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African Regional Implementation Review for the 14^th Session of the Commission on Sustainable Development (CSD-14)

Report on "Energy for Sustainable Development" in AFRICA (Full version)¹

Prepared by the Economic Commission for Africa (UNECA) on behalf of the Joint Secretariat of UNECA, UNEP, UNIDO, UNDP, ADB and NEPAD Secretariat

TABLE OF CONTENT

LIST OF TABLES

LIST OF BOXES

LIST OF FIGURES

ACRONYMS

PREFACE

The Commission on Sustainable Development, at its fourteenth session (CSD-14) in April 2006, will undertake a review of progress made at all levels in the implementation of targets and goals on the thematic cluster of "Energy for Sustainable Development, Atmosphere/Air Pollution, Climate Change and Industrial Development".

The present report is the African regional review of progress made at regional and sub-regional levels in the implementation of the commitments, goals and targets related to the theme of "energy for sustainable development" as agreed upon in Agenda 21 (A21), the Programme for the Further Implementation of Agenda 21 (PFIA21), the ninth session of the Commission on Sustainable Development (CSD-9) and the Johannesburg Plan of Implementation (JPOI).

Scope of the Report

This report reviews activities undertaken, and progress made by various organizations at regional, sub-regional and international levels, to achieve the commitments, goals and targets agreed during the above-mentioned meetings.

Actions reviewed and documented hereafter do not intend to exhaustively represent all initiatives taken by every development actor in Africa. To carry out such a comprehensive review would have required more consultations, means and goodwill from all actors. The report is mainly based on the compilation of responses to surveys sent to major regional, sub-regional and international organizations active in energy in Africa. Where information was obtained from other sources on the work done by organizations which did not respond to the survey, such information was included in the report. Finally, progress made at national levels will not be assessed in this report. Individual countries will report on their national situations separately to the CSD.

As the Secretary-General's report will focus on progress in implementation, this report is based on data, quantitative and qualitative information in the form of factual evidence sent by various organizations.

Organization of the report

The report comprises five main sections:

Section 1 presents an overview of the current African energy situation, highlighting the energy potential of the continent, its pattern of energy production and consumption, and the link between energy, poverty reduction and sustainable development.

Section 2 reviews the goals, targets and commitments made at A21, PFIA21, CSD9, and WSSD, and recalls the main energy issues from an African perspective.

Section 3 makes a critical assessment of the progress made in the implementation of the four main issue areas identified, which are "Energy accessibility for poverty alleviation", "Changing patterns of energy production and consumption", "Development of advanced and cleaner energy technologies", and "Crosscutting issues including finance, international, capacity building, regional trade, technology transfers, etc".

Section 4 summarizes the constraints identified by the actors in implementing the commitments, and recalls other key challenges to energy development in Africa.

Section 5 draws lessons from the identified constraints, and maps a way forward through specific recommendations addressed to various energy stakeholders.

EXECUTIVE SUMMARY

Africa is endowed with diverse energy resources, including important reserves of oil, gas and coal that account for 9.4%, 7.9% and 5.54% respectively of the world total². The hydropower potential of the continent amounts to 13% of the world. In Africa, energy is produced mainly from biomass (47%), oil (24.8%), coal (16.5%), gas (10.4%), and other renewable sources, such as large and small hydro damps, solar, and geothermal sources (1.3%)³. The continent has abundant solar irradiation ranging from 5 to 7 kWh/m², all year round, and it enjoys a relatively strong wind power potential in Northern, Southern and Eastern Africa. Furthermore, the continent has an estimated geothermal energy potential of 9,000 MW in the Rift Valley area in East Africa⁴.

Energy consumption in Africa is largely dominated by combustible renewable resources (biomass, animal wastes, municipal and industrial wastes). Energy from biomass accounts for more than 30% of the energy consumed in Africa and more than 80% in many SSA countries. Biomass constitutes the main energy resource for the large majority of African households for cooking, drying and space heating. While electricity access data varies widely depending on the reporting sources, IEA data reports average rates ranging from 70% to over 94% in Northern Africa, and 23% in sub-Saharan Africa, with large disparities between countries (for instance less than 4% in Uganda compared to 66% in South Africa or 100% in Mauritius), and between urban and rural areas, where in the latter, rates can be as low as 1%⁵.

Review of goals, targets and commitments made at A21, PFIA21, CSD-9 and WSSD

A21, PFIA21, CSD-9, and WSSD all recognized that energy issues must be given high priority by policy-makers, financial institutions, regional organizations, development actors, and all stakeholders if one is to achieve the MDG and sustainable development on the continent. Energy considerations should be appropriately integrated into socioeconomic programmes and into the planning, operation and maintenance of long-lived energy consuming infrastructures.

The WSSD calls upon the international community to reinvigorate its commitment to address the special challenges facing Africa, mobilize resources for effective support for Africa's efforts to implement NEPAD objectives, and other initiatives on energy on the continent.

Commitments, targets and goals made by the various actors during the above-mentioned meetings, can be clustered into the four issue-based categories discussed below.

Assessment of accomplishments and gaps

Issue 1: Energy accessibility for poverty alleviation

To address the problem of energy accessibility, various organizations undertook a large array of measures, including: Energy access scale-up initiatives; Productive use of rural/renewable Energy; Capacity development and investment in mini-hydro power systems; and Development of an African regional rural electrification programme.

The issue of accessibility to modern energy was linked to poverty alleviation efforts in some cases, but, unfortunately, not always. The need for more generation capacity has been recognized; however, efforts to solve the problem stumble over chronic lack of public funding and little interest of investors and financial institutions in the African energy market, mainly due to numerous disincentive measures built into national, institutional, policy, legal and regulatory frameworks.

Still, with close to two-thirds of Africans without access to modern energy and trapped in economic poverty, there is much to be done at all levels to achieve commitments.

Issue 2: Changing patterns of energy consumption and production

Activities undertaken by various actors on this issue include: Sustainable Transport Action Network for Africa (SUSTRAN-Africa); Wood Energy Information System (WEIS); Improving Energy Efficiency (EE) in small industries and in cities and developing EE and Energy Service Companies (ESCO); Development of Renewable Energy; Development of rural energy enterprises; and removing barriers for the development of RE. These diverse actions have not succeeded in increasing the share of RE in the energy mix, generating substantial energy savings, protecting forests and increasing access to modern energy.

Initiatives taken for changing consumption and production patterns for sustainable development have essentially lacked the strong political support from national governments that they require, and the minimum critical scale of projects that can create a momentum of change. Activities are much too localized, not promoted enough and often too controversial to be intuitively understood by African people and adopted by most governments.

Issue 3: Development of advanced and cleaner energy technologies and fuels

This issue was not viewed as a priority for the continent, though advanced energy technologies may provide answers to the problems of decentralized rural energy development and energy efficiency. Consequently, in this domain, few actions were carried out with the exception of some capacity building and networking initiatives. A lot more could be done especially in providing support to local research centers and universities, and in promoting innovative local energy enterprise ideas, based on indigenous material and locally available resources.

Issue 4: General and crosscutting Issues

Support to NEPAD energy programmes

Considerable efforts were deployed by the international and African communities to promote NEPAD and support its energy initiatives. Many UN special organs and organizations have responded well to NEPAD. Despite this goodwill, NEPAD energy initiatives have not made the anticipated progress and many initial expectations of African people remain unmet.

Financial issues

Like other development sectors in Africa, the energy sector suffers from meager funding and reduced financial options. Funding levels in the African energy sector remain very low and have not increased significantly for many years. Programmes such as the ADB FINESSE and various UNEP Finance initiatives dealt with the problem of capacity building within financial institutions in order to raise awareness and increase the share of energy investments in their portfolio. The sector received investments from various sources including regional and international financial institutions, as well as multilateral organizations. Analysis however shows that the sector is still under-funded and run the risks to collapse further unless business-as usual approaches are changed.

Capacity building

Several actions were implemented to strengthen the capacity of energy planners and developers; education and research institutions; and Centers of Excellence. Formal training and networking schemes were used. Overall, African human capacity in energy is viewed by most African policy-makers as adequate to make progress. However, national and sub-regional institutions are often severely under-equipped in communication and information management tools.

Gaps in actions implemented proceed from the small number of capacity enhancement programmes aimed at addressing the needs of sub-regional organizations such as the RECs, Power Pools, etc. Therefore, they remain a weak link when it comes to designing and implementing regional integration projects that normally fall under their leadership.

