TWh and 1,096 TWh per annum                   potential at feasibility level.
      respectively. The USA and Canada follow the
      DRC with potential production figures of 701                Once the generation study has been completed,
      TWh and 530 TWh per annum respectively.                     the consultant will carry out market surveys by
      When expressed as firm power capacity, the                  sub-region (central, east, west, north and south).
      DRC potential is equivalent to 100,000 MW of                The market survey will also include assessment
      which approximately 40% is located at Grand                 of the demand potential for export to Europe and
      Inga.                                                       the Middle East. Through transmission network
                                                                  analysis (load flow and stability analyses), the
      Whilst abundant unused capacity is available for            consultant will determine the best transmission
      hydropower generation in the DRC, only 2%                   network schemes to transmit power from Grand
      (2,487 MW) has been developed to date. The                  Inga to meet the demand of the African sub-
      national grid of the DRC is interconnected to               regions and export the surplus to the
      the Southern Africa Power Pool (SAPP)                       neighbouring continents. Thus Grand Inga would
      through the Zambian power system via a 220                  serve as an integrator of the African sub-region,
      kV network to export part of the surplus                    Europe and the Middle East.
      generation. A project has been initiated to
      strengthen this interconnection by constructing       (b) Environmental Impact Assessment Study: The
      an additional 220/330 kV tie-line to transfer the         study will also assess the environmental impacts
      remaining surplus power to the south.                     of the project both at the Grand Inga Dam and
                                                                along the transmission routes and recommend
      In 1997 a study financed by the African                   mitigating measures to minimize the negative
      Development Bank (AfDB), was undertaken to                impacts and enhance the positive impacts.
      exploit the hydropower at Grand Inga and                  Whenever possible the costs/benefits will be
      transmit the power to Egypt whilst tapping the            valued in monetary terms and considered in the
      line along the route to supply Chad, the Central          investment and operational costs, and
      African Republic and the Sudan. The study                 subsequently in the financial and economic
      recommended the installation of 26x750 MW at              evaluations.
      Grand Inga, construction of 5,300 km of 800 kV
      DC line, erection of 11 switching stations and 4      (c)   Cost Estimates: The consultant will prepare
      converter stations to supply the four countries             detailed cost estimates for the selected
      considered in the project.                                  interconnector. The project cost estimate will be
                                                                  prepared by work component (generation,
3.    Study Objective: The objective of the study is              transmission line, substation, communications,
      to investigate the feasibility of developing the            environment and consultancy services) and will
      hydropower potential at Grand Inga to supply                be broken down into foreign and local
      the sub-regions in the African continent and                components. The cost estimates will show the
      transmit the surplus power to neighbouring                  physical and price contingencies separately.
      continents. If implemented, the project would

(d) Implementation schedule: The consultant will                             consultant has been appointed. If funds are
    then prepare an implementation schedule for the                          available in the 4 th quarter of 2002, the consultant
    project. The implementation schedule will take                           should be in place at the beginning of the 3rd
    into account the time required for sourcing of                           quarter 2003 and complete the study by the end
    financing, selection of consultants, preparation                         of the 3nd quarter 2005.
    of tender documents, selection of contractors,
    manufacturing and installation of equipment.                        7.   Executing Agencies: As the study involves a
                                                                             continent-wide study, it will be implemented with
(e)    Financial and Economic Evaluations: The                               the    involvement      of     the    sub-regional
       consultant will identify initially the benefit                        organizations. Thus the DRC, CEMAC (central
       generated as a result of the interconnection.                         sub-region), EAC (east sub-region), ECOWAS
       He/she will carry out financial evaluations and                       (west sub-region), COMELEC (north sub-region)
       determine the Financial Internal Rate of Return                       and SAPP (south sub-region) will form a Study
       (FIRR) and the Economic Internal Rate of                              Implementation Unit (SIU) to implement the
       Return (EIRR) of the project, and determine the                       study.
       viability of the project.
                                                                        8.   Proposed Involvement of NEPAD: NEPAD
(f)    Cooperation Agreement: The consultant will                            would play a facilitatory role in (a) bringing the
       identify and recommend a possible strategy for                        RECs together to implement the study, and (b)
       the development of the project and mechanisms                         mobilization of resources for the study. NEPAD
       of financing. It is expected that the project                         would monitor the implementation of the study.
       would be implemented by two project
       companies (a Generation Company and a                            9.   Conclusions: The potential of Grand Inga is
       Transmission Company) formed with the                                 about 40% of the present installed generation
       participation of public and private sectors, with                     capacities in Africa. The proposed study is
       the major share held by the private sector.                           intended to investigate how, in the long-term, the
                                                                             Grand Inga hydropower potential could be
       The consultant will prepare model agreements                          developed to (a) integrate the power system
       based on experience of similar cooperation                            interconnections of the sub-regions (central, east,
       agreements. The model agreements will include                         west, north and south), and (b) strengthen the
       a Concession Agreement, Power Purchase and                            power exchange between the continent and
       Wheeling Agreements, and Construction and                             Europe to enhance the north-south partnership.
       Operation Agreements.                                                 The study, therefore, deserves the full support of
(g) Conclusions and Recommendations: The
    consultant will finally make conclusions as to
    the feasibility of the project based on the
    findings of the various specific studies
    (technical, economic, social, other benefits,
    environmental and operation). If found feasible,
    he/she will then propose an action plan for the
    development of the project.

5.     Study Cost Estimate and Sources of

                       Item                        Total (US$)

      Generation                                     2,000,000
      Transmission                                   3,000,000
      Total                                          500,0000
      Contingencies (10%)                             500,000
      Grand Total                                    5,500,000
      The cost of the study, net of taxes and duties, and the
      indicative financing plan is presented in the adjacent table.
      It is expected that 95% of the study cost will be financed
      from Multilateral/Bilateral sources and the balance of 5%
      will be borne by the sponsors of the project.

6.     Study Implementation schedule: The study
       will be implemented over 24 months after the

     DRC-ANGOLA-NAMIBIA (DRCANSA)                                route to transfer hydropower/gas power from
        INTERCONNECTION STUDY                                    DRC and Angola to the Southern African Pool
          TERMS OF REFERENCE                                     (SAPP) in general and South Africa in particular.

1.   Introduction: The DRCANSA study will                  4.    Study Description:
     investigate the feasibility of interconnection of
     the power systems of the Democratic Republic          (h) Technical Study: The consultant will initially
     of Congo (DRC), Angola and Namibia, and                   review the preliminary study undertaken in July
     transmitting hydropower from DRC and Angola               1998. He/she will then carry out a supply-
     via Namibia to South Africa. Specifically, the            demand analysis based on the generation
     study will make an assessment on                          expansion and demand forecast in each country
     interconnecting: the existing Inga Power Station          to determine the level of power exchange through
     (DRC) with the northern grid (Angola);                    the interconnector. Specifically, the study will
     Northern grid with central and southern grids             look into the possible utilization of flared gas in
     (Angola); and the Angolan grid with the                   Angola for power generation to feed the
     Namibian grid.                                            interconnector.

2.   Background: In 1998, the power utilities of the             The analysis will cover the period up to 2015.
     DRC, Angola, Namibia and South Africa                       The study will then assess the possible line routes
     carried out a ‘Preliminary Technical                        of the Power Transmission Line (PTL) in the
     Investigation’ to determine the feasibility of              Western Corridor and undertake network analysis
     linking Inga in the DRC and the three presently             (load flow and stability analyses) for the different
     isolated systems in Angola to the Namibian                  supply schemes identified in order to verify the
     Auas Substation near Windhoek (Namibia). The                technical feasibility of each scheme. He will then
     DRCANSA study was proposed as a possible                    carry out optimization studies and select the best
     alternative (Western Corridor) to the                       scheme from a technical and economic point of
     reinforcements to the Inga-Kolwezi HVDC and                 view. The consultant will then compare the
     Kolwezei-Luano AC line (Eastern Corridor).                  selected Western Corridor with the Eastern
                                                                 Corridor transmission network. The consultant
     The study investigated the various network                  will then carry out a detailed system study for the
     options with different network configurations               selected scheme.
     and routes and proposed the following hybrid
     AC and DC interconnection arrangement:                (i)   Environmental Impact Assessment Study: The
     Construction of a 400 kV AC network between                 study will also assess the environmental impacts
     Inga Hydropower Plant (DRC) and Luanda                      of the project and recommend mitigating
     (northern grid Angola); Construction of a 220               measures to minimize the negative impacts and
     kV AC network from Cambambe to Lomaum                       enhance the positive impacts. Whenever possible
     and Matala in Angola to link the three isolated             the costs/benefits shall be valued in monetary
     systems together; Construction of a 3rd 220 kV              values and considered in the investment and
     line between Luanda and Cambambe; and                       operational costs and subsequently in the
     Construction of a 500 kV HVDC line from                     financial and economic evaluations.
     Cambambe to Auas.
                                                           (j)   Cost Estimates and Sources of Financing: The
     This interconnector was found to be practical               consultant will then prepare detailed cost
     for transmitting 250 MW to Auas substation                  estimates for the selected Interconnector Project.
     without additional control equipment added.                 The project cost estimate will be prepared by
     However, with SVC arrangements at                           work component (transmission line, substation,
     Cambambe and Auas substations, up to 450                    protection and communication, civil works
     MW power could be transmitted to Auas. The                  environment and consultancy services) and will
     study indicated that 700-1,000 MW power                     be broken down into foreign and local
     could    be     imported  thorough    further               components. The cost estimates will show
     reinforcement in the DRC, Angola and South                  separately the physical and price contingencies.
     African networks.                                           The consultant will identify and recommend
                                                                 possible financiers of the project and prepare an
3.   Study Objective: The objective of the study is              indicative financing plan.
     to advance the preliminary study on DRCANSA
     carried out in July 1998 to feasibility level in      (k) Implementation schedule: The consultant will
     order to assist in making investment decisions            then prepare an implementation schedule for the
     on the project. If implemented, the                       project. The implementation schedule will take
     interconnector would serve as an alternative              into account the time required for sourcing of

      financing, selection of consultants, preparation                              the power utilities of the four countries will form
      of tender documents, selection of contractors,                                a Study Implementation Unit (SIU) composed of
      manufacturing and installation of equipment.                                  experts from each power utility to supervise the
                                                                                    study closely.
(l)   Financial and Economic Evaluations: The
      consultant will identify initially the benefit                           8.   Involvement of NEPAD: NEPAD would play a
      generated as a result of the interconnection.                                 facilitatory role in (a) bringing the four countries
      He/she will carry out financial evaluations and                               together to implement the study, and (b)
      determine the Financial Internal Rate of Return                               mobilization of resources for the study. NEPAD
      (FIRR) and the Economic Internal Rate of                                      will monitor the implementation of the study.
      Return (EIRR) of the project and determine the
      viability of the project.                                                9.   Conclusions: The proposed study will
                                                                                    investigate a possible alternative (Western
(m) Cooperation Agreement: The consultant will                                      Corridor) to the reinforcements Inga-Zambia
    prepare model agreements based on Rules and                                     (Eastern Corridor) to transmit the Inga surplus
    Standards established in the SAPP, experience                                   hydropower to the Southern Africa Power Pool
    on similar cooperation agreements, and results                                  (SAPP). The tie-line would also interconnect
    of discussions to be held with the four countries.                              Angola to the SAPP and promote the utilization
    The model agreements will include Power                                         of the Angolan hydropower and natural gas
    Purchase      and      Wheeling      Agreements,                                potential for power generation. The study,
    Construction and Operation Agreements. The                                      therefore, deserves the full support of NEPAD.
    consultant will further propose a development
    strategy (public, private of public-private
    partnership) for the project.

(n) Conclusions and Recommendations: The
    consultant will finally make conclusions as to
    the feasibility of the project based on the
    findings of the various specific studies
    (technical, economic, social, other benefits,
    environmental and operation). If found feasible,
    he/she will then propose an action plan for the
    development of the project.

5.    Study Cost Estimate and Sources of
      Financing: The cost of the study, net of taxes
      and duties, and the indicative financing plan is
      presented in the below.

                       Item                              Total (US$)
       Fees (40 mm @ US$15000/mm)                       600,000
       Reimbursables (perdiem, airfare, etc.            450,000
       Total                                            1,050,000
       Contingencies (10%)                              105,000
       Grand Total                                      1,155,000
       It is expected that 95% of the study cost will be financed from
       Multilateral/ Bilateral sources and the balance of 5% will be borne
       by the sponsors of the project.

6.    Study Implementation schedule: The study
      will be implemented over 12 months after the
      consultant has been appointed. If the funds are
      available in the 4th quarter of 2002, the
      consultant should be in place at the beginning of
      the 3rd quarter 2003 and complete the study by
      the end of the 2nd quarter 2004.

7.    Executing Agencies: The study will be jointly
      executed by the DRC, Angola, Namibia and
      South Africa, with the assistance of external
      consultants, and with financial assistance from
      multilateral/bilateral sources. It is expected that

 NIGERIA-ALGERIA GAS PIPELINE STUDY                              between Nigeria and Algeria. In addition the
        TERMS OF REFERENCE                                       study will also investigate how the countries,
                                                                 through which the infrastructure will pass, would
1.   Introduction: The proposed Nigeria-Algeria                  benefit from the project.
     Gas Pipeline Study is intended to investigate the
     feasibility of wheeling Nigerian natural gas           4.   Study Description
     through the Algerian gas networks to Europe.
     The study will also investigate the feasibility of     a)   Technical Studies: The consultant will initially
     installing a fibre optics communication system              review the preliminary study undertaken between
     between Nigeria and Algeria along with the                  1980-1990. The consultant will then assess the
     pipeline. Furthermore, the study will investigate           possible line routes of gas/fibre optics cable using
     how the countries, through which the                        appropriate maps. He/she will then carry out
     infrastructure will pass, would benefit from the            preliminary surveys and preliminary cost
     project.                                                    estimates for the different routes identified in
                                                                 order select the best scheme from a technical and
2.   Background: Nigeria’s natural gas reserves are              economic point of view. The consultant will then
     estimated at 115 trillion cubic feet (TCF), which           undertake detailed surveys, geo-technical and
     is one-third of the African continent's gas                 hydrological studies for the selected scheme. The
     reserve, whilst the country consumes less than              consultant will also look into the alternative of
     1% of its reserves per annum. Nigeria produces              exporting the Nigerian gas in the form of
     abundant natural gas during the production of               Liquefied Natural Gas (LNG) to Europe. He/she
     oil. Some of the gases produced are re-injected             shall then carry out a comparative study and
     to boost oil production and the rest are flared             justify that the proposed project is the least cost
     due to lack demand in Nigeria and infrastructure            option.
     to export to the neighboring countries. Currently
     Nigeria flares about 75% of the gas produced           b)   Environmental Impact Assessment Study: The
     during oil production.                                      study will also assess the environmental impacts
                                                                 of the project and recommend measures to
     At present a gas pipeline, the West African                 minimize the negative impacts and enhance the
     Pipeline (WAGP), is under construction to                   positive impacts. Whenever possible the
     export the Nigerian natural gas to Benin, Togo              costs/benefits will be valued in monetary terms
     and Ghana. The project is intended to export                and considered in the investment and operational
     130 million cubic feet of natural gas for power             costs, and subsequently in the financial and
     generation and direct utilization in the three              economic evaluations.
     countries. The front-end activities (various
     agreements and environmental study) are near           c)   Cost Estimates: The consultant will then prepare
     finalization. With construction commencing in               detailed cost estimates by work component
     2003, the completion of the project is targeted             separately for the gas pipeline and fibre optics
     for the end of 2004.                                        communication system. The components firstly
                                                                 for the pipeline will include: laying of pipes,
     The idea of constructing a Nigeria-Algeria Gas              erection of booster stations, erection of
     Pipeline Project was conceived in the 1980s.                tapping/terminal stations, and secondly for the
     Between 1980 and 1990, a number of                          fibre optics system will include: installation of
     preliminary studies were undertaken on the                  the fibre optics cable, switching stations and
     project. However, the project was not pursued               SCADA system. The cost estimates will show the
     until September 2001 when the governments of                physical and price contingencies separately.
     Nigeria and Algeria formed a Committee to
     undertake a feasibility study on the project. The      d)   Financial and Economic Evaluations: The
     proposed Nigeria-Algeria Gas Pipeline would,                consultant will initially identify the benefit
     therefore, serve as the second outlet to pump the           generated as a result of the interconnection.
     Nigerian natural gas to an additional demand                He/she will carry out financial evaluations and
     centre.                                                     determine the Financial Internal Rate of Return
                                                                 (FIRR) and the Economic Internal Rate of Return
3.   Study Objectives: The objectives are to prepare             (EIRR) of the project with/without the fibre
     a study to determine the technical feasibility and          optics system in order to determine the viability
     economic viability of constructing a pipeline to            of the two options.
     wheel gas through the Algerian gas network to
     Europe. The study will also investigate the            e)   Cooperation Agreement: The consultant will
     feasibility of laying a fibre optic cable, along            identify and recommend a possible strategy for
     with the pipeline, to facilitate communications             the development of the project and mechanisms

      of financing. The project may be implemented                           to implement the study. Furthermore, NEPAD
      by three project companies (Gas Production,                            should assist in the mobilization of resources for
      Gas        Transmission      Company         and                       the study and monitor the implementation of the
      Communication Company) formed with the                                 study.
      participation of public and private sectors, with
      the major share held by the private sector. The                   9.   Conclusions: The proposed study will
      consultant will prepare model agreements based                         investigate the feasibility of exporting Nigerian
      on the experience of similar cooperation                               natural gas, which would otherwise have been
      agreements. The model agreements will include                          flared, to Europe to enhance north-south
      a Concession Agreement, Power Purchase and                             partnerships. It will also investigate the
      Wheeling Agreements, and Construction and                              possibility of supplying the natural gas to
      Operation Agreements.                                                  countries along the route and the installation of
                                                                             modern communication systems between West
f)    Conclusions and Recommendations: The                                   Africa and North Africa. The study, therefore,
      consultant will finally make conclusions as to                         deserves the full support of NEPAD.
      the feasibility of the project based on the
      findings of the various specific studies
      (technical, economic, social, other benefits,
      environmental and operation). If found feasible,
      he/she will then propose an action plan for the
      development of the project.

5.    Study Cost           Estimate       and     Sources        of

                Item                       Total (US$)

     Production                              2,000,000
     Transmission                            3,000,000
     Total                                   500,0000
     Contingencies (10%)                      500,000
     Grand Total                             5,500,000
     The cost of the study, net of taxes and duties, and the
     indicative financing plan is presented in the adjacent
     table. It is expected that 95% of the study cost will be
     financed from Multilateral/Private Sector sources and the
     balance of 5% will be borne by the sponsors of the

6.    Study Implementation schedule: The study
      will be implemented over 24 months after the
      consultant has been appointed. If funds are
      available in the 4th quarter of 2002, the
      consultant should be in place at the beginning of
      the 3rd quarter 2003 and complete the study by
      the end of the 3rd quarter 2005.

7.    Executing Agencies: The study will be
      executed jointly by the governments of Nigeria
      and Algeria, with the assistance of external
      consultants. A Protocol Agreement will have to
      be signed between the two governments for
      undertaking the study, which is normally a
      prerequisite for securing financing for the study.
      It is expected that the power utilities of the two
      countries will form a Study Implementation
      Unit (SIU) composed of experts from each
      power utility to closely supervise the study.

8.    Involvement of NEPAD: NEPAD would
      facilitate that the four countries come together

      MASTER PLAN FOR SUB-REGIONAL                              in others. Whilst each sub-region as a whole has
     INTERCONNECTIONS (EAST, WEST &                             abundant energy potential, the energy sector in
                CENTRAL)                                        individual countries is amongst the least
          TERMS OF REFERENCE                                    developed. There is potential for strengthening
                                                                the power systems within individual countries
1)   Introduction: These Terms of Reference                     and between the countries, leading to the
     (TOR) are a summary of the detailed TORs                   establishment of an East African Power Pool
     compiled separately for the preparation of                 (EAPP), Western African Power Pool (WAPP)
     interconnection Master Plan studies for the East,          and Central African Power Pool (CAPP) along
     West and Central African sub-regions.                      the lines of the Southern African Power Pool
     The Master Plan for the East African sub-region
     (EASR) Interconnection is intended to                 3)   Electricity Master Plan Objectives: The
     investigate the feasibility of interconnection             objective of the Electricity Master Plan is to set,
     and/or    strengthening    of    the   existing            in stages, the conditions necessary to optimise
     interconnections of power systems of countries             energy resource utilisation, harmonise national
     in EASR. The countries include Kenya,                      energy        development      plans      through
     Tanzania, Uganda, Ethiopia, Sudan, Djibouti,               interconnection of electric power systems and to
     Eritrea and Somalia.                                       ensure security of energy supply to Member
                                                                States in the EASR, WASR and CASR.
     The Master Plan for the West African sub-
     region (WASR) Interconnection is intended to          4)   Description of the Master Plan
     investigate the feasibility of interconnection        a)   Technical Study: The Master Plan will be
     and/or      strengthening      the      existing           prepared separately for EASR, WASR and
     interconnections of power systems of countries             CASR. The consultant shall review data and
     in the WASR. The power systems                             information on electricity demand and power
     interconnections in WASR can be grouped as                 generation and supplies for the countries and
     (a) Western Zone: Niger, Nigeria, Benin, Togo,             carry out a market survey and assessment of
     Ghana, Côte d’Ivoire, Burkina Faso, (b) OMVS:              demand forecasts as well as generation expansion
     Mali, Senegal and Mauritania, (c) OMVG:                    programs for each country and for the sub-region.
     Gambia, Guinea, Guinea Bissau, and Senegal,                He/she shall evaluate the desired power exchange
     and (d) MRU: Guinea, Liberia, Sierra Leone.                between the respective countries and the potential
                                                                for strengthening power systems within
     The Master Plan for the Central African sub-               individual countries and between the countries,
     region (CASR) Interconnection is intended to               through network analyses, leading to the
     investigate the feasibility of interconnection             establishment of a Power Pool. He/she shall
     and/or      strengthening     the      existing            perform his/her analyses on the basis of the
     interconnections of power systems between                  network development plan of each country. In
     countries in the CASR. The countries include               this exercise, he/she shall review the various
     Angola, Burundi, Cameroon, Chad, Central                   relevant studies undertaken.
     African Republic (CAR), Congo, Democratic             b)   Specifically, the consultant shall: make an
     Republic of Congo (DRC), Equatorial Guinea,                assessment of the existing and future energy
     Gabon and Rwanda.                                          demand in respective countries of the sub-region
                                                                and evaluate the quantity of energy required to
     The study will assess the potential for the                meet the assessed demand; identify the various
     interconnection of the countries in each sub-              interconnection      options     and      carry   out
     region and recommend least cost sub-regional               comparative studies (technical and financial) to
     interconnection options at Master Plan level.              determine the least cost interconnection options;
     The study will further make an assessment on               assess the suitability of electricity interconnection
     the interconnection between two countries                  between the countries within the sub-region and
     or/and group of counties, as appropriate. The              from outside the sub-region to maximise the
     study will look into the interconnection between           utilisation of energy in the sub-region in the least
     countries within as well as outside the sub-               cost possible way; prepare the technical
     region, as appropriate. The study will further             description and costs by component for the
     prepare a Plan of Action for the implementation            recommended interconnection options; and
     of the interconnections.                                   prepare a Plan of Action for the implementation
                                                                of        the     recommended            sub-regional
2)   Background: Energy resources in the sub-                   interconnections.
     regions are characterised by an abundance of          c)   Environmental Impact Assessment Study: The
     energy resources in some countries and scarcity            study will assess the environmental impacts of

     the proposed tie-lines and sub-stations                         reserves, uninterrupted supply, centralised
     associated      with     interconnections,     and              technical co-ordination, and common energy
     recommend mitigating measures for the                           development and exploitation programs.
     negative impacts, whilst highlighting the               h)      Cooperation Agreement and Development
     benefits that would accrue from positive                        Strategy: The consultant shall draft a
     impacts. Whenever possible the cost/benefits                    Memorandum of Understanding (MOU) to set
     shall be valued in monetary terms and                           out legal and regulatory bases for the
     considered in the investment and operational                    development and implementation of energy
     costs and finally in the viability of evaluation of             exchange among the Member States of each sub-
     the selected interconnections.                                  region. Furthermore, he/she shall prepare MOUs
d)   Cost Estimates and Sources of Financing:                        specifying the framework for co-operation
     The consultant shall prepare detailed cost                      between electricity companies, Power Purchase
     estimates for the overall Electricity Master Plan               and Wheeling Agreements as well as
     by type of work. He/she shall further prepare                   Construction and Operation Agreements. He/she
     the cost estimates for the interconnection                      will also propose a development strategy (public,
     between two countries and/or groups of                          private     sector     or   public/private    sector
     countries, as appropriate. The consultant shall                 partnerships) for the project.
     also prepare detailed cost estimates for the            i)      Conclusions and Recommendations: The
     implementation framework for the Power Pool,                    consultant shall finally make conclusions on the
     and for institutional as well as capacity building              feasibility of the interconnection project on the
     or strengthening and training for the                           basis of the finding of various specific studies
     development and implementation of the Power                     (technical, economic, financial, environmental
     Pool. The project cost estimates shall be                       and others). If found feasible, the consultant shall
     prepared by work component and be broken                        propose an Action Plan for the development of
     down into foreign and local costs. The cost                     the project. The Action Plan should prioritise the
     estimates shall also show separately the physical               project by country or/and group of countries on
     and price contingencies. The consultant shall                   the basis of attractiveness of the package for
     identify and recommend possible financiers of                   funding.
     the project and prepare an indicative financing         j)      Organisation of a workshop: The consultants
     plan.                                                           shall organise a workshop for experts in energy
e)   Implementation Schedule: The consultant                         and      representatives     from     Governments,
     shall prepare an implementation schedule for                    electricity utilities as well as organisations from
     the project. The implementation schedule will                   the sub-region to review and comment on the
     take into account the time required for the                     results of the study and adopt/approve the Master
     sourcing of financing, selection of consultants,                Plan.
     preparation of tender documents, selection of
     contractors, manufacturing and installation             5)      Study Cost Estimates and Sources of
     equipment and putting into place a framework                    Financing: The cost of the study, net of taxes
     for the implementation of Power Pools.                          and duties, is presented in the table below. It is
f)   Financial and Economic Evaluations: The                         envisaged that 95% of the study cost will be
     consultant shall identify the benefits that would               financed from multilateral/bilateral sources and
     accrue from the implementation of the                           the remaining 5% borne by sponsors of the
     interconnections and the Master Plan. He/she                    project.
     shall make an assessment on the financial and
     economic viability separately for the overall                   Item         East       Western     Central        Total
     interconnection, the interconnection between                 Consultancy    1,890,000   1,350,000    1,890,000    5,130,000
     two countries and group of countries, as                     Fees
     appropriate.                                                 Per Diem        220,500      157,500      220,500     598,500
                                                                  Airfares        175,000      125,000      175,000     475,000
g)   Institutional Study: The consultant shall assess             Support         350,000      250,000      350,000     950,000
     requirements for energy reforms, institutional as            Services
                                                                  Logistical      910,000      650,000      910,000    2,470,000
     well as capacity building or strengthening and               Support
     training     for     the     development       and                 TOTAL    3,545,500   2,532,500    3,545,500    9,623,500
     implementation of the Power Pool. The                        Contingency      354,550     253,250      354,550      962,350
     consultant will also prepare modalities for the              Grand Total    3,900,050   2,785,750    3,900,050   10,585,850
     implementation framework for the Power Pool
     to facilitate and coordinate transactions in the
     electricity sub-sector, along the lines of the          6)      Study Implementation Schedule: Each sub-
     SAPP and the proposed Power Pool. Emphasis                      regional Master Plan will be prepared over a
     will be placed on cost saving, efficiency of                    period of 24 months after the consultant is
     production, transfer and use, on sharing of                     appointed. The consultant will be in place at the

     beginning of the 3rd quarter of 2003 and
     complete the study by the end of the 3rd quarter
     of 2005.

7)   Executing Agencies: It is envisaged that Study
     Implementation Unit (SIU) headed by the sub-
     regional organisation and with members from
     the power utilities of the sub-region will be
     established    to     implement      the  study.
     IGAD/COMESA,                ECOWAS           and
     CEMAC/ECCAS, respectively, will be the
     Executing Agencies in the East, West and
     Central sub-regions. The SIU will be assisted by
     external consultants, which will be financed
     from multilateral/bilateral sources.

8)   Involvement of NEPAD: NEPAD would
     facilitate (a) the conclusion of a protocol
     agreement to implement the study for countries
     in the sub-region, and (b) the mobilisation of
     resources for the study. NEPAD will also
     monitor the implementation of the study.

9)   Conclusions: The medium-term strategy of the
     Energy Infrastructure Program is to complete
     the sub-regional interconnections in the
     medium-term as building blocks for long-term
     intra-African power systems integration. The
     proposed study will, therefore, investigate and
     propose the least cost options for completing, in
     the medium-term, the interconnections in the
     East, West and Central sub-regions. The study,
     therefore, deserves the full support of NEPAD.

       CAPACITY BUILDING PROJECT                                 countries have ratified the Convention. The
          TERMS OF REFERENCE                                     Board and the Technical Advisory Body have not
                                                                 been put in place and the Secretariat at Algeria is
1)   Introduction: These Terms of Reference                      meagrely staffed. To discharge its mandate, it is
     (TOR) are a summary of detailed TORs                        necessary that AFREC be operationalized as
     contained in Working Papers prepared for the                stipulated in the Convention and its capacity
     separate projects under the headings: (a)                   strengthened. There is also a need to build
     Capacity Building in African Regional and Sub-              capacity within the RECs, specifically as regards
     regional Organizations - operationalization of              energy     policy    formulation,      institutions,
     the African Energy Commission (AFREC) and                   management and planning.
     institutional building in the Regional
     Communities (RECs); (b) establishment of an                 Furthermore, there is a need to align these RECs
     African Energy Information System, Energy                   so that they complement AFREC. Moreover,
     Database Centre, and operationalization,                    mechanisms are needed to ensure coherence,
     dissemination and use of the African Energy                 reduce duplication, rationalise structures, and
     Program's (AEP) Planning Tools; and (c)                     harmonise energy policies and programs.
     Training of Energy Experts.
                                                                 The energy industry operates on a long-term
     Firstly, the project is intended to operationalise          basis and the present level of demand and supply
     AFREC through ratification of the Convention                are results of decisions taken decades ago.
     and appointment of the Board and advisory                   Consequently, wrong decisions made on either
     body. The project would provide technical                   the formulation of energy policy decisions or
     support to build institutional capacity in the              investments     would     affect   the    energy
     energy sector in AFREC and sub-regional                     supply/demand situation at a later time, which
     organisations in Africa to enable them discharge            would result in either energy supply deficit or
     their mandates in the energy sector.                        over-investment. It is, therefore, necessary to
                                                                 develop policies and planning capacity at all
     Secondly, there is a widespread lack of reliable            levels (countries, RECs) for drawing up realistic
     energy data and adequate, up-to date energy                 energy sector investment plans to ensure that
     planning tools in Africa, which is a serious                demand always matches supply in providing
     impediment to policy formulation, planning,                 energy services.
     identification of opportunities and investment.
     No one organisation is adequately covering                  The AfDB's African Energy Program (AEP)
     African energy information. There is thus a                 Integrated Energy Planning Tools, which have
     need to develop and adopt a rationalised                    been designed in the context of the African
     collaborative approach to reduce duplication in             energy, would be valuable to African countries
     the collection and dissemination of energy data             and the RECs. There is a need to operationalize
     and use effective energy planning tools. The                these tools, up-date them taking into account
     project would thus refine and operationalize the            recent initiatives, and disseminate them to RECs
     Integrated Planning Tools (Information System,              and African countries.
     Accounting Model and Forecasting Model)
     developed by the African Development Bank                   The lack of skilled, well-trained human
     (AfDB) in the context of African energy                     resources, especially in policy formulation and
     situation.                                                  planning, is a major constraint in the
                                                                 development of policies/strategies and plans in
     Thirdly, training is a key element in developing            the energy sector. Moreover, training has tended
     Africa’s energy sector. Training should be in all           to be viewed from the perspective of supply and
     aspects of energy – energy planning,                        rarely from that of demand, which is a weakness
     engineering, managerial capacity, in education,             that should be addressed, in order to ensure the
     in information collection, analysis, management             optimal functioning of the energy system through
     and dissemination. The project will identify the            efficient management of both levels.
     sub-regional centres of excellence and propose
     how these centres could be strengthened and            3)   Project Objectives and Benefits: The objectives
     used for training in different disciplines at the           of regional and sub-regional capacity building are
     continent level.                                            to operationalize AFREC and strengthen the
                                                                 capacities of the RECs. Institutional and
2)   Background: The 37th OAU Assembly of                        managerial capacity will be built in AFREC
     Heads of State and Government in Lusaka,                    enabling it to implement the activities specified
     Zambia in July 2001 decided to adopt the                    in the Convention. The project will also develop
     Convention of AFREC. To date very few                       institutional and managerial capacity in RECs to

     help them plan and implement regional                        AFREC and ensure coherence, reduce
     programs. The project will assist AFREC and                  duplication, and better coordinate, harmonise,
     the RECs to discharge their responsibilities to              monitor and implement energy policies and
     promote the development of the African energy                programs within their respective sub-regions.
     sector at the regional and sub-regional levels.
                                                             b)   Establishment of Energy Information System,
     The objective of establishing an African Energy              Database Centre and Operationalization of
     Information System, Energy Database Centre,                  AEP's Energy Planning Tools: The Integrated
     and operationalizing/disseminating the AEP's                 Energy Planning Tools developed by the AfDB
     Planning Tools is to enable an effective                     would be updated taking into account the various
     development of capacity to plan, formulate and               initiatives on African Energy Information
     implement energy programs through the                        Systems. The consultant shall develop a proposal
     management of data/information and knowledge                 in this regard for review at a workshop before its
     at regional and sub-regional levels.                         dissemination for use. This would ensure a
                                                                  participative approach and harmonise efforts,
     The objective of the training assessment is to               avoid duplication, and obtain input and consensus
     generate proposals for training African energy               on the Energy Planning Tools for Africa.
     experts using existing sub-regional Energy
     Training Institutions or other centres of                    As an integral part of the abovementioned
     excellence. The assessment will identify the                 process, an African Energy Database Centre,
     sub-regional training institutions or other                  which would be internationally recognised and
     centres of excellence by discipline and make                 appropriate for Africa, would be established at
     proposals on how the centres would be                        the levels of AFREC and the RECs. The RECs
     strengthened and used for continent-wide                     would subsequently assist in replicating the
     training.                                                    Database Centres in the countries to ensure sound
                                                                  data collection for the continent using a
4)   Project Description                                          rationalised, collaborative approach. It is
                                                                  expected that the Database Centre would make
a)   Capacity Building                                            use of the software developed for the Integrated
                                                                  Planning Tools, or as appropriately enhanced.
     Operationalization of AFREC: The project
     will operationalize AFREC through ratification               The updated Planning Tools would be
     of the Convention, establishing the Board and                operationalized using appropriate data, and
     Technical Advisory Body, staffing of the                     disseminated to AFREC, RECs and countries.
     Secretariat and providing technical support.                 The project envisages holding 5 sub-regional
     Specifically, it would expedite the ratification of          workshops to train AFREC, RECs and country
     the AFREC Convention by the required number                  experts in the Planning Tools. In addition to
     of countries; expedite appointments to the                   assisting in the workshops, the experts appointed
     AFREC Board and the Technical Advisory                       will provide training services for a period of two
     Body; put in place an initial structure, including           years.
     a Director, experts for information/data bank,
     planning/economic studies and technical                 c)   Training of Energy Experts: The assessment
     projects as well as administrative/secretarial               would review existing regional/sub-regional
     support; and provide all necessary external                  energy training institutions and the present level
     technical support to make the AFREC                          of training, including the work done during the
     Secretariat fully functional.                                AfDB’s AEP on the same topic. These would
                                                                  serve as inputs for a draft position paper to
     Capacity Building in RECs: The project will                  formulate a strategy for addressing the human
     provide technical support to strengthen the                  capacity constraints in Africa in terms of the
     institutional capacity in ECOWAS/UEMOA,                      study objectives. A workshop inviting relevant
     COMESA, SADC, UMA and ECCAS/CEMAC.                           training experts and organisations in Africa’s
     The project would establish an institutional                 energy scene will be organized to provide input
     framework to initiate and coordinate energy                  to the final proposal. A consultant would
     sector policies within the RECs and link them                determine the kind of assistance required by
     with AFREC's functions. The project would                    regional and sub-regional institutions in order for
     assist in the building of capacity in RECs to                them to become regional centres of excellence,
     enable them effectively to perform their                     with the capacity to train the continent’s human
     functions and mandates in the field of energy;               resources.
     and put in place strategies and mechanisms to
     align the RECs so that they complement

5)     Project Cost and Sources of Finance: The                          Energy Information System/Planning Tools and
       cost of the project, net of duties and taxes, is                  Training sub-projects in line with its mandate.
       presented in the table below. It is broken down              8)   Involvement of NEPAD: NEPAD would assist
       into (a) building of capacity in the regional and                 in the operationalisation of AFREC through the
       sub-regional institutions; (b) establishment of an                ratification of the Convention and putting into
       African energy information system, energy                         place the Supervisory and Advisory Bodies.
       database centre, as well as operationalization,                   Furthermore, NEPAD would assist in the
       dissemination and use of the AEP’s Integrated                     mobilization of resources for the project and
       Energy Planning Tools; and (c) producing                          would monitor the implementation of the project.
       proposals for using existing African centres of                   AFREC will implement the Capacity Building
       excellence to train energy experts. It is expected                and Facilitation Projects, which are continent-
       that the project cost will be financed from                       wide projects. The operationalisation of AFREC
       multilateral/ bilateral sources.                                  would, therefore, be a priority area of NEPAD’s
     Item      Capacity     Info System    Training     Total
               Building     & Planning                  (US$)
                                                                    9)   Conclusions: Operationalisation of AFREC and
Consultancy    2,592,000         540,000    216,000   3,348,000          availability of institutional capacity in the RECs
Fees                                                                     is critical for regional policy/strategy formulation
Per Diem         594,000         81,000      36,000     711,000
Airfares         120,000         25,000      35,000     180,000          and planning. Therefore, the proposed project
Workshops              0        225,000      45,000     270,000          will operationalise AFREC and build capacity in
Support                0        100,000     100,000     200,000          RECs to discharge their mandates. The capacity
Logistical     1,620,000        100,000      50,000   1,770,000          building will be done through providing technical
Support                                                                  assistance, equipping AFREC and RECs with
TOTAL          4,926,000      1,071,000     482,000   6,479,000          energy planning tools. Training of energy experts
Contingency      492,600        107,100      48,200     647,900
(10%)                                                                    using the existing sub-regional training centres
Grand Total    5,418,600      1,178,100     530,200   7,126,900          and        other centres of excellence will be
                                                                         investigated. The project, therefore, deserves the
                                                                         full support of NEPAD.
6)     Project Implementation Schedule: The project
       will be implemented between 2003 and 2005,
       given that AFREC is operationalized by end
       2003 and funding for the project is secured by
       end 2002. The implementation of the project
       will commence by beginning of 2003 and be
       completed by mid 2005. The implementation
       schedule in chart form is shown below.