Constraints and challenges to achieve targets

Analysis of the African energy sector reveals a continent that is undersupplied in modern energy. When energy is available, it is supplied in a form that is usually inappropriate for the needs of the majority of people and economically unaffordable by most of those who have access to it. Some specific challenges in the sector can be identified as: Low energy production due to largely untapped energy resource potential; Uneven regional distribution of energy resources; Weak share of Renewable Energy in the energy mix; Low oil refinery capacity; Underdeveloped transport, transmission and distribution infrastructure; Low private sector participation and investment in the energy sector; Very low access to energy in rural Africa; Non-efficient utilization of energy; and Inadequate policy, regulatory and institutional framework.

Lessons learned

The following lessons could be distilled from the responses to the review surveys:

• It is important to take full account of the specific human, economic and environmental constraints of the African context in designing solutions;

• African governments need to translate their commitments into stronger political will and support for energy development activities initiated by their partners;

• Increase exchanges of innovative approaches to address problems related to energy for development between Asia, Latin America and Africa;

• Emphasize trainings in energy analysis and modeling; and

• Put more efforts in boosting the development of RE.

Way Forward

Major initiatives must be taken and scaled up at all levels to make progress, particular to:

Prioritize efficient institutional, regulatory and policy frameworks

African policy-makers are urged to pay special consideration to policy measures which clarify the role of various stakeholders (public and private); improve investments climate in general through more favourable legal and regulatory reforms; strengthen the role of independent energy regulatory bodies and lift barriers to the realization of regional integration projects in energy.

Increase financial flows towards the African energy sector

International development partners, including the UN, should enhance their role to support African Nations to undertake the necessary reforms conducive to a coherent, transparent and attractive investment framework and increase their advocacy and funding function to mobilize and significantly increase financial flow towards Africa for investment in energy projects. Commitments made to set the NEPAD energy initiatives, as priority for the continent, should be reinforced.

Improve the share of RE in the African energy mix

African Governments should put in place coherent regulatory and policy frameworks that support the development of thriving markets for renewable energy technologies and recognize the important role of the private sector. This includes removing barriers; allowing fair competition in energy markets; and taking into account the concept of internalizing external costs for all energy sources.

Promote energy regional integration as a catalyst for development

The RECs, with the support of international partners, must pursue with dedication, their efforts to promote regional energy trade as an efficient means to reduce the uneven distribution of energy resources in Africa; reduce energy import cost burdens on most national economies; and increase the supply of secure and environmentally sustainable energy.

AFREC should receive more assistance to accelerate the achievement of energy integration between all African regions, through up-to-date energy information as well as regional and national capacity development of pertinent energy-decisions tools.

Link rural energy development programmes to poverty reduction strategies and the achievement of the MDG

International development partners, regional, sub-regional and national energy stakeholders should view the energy access problem as inseparable from poverty reduction efforts and economic growth strategies. They should, therefore, be willing to drastically increase their financial participation in the sector and assist in the development of key infrastructure that can sustain the minimum economic growth required to break the cycle of poverty and achieve the MDG.

Promote coordination and coherence among all international partners

More efforts must be made by all energy stakeholders, especially UN organizations, to create coherence, complementarities and effectiveness in energy policy initiatives in Africa. This can be achieved in the framework of a collaborative mechanism such as UN-Energy/Africa.

SECTION I

A Brief Assessment of the Current Energy Situation in Africa

• What is energy used for in Africa?

Most social and economic activities require the use of energy in various forms and quantities. Energy is as important to households for basic uses, such as cooking, heating and lighting as it is to large industries for production of heavy goods or to fuel automobiles. The world consumed, in 2002, a staggering amount of 7,095 million tons of Oil Equivalent (MTOE) in the form of oil, natural gas, coal, electricity and combustible renewables and waste⁶. For its development, the world thirst for energy is growing at a faster rate than ever. According to recent BP statistics, energy consumption grew by 4.3% between 2003 and 2004⁷. In countries, mostly in the developing world, where the availability of energy is limited or where energy is economically unaffordable to most households or the society in general, development is seriously impaired, and growth limited. Energy is thus an essential ingredient for socioeconomic development. Rightfully then, issues of energy supply, access and security, as well as issues related to the impact of the consumption and production patterns of energy on the world sustainability, have been at the core of the world attention for decades.

Figure 1: Primary Energy Supply by Fuel in Africa in 2002

• Statistical overview of energy resources in Africa

Africa is relatively well endowed with energy resources. In 2004, its proved oil, gas and coal reserves were 9.4%, 7.9% and 5.54% respectively of the world total, compared to 8.5%, 4% and 2.19% respectively for South and Central America, taken together. The hydropower potential of the continent amounts to 13% of the world. In Africa, energy is produced mainly from biomass (47%), oil (24.8%), coal (16.5%), gas (10.4%), and other renewable sources, such as large and small hydro damps, solar, and geothermal sources (1.3%)⁸ (Figure 1). However, Africa is a vast continent with 53 countries and energy resources are unevenly regionally located. Most of the hydropower potential lies in central and western Africa, oil and gas resources are located in the western and northern parts of the continent, coal reserves are concentrated almost exclusively in Southern Africa, and geothermal is only being developed in eastern Africa. It is apparent from Figures 2 and 3 that 68% of all proved natural gas reserves of the continent is located in two countries (Nigeria and Algeria), while more than 74% of proved oil reserves is found in Nigeria and Libya. These three countries hold the large majority oil and natural gas reserves of the continent. Because of its geographical location across the equator, Africa has abundant solar irradiation ranging from 5 to 7 kWh/m², all year round, and it enjoys a relatively strong wind power potential in Northern, Southern and Eastern Africa. Finally, the continent has an estimated geothermal energy potential of 9000 MW in the Rift Valley area in East Africa⁹. Based on these potential and reserves, it could have been possible to achieve a well-balanced energy generation mix on the continent. However, due to numerous barriers this is not currently the case.

Figure 2: Proved Natural Gas Reserves in Africa, in 2004¹⁰

Figure 3: Proved Oil Reserves in Africa, 2005

• Statistical overview of the energy consumption and production

Africa exports more of its energy than it consumes. In the last decade, oil, natural gas, and electricity production have increased by 48.1%, 24.3% and 32.8% respectively, while coal production increased much less (Figure 4). In absolute terms, oil remains the largest source of modern energy in Africa, with production reaching 441 MTOE in 2004, which represents 11.4% of the world total. In Southern Africa, efforts for improving the energy resource mix through more import of electricity within the Southern African Power Pool, led to a slower increase in coal production.

Figure 4: Coal, natural gas, and oil production in Africa

Despite its relatively important energy resources, Africa generates only 3.1% of the world electricity, less than any other region of the world (Figure 5). This share has not changed for the last 10 years and most analysts forecast that it will remain the case for the next 15 years, though production of fuels used for electricity will continue to grow steadily. Electricity is generated mainly from coal (46%), gas (23%), hydro (18%), oil (11%) and nuclear (2%) (Figure 6). Other renewable sources such as solar, geothermal, wind, etc. play an insignificant role despite some noteworthy initiatives such as the 140 MW wind farms in Egypt. On the continent there are strong disparities among countries: South Africa alone generates close to half of the total African electricity. Many African countries, mostly in SSA with the exception of South Africa, rely heavily on hydropower (70% to 80%) for their electricity generation.

Figure 5: Electricity generation by region

Figure 6: Electricity generation in Africa by fuel, 2002

With 13.1% of the world's total population, Africa consumes only 5.5% of the world energy. The per capita energy consumption of 0.5 TOE, far lower than the world average of 1.2 TOE per capita, makes the continent lag behind all the others in energy use.

Energy consumption in Africa is largely dominated by combustible renewable resources (biomass, animal wastes, municipal and industrial wastes). Energy from biomass accounts for more than 30% of the energy consumed in Africa and more than 80% in some countries such as Burundi (91%), Rwanda and Central Africa Republic (90%), Mozambique (89%), Burkina Faso (87%), Benin (86 %), Madagascar and Niger (85 %)¹¹. Biomass constitutes the main energy resource for the large majority of African households for cooking, drying and space heating. Several million people are involved in the production, distribution and sale of fuelwood and charcoal. From 1994 to 2004, primary energy consumption increased by 24% (Figure 7).

Figure 7: Modern energy consumption trend in Africa

All African countries consume some oil mainly for transportation, electricity generation and industries regardless of whether they have refinery capacities or not (Figure 8). Gas consumption, however, is limited mostly to the few countries that produce it, such as Algeria, Libya, Egypt, Tunisia, Nigeria, Cote d'Ivoire, or those that are located in close proximity with them. This is explained by the lack of transboundary pipeline infrastructure for the transportation of natural gas. South Africa, with its large reserve of coal, is the only country with a significant use of coal.

Figure 8: Energy consumption per sector

In 2002, the continent electricity consumption was only 514 kWh per capita, lowest of all other world regions. The very limited availability of electricity combined with affordability issues to electricity services in most countries in Africa, have made access to electricity by most Africans very elusive. While electricity access data varies widely depending on the reporting sources, IEA data reports rates ranging from 70% to over 94% in Northern Africa, and an average of 23% in sub-Saharan Africa, in 2002. These numbers do not reflect the large disparities between countries (for instance less than 4% in Uganda compared to 66% in South Africa or 100% in Mauritius), and between urban and rural areas, where in the latter, rates can be as low as 1%¹².

• Link between energy, poverty and economic development

Limited availability of modern energy critically impairs socioeconomic development. Industries and productive activities (agriculture, commerce) require energy in various forms to fuel machines, power transformation processes, conserve perishable goods, ensure transport, etc. According to UNIDO, high levels of income per capita tend to be associated with higher levels of industrialization¹³.

Though, not specifically referred to in the targets of the Millennium Development Goals (MDGs), energy supply is an underlining requirement to achieve most of the MDGs. Without access to adequate energy services, the majority of Africans would continue to suffer from deep poverty, since energy is required for most basic household needs, such as cooking and heating. According to World Bank indicators, there is a strong correlation between modern energy consumption and GNP per capita. The GNP tends to rapidly increase as per capita commercial energy use increases, mainly for low-income countries. When the countries reach a level of per capita energy consumption of around 10.000 TOE, factors such as efficient utilization of energy by industries, energy production and transformation systems and households tend to make the difference for economic growth to continue; therefore, more energy consumption does no longer imply more income for the country (Figure 9).

Figure 9. Energy consumption versus GNP
Source: World Bank, World Development Indicators database.

Figure 9. Energy consumption versus GNP

Source: World Bank, World Development Indicators database.

SECTION II

Review of goals, targets and commitments made at A21, PFIA21, CSD-9 and WSSD

Agenda 21 (A21), the Programme for the Further Implementation of Agenda 21 (PFIA21), the 9^th Session of the Commission on Sustainable Development (CSD9), and the World Summit on Sustainable Development (WSSD), all recognized that energy issues must be given high priority by policy makers, financial institutions, regional organizations, development actors, and all stakeholders if one is to achieve most development goals and the MDGs. Energy considerations should be appropriately integrated into socioeconomic programmes and into the planning, operation and maintenance of long -lived energy consuming infrastructures.

The world community reached specific agreements during the above-mentioned forums. In order to boost implementation and facilitate evaluation of progress achieved, the meetings adopted programmes of actions or implementation plans including targets, timetables and partnerships, and underlined the role of various partners at all levels (international, regional, sub-regional and countries level.)

From an African perspective, commitments, targets and goals made by the various actors can be clustered into the following four issue-based categories:

1) Improving energy accessibility for poverty reduction;

2) Changing energy consumption/production patterns for environment and resource sustainability;

3) Developing advanced and cleaner energy technologies and fuels; and

4) Cross-cutting energy measures, including measures on international finance, trade, capacity development, technology transfer, and gender issues.

The various actions and measures agreed at the above-mentioned forums are compiled in summarized in a scoping paper by UNDESA. A brief analysis shows that they can be cross-organized in the following four clusters of measures: technical; institutional/regulatory; policy; and capacity development measures. They are summarized in Table 1.

Most recommended and agreed actions pertain to institutional/regulatory and policy measures. Thus, per the number of recommended actions identified and agreed upon by the international community, it appears that policy and institutional actions are viewed as high priority and capacity building measures are also very important. Technical issues are important, though a fewer number of actions were proposed.

An overview of commitments and actions agreed during the above-mentioned forums reveals that most of them are related to crosscutting issues including regional trade, international cooperation, finance, international trade, and capacity development and training. Environment related issues such as changing consumption/production patterns, and the development of cleaner fuels and technologies rank second, while energy accessibility improvements, though very important, rank last because they are addressed indirectly by the preceding issues.

Table 1: Analysis of actions and commitments made during A21/PFIA21/CSD/WSSD

The WSSD/JPOI calls upon the international community to reinvigorate their commitment to address the special challenges facing Africa's efforts to achieve sustainable development and give effect to a new vision based on concrete actions for the implementation of Agenda 21, PFIA21 and WSSD in Africa. The Plan recognizes the New Partnership for Africa's Development (NEPAD) as a pertinent instrument for achieving sustainable development on the continent.¹⁴

The JPOI states that achieving sustainable development will include actions at all levels to deal effectively with energy problems in Africa, including through initiatives to:

• Establish and promote programmes, partnerships and initiatives to support Africa's efforts to implement NEPAD objectives on energy, which seek to secure access for at least 35 per cent of Africa's population within 20 years, especially in rural areas.

• Provide support to implement other initiatives on energy, including the promotion of cleaner and more efficient energy use of natural gas and increased use of renewable energy, and to improve energy efficiency and access to advanced energy technologies, including cleaner fossil fuel technologies, particularly in rural and peri-urban areas.

NEPAD recognizes that energy plays a critical role in the development process; first, as a domestic necessity, but also as a factor of production whose cost directly affects prices of other goods and services, and the competitiveness of enterprises. NEPAD also recognizes that the search for abundant and cheap energy would focus on rationalizing the territorial distribution of existing, but unevenly allocated energy resources through regional energy cooperation and integration.

Recognizing that Africa's small market sizes and low purchasing power have been major barriers to universal access to modern energy services for development, NEPAD recognizes that the "business-as-usual" approach will not meet Africa's energy demand. Therefore, the strategy adopted to promote development of the African energy infrastructure aims at capitalizing on regional markets rather than country-specific coverage thereby generating the economies of scale necessary to lower transaction costs and increase competitiveness.

The NEPAD energy-related objectives are:

• To increase access to reliable and affordable commercial energy supply by Africa's population from 10 to 35 per cent or more in 20 years, especially in rural areas;

• To improve the reliability and lower the cost of energy supply to productive activities in order to enable economic growth of 6 per cent per annum;

• To rationalize the territorial distribution of existing and unevenly allocated energy resources;

• To strive to develop Africa's abundantly available solar energy resources;

• To reverse environmental degradation that is associated with the use of traditional biomass fuels in rural areas;

• To exploit and develop the hydropower potential of the river basins of Africa;

• To integrate transmission grids and gas pipelines so as to facilitate cross-border energy flows; and

• To reform and harmonize petroleum regulations and legislation in the continent.

NEPAD developed a Short Term Action Plan (STAP) for infrastructure development in the energy, water, transport and information and communications technology (ICT) sectors, with support from the African Development Bank (ADB), which was designated as the lead agency for NEPAD infrastructure planning and implementation. The Plan was reviewed by the Workshop of Regional Economic Communities (RECs) convened in Abidjan, Côte d'Ivoire in June 2002, and adopted by the first ordinary session of the Assembly of Heads of State of the African Union held in July 2002 in Durban, South Africa. The STAP is to be complemented by a more comprehensive Medium- and Long-term Action Programme, which is currently under preparation.

The STAP for energy infrastructure development initially comprised 23 projects categorized under the four following areas:

• Facilitation - establishment of the policy, regulatory and institutional framework required to create a suitable environment for investment and efficient operations;

• Capacity building - initiatives to empower the implementing institutions in order for them to perform their mandates;

• Investment - physical and capital investment projects; and

• Studies to prepare future priority projects.

The ADB carried out a review of all NEPAD infrastructure projects, in close consultation with the RECs¹⁵ and the NEPAD Secretariat, after one year of implementation, and came up with a list of "top twenty" priority projects.

The energy infrastructure development projects, which appear in the list include:

• One facilitation project: Sub-regional power pools (Southern and West Africa).

• Two studies:

• Great Inga Integrator Project; and

• Subregional power interconnections (East, Central and West Africa).

• One capacity building project: African Energy Commission (AFREC).

• Three investment projects:

• West African Gas Pipeline;

• Kenya-Uganda oil pipeline; and

• Mepande Uncua Hydropower Project.

The WSSD Plan of Implementation states "To promote effective implementation of Agenda 21 at the international level, actions to be undertaken should include, among other things, encouraging partnership initiatives for implementation by all relevant actors to support the outcome of the World Summit for Sustainable Development". During WSSD, the UN received some 32 partnership submissions for energy projects with substantial committed resources. These include:

• EU Energy $700 million partnership Initiative for Poverty Reduction and Sustainable Development, with the European Commission, as a leading partner;

• Global Network on Energy for Sustainable Development (GNESD) led by UNEP;

• Global Village Energy Partnership (GVEP), with UNDP and the World Bank as leading partners;

• The Renewable Energy and Energy Efficiency Partnership (REEEP) led by the UK Government;

• Clean fuels and vehicles partnership with the US Environmental Protection Agency (EPA), UNDESA and UNEP as leading partners;

• Indicators for Sustainable Energy Development (ISED) with IAEA as a leading partner;

• The South African energy utility (ESKOM) partnership to extend modern energy services to neighbouring countries; and

• The nine major electricity companies of the E7 agreements with the UN to facilitate technical cooperation for sustainable energy projects in developing countries.