                                                      2002               2003              2004               2005

                                              Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Front-end Activities
Ratification of AFREC
Resource Allocation
Tendering Process (Technical Support)
Project Implementation
Capacity Building in AFREC and RECs
Operationalization of Planning Tools
Training Assessment

7)     Executing Agencies: The project will be
       implemented by AFREC and sub-regional
       organizations (ECOWAS/UEMOA, COMESA,
       SADC,       UMA    and  ECCAS/CEMAC).
       Specifically, AFREC will implement the

          FACILITATION PROJECT                               wide enough to contribute significantly to
           TERMS OF REFERENCE                                energy     for    sustainable   development,
                                                             particularly in rural areas. Despite some
1.   Introduction: These Terms of Reference                  progress in promoting renewable energy
     (TOR) are a summary of detailed TORs                    applications in recent years numerous
     contained in Working Papers prepared for the            constraints, such as advances in technology,
     separate sub-projects indicated in (a) to (f)           high costs and market barriers, continue to
     below. The Facilitation Project, which deals            exist. The proposed NRSEs Assessment
     with continental issues, includes (a)                   would advance continent-wide cooperation to
     preparation and adoption of Policies and                address the barriers and constraints indicated
     Strategies; (b) preparation and adoption of a           above and promote the development of
     Protocol      on   Energy     (dealing    with          renewable energy.
     Institutional,   Legal     and      Regulatory
     Frameworks; (c) assessment to generate                  There is an urgent need to improve energy
     proposals for cooperation in New and                    efficiency in Africa and to improve reliability
     Renewable Sources of Energy (NRSEs); (d)                and lower the cost of energy supply to
     assessment to generate proposals for                    productive activities thus making them more
     cooperation on Improving Energy Efficiency              competitive. Enormous opportunities exist for
     and Reliability of Energy Supply; (e)                   implementing energy efficiency in Africa.
     assessment to generate proposals on                     However, many African countries have yet to
     Cooperation in Oil/Gas Trade, Procurement,              take advantage of energy efficiency measures,
     Refining/Processing and Distribution at the             due largely to lack of policies, lack of
     sub-regional level; and (f) assessment to               information and inadequate programmes as
     generate proposals on Cooperation in Rural              well as market barriers. African countries are
     Energy in the African Energy Sector.                    also lagging behind in the development and
                                                             putting in place of strategies for ensuring
     There is an urgent need for the development             reliability of energy supplies. It is necessary
     and adoption of coherent energy policies and            to improve reliability and lower the cost of
     strategies at the continental level to advance          energy supply to productive activities thus
     regional cooperation. A principal function of           making them more competitive. These issues
     the African Energy Commission (AFREC),                  and problems need to be addressed at the sub-
     the Convention of which was adopted by the              regional and regional levels and the proposed
     African Heads of State and Government in                Energy and Reliability Assessment would
     Lusaka, Zambia in July 2001, includes the               contribute to this end.
     launching      of    continent-wide     energy
     development policies, strategies and plans.             Although hydrocarbon consumption of Africa
     Under the initiative, continent-wide policies           is low, the hydrocarbon energy bill takes a
     and strategies will be prepared under the               good part of export earnings of non-oil
     auspices of AFREC.                                      producing countries in Africa. Trade and
                                                             cooperation among African countries in oil
     The lack of a common African institutional              and gas is limited and yet there are significant
     energy framework is a major handicap for                opportunities in this sphere. Intra-African
     regional energy integration. At the global              trade and cooperation in oil/gas procurement
     level, formulation, analysis and overall energy         and utilization would, inter alia, reduce
     planning for Africa are dominated by internal           inefficiencies     in     petroleum       product
     and external international institutions.                procurement,        refining/processing       and
     Regional integration in the field of energy in          distribution and thereby provide significant
     Africa has not been successful. Unreliable              financial     benefits     for    Africa.    The
     energy statistics have created difficulties in          rationalisation of African refining/processing
     regional and sub-regional evaluations. The              and distribution is today of critical importance
     adoption of the proposed Protocol on Energy             when putting in place a policy of regional
     would provide a framework for cooperation to            energy integration. The proposed assessment
     advance the optimal development and use of              would promote intra-African oil/gas trade and
     Africa's energy resources and attract                   cooperation in gas/oil procurement and
     investment for sector development.                      utilization.

     Africa has huge potential in renewable energy           Energy has a vital role to play in meeting
     resources. The main challenge lies in the               basic needs of the rural population and in
     development, utilization and dissemination of           improving the standard of living in the rural
     renewable energy technologies on a scale                areas and, therefore, in enhancing general

     rural development, which in turn plays a                  been prepared by the OAU/AEC General
     major role in poverty reduction. At the present           Secretariat. The review, completion, adoption
     time the rural areas of most of Africa have               and operationalisation of the Protocol would
     inadequate access to energy services. There is,           promote partnerships in the development of
     therefore, a compelling need to improve                   energy resources.
     access to modern energy services to rural
     areas in Africa where the bulk of the                     Africa has considerable NRSEs. However, the
     population lives. Given the extent of wood-               level of development of NRSEs on the
     fuel use in Africa, it is critically important to         African continent is relatively low. Many
     move towards more sustainable biomass use,                renewable energy projects have been
     whilst at the same time utilising a diversity of          undertaken in rural environments, and have
     commercial energy supplies and technologies.              already played a very positive part in rural
     There is, furthermore, a pressing need for                development. The need to increase the share
     African countries to develop and implement                of renewable energy sources of energy in the
     integrated national programs and cooperate in             overall energy mix has been the subject of
     the development and implementation of                     many international forums, which have also
     energy systems in rural areas. The proposed               identified required actions to achieve this
     Rural Energy Assessment would further                     objective. A number of sub-regional/regional
     cooperation at sub-regional and continental               institutions as well as research organisations
     levels to advance rural energy services.                  at national level have been established to
                                                               promote capacity in, and use of, NRSEs in
2.   Background: Development of policies and                   Africa. The initiative would enable the
     strategies for African energy development has             harmonization of the various efforts towards
     been of interest to African leaders for a long            the development of renewable energy
     time. The Lagos Plan of Action (1980)                     resources to meet energy requirements,
     identified     energy    as    important    for           particularly in rural areas.
     development and stated the need to work out
     policies     and    strategies   for    energy            Energy efficiency has an important role to
     development in the continent. In the recent               play in accelerating the development of
     past a number of initiatives, including the               energy supply to low-income households.
     African Energy Program (AEP) of the African               Governments are also urged to improve the
     Development Bank (AfDB), have been                        reliability of supply and lower the cost of
     undertaken towards the development and                    energy supply to stimulate economic growth.
     adoption of policies and strategies for the               In past decades, energy intensity in Africa has
     African energy sector at continent level.                 increased whilst during the same period there
                                                               has been a decline of world average energy
     In the AEP a comprehensive study was                      intensity. Energy supply and end-use
     prepared on energy in Africa and                          efficiencies are still relatively low. In the past,
     recommendations made to further regional                  initiatives have been taken by certain utilities,
     cooperation. However, the initiatives have not            governments or sub-regions - for example,
     lived up to expectations such as                          SADC's Industrial Energy Management
     implementation of energy policies and                     Program (SIEMP) or Eskom's demand-side
     strategies for Africa. AFREC would play a                 management and plant availability/reliability
     critical role in the development and adoption             approaches. But these have been scattered and
     of coherent energy policies and strategies and            not harmonized at the regional level and there
     in enhancing regional cooperation.                        is still a long way to go to achieve the desired
                                                               levels of energy efficiency and reliability of
     The Treaty Establishing the African                       supply. In formulating integrated energy
     Economic Community (Abuja 1991) called on                 strategies, governments have been urged to
     Member States to cooperate in accordance                  review both supply- and demand-side options
     with the provisions of a Protocol on Energy               and set priorities that address major
     and Natural Resources. Meanwhile, AEP                     impediments to improving the efficiency with
     (1992-95) recommended the preparation and                 which energy is produced and consumed. A
     adoption of a continent-wide legal framework              continent-wide assessment will facilitate the
     consisting of an African Energy Charter. An               addressing of these issues and problems.
     Energy Experts Meeting in May 2000 on the
     establishment of the AFREC identified the                 Despite vast opportunities for potentially huge
     preparation of a Protocol on Energy as one of             benefits, there is little regional cooperation
     the four initial activities for implementation            and trade between African countries in oil and
     by AFREC. A draft Protocol on Energy has                  gas. Energy supply to numerous African

     countries often depends massively on oil                      The objective of the Protocol on Energy
     products. For strategic rather than economic                  initiative is to put in place legal and
     reasons, many countries have built refineries,                regulatory frameworks to promote regional
     some of them with very low capacity. There is                 cooperation for integrated development and
     a proliferation of identical equipment in                     utilization of the African energy resources.
     numerous countries, at times oversized and                    This will facilitate the mobilization of
     thus under-utilised, with little thought of                   financing for the sector development.
     integration, coherent strategy and prior
     consultation between neighbours. A study                      The objective of the NRSEs initiative is to
     conducted in 1993 showed that Sub-Saharan                     generate proposals for co-operation among
     African countries can reduce the cost of                      RECs, African nations as well as multilateral
     hydrocarbon imports through integrated                        and other organisations to further the
     procurement of petroleum products and                         development and use of NRSEs in Africa.
     reducing inefficiencies in the utilisation of                 Developing and utilising NRSEs to their full
     refineries. The study further revealed that                   potential will help to facilitate sustainable
     through     sub-regional      co-operation    in              development for large numbers of people on
     petroleum product procurement, refining and                   the continent, in particular in rural areas.
     distribution,    annual     potential    savings
     estimated at over US$1.4 billion were                         The objective of the efficiency and reliability
     possible in Sub-Saharan Africa. This is an                    assessment is to generate proposals for
     area that requires priority attention by African              cooperation among RECs and countries that
     leaders and decision makers.                                  will enhance energy efficiency, improve
                                                                   reliability and lower the cost of energy supply
     Most of today's 2 billion people without                      in Africa's energy sector. Greater energy
     adequate energy services are in rural areas,                  efficiency and optimum utilisation of plant
     and many of these are in Africa. The rural                    assets will help to maintain secure energy
     areas of Africa are characterised by a heavy                  supplies and bring national economic benefits
     dependency on biomass, and commercial                         through reduced dependence on imported
     energy consumption, which is too low,                         fuels        and      increased       industrial
     decentralised and dispersed. Making modern                    competitiveness, apart from having significant
     energy services more readily available is an                  environmental benefits. Investments would
     important step in rural development. Efforts                  also be able to be deferred by these means.
     to find the most appropriate solutions to the
     energy problems of rural areas are hampered                   The objective of the oil/gas cooperation
     by the enormity of the problem, limited                       assessment is to generate proposals and
     availability of resources and lack of                         formulate strategies for intra-African oil/gas
     appropriate technologies, high investment                     trade,     sub-regional      cooperation    in
     cost and connection fees, affordability as well               procurement, and optimum utilisation of
     as insufficient attention to rural development                refineries    and    distribution.    Reducing
     in general. The assessment would assist in                    inefficiencies    in     petroleum     product
     promoting the provision of energy services to                 procurement, refining and distribution will
     rural areas and in the management of                          have very significant financial benefits for
     traditional energy use.                                       Africa.

3.   Project Objectives and Benefits: The                          The objective of the rural energy assessment
     objective of the policies and strategies                      is to generate proposals for cooperation
     initiative is to formulate and adopt continent-               among RECs, among African nations and
     wide energy policy and strategy frameworks                    organisations in the developed/developing
     in order to further regional cooperation for                  world regarding furthering rural energy
     effective development and use of Africa’s                     development in Africa. This will contribute to
     energy resources. The continent has abundant                  effective implementation of improved energy
     energy resources but it is characterised by                   services for sustainable rural development and
     uneven distribution of the resources and of                   lead to significant improvements in the
     needs. Given that national needs are often too                quality of life for Africa's rural population.
     small to justify the full development of energy
     resources, suitable policies and strategies              4.   Project Description: A review will be
     would enhance integrated development of the                   undertaken of the various initiatives
     continent’s energy resources to match supply                  undertaken towards formulating and adopting
     with demand.                                                  policies and strategies for the African energy
                                                                   sector. Policy and strategy recommendations

made by the AEP will be assessed and a                            The oil/gas cooperation assessment will
‘Policy and Strategy for African Energy                           review existing intra-African oil/gas trade and
Development’ prepared. These would serve as                       the extent of sub-regional cooperation in
inputs for drafting a ‘Policy and Strategy for                    petroleum product procurement, joint
African Energy Development’. Workshops                            utilisation of refineries, and distribution
inviting experts and relevant organisations                       aspects. These would serve as inputs for a
involved in the African energy scene will be                      draft position paper to establish modalities for
organised to deliberate on the paper and make                     promoting cooperation in this regard. A
recommendations for its adoption by African                       workshop inviting relevant organisations
Energy Ministers.                                                 involved in African oil/gas energy trade will
                                                                  be organised to provide input to the final
In the Protocol project, the text of the draft                    proposal on intra African oil/gas trade and
Protocol on Energy and Natural Resources                          cooperation in procurement and utilization of
(prepared by the OAU) will be examined in-                        oil/gas.
depth and a Protocol on Energy, which deals
with legal, institutional and regulatory                          The rural energy assessment will review the
frameworks, and standards, will be prepared                       rural energy programmes within African
and adopted. Workshops inviting experts and                       regional/sub-regional energy organisations,
relevant organisations involved in the African                    within African countries as well as relevant
energy scene will be organised to deliberate                      regional and international initiatives, which
on the draft paper and make recommendations                       may support rural energy development in
for its adoption by African Energy Ministers.                     Africa. These would serve as inputs for a draft
                                                                  position paper to formulate a strategy for rural
The assessment on NRSEs will include a                            energy in Africa. A workshop inviting
review of initiatives and programs in this area                   relevant rural energy experts and practitioners
within African regional/sub-regional energy                       and organisations which are able to contribute
organisations, countries as well as relevant                      to developing rural energy in Africa will be
regional    and      international    initiatives                 organised to provide input to the final
(including the G8 initiative), that may support                   proposal on rural energy development
NRSEs development and use in Africa. These                        strategy at the continental level.
would serve as inputs for a draft position
paper to formulate a strategy for faster                     5.   Project Cost and Sources of Finance: The
development and widespread use of                                 cost of the facilitation project, net of taxes and
renewable energy and technologies in Africa.                      duties, is presented in the table below. It is
                                                                  expected that the project cost will be financed
A workshop for renewable energy experts,                          from Multilateral/ Bilateral sources.
practitioners as well as organisations involved
or interested in the development and use of           Item            Policies &   NRSE     Efficiency    Oil/gas    Rural    Total
NRSEs in Africa will be organized to provide                          Protocol
input to the final proposal on NRSEs for                                              Estimated Costs US$ (‘000)
                                                      Consultancy           252      216            216        216      216       1,116
adoption.                                             Fees
                                                      Per Diem               36       36             36         36       36           180
The efficiency and reliability assessment will        Airfares               60       35             35         35       35           200
                                                      Workshops             225       45             45         45       45           405
include a review within African countries,            Support               100      100            100        100      100           500
sub-regions and the region of existing                Services
activities that could be valuable in improving        Logistical            100       50             50         50       50           300
energy efficiency as well as reliability and          Total                 773       482           482        482      482       2,701
lowering the cost of energy supply in Africa's        Contingency          77.3      48.2          48.2       48.2     48.2       270.1
energy sector. This would serve as an input           Grand Total         850.3     530.2         530.2      530.2    530.2     2,971.1
for a draft position paper to formulate a
strategy for Africa in terms of the study
objectives. Workshops will be organised to                   6.   Executing Agencies: The project will be
provide input to the final proposal on energy                     implemented by AFREC with close
efficiency and reliability for adoption. These                    involvement of the RECs, UNECA, OAU and
will enable relevant energy efficiency and                        AfDB. It is imperative to operationalise
plant/system      reliability   experts    and                    AFREC to implement the project.
practitioners in Africa and the rest of the
world to contribute to the realisation of the                7.   Implementation schedule: The project will
study.                                                            be implemented between 2003 and 2005,
                                                                  given that AFREC is operationalized by end

      2003 and funding for the project is secured by
      end 2002. The implementation of the project
      will commence by beginning of 2003 and be
      completed by mid 2005. The implementation
      schedule in chart form is shown below.