Finally, it is worth recalling that the United States announced that it would invest up to $26 millions in energy projects in developing countries in 2003.

SECTION III

Review of Progress Achieved in the Implementation of the Energy Agenda

This section seeks to review actions undertaken by various actors to achieve the commitments, goals and targets agreed during the above-mentioned meetings, and assess the overall progress made mostly by sub-regional (e.g. Regional Economic Communities), regional (e.g. ADB, AU, NEPAD, etc.) and international institutions (e.g. UN organizations, IEPF and others) toward attaining the established objectives. It is worth mentioning that actions reviewed in this section do not intend to exhaustively represent all initiatives taken by every development actor in Africa. It focuses mainly on the compilation of the responses to surveys sent to the major actors. The present report does not assess progress made at national levels as such assessment will be reported to the CSD directly by countries.

As mentioned before analysis of actions agreed in A21, PFIA21, CSD and WSSD show that priority energy issues in Africa can be clustered in the following four main issues:

• Improve energy accessibility for poverty reduction;

• Changing consumption & production pattern of energy for environment and resource sustainability;

• Develop advanced and cleaner energy technologies and fuels; and

• Crosscutting energy measures, including on international, finance, trade, capacity development, technology transfer and gender issues.

These issues are in line with the NEPAD energy programme. However, this progress review report will also assess initiatives taken directly by NEPAD or implemented in support of the NEPAD, following the WSSD.

ISSUE 1: Improve energy accessibility for poverty reduction

• Priority for Africa:

Analysis of African population accessibility rate to modern energy reveals that this issue is of paramount importance to development on the continent, and must be given a first priority attention by all energy stakeholders. Current levels of access to modern energy services and resources fail to meet the needs of most Africans particularly the rural and urban poor population in Sub-Saharan Africa (SSA). Much greater access to energy services and resources, including peri-urban and rural electricity as well as cleaner cooking fuels, is essential to achieving the MDGs, and create sustainable development. Numerous actors envisaged a large array of measures, which spans from increasing the supply energy, through various crosscutting measures, to improving the efficiency of its usage.

• Brief review of the commitments/actions implemented

Energy scale-up initiative

The UN-Habitat "energy scale-up initiative" aims to facilitate access to modern energy services for the urban poor while reducing the incidence of harmful indoor air pollution within informal settlements in sub-Saharan Africa. This to be achieved through policy change, development of regulatory instruments and pilot demonstrations. Specific project objectives include: Promotion of access to renewable energy technologies affordable for the urban poor; Increase in the number of households and businesses using energy-efficient cooking stoves and cooking places (i.e. smoke extracts); and Development of recommendations on policy implications of energy provision vis-à-vis environmental sustainability.

Productive use of rural/renewable energy

The UNIDO energy activities in Africa focus on fostering the development of efficient, cost effective and environmentally sound energy systems and providing access to energy for the poor. The main activities are centered on "packaging" rural energy programmes, that is combining components such as capacity building, technology transfer, training, financing, costing, increasing the income level of rural people , etc. UNIDO has been also developing a different energy service delivery model which looks beyond the energy aspects of the project. In conjunction with other partners (i.e. governments, NGOs, academia, etc.), UNIDO energy service delivery models evaluate a range of factors that link amongst other things, increased production, new types of production, and new social possibilities to the energy supplied by the project. The model is entitled "productive use of rural/renewable Energy". It involves supplying energy and capacity building for production of energy.

Capacity development and investment in mini-hydro power system

The francophone institute for environment (IEPF) has implemented pilot projects for the promotion of micro/mini-hydro electric systems in Rwanda (Nyakabanda), Cameroon (Bapi, Figure 10) and Madagascar (Ambositra). UNEP/GEF in partnership with IEPF, ADB, UNIDO, UNEP and UNECA completed the feasibility study of a regional project for capacity development and increase investments in mini/micro hydropower in 11 sub-Saharan African countries¹⁶.

Figure 10: African village entrepreneur building a 4kW pico-hydro turbine, based on Sri-Lanka Technology,
in Bapi village in Cameroon. Coutersy, IEPF project in Bapi.

Development of a regional rural electrification programme

The revised ECOWAS Treaty establishes that "the aims of the Community are to promote co-operation and integration, leading to the establishment of an economic union in West Africa in order to raise the living standards of its people, and to maintain and enhance economic stability, foster relationships among Member States and contribute to the progress and development of the African Continent". These objectives call for harmonization and co-ordination of national policies and the promotion of integration programmes, projects and activities in various fields, and in particular, in energy.

In order to comply with these objectives in the field of energy, ECOWAS is implementing a community energy programme, which includes the following major initiatives:

• West Africa Power Pool (WAPP);

• West Africa Gas Pipeline (WAGP);

• ECOWAS Energy Protocol;

• ECOWAS Energy Observatory;

• Regional Regulatory Body for the Electricity sector;

• Access to energy for rural and peri-urban populations in member countries.

Progress made

The implementation of the above-described commitments and actions contributed to progress in the following ways:

• Access to affordable and clean energy services for the urban poor largely residing within informal settlements has now become more recognized as an important human settlements agenda item among sub-Saharan African governments at local and national levels. As a result, country-to-country and city-to-city dialogue and cooperation are beginning to take place in this area.

• Funds were mobilized to implement various UNIDO activities including:

• Capacity-building for identification and removal of barriers for the rational use of energy in Small and Medium Scale (SME) Enterprises in Ethiopia,

• Capacity-building for growth and competition of SME in Ghana;

• Hydro-energy capacity building and assessment in Mozambique, Uganda, Tanzania;

• Programme on rural energy productive use in several countries in West Africa;

• Renewable energy development programmes in Zambia;

• Reinforcement of national and regional capacity to implement the "Multipurpose Platform" in Senegal, Cote d'Ivoire, Burkina Faso, and Guinea.

• About one hundred pilot sites for potential micro/mini hydropower plants were identified and analyzed for technical, environmental and economic feasibility, in the 11 selected countries. The regional mini/micro hydropower project has mobilized $1million of funding from UNDP/GEF at its preparatory phase. In addition, important funding commitments were made by ADB and the countries involved. The project concluded its pre-feasibility phase in mid-2005. The full active phase is to be launched by the end of 2005. The project is to be extended to 10 more countries in a subsequent phase.

• IEPF activities in the context of improving energy access also include the implementation of several pilot projects in photovoltaic, wind and biogas in Burkina Faso, Tunisia, and Guinea respectively.

• The ECOWAS Heads of State and Government adopted in Accra, in December 2003, the European Initiative on Energy for Poverty Eradication and Sustainable Development, and voted Decision A/DEC.3/12/03 on the regional rural electrification programme.

• The ECOWAS Executive Secretariat, supported by UNDP, France and the EU decided to start the process of drafting a White Paper intended to support the definition of a regional policy for access to energy services in rural and peri-urban areas of its member States focusing on meeting the MDGs. As part of the process of developing and finalizing the White Paper, a regional forum was organized in Bamako, on 16 to 19 May 2005, which brought together major institutional stakeholders to define the components of a regional policy for access to energy services for rural and peri-urban zones to meet the MDGs.

ISSUE 2: Changing consumption/production patterns of energy for environment and resource sustainability

Priority for Africa

Energy and development experts recognized that the current production and consumption patterns of energy are not sustainable. More emphasis must be put on improving the energy production resource mix, through increased use of RE sources such as photovoltaic, wind, geothermal and hydro; promoting energy efficiency and conservation practices; and increasing the use of cleaner fuels, such as biofuels.

Clean air and an efficient transport system are essential to sustaining urban development, but urban transport's heavy dependence on fossil fuels causes high pollution, particularly in Africa, due to the age, quality and condition of its rolling stock. Emissions from transport vehicles contribute as much as 70% of air pollution. The larger the city, the larger its percentage contribution to the problem. Cars, trucks, motorcycles, scooters, buses and other public transport vehicles (both in the formal and informal sectors) emit significant quantities of carbon monoxide, hydrocarbons, nitrogen oxides and fine particulate matter. Where leaded gasoline is used (as it is in most of Africa except in South Africa, Cote d'Ivoire, Swaziland, Lesotho, Botswana and Mozambique), vehicles remain a significant source of lead in urban air with its attendant health effects.

• A review of the commitments/actions implemented

Sustainable Transport Action Network for Africa (SUSTRAN-Africa)

This UN-Habitat project established a regional mechanism that promotes the adoption of suitable sustainable transport options (Non Motorized Transport (NMT); Transport Demand Management (TDM); Bus Rapid Transit (BRT); and, Land Use Planning (LUP), which have proven successful in Asia and Latin America and in African urban centers. It is a regional networking initiative, maintained and housed by an existing local organization in collaboration with other local and regional institutions which have expertise and interest in sustainable transport. The initiative involves the identification of African urban centers which are ready to implement sustainable transport initiatives, giving priority to projects in Senegal, Ghana, South Africa, Tanzania, Uganda and Kenya.

Wood Energy Information System (WEIS)

One of the major priorities of the FAO Wood Energy Program is to improve wood energy statistics and information (Wood Energy Information System (WEIS) as a major tool for the promotion of sustainable wood energy systems. It aims to generate and disseminate information created from wood energy activities and assist countries to develop their wood energy planning and policy capabilities. It consists of several components:

o Unified Wood Energy Terminology (UWET) with standardized terms, definitions and conversion factors commonly used for the collation and presentation of woodfuel statistics;

o Wood Energy Data Base (WEDB) with national annual production, trade and consumption of woodfuels. The database contains over 115,000 records from more than 200 countries;

o Guide for woodfuel surveys;

o Set of wood energy planning tools called WISDOM (Woodfuel Integrated Supply/Demand Overview Mapping); and

o Website and newsletter (Forest Energy Forum) for the dissemination of information.

In addition, FAO assist countries to enhance national capabilities of forestry services and energy agencies for wood energy planning and policy development.

Improving Energy Efficiency (EE) in small industries and developing EE and Energy Service Companies (ESCO)

UNIDO EE effort has focused on:

• Support programmes on environmentally-sustainable industrial development strategies and technologies, including transfer of environmentally-sound technologies within high priority industrial sectors; and

• Carrying out activities aimed at improved energy efficiencies and industries and cleaner production.

UNIDO's traditional industrial plant level-based approach involves reducing a plant's industrial energy consumption in a variety of ways, including lower energy consumption method of production; and processing or initiating product changes linked with the lower process energy inputs.

UNEP energy efficiency activities are mainly aimed at reducing the emission of greenhouse gases by identifying and carrying out Energy Efficiency (EE) improvements as an integral part of Cleaner Production (CP) assessments in industrial enterprises. It also provided support for energy efficiency efforts through the promotion of the establishment of specialised Energy Service Companies (ESCOs) that provide Monitoring and Targeting (M&T) energy services to industrial and commercial clients. The energy efficiency activities in Africa have been promoted through National Cleaner Production Centres that are jointly supported by UNEP and UNIDO.

IEPF initiated and supported several activities in energy efficiency, mainly at country level, including:

• The development of ESCOs in Cote d'Ivoire, with funding from the World Bank and the GEF. As a result, two ESCOs are operational and financially sustainable. This initiative has been approved by the GEF for replication in Mali, Benin, Senegal, and Mauritania.

• The Energy-City programme in Burkina Faso which helps city organizations to achieve energy savings, through auditing and other saving measures.

Development of renewable energy

UNEP's renewable energy activities focus on the needs of developing and transition economies in various facets of renewable energy technology research, development, and commercialization. The following are the key activities implemented:

The African Rural Energy Enterprise Development Initiatives (AREED): AREED seeks to develop new sustainable energy enterprises that use clean, efficient, and renewable energy technologies to meet the energy needs of under-served populations, thereby reducing the environmental and health consequences of existing energy use patterns. The AREED approach offers rural energy entrepreneurs a combination of enterprise development services and start-up financing. This integrated financial and technical support allows entrepreneurs to plan and structure their companies in a manner that prepares them for growth and to appear less risky to mainstream financial partners willing to invest in them¹⁷.

Mediterranean Renewable Energy Programme (MEDREP): The key objectives of MEDREP Finance are to investigate different approaches to financing renewable energy companies and projects in target countries, and to structure various support mechanisms that help lenders and investors scale up financing in the clean energy sector. Tunisia, Morocco, and Egypt are the first three Mediterranean countries to be reviewed for the programme.

Solar and Wind Energy Resource Assessment (SWERA): SWERA seeks to bring sustainable energy approaches to developing countries through increased investment in renewable energy projects. The database and analytical tools developed through SWERA helps governments formulate realistic energy policies and programmes that are based on sound knowledge of available renewable Resources. African countries involved in the SWERA effort include Ethiopia, Ghana and Kenya.

Removal of barriers to renewable energy technologies in Africa: This UNEP project focuses on identifying barriers to implementation of renewable energy technologies (RETs) in Egypt, Ghana and Zimbabwe and proposes measures to overcome them.

Progress made

The implementation of these commitments and actions contributed to progress in the following ways:

• There is now an active, vital and functioning network of individuals, institutions and government representatives sharing information and knowledge regarding sustainable transport infrastructure investment and air quality management in Senegal, Ghana, Tanzania, Kenya, Uganda and South Africa. Lessons and experiences are being shared in Bus-Rapid Transport and Non-Motorized Transport within the City-to-City Cooperative Framework.

• FAO Wood Energy Program has achieved the following:

  1. The "Unified Wood Energy Terminology (UWET)" is gradually adopted by countries and national and international agencies for the collection and presentation of wood energy statistics and information.

  2. The "Wood Energy Data Base (WEDB)" has been improved with data of national production, trade and consumption of woodfuels of all African countries.

  3. Improved national energy balances, including wood energy, will be implemented in four countries: Senegal, Niger, Togo and Mali during the next two years. The approaches will be expanded to 10 countries in the next 5 years.

  4. A "Guide for Woodfuel Surveys" in English and French is being used for the collection and dissemination of woodfuel data.

5. WISDOM (Woodfuel Integrated Supply/Demand Overview Mapping) has been applied at national level (as in Senegal) and at sub regional level (wood energy maps of 10 Eastern African countries, including Rwanda, Burundi, Congo, Tanzania, Kenya, Sudan, and Somalia, are being prepared). The maps include woodfuel supply/consumption balances and hot spot of areas facing unsustainable woodfuel production.

Box 1: Zambia goes “nuts” for local fuel The supply of liquid fuels in the Zambezi region of northwestern Zambia is often erratic and expensive, but the oily Jatropha nut can provide a viable and locally produced alternative fuel for use in lamps and diesel engines. The thorny Jatropha plant is found in abundance in the region and used as hedging and a natural division between properties. The nuts from the plant, however, are mostly wasted. Enter entrepreneur Henry Ngimbu, who saw the potential to displace imported fuels with locally produced Jatropha oil. In 2001, he started Rural Challenge International (RCI) and began producing Jatropha oil and its by-product of “pressed cake” fertilizer using a manual oil can then lead to rural electrification and help families escape poverty,” says E+Co’s B-REED Program Manager, Gina Rodolico. There is also potential to replicate the investment with other farmers and create sufficient scale to negotiate higher prices for rural products. With training to rotate crops and use organic fertilizers, the project will also advance the practice of sustainable land management. Source : AREED project www.areed.org

• UNIDO EE programmes were implemented in several countries including Ghana, Nigeria, Tanzania, and Tanzania. These typically involved identifying barriers to improve energy efficiency within a given sector and the removal of those barriers. The removal of barriers revolves around capacity building at various levels as well as designing and putting in place appropriate regulatory reforms.

• AREED programme supported a broad range of energy enterprises that marketed a variety of energy services in Senegal, Mali, Ghana, Zambia and Tanzania. AREED applies a market-based approach to help rural and peri-urban households (and enterprises) climb the energy ladder. AREED has now invested in 25 clean energy enterprises with additional investment opportunities receiving business development assistance from AREED partners. The investments include enterprises involved in a wide range of products and services, including:

• Solar crop drying;

• Efficient charcoal production;

• Manufacturing efficient cook stoves;

• Wind powered water pumps;

• Solar water heating;

• Liquefied petroleum gas (LPG) distribution;

• Biofuel development (Box 1);

• Biofueled multifunctional platforms; and

• Energy efficient motors and lighting.
• With a US$6.7 million investment from the GEF, SWERA is developing new information tools for energy planners and project developers, including regional and national maps of solar and wind energy resources. SWERA is also developing a geographical information system (GIS) interface that will allow easy access to data and thus help the screening and pre-investment evaluation of wind and solar energy-based renewable energy projects. Thirteen countries, including Ghana, Ethiopia and Kenya participate in the initial phase of SWERA.

ISSUE 3: Advanced and cleaner energy technologies and fuels

Priority for Africa

This issue is generally not perceived as high priority in Africa. Notwithstanding, the development of advanced and cleaner technologies was viewed as a way to diversify the energy supply, particularly to increase the share of RE sources in the energy mix, and provide innovative technical solutions to supply modern energy in rural areas. Most activities are of regulatory/policy nature and are undertaken at national level.