      AFREC will implement both the Capacity
      Building and Facilitation Projects. As the
      capacity of AFREC to implement projects the
      short-term will be limited, the proposed
      projects will have to be undertaken on a
      priority basis. It is, therefore, proposed that
      (a)     preparation      and     adoption    of
      policies/strategies, the Energy Protocol, and
      the    oil/gas    cooperation     project   are
      implemented in the first phase, and (b) the
      remaining projects in the second phase.

8.    Involvement of NEPAD: Initially, NEPAD
      would assist in mobilization of funds for the
      project and in monitoring the implementation
      of the project. NEPAD would also assist in
      operationalising AFREC to implement the
      project. NEPAD would also help in the
      adoption and/or implementation of the
      recommendations on the various initiatives.

9.    Conclusions: The Facilitation Project is
      intended to put in place appropriate
      policies/strategies, legal and institutional
      frameworks, to promote regional cooperation
      and public-private partnership. Given that the
      Facilitation Project will be implemented
      under the auspices of AFREC, priority will
      have to be given to operationalise and
      strengthen AFREC.

                                                  2002         2003       2004        2005

                                              Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Front-end Activities
Ratification of AFREC
Resource Allocation
Tendering Process (Technical Support)
Project Implementation
Preparation and Adoption of Policies
Preparation and Adoption of Energy Protocol
Proposal on Cooperation in Oil/Gas
Assessment on Rural Energy Cooperation
Assessment on NRSEs Cooperation
Assessment on Energy Efficiency/Reliability

        APPENDIX 3


     WATER RESOURCE PLANNING AND                                  addressing issues related environmental
       MANAGEMENT – NILE BASIN                                    management, power trade, efficient water use
                                                                  for agriculture, and water resources planning
1.   Project Name and Location: The project is                    and management. The remaining three are
     entitled the Water Resource Planning and                     facilitative, supporting efforts to strengthen
     Management – Nile Basin and will be                          confidence-building        and       stakeholder
     implemented in the 10 countries participating in             involvement, applied training, and socio-
     the Nile Basin Initiative (NBI): Burundi,                    economic development and benefit sharing. The
     Democratic Republic of Congo (DRC), Egypt,                   projects were identified through a high level of
     Eritrea, Ethiopia, Kenya, Rwanda, Sudan,                     consultative process between the NBI countries.
     Tanzania and Uganda.

2.   Sponsor(s): All ten NBI countries sponsor the           5.   Project Objective: The objective of the project
     project.                                                     is to introduce analytical capacity in order to
                                                                  support the development, management, and
3.   Current Status: The Project document was                     protection of the Nile basin water resources in
     prepared in March 2001 and funding has been                  an equitable, optimal, integrated, and
     secured for US$ 20.0 million out of total project            sustainable     manner.       The      immediate
     cost of US$ 28.2 million. Project launching and              beneficiaries will be policy and decision makers
     preparatory work for implementation is                       as well as planners and managers of water
     underway.                                                    resources in the Nile riparian countries.
                                                                  Enhanced skills in water policy, project
4.   Background: Having been aware that                           planning and management, and Decision
     cooperation requires a development focus, a                  Support System, will improve the on ward
     permanent institution, and agreement on core                 planning, identification and implementation of
     legal principles, the Nile riparian countries                cooperative projects.
     initiated a forum to facilitate a process of legal
     and institutional dialogue in 1997. A draft text of     6.   Project Description: The project will include
     a “Cooperative Framework” was prepared in                    three components:
     2000, and dialogue on outstanding issues is
     continuing.                                                  a) Water policy good practice guides and
                                                                     support. The objective of this component is
     While the legal and institutional dialogue                      to    enhance     the    development      and
     continues, the Nile riparian countries established              implementation of effective national water
     in 1999, the Nile Basin Initiative (NBI), as a                  policies and strategies for integrated water
     transitional institutional mechanism that includes              resources management (IWRM) in the
     all riparian countries and provides an agreed                   riparian   countries.     Though      to   be
     basin-wide framework and a shared vision to fight               implemented at country level, the project
     poverty and promote economic development in                     also aims to provide a common
     the region. The NBI is comprised of a Council of                understanding of the interaction between
     Ministers of Water Affairs, of the Nile Basin                   national policies, regional needs, and
     (Nile-Com), a Technical Advisory Committee                      cooperative development between the basin
     (Nile- TAC), and a Secretariat (Nile-SEC) located               countries and to initiate a regional dialogue
     in Entebbe, Uganda.                                             on good practice elements of a water policy
                                                                     formulation process. The main outputs are a)
     To translate the shared vision into action, a                   good practice guides, and strengthened
     strategic action program has been launched to                   capacity for IWRM policy formulation, b)
     identify and prepare cooperative projects in the                strengthened capacity and tools provided for
     Basin. The program consists of two                              the effective implementation of water
     complementary sub-programs: a Shared Vision                     resources policy, and c) the establishment of
     Program (SVP) of technical assistance and                       a fund for demonstrated national need for
     capacity building type projects to be implemented               support. Some of the important activities
     basin-wide to create an enabling environment for                include the establishment of a regional task
     cooperative development and Subsidiary Action                   force, the compilation of good policy
     Programs (SAPs) carried out by smaller groups of                practice guide, and case studies for policy
     riparians, comprising physical investments at the               development and implementation.
     sub-basin level.
                                                                  b) Project planning and management good
     The basin-wide SVP currently includes seven                     practice guides and support. The objective
     projects, of which four are thematic in nature                  of this component is to contribute towards

            improved IWRM in the basin by strengthening         8.   Possible Financiers and Indicative Financing
            national capacities for multi-country project            Plan: As of October 2001, US$ 19.8 was
            planning and management. Four main areas                 pledged by Denmark, GEF, UK, Germany,
            will be supported: a) IWRM project planning              Norway, and Sweden. Funding sources for the
            and design, b) project management and                    balance of US$ 8.2 is being sought.
            administration, c) development of technical
            guidelines in priority areas, and d) the            9.   Project Implementation: The Nile-COM and
            establishment of a fund to provide technical             Nile-TAC and supported by the NILE-SEC, will
            assistance and advisory support at the national          provide overall policy and guidance. A project
            level.                                                   co-coordinating committee will oversee the
                                                                     work from a broad technical and strategic
     c) Development of a decision support system                     perspective. A project management unit (PMU),
            (DSS) for the Nile Basin. The objective of this          comprising of the managerial, technical, and
            component is to build the technical                      administrative support for all three-project
            infrastructure to facilitate water resources             components, will oversee the implementation of
            planning and management from a basin-wide                the project. The project will be completed in a
            perspective. Together with human resources               period of 6 years.
            development and institutional strengthening,
            the Nile Basin DSS will provide a framework         10. Project Benefits: Cooperative development and
            of computer based platform for sharing                  investment planning, including sustainable
            knowledge, understanding river/lake behavior,           development of water resources on a regional
            evaluating alternative development and                  scale, is an important approach in the Nile Basin
            management schemes, and supporting                      to alleviate poverty. The project will enable the
            informed decision making from a regional                identification and evaluation of joint water
            perspective. The component has four                     resources projects, based on sound information
            categories of activities:                               and aided by decision support tools. The
                                                                    development of mutually acceptable and
     -      institutional development that strengthens the          beneficial investment projects will support
            institutions and human capacity in DSS                  sustainable economic growth and improved
            development and application,                            social conditions.
     -      technical development that includes the
            design, development, and application of the         11. Project Justifications: To achieve integrated
            decision support tools. This sub-component              and sustainable management in the Basin it is
            focuses on three DSS elements, a basin-wide             important to assure that all countries have
            communication and information management                effective water policies and sufficient capacity
            system, a regional river basin planning model,          to absorb, handle, and administer future
     -      core national capacities, including Information         projects. Efforts to improve water resources
            Management System (IMS), and                            project planning capability, bringing all the
     -      cooperation mechanisms focusing on the                  countries to similar level, can be seen as an
            development of common guidelines for the                essential step in making effective use of the
            collection, processing, analysis, and exchange          DSS and in ensuring effective planning of water
            of data and information.                                resources projects at the national, sub-regional,
                                                                    and basin-wide level.
7.          Project Cost Estimate
                                                                     The policy and project planning components
                       Summary Cost Estimates                        will have a definite lifespan and will be
                        Components             Costs                 redundant as development and institutional
                                            (US$ million)            capacity in the basin grow. In order to ensure
            1.   Water policy good practice     2.846                technical sustainability of the DSS component,
                 guide and support                                   the project has made provisions for short and
            2.   Project    planning    and     4.442                long-term training programs, the involvement of
                 management support                                  regional universities, twinning with DSS
            3.   Nile    Basin     Decision    21.000                institutions, acquisition of advanced degrees,
                 support system
                                                                     and career planning. Institutional sustainability
                 Total                         28.288
                                                                     and access to information are important, and a
                                                                     momentum of ownership, interest and
         The project is estimated to cost a total of US$             usefulness has to prevail during the project
         28.20 million covering all the 10 basin                     period and beyond.
         organizations. The financing gap is US$ 8.2

12. Issues and Proposed Action: The project will
    need to pay close attention to a number of issues
    in the course of implementation. The contribution
    of the project to socio-economic development has
    to be pursued by NBI states through identification
    of cooperative opportunities. The project will seek
    long-term financial sustainability, including
    country support through the budgetary process.
    The challenges to address technical issues such as
    the operation and maintenance of data collection
    networks, IMS, hardware and software and
    adaptability of DSS at all levels are aspects of
    project concern. As the project will be
    implemented at the regional and country levels,
    the institutional and manpower capacities, their
    flexibility and response time, updating of skills,
    commitment to exchange of information capacity
    will be important factors for project success. It is
    important for the project to be as broad based as
    possible through a mechanism of stakeholder
    participation. For the policy and planning
    components, broad participation including women
    is essential. Mechanism for multi-sect oral
    beneficiaries and decision makers to participate in
    coordination groups and discussion meetings at
    critical points need to be instituted during the
    development and application of the DSS.

13. Proposed Involvement of NEPAD: The role of
    NEPAD would be to lend support to the
    continuing regional cooperative framework to
    ensure continued commitment of Nile basin
    countries; enhancement of regional security,
    donor support to meet the financing gap as well as
    development projects resulting from this project.

     SUPPORT OF OTHER NEW AND EXISTING                               up ambitious plans and programs to develop
         RIVER BASIN ORGANIZATIONS                                   these shared resources. External support was
                                                                     also forth coming for some these developments.
1.    Project Name and Location: Support of Other                    However, while some of these organizations
      New and Existing River Basin Organizations                     have and continue to carry out important
      project will cover diagnostic Study of two of the              development work, most have been faced by a
      Existing River/Lake Basin Organizations (BOs) in               multitude of problems. They have failed to live
      the continent. The initial study will be carried out,          up to expectations and are in a poor state of
      following expressed demand, for two of the                     operation. The reasons for this deterioration of
      following existing river BOs including: Senegal                the organizations are many including:
      River Basin Organization (OMVS); Niger
      Basin Organization (ABN); Gambia River                    a)   Inability to maintain the initial level of political
      Basin Organization (OMVG); Lake Chad                           commitment by member states which has been
      Basin Commission (LCBC); Kagera Basin                          followed by lack of concrete support;
      Organization (KBO); and Manu River Union                  b)   Lack of clear legal, co-operational and
      (MRU)                                                          organizational frameworks for effective
                                                                     development and management the shared water
2.    Sponsor(s): The project will be sponsored by all               resources, which led lack of focus by the BOs,
      the respective RECs of the Basin organisation to               and to conflict of priorities between the BO and
      be studied.                                                    the member states;
                                                                c)   Inability to raise funds internally and externally
3.    Current Status: Draft Terms of Reference for the               which has weakened some of the regional
      study have been prepared but need to be further                organizations to a point where some cannot
      elaborated following consultations with the                    meet their operational expenditures;
      selected organizations. It is expected that the final     d)   Politicization of BOs which has left some of
      TOR shall be ready within two months after                     them plagued by internal operational and
      commissioning.                                                 managerial problems;
                                                                e)   Some BOs have been severely affected by
4.    Background: Most of the available water                        regional conflicts and civil strives in some of
      resources in Africa form part of shared                        their member countries.
      (international) or transboundary rivers, lakes or
      ground water aquifers, and are being shared by            5.   Project Objectives: The main objective of the
      two or more (in some cases as many as ten)                     project is to prepare a framework necessary for
      countries. It is estimated that there are 57 such              strengthening the existing BOs and also for
      trans-boundary river / lake basins in Africa,                  creation of the future BOs, by carrying out a
      occupying approximately 40% of the surface area                diagnostic study of two of the existing
      of the continent. Some of the largest trans-                   organizations. The project will provide support
      boundary or international rivers in the world are              to address priority areas, in order to recommend
      found in Africa, including Congo, Nile and                     the most appropriate options of setting up and
      Zambezi river basins.                                          running an organization to manage the shared
                                                                     water resources.
      The need for international co-operation for
      integrated development of trans-boundary or               6.   Project Description: The project will start with
      international rivers in Africa gained a lot of                 a diagnostic study being carried out for two of
      acceptance early in the post-colonial era. A                   the six oldest existing BOs in order to identify
      number of international treaties were signed                   the strengths and weaknesses of each. This will
      between countries leading to the creation during               include review of the legal and institutional
      the sixties, of intergovernmental basin                        framework,        mandate/mission      of     these
      organizations including OMVS, ABN, LCBC and                    organizations as well as their organizational set-
      OGVS. Others like MRU, and KBO were formed                     up and management. From these findings, the
      not too long thereafter. Creation of BOs in the                study will identify the essential ingredients that
      southern Africa region including Zambezi River                 should be considered while establishing a BO,
      Authority (ZRA), and Okavango River                            and also recommend the most appropriate
      Commission (OKACOM), is a much later                           options of such establishment. The main
      phenomenon, a process that continues even today.               activities of the study for each organization shall
                                                                     include but not limited to:
      Establishment of most of the early BOs was done           a)   Examination of the legal and co-operational
      with a lot of enthusiasm, commitment and                       agreements (including treaties, acts and protocol
      expectations by the countries involved. As a                   agreements) used for the creation of the BO and
      result, many of these organizations quickly drew               make recommendations of modifications to the

     legal and institutional framework, required to be                     manage the implementation of the study, which
     made to ensure efficient management of the shared                     will be carried out by a consultant recruited for
     resources;                                                            this purpose. In addition, the respective BOs
b)   Review for the relevant national legislations                         shall designate one of their senior staff members
     pertaining to the creation of the BO for each                         to be the liaison person in that organization.
     member state of the BO, with the aim of                               Following completion of the diagnostic review
     identifying     discrepancies      and     proposing                  of each of the nine basin organizations,
     harmonization;                                                        workshops will be held in each of the BOs
                                                                           region to present the findings and also
c)   Review      of     the     consistency     of    BOs
                                                                           preliminary recommendations for any proposed
     mandate/mission with the expectations of the
     member states;
d)   Review the planning and budgeting processes                           A firm of consultants will be recruited to carry
     together with any medium-term development                             out the study and make recommendations. This
     programs and analyze how these fall within the                        consultant will be supervised by the PMU. The
     expected mission of the organization;                                 study is estimated to last 30 months, and shall
e)   Review the main development activities                                be preceded by elaboration of the TOR through
     undertaken by each BO during the last 10 years                        discussions with the concerned organizations.
     and assess their effectiveness and sustainability;                    The support to the organisation shall take
f)   Review management systems including technical,                        approximately 3 years.
     financial, operational and personnel procedures
     and assess their general suitability and                        10. Project Benefits: The expected project outputs
     effectiveness to the institution operations;                        including identification of strong and weak
g)   Review the organizational set-up and skills mix of                  points     of     each      organization,    and
     each BO and assess its suitability to the                           recommendations of the most appropriate
     organization’s        mandate,        and       make                regional basin organization, will be of great
     recommendations for improvements required to                        assistance in revitalizing the existing BOs. The
     make the organization more effective.                               outcome of the study shall also provide a
h)   The project will then provide support for the                       framework of establishing future organizations
     identified priority areas of each of the studied                    where these have not been created so far. The
     organisations.                                                      BOs shall also benefit from the technical
                                                                         assistance     provided      to    assist   with
7.   Project Cost Estimate: The project is estimated                     implementation of the recommended changes.
     to cost a total of US$ 11.50 Million covering 6                     The revitalized BOs shall then become effective
     basin organizations.                                                tools of regional development that will foster
                                                                         regional economic integration. In the end, all
                                                                         the people covered by each basin organization
                 Summary Cost Estimate
                                                                         shall benefit from efficient use of scarce water
                 Component                         Cost
                                               (US$ million)             resources.
      1.   Review of existing Basin               0.800
           Organizations (2 No)                                      11.      Project Justification: Considering the
      2.   Provide support to the two Basin       3.500                    recognized ineffectiveness of most of the
      3.   Replicate Projects in other Basin      7.200
                                                                           established BOs, the time to analyze their
           Organizations                                                   performance is long overdue. If anything,
                                                  11.500                   available fresh water resources are under
                                                                           pressure in many regions of the continent. This
                                                                           calls for efficient utilization and conservation of
8.    Possible Financiers/Indicative Financing Plan:                       these scarce resources. In addition, joint
     Being a new intervention, the financing for this                      development of shared water resources is a vital
     project will have to be sourced under the NEPAD                       catalyst in promoting regional development and
     initiative.                                                           economic integration. Suitable organizations are
                                                                           therefore necessary to facilitate cooperation and
9.   Project Implementation: The project will be                           optimum use of these resources.
     implemented under the direct supervision of the
     regional REC for the selected BOs to be studied                 12. Issues and Proposed Action: The issue that
     or any of the other regional BOs as agreed among                    needs to be addressed to enable the project to
     the six organizations. A Project Management Unit                    start is for an agreement on the two BOs that
     (PMU) comprising project Coordinator, a                             will be the focus of the project to assume the
     Hydrologist/Hydro-geologist, a financial analyst                    role of the executing agency. Identification of
     and an environmentalist shall be constituted to                     the source of funding is also required.