A review of the commitments/actions implemented and progress made

The Partnership for Clean Fuels and Vehicles (PCFV)

PCFV is a UNEP-sponsored energy-related partnership that was established during WSSD in September 2002. The main purpose of the partnership is to reduce vehicular air pollution in developing countries through the promotion of clean fuels and vehicles. The Partnership currently works to support developing countries in their efforts to improve fuel and vehicle technologies that reduce air pollution¹⁸.

The main achievement of the partnership was to create awareness among members on the environmental and health danger associated with the use of lead gasoline and old petrol vehicles. As a result, many African countries committed to limiting the age of their vehicles parked on the road; move towards catalytic converters; and phase out the production of leaded gasoline. Several countries have already stopped producing leaded gasoline.

ISSUE 4: General and crosscutting energy issues including international, finance, trade, capacity development, technology transfer and gender

Sub Issue 1: Progress in international support to AU/NEPAD energy initiatives¹⁹

Priority for Africa

UN system's response to NEPAD Initiative

In its resolution 57/2 of 16 September 2002, the General Assembly of the United Nations welcomed NEPAD as an AU-led, owned and managed initiative and urged the international community and the United Nations system to organize support for African countries in accordance with the principles, objectives and priorities of NEPAD. The United Nations, within the existing programming and coordination mechanisms, developed an operational framework to support NEPAD.

Progress made

Progress made in supporting NEPAD includes:

• Establishment of a NEPAD focal point at the UN Headquarters

At the global level, the UN Secretary-General established the Office of the Special Adviser on Africa, effective 1^st May 2003. Its mandate includes coordinating global advocacy in support of NEPAD, coordinating all reports to the General Assembly and ECOSOC on NEPAD, and following up on the recommendations of global conferences and summits as they relate to Africa. The Office of the Special Adviser on Africa serves as the focal point for NEPAD at the UN Headquarters.

• UN system-wide coordination in support of NEPAD

The Office of the Special Adviser on Africa is providing support, in collaboration with ECA, to the Secretary-General in promoting a coordinated, system-wide response in support of Africa's development, particularly the implementation of NEPAD, through the UN System Chief Executives Board for Coordination (CEB). The CEB provides oversight and policy guidance to the entities of the UN system in their support for Africa's development. Support to NEPAD has been on the agenda of the CEB since 2001.

• Advocacy and awareness raising for NEPAD energy programme

Within African countries, UN agencies and information Centres are expected to support the NEPAD Secretariat in popularising NEPAD and increasing local awareness and ownership of the programme. Several Public Information services on Africa have joined the effort to publicize NEPAD activities. A global advocacy strategy for NEPAD was developed as a collaborative effort by the Office of the Special Adviser on Africa, ECA, and the Department of Public Information.

• Activities of some UN agencies and programmes

Many agencies and organizations of the United Nations system have aligned their activities in Africa with the priorities of NEPAD. Most have established a special office in charge of NEPAD and the AU in Addis-Ababa. They have all provided substantive support to the NEPAD Secretariat to develop its five-year strategic plan, including the Short Term Action Plan on Energy and the Action Plan for the Environment Initiative of NEPAD. The latter was adopted by the African Ministerial Conference on the Environment (AMCEN) and the African Union.

The United Nations²⁰, in collaboration with the Government of Senegal, convened a workshop of African energy experts on "Operationalizing the NEPAD Energy Initiative" which took place in Dakar, Senegal in June 2003. The main purpose of the workshop was to develop proposals for the implementation of the short-term action plan and propose measures to ensure that the programmes established through the World Summit on Sustainable Development (WSSD) follow-up are in support of NEPAD energy objectives.

Accordingly, the Dakar workshop identified actions/issues that could help expedite the implementation of energy project in the NEPAD short term action plan. The workshop examined funding options that could be exploited to advance the NEPAD goals/objectives with regard to rural energy, renewable energy and energy efficiency. Some of the WSSD partnerships could be used to disseminate best practices in Africa, create training synergies and develop sub-regional energy master plans. The UN system was urged to support NEPAD, inter alia, by assisting with access to post-WSSD mechanisms.

• Annual regional consultation of UN Agencies working in Africa

At the regional level, the annual regional consultation meeting of United Nations agencies working in Africa is the framework for coordination and collaboration amongst UN agencies at the regional level (Box. 2). These annual regional consultation meetings provide a platform for achieving system-wide coherence and effectiveness in support of NEPAD.

• UN Energy/Africa

Following a recommendation adopted by African energy ministers in Nairobi in May 2004, and the creation of UN-Energy at the global level, UN organizations working on energy issues in Africa created, in May 2004, a collaboration mechanism called UN- Energy/Africa. UN-Energy/Africa serves as the sub-cluster on energy in support of the NEPAD agenda.

• Progress made on NEPAD energy related investments

Progress made on NEPAD energy related investments

The NEPAD energy initiative revolves around the development of major infrastructure that requires huge investments. Some progress can be reported since 2002, including the following:

• ADB approved USD 580 million for the financing of infrastructure and energy projects prioritized in the NEPAD Short Term Action Plan (STAP). Some of the projects are listed in Table 2 ;

• The World Bank approved USD 570 million for energy projects in West and Southern Africa;

• Canada contributed USD 10 million for projects preparation and the NEPAD Secretariat is now working with ADB to mobilize contributions from other development partners;

• The French Government and the Development Bank of Southern Africa (DBSA) have contributed to the establishment of a R25 million (about $ ) NEPAD project preparation facility. The facility is hosted by the DBSA;

• Negotiations are in progress to access USD 1 billion committed by Japan for infrastructure projects and USD 200 million offered by India in 2003.

• The EU Commission earmarked about 10 million Euros for the four sub-Saharan regions pilot basins within the Integrated Water Resources Management (IWRM) initiative. North Africa is covered under the Mediterranean Basin;

• Africa Energy Fund and the Emerging Africa Infrastructure Fund was initiated by the UK Department for International Development (DfID) as a Public/Private Partnership venture and has been capitalized at $305 million; and

• The preparation of the following high priority sub-regional energy infrastructure projects is being accelerated for funding by the ADB:

  - Mphanda-Nkua hydroelectric power project in Mozambique;

  - Nigeria-Benin-Togo-Ghana and DRC-Angola-Namibia electricity inter-connectors;

  - Kenya-Uganda oil pipeline; and

  - West Africa Gas pipeline.

Table 2: ADB funded NEPAD energy projects in 2003

Sub Issue 2: Financing of energy programmes

Priority for Africa

The energy sector in Africa lacks appropriate finance for the development of key energy generation, transport and distribution infrastructure. Yet, mobilizing of finance for development is a serious issue for Africa. Overall, financial flows in this sector are far below the needs. The uneven regional distribution of energy resources calls for a rapid development of sub-regional oil and gas pipelines, and inter-country power lines. The high level of poverty and low technical capacity on the continent call for the development and use of innovative financial instruments which promote favorable terms in line with the needs and priorities of African countries.

A review of the commitments/actions implemented

UNEP Finance Initiatives

UNEP has been working with the finance sector since the late 1990s on new approaches to financing sustainable energy in developing countries. The UNEP's Finance Initiative (FI) includes 170 banks and 85 insurers committed to integrating environmental considerations into their internal and external business activities and asset management. UNEP also works closely with the Basel Agency for Sustainable Energy (BASE), a UNEP Collaborating Centre, that promotes and facilitates investment in the renewable energy and energy efficiency sector. Other UNEP initiatives to improve financial flow in the energy sector in Africa include:

• Sustainable Energy Finance Initiative (SEFI): SEFI provides current and targeted information to financiers while facilitating new economic tools that combine social and environmental factors - both risks and returns - as integral measures of economic performance.

• The Renewable Energy Technology/Energy Efficiency Investment Advisory Facility (IAF): IAF helped financial institutions to evaluate potential renewable energy technology or energy efficiency investments in developing countries and countries with economies in transition. The first phase of the project was completed with interesting results and effort is being made to have a second phase.

Regional and international financial institutions investments in Africa's energy sector

In the previous sub-section we highlighted some of the investments of regional and international financial institutions in support of the NEPAD energy programme. The strong link between sustainable energy provision and poverty reduction implies that the provision of energy should be high on the agenda of financial institutions working in Africa. Currently, the World Bank, the West African Development Bank (BOAD), the ADB, the Development Bank of Southern Africa (DBSA) and other sub-regional institutions are major actors in financing energy projects and programs in Africa.

Progress made

The implementation of the above mentioned commitments and actions contributed to progress in the following ways:

• Between 1976 and 2003, the ADB group made cumulative loan and grant approvals exceeding 49 billion US dollars. Of this amount, approximately 9.4% was invested in the power sector (Figure 11). This translates to about 4.5 billion US dollars. The majority (87%) of these investments were made in the electricity sub-sector. The remaining 13% supported projects in the rest of the sub-sectors (e.g. petroleum, fuel wood, solar, geothermal, coal and energy in general) (ADB report)²¹.

ADB is also supporting, or has committed to support, a number of projects and programs in renewable energy in Africa. Some recent examples are:

• Capacity building in eleven Sub-Saharan African countries on the development of small hydropower ( 37.5 million total amount of which 18 million by the ADF and 10 million Global Environment Facility GEF);

• Renewable energy studies for Uganda, Tanzania and Gambia ( 2.5 million);

• Mozambique energy reform program on rural electrification (isolated grids and PV) ( 67 million);

• Solar/gas power stations in Morocco and Egypt ( 200 million each); and

• Nigeria's small hydropower and rural electrification study ( 2 million).

Figure 11. Investments of the African Development Bank in the energy sector by year of Board approval. The figures are given in the Bank's Unit of Account, which is a basket of major international convertible currencies calibrated to be equivalent to the Special Drawing Right (SDR) of the IMF. Its exchange rate on 31 May 2005 was UA1.00 = US $ 1.45661.

• The UNEP IAF has assisted a variety of development and commercial banks, and private investors to assess prospective debt and equity investments in the sustainable energy sector. These include projects or investment funds involving wind, biomass, biogas, geothermal, small hydro and district heating technologies, as well as energy service companies (ESCOs). IAF recently supported a $1.2 million biomass plantation in Tanzania.

Sub-Issue 3: Capacity-building and networking for sustainable development

Overall, the energy sector in Africa suffers from poor planning and decision-making tools. This is due to both inadequate human and technical capacity, and insufficient scientific capacity to provide decision-makers with well-informed technical data and policy options. Thus, capacity building and training at regional or country level, as well as awareness raising programmes are of high importance for the development of the continent. Networking on thematic energy issues is a pertinent means to achieve knowledge dissemination.

A review of the commitments/actions implemented

Training on energy planning and analysis

IAEA provided assistance and capacity-building in energy planning, energy-economics/environment analysis to member States upon request, through a variety of mechanisms. Such assistance, technical support and training, are consistently listed as top priorities among African countries concerned with harnessing energy for sustainable development, on a regional and national basis.

The IAEA also has a WSSD partnership project with South Africa and UNDESA on assessing energy development for sustainable development goals. The project includes energy sector modeling, statistical and policy analysis.

Advanced education in energy resources, planning and policy

IEPF in collaboration with "Agence Universitaire de la Francophonie'' in Dakar, and the "Centre d'enseignement spécialisé en énergie (CRES-É)" established a Master Degree programme in energy and its environment, and a training curriculum in energy policy development, covering various themes such as "energy resources", "method of resource assessment", "analysis and modeling", "energy sector planning", etc. Other training and awareness raising initiatives undertaken by IEPF dealt with issues related to power sector reform and public-private partnership for power sector development.

IEPF launched a programme in 1998 to assist countries to develop national energy information system. The second phase of this project, launched in 2004, with 1.1million Euros co-funding by IEPF and the EU, assists Togo, Niger, and Senegal establish their National Energy Information System, through the provision of adequate equipment and the training of a national team.

In the framework of UN-Energy/Africa, ECA, in partnership with UNEP, undertook a study to assess power sector reforms in Africa to promote the mainstreaming of social and environmental considerations in power sector reforms in Africa.

Global Network on Energy for Sustainable Development (GNESD)²²

This is a global network launched during WSSD to promote partnership for the sustainable development of the energy sector. GNESD is helping to promote research, transfer and take-up of green and cleaner energy technologies in the developing world. The Network is achieving this by strengthening collaboration between existing "Centres of Excellence", and work through these centres to influence sustainable energy policies, strategies and programmes.

Global Village Energy Partnership (GVEP)

GVEP is a voluntary partnership that brings together developing and industrialized country governments, public and private organizations, multilateral institutions, consumers and others in an effort to ensure access to modern energy services by the poor. It was launched as a Type-11 partnership in Johannesburg, during WSSD. The Secretariat is housed by ESMAP (FULL!).

Progress made

The implementation of the above-described commitments and actions contributed to progress in the following ways:

• The IAEA has national energy planning and capacity building projects in Egypt, Ghana, Morocco, Nigeria, Sudan and Tunisia. The IAEA also has a regional energy analyses project that encompasses 15 countries: Burkina Faso, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Mali, Mauritius, Namibia, Niger, Nigeria, Sudan, Tanzania, Uganda, Zambia and Zimbabwe. Figure 12 indicates a regional distribution of the people trained. For Africa, there were 22 trainees in the first half of 2005, 38 in 2004 and 28 in 2003.These involve not only training in energy modeling and analysis, but also technical support for national case studies or regional analyses.

• Twenty people are currently enrolled in the IEPF sponsored Master's degree programme, while 24 representatives of the UEMOA countries were trained on energy policy development. Several hundred people participated in the awareness raising workshops, and currently, three countries (Togo, Senegal, and Niger) are in the process of establishing a national energy information system.

• Three African Centers of Excellence (ENDA-TM, Senegal, AFREPREN, Nairobi, and URC, South Africa) are members of the GNESD network. The focus of the network is on energy access and poverty. GNESD is supported by the several European countries (France, Germany, UK and Danemark).

• Ten GVEP countries - Cameroon, Ghana, Kenya, Mali, Niger, Senegal, South Africa, Tanzania, Uganda, Zambia - are at various stages of preparing energy action programmes, linked to their national poverty reduction strategies/development plans, and portfolios of major investment projects. With support from GVEP Senegal reoriented its rural electrification programme with the development of Multi-Sectoral Rural Energy Projects (PREMs). South Africa is undertaking GVEP activity within the existing network of Integrated Energy Centres, which includes the establishment of six new energy businesses and two partnerships to make LPG more accessible and affordable. Cameroon and Ghana have advanced the farthest in developing energy-poverty reduction programs; in the case of Ghana, GVEP is facilitating the design and implementation of a major investment program (GVEP, 2005 update)²³.

Sub-issue 4: Africa regional energy integration

Priority for Africa

Expanding regional cooperation in the energy sector to further regional economic integration has been a concern of most Regional Economic Communities (RECs). They seek to promote energy pooling and cross-border energy flows to minimize the cost of supply through economies of scale and to enhance the security and reliability of supply. Good indicators of achievement should assess progress made in joint development of hydropower generating facilities, energy pooling through cross-border pipeline projects, regional power pooling and expansion of cross-border oil pipelines²⁴.

A review of the commitments/actions implemented

All energy divisions of the RECs aim at ensuring the availability of a sufficient, integrated, efficient and cost effective infrastructure system that will support and sustain regional economic development, trade and investment for poverty alleviation. They are all committed to support NEPAD energy initiatives and to undertake joint development or use of hydropower generating facilities, expand sub-regional power pools and interconnection of electricity grids, develop, where cost effective, cross-border gas and oil pipelines projects.

In West Africa, the establishment of a regional electricity market through the West African Power Pool (WAPP), and the provision of natural gas from Nigeria to Benin, Togo and Ghana for electricity generation and industrial uses through the West Africa Natural Gas Pipeline (WAGP) and the ECOWAS Energy Observatory are among the current priority actions.

The core of ongoing efforts in Southern Africa include: facilitating the implementation of the Southern African Power Pool (SAPP) plan; establishing and maintaining a regional energy-planning database; facilitating the creation of an information exchange system in all SADC member States; developing a regional capacity building programme for the creation of national electricity regulatory authorities in the SADC member States; and establishing and operationalizing the Western Corridor Project.

In the other sub-regions of Africa, such as Central and Eastern Africa, efforts to develop an energy programme are being pursued. The Central Africa Power Pool (PEAC) was established in April 2003, in Brazzaville. It covers the 11 countries of the Economic Community of Central Africa States (ECCAS). The latest of the power pool arrangements, the Eastern Africa Power Pool (EEAP), was launched in March 2005.

Progress made

The implementation of the commitments and actions contributed to progress in the following ways:

• Implementation of the SAPP and WAGP

The WAPP is still in its development stage. The following advances were made: The Study on the W.A. Regional Regulation Mechanism for Electricity Sector was launched and data collection was completed in 2003; regional energy master plan and stability study was developed; The Energy Protocol was adopted by the Council of Heads of State and Government and ratification by member States is underway. Also, the ECOWAS Council of Ministers adopted in Accra, in December 2003 the regulation on the operationalization of the ECOWAS Energy Observatory. Currently, studies for four priority connection projects²⁵ have been completed, and funding partially secured. Progress was also made on the West African Gas Pipeline (WAGP) with the ratification of the treaty and adoption of relevant legal instruments ratified by member States' Parliaments in 2004. The active phase of construction of the pipeline started mid-2005.