13. Proposed Involvement of NEPAD: Involvement
    of NEPAD is necessary to solicit the co-operation
    required to carry out the project. Furthermore,
    NEPAD has a vital role to play in marshalling the
    political will required to implement the
    recommendations following review of existing

       ACTION PLAN FOR INTEGRATED                                 in the member states; (ii) a Committee of
     WATER RESOURCES MANAGEMENT IN                                Experts (CE); (iii) a Regional Consultation
               WEST AFRICA                                        Committee (RCC), a consultative body; and (iv)
                                                                  a coordination named the Executive Body (EB).
1.   Project Name and Location: The project is                    Its headquarters will be set up in Burkina Faso.
     entitled “Action Plan for the integrated                     The putting in place of all these bodies will take
     management of water resources in West Africa. It             place in 2002.
     covers the member states of the Economic
     Community of West African States (ECOWAS):              4.   Objective: The project’s objective is to ensure,
     Benin, Burkina Faso, Cape Verde, Côte d’Ivoire,              within the community the shift from a sectoral
     Gambia, Ghana, Guinea, Guinea Bissau, Liberia,               and fragmented management of water resources
     Mali, Niger, Nigeria, Senegal, Sierra Leone and              to an integrated management, with the view to
     Togo.                                                        establish sustainable development. The goals of
                                                                  the RAP concern the (i) implementation in each
2.   Sponsor(s): The project has been initiated and               country of the community of an integrated
     coordinated by ECOWAS. The project was                       management policy based on a national action
     launched during the sub-regional conference on               plan; (ii) the creation of a regional cooperation
     the integrated management of water resources                 framework for the integrated management of
     held in Ouagadougou, Burkina Faso in 1998. The               resources, harmonisation of national policies
     process involved, among others, diplomatic                   and     legislation,    the    introduction    or
     missions, international organisations as well as             strengthening      of    consultation    between
     non-governmental associations and organisations.             neighbouring communities for the development
                                                                  of trans-border water resources and regional
3.   Current Status: The foundation of this project               strategies for mobilising the financial resources
     was laid down during the Ouagadougou                         required for integrated water management
     Conference on the integrated management of                   resources.
     water resources in the sub-region.             This
     conference aimed specifically at the following          5.   Project Description: The project is made up of
     objectives: (i) sensitise decision-makers on water           six components, each containing a certain
     resources issues; (ii) build up a unified vision on          number of activities:
     water management; (iii) develop strategies and
     operational programmes; and (v) define the              A)   Support to national water resources integrated
     mechanisms, consultation bodies for the cross-               management plans, the activities of which are:
     border river basins.             This conference
     recommended the introduction of an integrated                   Support to the implementation of national
     management process in countries of the                          action plans.
     community and the creation of a Ministerial
     Monitoring Committee charged with supervising                   This action’s objective is to: (i) assemble,
     the monitoring process and implementation of                    index, translate and disseminate existing
     recommendations. Consultations were held with:                  documentation; and (ii) elaborate a guide on
     (i) regional bodies convened for their                          the presentation of action plans. A2 Support
     observations and suggestions; (ii) the donor                    to the implementation of national action
     community and development partners to inform                    plans. The aim is to put in place in each
     them of the process; and (iii) the Southern African             country: a national water plan geared
     Development Community – Water Sector, to draw                   towards     a    three    stage    integrated
     from its experience.                                            management        of     water     resources:
                                                                     stocktaking, elaboration of plan, capacity
4.   Background: The process for the development of                  building.
     integrated water resources management policies
     in the ECOWAS countries was initiated in 1998                   Stocktaking and monitoring of water
     following the Ouagadougou Meeting of Ministers.                 resources
     The principle of integrated water resources                     Works will include: (i) the capacity building
     management was adopted and, in particular, a                    of national structures in charge of the stock-
     Regional Action Plan (RAP) by the highest                       taking and evaluation of water resources; (ii)
     political level.                                                elaboration of a methodology and the
                                                                     organisation of training courses; and (iii) the
     It was decided within ECOWAS to set up a                        developing and setting up of computerised
     steering and coordination mechanism comprising:                 data on water resources.
     (i) a Ministerial Monitoring Committee (MMC)
     made up of Ministers in charge of water resources

        Development of a participatory approach to                  review existing agreements to streamline them
        women in integrated management.                             with the new policy.
        This component will seek to evaluate
        women’s         status      and     formulate          F)   Institution of a Regional Development Fund for
        recommendations to enhance their socio-                     the Integrated Management of Water Resources:
        economic situation and further their                        The purpose of this activity is to elaborate and
        participation in the integrated management of               implement a regional strategy in view of
        water resources.                                            mobilising financial resources required for the
                                                                    integrated management of water resources. The
        Generalization of methods to contain the                    aim will be to give more focus to economic
        proliferation of water plants.                              issues to give water its rightful place in regional
        This component’s aim is to evaluate the                     economy, and lay down the financing
        current situation, publish a guide on the                   requirements and mechanisms through the
        elaboration of control actions, capacity                    creation of a regional development fund.
        building and coordination at the regional level.
                                                               7.   Project Cost: The project is estimated at
B)   Support to the re-organisation of Water                        23,933,000 US dollars (or US$ 24 million)
     Management in countries affected by Civil War:                 broken down as follows:
     This activity will provide specific support to the
     restructuring of water supply services in countries                            Component                         Cost
     ravaged by civil war (Guinea Bissau, Liberia and               1. Support to national integrated water        7,193,000
     Sierra Leone). It will help in stocktaking,                    resources management plans
     identifying needs, elaborating an Action Plan and              2.    Support to the reorganisation of water   4,710,000
     building up minimal capacities to render the Plan              management in countries affected by Civil
     operational.                                                   3. Capacity building (education, training,     5,160,000
C)    Capacity building: (education, training, research             4.    Regional coordination of integrated      1,580,000
     and development): The overall objective is to: (i)             management of water resources
     develop methods and tools to foster information,               5.      Creation or revival of frameworks      3,860,000
                                                                    between countries for the management of
     education and sensitisation of water-rises; and (ii)           shared water resources
     put in place and/or strengthen training                        6. Creation of a regional development fund     1,430,000
     programmes relating to integrated management on                for the integrated Management of water
     one hand, and providing support to research-                   resources
     development programmes on the other.
                                                               8.   Financing Plan: The financing plan could be
D)   Regional Coordination and the Integrated                       global or divided by programme or by project
     Management of Water Resources: This                            depending on financing possibilities. Member
     component is divided into two parts: Setting up of             countries’ financial participation will be about
     a Coordination and Monitoring Body for the                     10% of the overall cost.
     Regional Action Plan for the integrated
     management of water resources in view of                  9.   Project     Implementation:       The     project
     responding to the following objective: (i)                     implementation period is about 5 years. The
     facilitating the implementation and monitoring of              major monitoring indicators are: (i) national and
     the Action Plan by the Ministers concerned; (ii)               regional integrated management plans prepared
     create a framework for ideas and formulation of                or implemented; (ii) coordination or cooperation
     projects; and (iii) put in place a permanent set up            bodies set up; (iii) consultation frameworks
     for inter-country consultation.                                established; and (iv) regional water fund
E)   Creation of a regional framework for cooperation
     and information exchange on water resources:              10. Project Benefits: The project is closely
     Revival or establishing of consultation bodies                following the new strategic vision on the
     between riparian countries for the management of              management of water resources for sustainable
     shared water resources. This component will seek              development. The project will help ECOWAS
     to: (i) elaborate a regional cooperation agreement            member countries to set up institutional, legal
     on shared water resources and provide capacity                and financial instruments in view of an
     building for its application; (ii) provide support to         integrated management of water resources and
     the ratification and follow-up of enforcement                 enduring use and in a spirit of cooperation and
     measures of international conventions; (iii)                  solidarity.
     establish agreements and institute executing
     bodies for river basins which so desire; and (iv)

11. Project Justification: West African countries are
    faced with a number of problems relating to the
    management of water resources such as: (i) higher
    water demands due to population and economic
    growth; (ii) impoverishment of resources, both in
    quantity and in quality because of drought and
    pollution; (iii) inadequate human and material
    means. Conflicts in water use will increase in the
    future both at the national (rivalry among users)
    and international levels (shared water resources).
    It has become crucial to promote an integrated
    management of water resources within the
    framework of a common and concerted approach
    at the regional level. The project will seek to
    ensure a shift towards integrated management
    through the creation of a propitious political,
    institutional and legal environment.

12. Issues and Proposed Actions: The project has
    been the subject of wide-scale consultation both
    among member countries as with the various
    partners like development institutions, financing
    institutions and non-governmental organisations.
    It equally disposes of a steering and coordination
    committee, and the adopted approach is a
    guarantee for success. It is highly recommended
    that consultation on all phases of the studies will
    be pursued.

13. Proposed Role for NEPAD: The project is of
    regional importance and is within the Framework
    for Action of the African Water Vision. Its
    purpose is to further the development of
    integrated management of water resources within
    an enlarged regional framework and to serve as a
    model of cooperation and solidarity in Africa.
    NEPAD’s support would be instrumental in its

     WATER RESOURCES MANAGEMENT                              i)        Support the setting up and running of a
      SUPPORT FOR CENTRAL AFRICA                                       project implementation unit.
                                                             ii)       Studies: (a) Harmonisation of policies and
1.   Project Name and Location: The project entitled                   the legal framework; (b) Stock-taking,
     “Water Resources Management Support for                           evaluation and water resources management;
     Central Africa” is closely following the initiative               and (c) Study of the financing mechanisms
     taken by the following countries of the sub-                      for the proposed institution.
     region: Angola, Cameroon, Congo, Gabon, Chad,           iii)      Capacity building.
     Central African Republic and the Democratic
     Republic of Congo. It aims at enhancing the water       7.     Project Cost: Project costs are estimated at 6.5
     resources management in Central Africa including               million US dollars broken down as follows:
     the Congo River. The project will cover all the
     countries concerned.                                                                                              Cost
                                                                                      Components                      (US$ )
                                                                    Support to the setting up and functioning of
2.   Sponsor(s): The Ministries in charge of water                  the project implementation unit (Installation,   2.500.000
     resources in Central Africa designed the project.              support staff, office equipment, etc.
                                                                    Experts and consultancy services for missions
3.   Current Status: Following a resolution adopted                 - Harmonisation of policies and the legal        2.000.000
     by the Ministries of the countries concerned, a                framework
     task force was set up with the view to collate all             - Stock-taking of water resources
     information necessary for elaboration of the                   - Elaboration of a Regional Action Plan
     instruments of establishment and organisation of               Study on the institution’s financing             1.000.000
     this new sub-regional institution. Work is near                Capacity building for integrated management      1.000.000
     completion and corresponding instruments will be               in Member States
     submitted for consideration to the Ministers
     before their next meeting scheduled for June
     2002.                                                   8.     Financing Plan: The financing plan is as
                                                                    follows: Member States will meet 20% of
4.   Background: The decision to establish an                       global project cost; Other financing sources
     institution responsible for integrated water                   80% of overall project cost.
     resources management in Central Africa was
     taken at the meeting of Ministers in charge of          9.     Project implementation: The project will be
     water resources in Central African countries held              implemented by the Project Implementation
     in Brazzaville, November 2000. A task force was                Unit under the aegis of a country to be
     instructed in accordance with the resolution to                designated to direct operations. The project
     collate all information necessary for the                      implementation period will be 2 years. The
     elaboration of the instruments establishing the                project’s performance indicators will be: (i)
     creation and organisation of this institution.                 project implementation unit installed and
                                                                    operational; (ii) technical assistance provided;
5.   Objectives: The objective of the project is to                 (iii) studies completed; and (iv) the required
     further an integrated management of water                      number of agents trained and sensitised.
     resources in the sub-region. This initiative is in
     line with the African Water Vision on water             10. Project Benefits: The project will permit a shift
     resources management.                                       from a fragmented sectoral and national water
                                                                 resources management to an integrated regional
6.   Project Description: The project entails                    management within the framework of
     supporting the setting up of a regional institution         consultation and cooperation between riparian
     for the integrated management of water resources.           countries.
     To this end, a project implementation unit
     comprising the focal persons designated by each         11. Justifications: The project justified on the
     of the member states under the supervision of               urgent need to provide support to this initiative
     Congo will be set up. The unit will, in particular          which is in keeping with the new strategic
     be responsible for (i) taking stock and carrying            vision for water resources management in
     out an evaluation of water resources management             Africa.
     in member countries; (ii) carrying out
     harmonisation of policies and the legal                 12. Measures and Recommendations: Measures
     framework; (iii) undertaking a study on the                 earmarked are crucial in order to guarantee the
     financing mechanisms for the regional institution;          new institution all chances of success. A
     and (v) elaborating a regional action plan. The             regular monitoring of this operation at the
     project’s components are the following:                     highest level is recommended.

13. Role of NEPAD: NEPAD will support a
    framework for the implementation of a project
    responding to the new strategic vision for water
    resources management and enhancing regional

GUIDELINES AND SUPPORT FOR NATIONAL                                states in the development of the policies and
 WATER SECTOR POLICY AND STRATEGY                                  strategies and to implement same.
               STATES                                         6.   Project Description: There are five main
                                                                   components under the project. These are
1.   Project Name and Location: The project entitled               outlined together with the activities under each
     “Support     for      the    Development      and             component.
     Implementation of National Water Sector Policies
     and Strategies – SADC” was identified by the                  Review of Water Policies in all SADC States.
     SADC region and has been under development                    Consistent water policy is essential for
     process designed to harmonize national sector                 successful management of transboundary
     policies and strategies with those required for               waters. The activities under this component
     regional co-operation. The project will be                    comprise of the review of water policy in all
     undertaken in all 14 countries of the SADC region             SADC states vis a vis consistency between
     though the scope of activity will be country                  states, between key water using sectors, with the
     specific depending on level of existing policy                Protocol on Shared Water Courses, with other
     development.                                                  SADC policies and Water Vision.

2.   Sponsor(s): The sponsor of the project is SADC                Preparation of Guidelines on Water Policy.
     Secretariat situated in Gaborone, Botswana                    Guidelines on mechanisms for harmonizing
     through the SADC Water Sector Coordination                    policies including sustainable use of water in
     Unit.                                                         key water using sectors, and improving
                                                                   consistency with the Protocol, and other SADC
3.   Current Status: Project document has been                     policies and positions will be elaborated.
     prepared, approved and submitted to potential                 Practical examples and best practice examples
     financing organizations. Implementation will                  and actions to address constraints will be
     proceed as soon as financing is secured.                      provided. The activities are the preparation of
                                                                   draft guidelines, consulting and reviewing with
4.   Background: In order to support the sustainable               member states followed by finalizing the
     management of water resources in the region,                  guidelines and their introduction to policy
     SADC members have adopted the SADC Water                      developers.
     Sector Regional Strategic Action Plan (RSAP).
     The RSAP identified a number of opportunities,                Preparation of a Framework Process and Work
     issues, and constraints to improved water                     Plan to Guide the Development and
     resources management in the SADC region. One                  Implementation of the National Water Policies
     issue is the need to harmonize water policy in                and Strategies. The activities comprise of
     SADC states at different levels:                              preparation of draft framework process and
                                                                   work plan, consult with member states and
                                                                   finalize the draft.
     a) Harmonization of national water policies
          with     the    principles   of     sustainable          Support to the Development of National Water
          development and management of water                      Policies and Strategies in Selected Pilot SADC
          resources.                                               States. National water policies and strategies in
     b)   Harmonization of national water policies                 some three states will be prepared, in
          with SADC protocol on shared water courses               accordance with the reviews conducted and
     c)   Harmonization of policies across national                guidelines prepared. Important elements to
          boundaries to assist in the management of                include are government decision-making
          transboundary waters and running of river                process, policy, legislation, institutions,
          basin organizations.                                     capacity building, public participation, and
     d)   Harmonization between water policies and                 resource mobilization. The activities include:
          policies in key water using sectors.                     reaching agreement with selected countries for
                                                                   pilot case, prepare draft national water policy
     e)   Harmonization of national water policies
                                                                   and strategy, conduct national review
          with other key SADC water policies and
                                                                   workshops, finalize the policy, and prepare
          positions, such as the Vision and Framework
                                                                   report on best practice to assist with replication.
          for Action.

5.   Project Objectives: The main objective of the
                                                                   Support to the Implementation of National
     project is to develop guidelines, which would give
                                                                   Water Policies and Strategies. The activities
     direction to the formulation of water policies in
                                                                   work plan, timetable and costing will be known
     the SADC countries; and to support member

     upon completion of the implementation plan of                         implementation of this project is thus in line
     each state. Suggested activities include: conduct                     with the programs of the RSAP. The
     of technical workshops, support by SADC for                           development of policies and strategies
     national budgeting for the implementation, and                        following an agreed guideline would ensure
     preparation of a report on lessons learnt.                            compatibility of policies and would eliminate
                                                                           the chance of conflicting water policies existing
     Support to the Replication of the Preparation and                     within the region.
     Implementation of National Water Policies and
     Strategies in Other SADC Member States. Based                         The project is of a regional nature in terms of
     on the experience of the preparation and                              objective, activities, and outputs, and is in line
     implementation of national water policies in                          with the strategic objectives of the RSAP. The
     selected states, the same could be replicated in the                  project     supports       the     socio-economic
     remaining states using the best practices.                            development of the region, contributes towards
                                                                           regional integration, and capacity enhancement
7.   Project Costs: The project costs for Phase I is                       of the stakeholders in being equipped with
     US$ 5 as estimated at 2002 prices. Phase II                           harmonized        policies     for     cooperative
     activities will be elaborated including costs as part                 management of transboundary watercourses.
     of Phase I study.
                                                                      12. Issues and Proposed Action/Way forward:
                                                                          The outstanding issue is securing finance for the
                     Estimated Project Costs
     Phase 1      Description                        Cost                 project.
                                                (US$ million)
     Stage 1      Review, guidelines, and      0.350                  13. Proposed Involvement of NEPAD: NEPAD
                  framework process                                       would lend broad support to continued
     Stage 2      Development and              1.800
                  implementation of policies
                                                                          cooperation between member states for timely
                  and strategies                                          development and implementation of policies
     Stage 3      Support replication in       2.400                      and strategies, support SADC’s effort in
                  other countries                                         identifying finance, and would undertake a
     All Stages   Management overhead          0.450                      broad follow up of project implementation with
                                               5.000                      a view to see progress to Phase II and also
8.   Possible Financiers:Possible financiers who have                     replicating similar projects in other regions.
     shown interest include UNEP, GTZ, World Bank,
     USA, UK, FAO, UNDP, ADB, and Norway.

9.   Project Implementation: The Water sector
     Coordination Unit and Member States will be the
     Implementing /Executing Agencies.

     Implementation plan. The pilot phase of the
     project will be completed in 5 years. The overall
     completion could take 8 to 10 years depending on
     the progress made by Member countries.

10. Project Benefits: The development and
    implementation of harmonized water policies of
    each member state will facilitate the co-operative
    management of shared surface and ground water
    sources at the basin level, and will support the
    implementation of the Protocol on Shared Water

11. Project Justification: The SADC region has
    demonstrated its commitment to sustainable
    management of the region’s water resources and
    accordingly adopted the SADC Protocol and
    Water Sector Regional Strategic Action Plan
    (RSAP). The RSAP identified a number of issues
    and constraints that needed to be addressed. One
    of these is the need for development of
    harmonized water policies and strategies. The

 WATER SUPPLY AND SANITATION - NIGER                         5.   Project Objectives: The project seeks to meet
            RIVER BASIN                                           the needs in water and sanitation of under-
                                                                  privileged rural populations living in the Niger
1.   Project Name and Location: The project entitled              River Basin through the putting in place and
     “Water Supply and Sanitation of Rural                        rehabilitation of water points, on one hand, and
     Communities in the Niger River Basin” is in                  the setting up of sanitation systems on the other.
     keeping with the initiatives taken to upgrade the            The project’s purpose is to further regional
     supply of clean water and sanitation of the rural            cooperation and help in improving, in a
     population in the river basin hit by recurrent               sustainable way, the living conditions and
     periods of drought and severe water shortages.               hygiene of the populations.
     The project area includes all the member
     countries of the NRBA, namely: Benin, Burkina           6.   Project Description: The project concerns the
     Faso, Cameroon, Côte d’Ivoire, Guinea, Mali,                 development and equipping of 1800 new water
     Niger, Nigeria, and Chad.                                    points, the rehabilitation of 900 existing ones,
                                                                  and providing improved sanitation systems in
2.   Sponsor(s): The project was initiated by the                 the nine (9) member countries of the NRBA.
     Niger River Basin Authority in the year 2000,                The population concerned is about 84 million
     based on studies conducted in each of the member             inhabitants. The project comprises the following
     States.                                                      components: a) Evaluation of requirements and
                                                                  sites identification; b) Development and
3.   Current Status: The various studies undertaken               equipment of 1800 new water points (200 water
     in the Niger have shown that a population of 84              points per country) and setting up of sanitation
     million people live in a precarious socio-                   systems at the rate of 200 water points for each
     economic situation characterised, in particular, by          country; c) Rehabilitation of 900 water points
     net per capita income less than 500 US dollars a             and sanitation systems at the rate of 100 water
     year, a low school enrolment rate and a difficult            points for each country; d) providing improved
     access to health care and treatment. From the                sanitation to the population of the basin; and e)
     health viewpoint, a good part of the population is           Sensitisation and formation of management
     exposed to water diseases such as guinea worm,               committees.
     cholera, that are sometimes are fatal due to the
     consumption of polluted water.                          7.   Project Cost: The project is estimated at 30
                                                                  million US dollars broken down as follows:
     The three-year action plan (2000-2002) approved               Components                             Cost (US$)
     at the 18th session of the NRBA Ministers’                    Evaluation of requirements and site      100,000
     Meeting underscored the problem of clean water                identification
                                                                   -       Monitoring and control of
     supply to communities, and instructed the                     implementation
     Executive Secretary to take the necessary steps to            - Formation of management Committees
     make good this situation. The NRBA carried out                Development and equipment of 1800      18,000,000
     an evaluation of country requirements and                     water points
                                                                   Rehabilitation of 900 water point       1,800,000
     identified the sites. The project set off with                Setting up of new sanitation systems    8,100,000
     NRBA financing as from the year 2000 with the                 Rehabilitation of sanitation systems    2,000,000
     construction of a first set of 15 boreholes in the
     following countries: Benin (3), Burkina Faso (1);
     Cameroon (1); Côte d’Ivoire (1); Guinea (1); Mali       8.   Financing Plan: The financing plan is as
     (3); Niger (1); Nigeria (4); Chad (1).                       follows: The Member States of the NRBA will
                                                                  meet 10% of the overall project cost. Other
4.   Background: The clean water supply and                       sources of finance will provide 90% of overall
     sanitation of rural communities in the Niger River           costs.
     Basin was initiated by the NRBA under its three-
     year action plan (2000-2002) approved at the 18th       9.   Project         Implementation:            Project
     Session of the Ministers’ Meeting held in                    implementation will take 3 years.             The
     September 1999. The Executive Secretary was                  development and rehabilitation of water points
     instructed to take the necessary steps in view of            will be undertaken by each Member State
     providing adequate clean water supply and                    according to an implementation schedule and
     sanitation of the rural populations of the Niger             set priorities. The project’s performance
     River Basin adversely affected by drought. The               indicates are the following (i) the populations
     programme was put forward following a study                  are sensitised; (ii) management committees
     carried out in each of the countries concerned.              formed; (iii) water points and sanitation systems
                                                                  set up or rehabilitated.

10. Project Benefits: The project will assist to
    improve access to clean water and improved
    sanitation for deprived populations confronted
    with sever water shortage in the region that could
    have serious inroads in their health. It will also
    contribute to poverty reduction and save women
    and children precious time that they can devote
    respectively to education and their socio-
    economic pursuits.

11. Project Justification: The long period of drought
    that has hit the Niger Basin in the past two
    decades has resulted in a sharp decrease of the
    flow in the Niger River and its tributaries and at
    times leading to no flow at all. This drought is
    accompanied by strong evaporation that has
    reduced half of these flows in regions such as the
    Internal Delta. Some villages along the Niger
    River and its tributaries and sub-tributaries are
    thus deprived of water for a good part of the year,
    decreasing their socio-economic activities in a
    great way. Women and children devote most of
    their time in the search for water to the detriment
    of their activities. The project finds its
    justification in the urgency to put at the disposal
    of the populations of the river basin, adequate
    water points and sanitation systems to relieve the

12. Issues and Proposed Action: The actions are
    well identified and the risks relatively limited,
    account taken of the strong commitment expected
    from the States and the populations concerned by
    the project. It is recommended that the Niger
    River Basin Authority, the initiator of this
    programme will monitor the state of progress
    during implementation.

13. Role of NEPAD: Considering that it is a project
    of regional importance and is within the
    Framework for Action of the African Water
    Vision, setting specifically objectives as the
    improvement of access to drinking water, NEPAD
    support would be instrumental in its success.

      DROUGHT AND DESERTIFICATION                                    up of a system of information; (iii) Introduction
     CONTROL PROJECT IN THE MAGHREB                                  of a surveillance network of ecosystems; (iv)
                                                                     Establishment of comprehension of drought
1.   Project Name and Location: The project entitled                 preparedness plans and assistance in case of
     “Drought and desertification control in the                     catastrophe; and (v) Establishment of an
     Maghreb”, is in line with actions undertaken                    integrated trans-border programme in the arid
     worldwide to halt the degradation of natural                    eco-systems of the Maghreb. The project
     resources including water in arid and semi-arid                 identified in the project brief is an integral part
     regions, in accordance with the provisions of                   of actions defined in the SRPA.
     United Nations Convention, November 1996 on
     desertification control. The project will cover a          5.   Objectives: The project’s objectives are as
     total area of about 6 million km2.                              follows: (i) the undertaking at the Algerian and
                                                                     Tunisian border of a pilot desertification control
2.   Sponsor(s): The project was initiated by the Arab               operation centred on the protection of
     Maghreb Union with the view to further the                      agricultural perimeters and infrastructure
     regional integration and specifically with regard               against silting and the furtherance of high water
     to protection and control of environmental                      savings techniques; (ii) the valorisation and
     degradation, in accordance with United Nations                  dissemination of know-how an traditional
     provisions on drought control that recommended                  drought control techniques and mobilisation of
     the implementation of actions under the sub-                    running water in the Maghreb; (iii) the setting
     regional plan of action (SRPA). The SRPA                        up of an information dissemination system on
     constitutes not only a framework for consultation               desertification and the environment in the
     coordination and integration of efforts by States,              Maghreb Arab Union.
     inter-governmental      and      non-governmental
     organisations, but also a set of coherent measures         6.   Project Description: The project comprises: a)
     and mechanisms for the sustainable management                   The implementation of a pilot operation at
     of shared natural resources.                                    Algeria-Tunisian border at Hazoua (Tunisia)
                                                                     and El Oued (Algeria) pertaining to: (i) the
3.   Current Status: The project presented in this                   construction of silting control devices through
     project brief is part of the activities defined in the          mechanical and biological procedures; (ii)
     SRPA whose objectives are: (i) the                              development of access roads; (iii) development
     implementation of a pilot trans-border operation                of water points for cattle; (iv) the equipping of
     focusing on the development of water points and                 water points and popularisation of high water
     on silting control actions; (ii) the valorisation and           saving irrigation techniques; (v) institutional
     popularisation of traditional drought control                   strengthening technical assistance and training.
     techniques; and (iii) the putting in place of an                b) Stock-taking, valorisation and dissemination
     information system on desertification and the                   of know-how and techniques in the Maghreb
     environment. Project feasibility studies have been              concerning drought and desertification control
     completed.                                                      and mobilisation of running water, by way of
                                                                     guides, video films and training courses. c) The
4.   Background: The problem of desertification was                  elaboration of a regional data base and setting
     incorporated in the national development policies               up of a system of information on desertification
     of the Maghreb countries around the end of the                  and the environment aims at collecting and
     1970s following the Nairobi Conference. It was                  passing on comprehensive information on
     consequent to the signing on 17 February 1989 of                physical degradation, desertification and
     the MARRAKECH treaty informing the Arab                         environmental monitoring.
     Maghreb Union Secretariat (AMU) that the file on
     desertification control had been incorporated at           7.   Project Costs: The project is estimated at
     the sub-regional level through the elaboration of               6,250,000 US dollars broken down as follows:
     an SRPA according to a consultative and                         Realization of a pilot operation at Algeria-
     participatory process in line with the                          Tunisian border (US$3,600,000 ); Valorisation
     recommendations of the United Nations                           of know-how and techniques (US$650,000);
     Convention.                                                     Elaboration and setting up of a system of
                                                                     information (US$2,000,000)
     The Maghreb SRPA was formulated in 1995 and
     validated in Algiers in 1999. It is based on the           8.   Financing Plan: The financing plan is as
     realisation of the six following projects: (i)                  follows: The AMU will meet 10% of overall
     Institutional support to the sub-regional body in               project costs. Other sources of finance will
     charge of the SRPA; (ii) Evaluation of the                      cover 90% of overall costs.
     desertification process in the Maghreb and setting

9.   Project implementation: Project implementation
     according to the implementation schedule will
     take 5 years.

10. Project Benefits: Through this pilot operation,
    the project will make it possible to assist the
    population living in regions highly prone to
    drought and desertification, to improve their
    living conditions and income through the
    following actions: protection of irrigated areas
    and infrastructure against silting development and
    equipment       of      water-points,     livestock
    development,       tourism       promotion      etc.
    Furthermore, the experience acquired during the
    project’s implementation will receive widespread
    publication in the Maghreb for its extension and
    replication in the regions threatened by the
    advancing desert. Finally, the setting up of a
    system of information will help in scientific and
    technical research in this area for the fine-tuning
    of strategies and desertification control measures
    in the Maghreb.

11. Project Justification: The project is in keeping
    with the regional drought control programme; it is
    justified by the need to preserve habited areas,
    farms and infrastructure, threatened with
    extinction the advancing desert. Through the
    pilot operation, the project will provide
    generalized      experience     and       popularise
    desertification control techniques in the Maghreb.

12. Issues and Proposed Actions: Measures to be
    taken and executing agencies have been defined
    and the risks are relatively limited given the
    strong commitment from regional and national
    institutions and that of the populations concerned.
    Project coordination and support by the Maghreb
    Arab Union is expected to guarantee success.

13. Role of NEPAD: The project is of regional
    importance and responds to the objective of
    environmental conservation. In this regard the
    NEPAD could through this project revitalise the
    AMU and revive regional cooperation.

       GROUND WATER MANAGEMENT                                     to co-ordinate resource         assessment     in
     PROGRAMME FOR THE SADC REGION                                 transboundary water bodies.

1.   Project Name and Location: The “Ground                        Groundwater was thus given attention and an
     Water Management Program for the SADC                         assessment of the groundwater resources
     Region” was initiated in 1998 and has been                    management situation was carried out in the
     partially under implementation. The program will              SADC Member States, in consultation of major
     be undertaken in all 14 countries of the SADC                 stakeholders followed by the preparation of the
     region, namely: Angola, Botswana, Democratic                  Groundwater Management Program for the
     Republic of Congo, Lesotho, Malawi, Mauritius,                SADC Region. It includes 10 projects of
     Mozambique, Namibia, Seychelles, South Africa,                regional significance and supports the national
     Swaziland, Tanzania, Zambia, and Zimbabwe.                    programs     with    due    consideration    of
                                                                   transboundary issues. The program was
2.   Sponsor(s): The sponsor of the program is SADC                developed within the framework of SADC’s
     Secretariat situated in Gaborone, Botswana. The               Regional Strategic Action Plan for Integrated
     Water Resources Technical Committee (WRTC)                    Water Resource Development and Management
     through the Sub-Committee for Hydrogeology is                 (RSAP).
     responsible for supervision of the program or
     serving as steering group for the implementation         5.   Project Objectives: The general objectives of
     of programs/projects of regional magnitude.                   the study are to:
     Water sector departments, hydro-geological units              - promote sustainable development of ground
     and where applicable river-basin organizations                    water resources at sub- regional scale in
     (RBOs) will utilize the project generated                         terms of research, assessment, exploitation
     guidelines, data and information for planning,                    and protection,
     quality control and management of groundwater                 - assess groundwater management issues in
     resources.                                                        member states and provide technical support
                                                                       for their assessment and management
3.   Current Status: Ten sub-projects have been                        programs (including capacity building,
     developed and approved under this program with                    institutional and legal framework, policies,
     an estimated cost of US$ 17.2 million (2002                       socio-economics and financing),
     estimates). Using funds and technical assistance              - develop the groundwater component in the
     secured from French Government adding to about                    context of regional integrated water
     US$2.9 million, implementation of 5 of the 10                     resources development and management
     projects (initial phases) is in progress. The                     approach, with a particular emphasis on the
     program part entitled “Protection and Strategic                   role of groundwater in drought management
     Uses of Groundwater Resources in the Limpopo                      issues, and
     Basin and Drought Prone Areas of the SADC                     - intensify links between national and
     Region” is being elaborated for possible financing                regional levels of activities within a general
     through France, GEF. The financing gap is US$                     framework of regional economic integration.
     14.3 million out of which, if approved, France
     GEF will provide US$8 million.                           6.   Project Description: The program includes ten
                                                                   projects/components and is herein outlined.
4.   Background: Groundwater is an important
     source of water supply for about 37% of the total             Component 1: Capacity Building within the
     population in the SADC region. Surface water                  context of Regional Groundwater Management
     provides 23% while the remaining 40% of the                   Programme.
     population rely on unsafe water sources.
     Groundwater is the primary source of intensive                Activities: Review the capacities of member
     irrigation in some parts of SADC (South Africa)               States and devise a program for capacity
     and has a significant role to play for food security          building.
     through small-scale irrigation (gardens). As                  Outputs: Capacity of Member States enhanced
     drought affects several countries of the region,              for the successful implementation of the
     drought management initiatives need to take into              program.
     account the protection, conservation, development
     and sustainable management of groundwater.                    Component 2: Develop minimum common
     Some of the SADC Member countries have                        standards for groundwater development in the
     limited knowledge of their groundwater resources              SADC region.
     thereby affecting their long-term policy. As a
     number of the groundwater reservoirs (aquifers)                  Activities: Assess current practices and
     are found within several countries, there is a need              procedures in Member States and prepare

recommended common standards for the
development and protection of groundwater                    Activities: Design a website for the ground
resources.                                                   water industry in the SADC, including an
Outputs: Regional Common Standards and                       inventory       of    relevant    institutions,
Guidelines for the Development of                            professionals, and updated activities. WSCU
Groundwater.                                                 staff to be trained on website updating.
                                                             Outputs: A website on internet and
Component     3:   Develop      a      regional              newsletters. A functional groundwater
groundwater information system.                              information system

Activities: Assess the existing groundwater                  Component 8: Region Groundwater
information systems in Member States and                     Resources assessment of Karoo aquifers.
identify their needs for improvement. Define
objectives for the regional Information System               Activities:     Synthesis     of    available
and develop capacity for exchange of                         hydrogeological data, in order to map the
information.                                                 aquifer extent, and identify data gaps.
Outputs:      A      functional   groundwater                Prepare a comprehensive plan for specific
information system with GIS capacity to store,               recharge studies, quantification of resources
retrieve and manipulate drought related                      and identification of projects to be taken at
monitoring data and groundwater data of                      local scale.
regional significance.                                       Outputs: Characterized ground water
                                                             occurrence and resource assessment for joint
Component 4: Establishment of a regional                     management of Karoo Aquifers at sub-
groundwater-monitoring network                               region scale.

Activities: Evaluation of the current system in              Component     9:   Region        groundwater
ground water monitoring, preparation of                      resources assessment of          Precambrian
proposals for rationalization of monitoring                  Basement aquifers.
networks, and design of Regional Monitoring
System.      Organize     a    workshop      to              Activities:     synthesis     of    available
introduce/validate system.                                   hydrogeological data, statistics on borehole
Outputs: A functional groundwater monitoring                 success rate, evaluation of appropriate siting
system. Assess regional impact of drought and                techniques, identification of data gaps,
abstraction. Joint management of major river                 evaluation of recharge variations and
basins.                                                      potential, proposal for feasible groundwater
Component 5: Compilation of Region                           Outputs: Characterized ground water
Hydrogeological Map and Atlas for the SADC                   occurrence and assessment of the
Region.                                                      development potential of Precambrian
Activities:     Review existing national
hydrogeological maps, legends, parameters,                   Component 10: Groundwater Resources
etc. Propose uniform hydrogeological map                     Assessment of Limpopo/Save Basin
parameters. Define the overall structure and
design the map and atlas.                                    Activities: Characterization of ground water
Outputs: Region hydrogeological map and                      occurrence in the basin, assessment of the
atlas.                                                       groundwater component of hydrological
                                                             cycle, water balance study, evaluation of
Component    6:    Establish   a    Region                   groundwater development potential, and
Groundwater Research and Training Institute.                 impact of river flow.
                                                             Outputs: Understanding under a pilot study,
Activities: Collect views of research/education              the surface and groundwater interaction at
institutions and groundwater professionals.                  basin level in view of integrated water
Identify and elaborate options for the location,             resources management, including drought
structure, and function of the research                      management.
Outputs: A region groundwater research               7.   Project Cost Estimate: The total project cost is
institute/commission                                      estimated at US$ 17.2 million. By April 2002,
Component 7: Construct a website on Internet              financing to the tune of US$ 2.9 million has
and publish quarterly newsletters.

     been secured, leaving the financing gap at US$              level. In addition, improvement of information
     14.3 million.                                               acquisition, management and dissemination,
                                                                 supporting awareness building, education and
8.   Possible Financiers/Indicative Financing Plan:              training, promotion of public participation, and
     Since 1998, the WSCU through the French                     investment in infrastructure (coverage of rural
     Technical Assistance, has undertaken an                     water supply) are objectives of RSAP met by
     assessment of groundwater management issues in              the projects. This program was placed under
     the SADC, and has been developing the terms of              Group 6: “Stand Alone or Special Priority
     reference for project proposals. Through a                  Areas” of SADC water sector programs.
     financing    mechanism      of    the   Global
     Environmental Facility, PDF Block B Grant,             12. Issues and Proposed Action/Way forward:
     implementation of 5 of the 10 projects (initial            There are no major outstanding issues under this
     phases) is in progress. Interested cooperating             program. The way forward for this program is
     organizations for further financing include:               to secure funding. Assignment of an executing
     France GEF, World Bank, Germany, SIDA, and                 agency will be followed as soon as funding is
     UNESCO.                                                    secured.

9.   Project Implementation: Implementation of the          13. Proposed Involvement of NEPAD: The role of
     initial phases of the program is being conducted           NEPAD would be to seek commitment and
     through the WSCU and will continue for the                 contribution from Member States to implement
     remaining parts of the project. A technical                the project and also facilitate availability of
     assistant expert is assigned to the WSCU. The              funding required, and also the replication of
     SADC Water Resources Technical Committee                   similar projects in other regions.
     through the Sub-committee for Hydrogeology
     provides technical backup and review during the
     implementation of the program.

     Implementation plan. The program is envisaged to
     be implemented within a period of 3 to 4 years,
     depending on funding availability.

10. Project Benefits: The main beneficiaries are the
    water affairs and hydrogeological units of
    Member States whose capacities will be improved
    through trained manpower, equipment and
    facilities, good practice guidelines, functional
    region groundwater information system (website
    and newsletter), region groundwater monitoring
    network, hydrogeological map and atlas, and
    establishment of a region groundwater research
    institute/commission. This will better equip the
    water affairs and hydrogeological units of
    Member States to conduct integrated water
    resources planning and management at the basin
    level, revise policies that reflect the new
    information, plan effective drought management
    initiatives, guide planning water supply especially
    in rural areas, and co-operate effectively on
    transboundary groundwater utilization, regulation
    and monitoring.

11. Project Justifications: The Groundwater
    Management Program is of a region nature in
    terms of objective, activities, and outputs. The
    identified projects are in line with the following
    objectives of the Regional Strategic Action Plan
    (RSAP): improvement of national and
    transboundary river basin management, planning
    and coordination, improvement of the legal and
    regulatory framework at the national and region

      ASSESSMENT OF SURFACE WATER                                   supply of water to industry, power generation
              RESOURCES                                             mining and manufacturing systems need to be
                                                                    planned, regulated, and monitored.

1.   Project Name and Location: The project entitled                Recognizing the importance of water resources
     “Assessment of Surface Water Resources” was                    for the economic development of the region,
     identified by the SADC region. It has been under               SADC adopted the Water Regional Strategic
     development process designed to assess and                     Action Plan (RSAP). The Strategy reaffirmed
     quantify the surface water resources of the whole              the importance of the regions’ water resources
     of Southern Africa in a co-coordinated and                     and its influences on all aspects of the region’s
     unified manner, as well as building capacity                   economic and social performance. In 1998, the
     within the region to make site specific water                  RSAP together with 31 projects/projects was
     resource assessments. The project will be                      presented to the international community for
     undertaken in the continental countries of the                 support. The “Assessment of Surface water
     SADC region.                                                   resources” was one of the projects submitted
                                                                    whose purpose is to make a SADC-wide surface
2.   Sponsor(s): The sponsor of the project is SADC                 water resources assessment. This assessment
     Secretariat situated in Gaborone, Botswana                     should build on existing work at a national
     through the SADC Water Sector Coordination                     level, build on capacity in implementing
     Unit. The WRTC through the Sub-Committee for                   institutions, promote confidence in the
     Surface Water Hydrology is responsible for                     assessment products among other member states
     technical review and approval.                                 and support the concepts of information access,
                                                                    equitable     sharing    of    resources      and
3.   Current Status: The detailed Project Brief under               environmentally sustainable water development,
     the title “Terms of Reference for a Study to                   to which the states are committed in the
     Quantify the Surface Water Resources of                        Protocol on Shared Watercourse Systems in the
     Southern Africa ” was compiled for the SADC                    Southern African Development Community.
     Water Sector Coordination Unit by the Water
     Research Commission (WRC) of South Africa.                     The Terms of Reference for the project was
     The project is planned to be undertaken in two                 prepared and finalized in 2001 taking into
     phases: Phase I, lasting a period of 4 years                   account the comments of Member States. This
     followed by Phase II which is envisaged to be                  entails duration of 8 to 10 years, and costing
     finalized in a further 6 years. The financing                  US$16.27 million. In order to facilitate quicker
     document has been provided to potential financers              implementation, the project was reformulated in
     and response is awaited.                                       two phases. Phase I will have a duration of 4
                                                                    years at an estimated cost of US$ 5 million.
4.   Background: The regional estimates place                       Phase I will be implemented in two river basins
     renewable freshwater resources at an annual                    as a pilot phase, but will provide the full range
     average of 650 billion m3 distributed in rivers,               of envisaged outputs based on a methodology
     lakes, and ground water bodies. All the countries              that is considered to be applicable for all
     share one or more rivers. Rainfall patterns vary               subsequent phases. Attempt will be made to
     dramatically and droughts are frequent causing                 involve all continental Member States in at least
     severe impacts on environmental and economic                   some aspects of the project. Accordingly, a
     activities in the region. Some areas of the region             “Proposal for Funding the Implementation of
     are prone to severe flooding. With increasing                  PCN 14- Assessment of Surface Water
     population, water will become an increasingly                  Resources of SADC” has been prepared and
     scarce resource affecting growth in industry,                  awaits approval by the Council of Water
     agriculture and urban centers. Competition for                 Ministers.
     shared water resources will intensify. Water
     scarcity will impact on the policies and programs         5.   Project Objectives: The main objective of the
     for rural, urban and industrial development.                   project is to produce and make accessible a
     Poverty has risen steadily in the region, calling for          SADC – wide Surface Water Resources
     programs for improving people’s standard of                    Assessment, in a manner that builds capacity in
     living. Water is key to achieving this through                 implementing institutions, promotes confidence
     reliable access of water for agriculture, and safe             in assessment products amongst Member States,
     water and sanitation services. To address the                  and which ensures that the assessment supports
     deteriorating food security conditions in the                  equity amongst stakeholders through sharing
     region, there is need to expand water delivery                 water within international river basins, through
     infrastructure, protect aquatic resources and                  national and river basin planning, and through
     expand livestock (and wildlife) watering. The                  operational water resources management.

                                                                     regionalized long-term rainfall time series and
         The specific objectives are:                                simulation of river flows for all catchments. The
       i. To generate monthly time series of                         output is the elaboration of database
             naturalized river flow at the sub-                      management software.
             catchment as well as at major river and
             basin scale;                                            Component 2: Develop and distribute databases.
      ii. To develop and distribute databases of the                 The activities comprise of database design for
             generated river flow and associated                     both time series and spatial data, populating the
             information (spatial data, rainfall,                    databases, and identification of associated
             evaporation, water use, etc.);                          products. The outputs are consolidated and
                                                                     integrated databases of spatial and time series
     iii. To develop and distribute tools for                        information relevant to the assessment of
             accessing and applying the information
                                                                     surface water resources in all SADC countries.
             contained within the databases;
     iv. To build capacity within the SADC water                     Component 3: Develop and distribute tools. The
             resources community, to make use of the                 activity under this component is the
             developed information tools; and                        development of application tools, with the
      v.     To improve inter- and intra-country, as                 output of regionalized model parameter,
             well as international networking and to                 observed and simulated time series of monthly
             improve the ability of SADC Member                      hydrometeorological data for a standard period,
             States to develop water sharing programs                regionalized water usage information, as well as
             in a sustainable and equitable manner.                  guidelines for the use of both the data and the
                                                                     modeling techniques within the various basins.
     The project is in line with the SADC Protocol on
     Shared Watercourse Systems that provides the                    component 4. capacity building. the activities
     necessity and importance of initiating a regionally             comprise of training and capacity building
     coordinated study about the quality and quantity                during the long-term project and training and
     of water resources.                                             capacity building on products. this will have
                                                                     outputs comprising of training courses and
6.   Project Description: The project will be                        manuals on the use of the software, models, and
     implemented in two pilot basin areas with                       database information, improved capacity in the
     technical support provided by personnel recruited               (sub-) region related to processing primary
     from within the SADC region. The project will be                hydrometeorological data, analysing spatial
     undertaken at four levels. A Steering Committee                 data, interpreting hydrometeorological data,
     will guide the Implementing Agent in the                        using rainfall-runoff and associated water
     execution of the project. At the second level, the              resource estimation models and the ability to
     Implementing Agent and the Project Wide Team                    make efficient and informed decisions about
     will be responsible for the technical management                water resource development options using the
     of the project based on the directives of the                   information and tools generated to the long-term
     Steering Committee. At level 3, Technical                       project.
     Steering Committees will be established for each
     basin and will ensure satisfactory technical                    Component 5. Improve networking.             The
     progress and liaison with associated stakeholders.              activity under this component is the facilitation
     At level 4, the designated body in each Member                  of networking, resulting in improved capacity to
     State will carry out preliminary studies, data                  access and exchange information
     inventories that can add value to the outcome of
     Phase I. There are five components of the project        7.     Project Cost Estimate:
     as herein described.
                                                                                    Estimated Project Costs
     Component 1: Generation of monthly time series                                    Description                  Cost
                                                                                                               (US$ million )
     of river flow. The activities under this component            Phase 1   Implementing Agent               0.140
     are: time series data collection, measurement of                        Steering Committee               0.100
     field data, time series data processing and                             Study Specialists                0.515
     preparation, spatial data collection, spatial data                      Country Study Teams              1.360
                                                                             Basin Study Teams                1.440
     processing and preparation, selection of rain-fall-                     Special Outsourced Studies       0.300
     runoff model and modeling software, rainfall-                           Training/Information Workshops   0.640
     runoff model calibration and validation,                                Contingency – 10 %               0.465
     naturalization of the observed river flows in                           TOTAL                            4.960
                                                                   Phase 2   Estimated Cost                   11.310
     calibration catchments, regionalization of rainfall-
                                                                   TOTAL                                      16.270
     runoff model parameters, generation of

     The project costs as estimated at 2002 prices are           Other project benefits include the provision of
     US$ 16.27 million. Phase II costs are preliminary           time series of naturalized stream flow, as well
     estimates, as the study extent will be elaborated,          as present day water use for sub-basins in the
     including costs as part of Phase I project.                 region for determination of environmental
                                                                 release consideration, compilation of sub-basin
8.   Possible Financiers/Indicative Financing Plan:              scale monthly rainfall time series and other
     Possible financiers include the Netherlands,                spatial information for ground water recharge
     Sweden, FGEF, USA and UK. To date US$ 0.300                 studies, generation of data for drought
     million has been secured, with the financing gap            vulnerability assessments in conjunction with
     being US$ 16.0 million (US$ 5.0 million in Phase            SADC-HYCOS project and contribution to
     I, and US$ 11.00 million in Phase II). Phase I is           flood estimation procedures.
     proposed for support under NEPAD’s Short-term
     Plan.                                                  11. Project Justification: The project is of critical
                                                                importance for sustainable use of water
9.   Project Implementation: The SADC Water                     resources for socio-economic development of
     Sector Coordination Unit will be the                       the region. The development of technical and
     Implementing Agency. Direct implementation                 institutional capacity and the provision of
     will be undertaken through designating a water             database and analysis tools will improve the
     research organization or consultants who would             efficiency of water resource estimation. It is
     be supervised by the WSCU.                                 equally important to acquire sufficient
                                                                information on river flows and related data to
     Implementation plan: The project is planned to be          enable sound and consistent resource
     implemented within a period of 8 to10 years, out           management and maintain ecological diversity.
     of which Phase I will take the first 4 years.              The development of water resource databases
                                                                using common methodologies throughout the
10. Project Benefits: The main beneficiaries will be            region should help to avoid conflict between
    the sector stakeholders of each country as well as          member states, improve the ability to reach
    basin organizations and SADC water sector                   agreement in shared water systems and assist in
    bodies who will be equipped with reliable and               the equitable apportionment of water between
    mutually acceptable water resources data as well            sectors or economic sectors. The development
    enhanced capacity and tools for planning and                of a regional database on water availability and
    management of water resources.                              existing water utilization will enable sound
                                                                resource based planning and management in
     The project will contribute to the improvement in          sectors other than water.
     the efficiency of water resource estimation
     through the development of technical and                    The project is of a regional nature in terms of
     institutional capacity and the provision of                 objective, activities, and outputs, and is in line
     necessary data storage and analysis tools. The              with the strategic objectives of the Regional
     project will contribute to the integration of               Strategic Action Programme (RSAP). The
     national scale experience and data at the regional          stated purpose is to make accessible a SADC-
     level. The project will also contribute to                  wide surface water resources assessment. The
     consistent and environmentally sustainable                  project     supports      the    socio-economic
     resource management, and to the development of              development of the region, contributes towards
     common technologies in the field of water                   regional integration, and capacity enhancement
     resource management.                                        of the stakeholders in being equipped with
                                                                 mutually recognized database for the water
     The project will further contribute to the                  sharing and cooperative management of
     development of common methodologies in the                  transboundary rivers.
     field of water resource management and will
     improve the ability of Member States to reach          12. Issues and Proposed Action/Way forward:
     agreements on the use of shared resources. The             The outstanding issue is securing of finance for
     development of a regional database on water                the project. Direct implementing body will be
     availability and existing water utilization will           designated from one of the Research
     enable sound resource based planning and                   Organizations in the SADC or through tenders
     management in sectors other than water. This is            in accordance with the requirements of the
     expected to contribute to the understanding of             financing stipulations.
     competitive advantages and disadvantages of the
     use of water in the region.                            13. Proposed Involvement of NEPAD: This
                                                                programme is earmarked for NEPAD support as
                                                                it promotes the sustainable development of

surface water resources at regional levels, builds
capacity at the national level, and has continued to
interest all SADC Member countries. NEPAD
would lend support to the continued commitment
and cooperation of the member states, and
SADC’s effort to obtain financing. In addition,
NEPAD would undertake a broad follow up of
project implementation with a view to replicating
similar projects in other regions.

     EXPANSION AND IMPLEMENTATION OF                               to collect, process and distribute hydrological
        SADC HYDROLOGICAL CYCLE                                    data, and supporting the NHSs in enhancing the
     OBSERVATION SYSTEM (SADC HYCOS)                               development and operation of adequate
                                                                   hydrological observing networks. WHYCOS
1.    Project Name and Location: The project entitled              has been implemented through a number of
      “Expansion and Implementation of SADC                        regional HYCOS.
      HYCOS” is a continuation of Phase I and has the
      objective of promoting regional cooperation                  For the SADC region, the establishment of a
      between the National Hydrological Services                   reliable region-wide hydrological network and
      (NHSs) and to set-up a regional information                  information system on water resources has been
      system on water resources. The project will be               a long-standing priority objective. The SADC-
      implemented in all 14 countries of the SADC                  HYCOS (Phase I) has been under
      region with relevance for river basin planning,              implementation in close collaboration with
                                                                   NHSs and WMO. Under Phase I, a network of
      development and management.                                  50 DCPs was installed for the collection and
                                                                   data transmission via the Meteosat data
2.    Sponsor: The sponsor of the project is SADC                  collection system. The Phase I is considered a
      Secretariat situated in Gaborone, Botswana                   success from the perspective of the cooperative
      through the SADC Water Sector Coordination                   mechanism that has been established to address
      Unit. The Water Resource Technical Committee                 water related problems on a regional scale and
      (WRTC) through the Regional Steering                         the nucleus of a water resources information
      Committee is responsible for technical review and            system is in place.
      approval. Another important sponsor of the
      project is WMO, which supported Phase I of the               In 1998, the SADC Water Sector recognized the
      SADC Hydrological Cycle Observing System                     benefits of SADC-HYCOS and took steps to
      (SADC-HYCOS), and integrates such regional                   further its consolidation and expansion as one of
      projects as part of the World Hydrological Cycle             the key projects in the Regional Strategic
      Observing System (WHYCOS).                                   Action Plan (RSAP) for Integrated Water
                                                                   Resources Development and Management. The
3.    Current Status: A pilot project involving a total            development of Phase II of the project will be
      of 50 Data Collection Platforms (DCPs) was                   carried out in consultation with river basin
      completed in 2001, under Phase I. In order to                organizations in the region. WMO will continue
      build on the achievements of Phase I, the WSCU,              to provide the technical supervision of the
      in collaboration with the Canadian International             project. Phase II will include the new SADC
      Development Agency (CIDA), developed a                       Member States, undertake a comprehensive
      “Framework Document for the Consolidation and                need assessment for hydrological information,
      Expansion of SADC-HYCOS”. This document                      to expand the DCPs as required such as for
      provides the basic terms of reference for further            flood monitoring/forecasting, water sharing, and
      development of SADC-HYCOS. A project                         assessment of the water resource and to expand
      implementation document has been prepared in                 the water resources information system to be
      consultation with WMO providing a detailed                   readily available to all NHSs.
      description of the activities to be undertaken in
      the implementation of Phase II of the Project.          5.   Project Objectives: The objective of the
      Currently funding is being sought to initiate the            project is to enhance the effectiveness of real-
      project.                                                     time and near real time hydrological monitoring
                                                                   across the SADC region, by a consolidation and
4.    Background: The 1998-1994 Sub-Saharan Africa                 expansion of SADC-HYCOS, including
      Hydrological Assessment by World Bank/UNDP                   implementation in the Angola/Namibia basins.
      confirmed that there was considerable                        The SADC-HYCOS Phase II is designed to
      deterioration in the capacity of National                    consolidate and expand on the project activities
      Hydrological Services to supply data and                     that were initiated during the first phase. The
      information on the state of their water resources.           consolidation will address the need for further
      However, the demand for such information for the             institutional strengthening, building capacity in
      development and management of water resources                using the new technologies for maintenance and
      has increased. In response to the needs established          operation of DCPs, and in the development and
      by the various surveys, the WMO in association               management of national and regional databases
      with the World Bank launched the WHYCOS in                   using common standards and operating
      1995 with the objective of promoting and                     practices. The expansion will ensure that the
      facilitating the exchange and use of water                   system is fully responsive for regional needs for
      resources data and information, strengthening the
      technical and institutional capacities of the NHSs

     water resources assessment, drought monitoring                 and promotion of awareness activities for the
     and flood forecasting.                                         general public, water agencies and decision-
                                                                    makers. The outputs under this component are
6.   Project Description: The project will be                       trained staff, and participatory consultations
     implemented in two stages: Under Stage 1, which                through workshops, press releases, and
     will last for a period of 6 months, detailed project           information brochures produced on the role and
     and implementation plan will be prepared, while                services of the NHSs.
     in Phase 2, implementation of main project
     activities will be undertaken and will completed         7.    Project Cost Estimate:
     in a period of 42 months. The project components                        Description                   Cost
     and activities under Stage 2 are herein described.                                                2002 Prices
                                                                                                      (US$ million)
     component 1: improvement of the network of                    Joint monitoring between Angola   2.000
     hydrological observing stations. the activities               and Namibia
     under this component are procurement and                      Water Resources Monitoring        1.500
     delivery of equipment, installation of equipment              Systems for Lake Malawi and
     and operationalize stations, establishment of data            Nyasa
     transmission and reception procedures, and                    Congo HYCOS                       4.000
     training of staffing the installation, maintenance            HYCOS System in rest of the       4.500
     and operation of equipment, with particular
                                                                   Total                             12.000
     attention to dcps. the outputs under this
     component comprise of 100 mapped stations, 50
                                                              8.    Possible Financiers/Indicative Financing
     real time and another 50 non real-time equipment
                                                                    Plan: The Framework Document and
     supplied and installed and operationalized, data
                                                                    Implementation (Funding) Document have been
     transmission system established and staff trained
                                                                    prepared with the assistance of CIDA and
     in the installation, maintenance and operation of
                                                                    WMO. The Netherlands Government has been
                                                                    asked to finance parts of Phase II and response
                                                                    is awaited. Other cooperating partners that have
     Component 2: Further development of the
                                                                    shown interest in addition to CIDA and WMO
     regional and national water resources information
                                                                    include Sweden, FGEF, EU, USA and GWP.
     systems. The activities under this component
                                                                    The costs of other related sub-projects are: US$
     comprise of comprehensive analysis of the needs
                                                                    2.0 million for Joint Monitoring System
     of the participating countries and establish
                                                                    Between Angola and Namibia; US$ 1.5 million
     database management structure, install database
                                                                    for Water Resources Monitoring Systems for
     on upgraded computer hardware, develop
                                                                    Lake Malawi and Nyasa (PCN 18) and US$ 4.0
     protocols for data exchange between regional and
                                                                    million for Congo HYCOS (possible EU
     national databases, develop mechanisms for
                                                                    financing). The estimated total project cost is
     quality assurance and develop procedures for
                                                                    US$ 12.0 million, out of which the financing
     water resource data for particular river basins.
                                                                    gap is about US$ 11.5 million.
     The outputs comprise of fully operational regional
     and national databases, upgraded computer
                                                              9.    Project Implementation: The Implementing
     systems, agreements on data exchange, agreement
                                                                    /Executing Agency will be selected after the
     of procedures and trained staff for each service.
                                                                    financial arrangements have been finalized. The
                                                                    WMO as the custodian of the WHYCOS will
     Component 3: Identification and development of
                                                                    act as the Supervising Agency, providing
     hydrological products of regional interest. The
                                                                    critical technical service to guide the SADC
     activities under this component comprise of
                                                                    Water Sector Coordination Unit on the
     surveying the needs for hydrological products, in
                                                                    implementation of the project. The project will
     the SADC region, arrange for the transfer and
                                                                    be implemented within a period of 4 years, out
     adaptation of tools and products developed by
                                                                    of which Stage 1 takes the first 6 months.
     other HYCOS projects, and provide staff training
     in the use of new tools and products. The outputs
                                                              10. Project Benefits: The beneficiaries of the
     include survey results of regional hydrological
                                                                  project    include    NHSs,      water     sector
     needs, tools for data presentation and information
                                                                  organizations, river basin organizations, RCU,
     generation for decision support established, and
                                                                  various organizations involved in water related
     staff trained.
                                                                  projects as well as people living in flood prone,
                                                                  drought or irrigated areas. They will benefit
     Component 4: Training and awareness building.
                                                                  from improvement of the real-time observation
     The activities under this component comprise of
                                                                  network and data transmission and reception
     addition training based on assessed further needs,
                                                                  capability, development of a regional water

     resources information system, as a decision-
     making tool for water management, generating
     mutually acceptable hydrological products for
     both national and regional applications and
     continuing the training of staff. Sectors benefiting
     will be flood control and disaster mitigation,
     drought forecasting and management, irrigation
     management, protection of aquatic ecosystems,
     and the monitoring of international agreements
     for shared and transboundary rivers.

11. Project Justification: The project will facilitate
    the improved and reliable water resources data
    and information availability and dissemination for
    regional    and     national     water    resources
    management. The SADC-HYCOS project
    provides the underpinning to further develop and
    implement the Protocol on Shared Watercourses,
    to the provision of information for other SADC
    projects. The project will also provide an enabling
    environment for policy development, and support
    for emergency preparedness and vulnerability
    assessment and development of adaptive
    strategies and actions in response to adverse
    effects of climate change on poverty reduction,
    food security, environmental protection and
    socio-economic development. Sustainability of
    the project after implementation will be ensured
    through the take over of the DCPs by the NHSs
    and active participation of river basin
    organizations. In addition, a portion of water
    charges/fees collected from various users could be
    dedicated for sustaining the DCPs and
    information management systems. The project
    fulfils a large number of provisions of the
    Regional Strategic Action Plan and Water Vision
    for Africa.

12. Issues and Proposed Action/Way forward: In
    order to proceed with the project, the main
    outstanding activities required include approval of
    the project implementing (financing) document by
    SADC WSCU and securing funding amounting to
    US$11.5 million over a period of 4 years. The
    project will be implemented with technical
    support provided by international and national
    personnel. A Project Steering Committee will be
    established to oversee project policy. An
    Implementing Agency will be identified in one of
    the NHSs of SADC.

13. Proposed Involvement of NEPAD: NEPAD
    would lend support for continued cooperation
    between the SADC member states and SADC’s
    effort to seek financing.

HYDROLOGICAL CYCLE OBSERVATION                                In response to a request from the IGAD
      SYSTEM (IGAD HYCOS)                                     Secretariat and with financial assistance from the
                                                              European Unit (EU), the World Meteorological
1.   Project Name and Location: The project is                Organization (WMO) prepared a project
     entitled “ Implementation of IGAD HYCOS”                 proposal for the IGAD-HYCOS with the
     and will be implemented in the IGAD member               following objectives:
     states of Djibouti, Eritrea, Ethiopia, Kenya,
     Somalia, Sudan, and Uganda.                              • to strengthen the technical and institutional
                                                              capacities of the National Hydrological Services
2.   Sponsor(s): The member states are the                    (NHSs)      in    collecting   and     processing
     sponsors of the project, through the IGAD.               hydrological data, to meet the needs of their end-
                                                              users regarding information on the status and
3.   Current Status: The initial project document             trend of water resources;
     has been reviewed and endorsed by the
     Directors of Meteorology, Hydrology and                  • to support the NHSs in enhancing the
     Early Warning Systems, in January 2000, and              development and operation of adequate
     submitted to the European Commission to                  hydrological observation networks, in order to
     consider financing. Upon request of the                  provide information of a consistent quality,
     European Commission, Terms of Reference                  transmitted in real time or near-real time as
     have been finalized to elaborate the project             required to national databases and regional
     document and main project is expected to                 information systems.
     commence in 2002/2003.
                                                              • to facilitate and promote the exchange and
4.   Background:         The      Intergovernmental           use of water-resources data and information,
     Authority on Development (IGAD) is an                    using modern information technology, including
     international institution grouping Djibouti,             the Internet.
     Eritrea, Ethiopia, Kenya, Somalia, Sudan and
     Uganda having as its long-term goal the                  Following submission to EC for possible
     attainment     of     sustainable    economic            financing, it was agreed to prepare an elaborated
     development for its member countries. A                  project document in order to establish more
     number of serious droughts have affected the             securely the project's sustainability and long-
     region in the last decades, with dramatic                term usefulness. The project will thus have two
     human,       economic       and      ecological          phases: detailed project elaboration and
     consequences. It is foreseen that by 2015 all            implementation phases. Upon full development,
     the countries in the region will experience              the project will be integrated with the WMO
     severe water shortages.                                  initiated World Hydrological Cycle Observing
                                                              System (WHYCOS).
     While demand for water is increasing
     throughout the region, growing pollution and             5.   Project Objectives: The IGAD–HYCOS
     possible impacts of climate change and                        project, will serve the three main purposes to
     variability are likely to further reduce the                  accomplish an overall objective of
     quantity of water of suitable quality. In these               developing national and regional capacity in
     circumstances, planners and decision-makers                   the field of water resources monitoring,
     must achieve new levels of integration,                       assessment and management; namely:
     reliability, and acceptance. This calls for
     timely,      accurate  and     comprehensive         •   Assist the participating countries in developing
     information about the status of water                    their own national capacities in these fields and
     resources and for complementary information              thus allow them to fully participate in and benefit
     about the economic, social and environmental             from the project;
     dimensions of water use.
                                                          •   Provide IGAD countries with one of the
     Unfortunately, the systems for collecting and            necessary tools (i.e. a water resources
     managing water-resources related information             information system) for the sustainable
     in the region are inadequate, and often are              development of regional integrated water
     deteriorating, precisely at a time when there is         resources   monitoring, assessment  and
     an increase in the demand for such                       management;
     information for regional cooperation in the
     assessment and management of water                       •    Collaborate with other national, regional and
     resources.                                                    international projects and programs to

     modernize, rationalize and improve efficiency,
     cost effectiveness and sustainability of water                 Stage 3: will be dedicated to the finalization
     resources information systems in the IGAD                      of the detailed comprehensive project
     Region and at international levels.                            document for the IGAD-HYCOS for
                                                                    potential funding. The project document will
     The main beneficiaries will be the general                     include annexes containing: work program
     population as well as sector stakeholders of                   (WP), equipment specifications and
     each country who will benefit from                             description, tender dossiers for supplies and
     improvement of the real-time observation                       services, recommendation for the location of
     network and data transmission and reception                    PRC and a possible memorandum of
     capability. Other benefits include development                 understanding for the institution and country
     of a regional water resources information                      hosting it and draft financing proposal.
     system as a decision-making tool for water
     management, generating mutually acceptable                     Phase 2 will focus on the actions required to
     hydrological products for both national and                    improve the network of hydrological
     regional applications and continuing training                  observing stations, further development of
     of staff.                                                      the sub-regional and national water
                                                                    resources information systems, identification
6.   Project Description: The project will be                       and development of hydrological products of
     implemented in two phases:                                     regional interest, and training and awareness
                                                                    building. The activities under this
     Phase 1: identification of scope, preparation                  component will be elaborated under Phase 1.
     of a project document which will include
     detailed design and budget; and                      7.        Project Cost Estimates: The project cost is
                                                                    estimated at US$ 2.1 million.
     Phase 2:project Implementation
                                                                             Summary Cost Estimates
     Phase 1 will focus on the development of a                       Components                           Costs
     detailed project document including number,                                                        (US$ millon)
     location and identification of stations, type of          1.     Project detailed documentation       0.100
     measurements required by the National                     2.     Rehabilitation and construction      1.300
                                                                      of Data Collection Platforms
     Hydrological Organizations, the equipment
                                                               3.     Information management               0.700
     issues      (functional      and       technical                 training
     specifications), detailed costing (including                     Total                                2.100
     national contributions and operational costs),
     training needs, identification of the Pilot          8.        Possible Financiers and Indicative
     Regional Center (PRC), preparation of tender                   Financing Plan: EU has been approached
     documents as well as the actual preparation of                 for possible financing.
     the financing proposal itself. During this
     period a realistic implementation period will        9.        Project Implementation: A technical
     be established. Phase 1 will be implemented in                 committee      comprising     of    members
     three stages:                                                  representing the National Hydrological
                                                                    Services (NHSs) will be responsible for
     Stage 1: covers gathering and analysis of                      overseeing and technical approval of the
     information on the status of hydrological                      project. WMO as the custodian of the
     activities in each country and design of                       WHYCOS will act the supervising agency,
     hydrological network, types of measurements                    providing critical technical service to guide
     required      by     National      Hydrological                IGAD Secretariat, NHSs and the PRC on the
     Organizations, equipment (functional and                       implementation of the project. The project
     technical specifications), detailed costing                    will be implemented within a period of 12
     (including     national     contributions   and                weeks for Phase 1, and 3 years for Phase 2.
     operational costs), training needs, criteria for               NHSs will be responsible for the up-keep
     identification and facilities to be provided for               and operation of hydrological equipment. A
     selecting the PRC,                                             Pilot Regional Center (PRC) will be
                                                                    identified in Phase 1 to organize database
     Stage 2: will be devoted to the organization of                and provide the data and information
     a regional workshop to present outline of the                  requirements of users.
     project document and to agree on the format to
     be followed in finalizing the document.              10. Project Benefits: The primary benefit of the
     Finally,                                                 project is to facilitate availability and

    dissemination of improved and reliable water
    resources data and information essential for
    regional and national water resources
    management. The beneficiaries of the project
    include NHSs, water sector organizations,
    river basin organizations, PRC, various
    organizations involved in water related
    projects as well as people living in flood
    prone, drought or irrigated areas.

11. Project Justifications: The project will
    facilitate the improved and reliable water
    resources data and information availability
    and dissemination for regional and national
    water resources management. The project will
    also provide an enabling environment for
    policy development, and support for
    emergency preparedness and vulnerability
    assessment in addition to providing basic
    information needed for the development of
    adaptive strategies and actions in response to
    adverse effects of climate change on poverty
    reduction, food security, environmental
    protection and socio-economic development.
    Sustainability     of    the    project    after
    implementation will be ensured through the
    participatory planning of the project, requiring
    member NHS to commit themselves to take
    over of the DCPs and ensure recurrent budgets
    for their operation and upkeep.

12. Issues and Proposed Action/Way forward:
    No issues are identified at this stage. Further
    issues will be identified during project
    elaboration. However, such issues are
    expected to be resolved within the mandate of

13. Proposed Involvement of NEPAD: This
    project is selected for NEPAD support as it
    has the objective of promoting regional
    cooperation      between      the     National
    Hydrological Services (NHSs) and to set-up a
    regional information system on water
    resources thereby providing fundamental data
    for all sectors. NEPAD would oversee the
    commitment by member states to participate
    in the implementation of the project as well as
    in the operation and maintenance of the

 STRENGHTENING OF THE NIGER RIVER                             In view of the foregoing, the NRBA has
    BASIN AUTHORITY INTER-STATE                               prepared a programme seeking to modernize its
       FORECAST CENTRE (CIP)                                  equipment and capacity building for the Inter-
                                                              State Forecasting Centre – HYDRO-NIGER.
1.   Project Name and Location: The project
     entitled “Strengthening of the Niger River          5.   Project Objectives: The purpose of the project
     Basin Authority Inter-state CIP” is closely              is (i) to modernize the HYDRONIGER
     following the initiatives taken by the Niger             forecasting instruments to enable it accomplish
     River Basin Authority, aimed at improving                its mission in providing hydrological
     basic water resources. The project concerns              measurements and forecasts; (ii) ensure capacity
     the nine member countries of the River Basin             building; (iii) contribute to the development of
     Authority, namely: Benin, Burkina Faso,                  an environmental observatory for the Niger
     Cameroon, Cote d’Ivoire, Guinea, Mali,                   basin; and (iv) put in place mechanisms for the
     Nigeria and Chad.                                        valorisation of products and services provided
                                                              by the Inter-State Forecasting Centre –
2.   Sponsor(s): The project is initiated by the              HYDRONIGER.
     Niger River Basin Authority (NRBA).
                                                         6.   Project Description: The project concerns the
3.   Current Status: The NRBA manages 64                      strengthening of the structures and resources of
     hydrological data collection platforms.                  the HYDRONIGER Regional and National
     Measurements and observations collected are              Centres in terms of logistics, observations and
     transmitted via the ARGOS satellite to the               communication networks, gauging, camping,
     Inter-State Forecasting Centre based in                  functioning, tracking and consultations with the
     Niamey, capital of the Republic of Niger.                authorities and population of the Niger River
     Considering the dilapidated state of these               Basin. The project comprises the following
     installations as well as maintenance problems,           components:       a)     Rehabilitation     and
     measures have been taken by the NRBA to                  modernization of data collection platforms; b)
     replace the existing system with the modern              Technical assistance (Experts and Consultants);
     METEOSAT system presently used on                        c) Personnel training; d) Procurement of 4x4
     several projects such as GENIS and                       vehicles; e) Procurement of computer hardware.
     WHYCOS. A number of member countries,
     Guinea, Mali, Cameroon have commenced               7.   Project Cost Estimates: The project is
     the modernisation of their installations from            estimated at US$ 10 million broken down as
     domestic resources or within the framework               follows: Rehabilitation and modernization of
     of bilateral financing and other types of                platforms (US$5,800,000); Technical Assistance
     financing as Nigeria is prepared to do.                  (Experts and Consultants) (US$2,000,000);
                                                              Training (US$500,000); Procurement of 4x4
4.   Background: The Niger River Basin                        vehicles (US$1,200,000); Procurement of
     Authority (NRBA) currently operates 64                   computer hardware (US$600,000)
     platforms for collection of hydrological data,
     located in eight member states along the river.     8.   Financing Plan: Member states of the NRBA
     Most of these installations were set up as far           will meet 20% of the project’s overall cost.
     back as 1984 by the NRBA under the                       Other sources will finance 80% of overall costs.
     HYDRONIGER project with the assistance of
     the World Meteorological Organisation.              9.   Project Implementation: The Niger River
     HYDRONIGER installations were set up in                  Basin Authority will play the role of executing
     two stages a) 1980-1986: Construction of                 agency with the support of the World
     buildings of the regional and national centres,          Meteorological         Organisation.      Project
     setting up of a hydrological data collection             Implementation will take 3 years. Project
     system in real time, elaboration of forecasting          performance indicators are: (i) stations
     models, procurement of equipment