• Implementation of the SAPP

The SAPP market started with two players ZESA and ESKOM and now includes Nampower (Namibia), Botswana Power Corporation, Electricidade de Mozambique, Hidroeléctrica de Cahora Bassa (Mozambique), Kariba North Bank (Zambia) and Swaziland Electricity Board. In 2003, the energy and volume traded on the Short-Term Energy Market (STEM) was 713GWh and US$3.6 million respectively, compared to 739GWh and US$2.9 million for 2002. The price of energy increased from 0.4 to 0.6 Usc/kWh from 2002 to 2003.

The World Bank and NORAD, in November 2003, approved US$178.6 million for the SAPP power market project. The first phase of the project has started and it consists of the upgrade of the SAPP Coordination Centre; the feasibility study for the transmission line from Zambia to Tanzania; and the strengthening of the transmission corridor from Inga to SAPP countries.

Furthermore, the World Bank has pledged financial support to SAPP and SIDA has approved a grant of SEK10 million (approximately US$1.6 million) to SAPP for the development of long-term transmission pricing policies and implementation procedures and ancillary services market development in June 2004. The Coordination Centre has received a grant of NOK35 million from NORAD to develop a competitive electricity market for Southern Africa²⁶.

Western Corridor Power Project (Westcor)

The Westcor Project aim is to harness the large water resources of the Congo River at Inga, to produce and supply electric power, initially for the five countries²⁷ involved but ultimately to the whole SADC sub-region. The estimated $7 billion project comprise the construction of a 4,000 MW hydroelectric dam, a transmission line and a telecommunications line. The Inter-Governmental Memorandum of Understanding (IGMOU) and Inter-Utility Memorandum of Understanding (IUMOU) of the project were signed in South Africa on 22 October 2004.

African Energy Information Management

Progress was achieved in the collection, management and dissemination of energy information in Africa by several actors: The World Energy council (WEC), the International Energy Agency (IEA) and the UN statistics section of UNDESA have developed databases of statistics for the African energy sector. Other institutions active in this area at the regional level include FAO, IEPF, UNDP and UNEP. The African Energy Commission (AFREC), an AU technical organ, launched in May 2005 the African Energy Information System (AIES). These will assist Africa in the collection and management of key energy information and assist decision-makers in formulating sound energy policies, based on best practices and up-to date technology options.

Assessment of accomplishments and gaps

The present review of achievements in the implementation of commitments made during WSSD/A21/PFIA21/ CSD is, by no means, exhaustive of every action undertaken by all energy stakeholders in Africa. Such a comprehensive review would require more consultations, means and goodwill from all actors. However, based on responses to the surveys, the following qualitative assessment of progress made during the last few years on the main energy issues can be made:

Energy accessibility issue

The problem of energy accessibility has been addressed by many international organizations on a bilateral or multilateral level, including African development partners, regional, sub-regional and country level organizations. This issue has been linked with poverty alleviation efforts in some cases, but, unfortunately, not always. The need for more generation capacity has been recognized; however, efforts to solve the problem stumble over chronic lack of public funding and little interest of investors and financial institutions in the African energy market, mainly due to numerous disincentive measures built into national institutional, policy, legal and regulatory frameworks.

Therefore, with close to two-thirds of Africans without access to modern energy and trapped into economic poverty, there is much to be done to achieve commitments and targets at national, sub-regional and regional and international levels.

Some of the gaps and shortcomings identified in the global strategy for achieving equitable energy access for all are:

• The lack of general recognition and acceptance that the energy issue is an integral part of the poverty reduction debate and a prerequisite for reaching sustainable development.

• Approaches to design rural energy development strategies and policies are still supply- driven based on constraints and available means in urban areas.

• Sub-optimal use of human, technical and financial resources by various international, regional and national organizations due to lack of coordination and coherence among various development programmes and institutions.

Overall, resources were inadequate to make a significant difference on the energy accessibility challenge.

Changing patterns of consumption and production

Approaches used to address this issue include the development of renewable energy sources, modernization of the biomass energy sector, development of EE and RE service companies and actions to achieve sustainable urban transport. These diverse actions have not succeeded in affecting the continent RE mix, in generating substantial energy savings, protecting forests and increasing access to modern energy.

Initiatives taken for changing consumption and production patterns for sustainable development lacked strong political support from national governments that they require and the minimum critical scale of projects that can create a momentum of change. Activities are much too localized, not enough advertised and often too controversial to intuitively be understood by African people and adopted by most governments.

Development of advanced energy technologies and fuels

This issue was not viewed as a priority for the continent, though advanced technology may bring an answer to the questions of decentralized rural energy development and energy efficiency. Consequently, few actions were carried out with the exception of some capacity building and networking initiatives.

Efforts to develop required advanced energy technologies in Africa, have been insufficient. A lot more could be done especially in providing support to local research centers and universities, and in promoting innovative local energy enterprise, based on indigenous material and locally available resources.

Crosscutting Issues

Support to NEPAD energy programmes

Considerable efforts were deployed by African countries and the international community to promote NEPAD and support NEPAD energy initiatives. Many UN special organs and organizations have responded well to NEPAD. Despite this good will, NEPAD energy initiatives have not made the anticipated progress and many initial expectations of African people remain unmet.

Shortcomings in the various initiatives derive from many factors, including:

• Evolving institutional status of the NEPAD with respect to the African Union and regional organizations;

• Low and insufficient human and institutional capacity at the NEPAD secretariat and technical divisions;

• Slow progress in the design and formulation of priority energy projects of the NEPAD;

• Unclear procedure and framework on how best development partners can assist NEPAD; and

• Regional Economic Communities (RECs), generally, do not have the human, technical, financial and institutional capacities to carry out the implementation of NEPAD projects expected.

Financial Issues

Like other development sectors in Africa, the energy sector suffers from meager funding and reduced financial options. Despite many publicized announcements of commitments made by various development partners (bilateral and multilateral), funding levels in the African energy sector remain very low and have not increased significantly for many years. Programmes such as ADB FINESSE and various UNEP finance initiatives deal with the problem of capacity building within financial institutions in order to increase the share of energy investments in their portfolio. Analysis however shows that the sector is still under-funded and run the risks of collapsing further unless business-as usual approaches are changed.

Some of the shortcomings in the implementation of the finance targets are due to:

• Commitments made by bilateral and multilateral organizations in terms of increase of ODA and grants to Africa did not materialize;

• Continued lack of innovative initiatives by financial institutions and investors; and

• Weak involvement of national financial institutions and low mobilization of indigenous capital for development.

Capacity-building and networking

Many actions were aimed at strengthening the capacity of energy planners and developers; education and research institutions; and Centers of Excellence. Formal training and networking schemes were used. Overall, African human capacity in energy is viewed by Africans as adequate to make progress. However, national and sub-regional institutions are often severely under-equipped in communication, data acquisition and processing tools.

There are serious gaps in the number of capacity enhancement programmes aimed at addressing the needs of sub-regional organizations such as the RECs, Power Pools, etc. They, therefore, remain weak with regards to design, implementation and integration of projects that normally fall under their leadership.

SECTION IV

Constraints and Challenges to Achieve Targets

This section presents an overview of the main energy challenges in Africa, and describes the constraints identified in implementing energy activities on the continent

Overall, a synoptic picture of the African energy sector reveals a continent that is undersupplied in modern energy. When energy is available, it is usually in a form that is not appropriate for the needs of the majority of people and economically unaffordable by most of those who have access to it. This is indicated by a very low access rate to processed energy, particularly in the rural areas; the dominant usage of cheap or free form of energy such as biomass; and, paradoxically, an intensive waste during the transformation of energy resources and usage of products and services available. Approaches and recommendations must take full cognizance of the specifics of external constraints to the sector and the limitations of the instruments used so far to induce changes.

External constraints to the energy sector

Electrification rate versus population growth: The never-ending race

When the current rate at which new electricity connections are made in most African countries is compared to the growth rate of the population, it is easy to see why Africa is involved in a never-ending race to reduce energy poverty. In sub-Saharan Africa, the number of people without access to electricity grew from 434.5 million in 1990 to 516 million in 2000. This never-ending race is explained by the fact that while the number of people with access to electricity increased by 19% between 1990 and 2000, the population grew by 30% in the same period²⁸. The problem of energy poverty thus seems to worsen in absolute terms²⁹.

Low education level

A higher proportion of Africa's children do not complete primary school (see Figure 13). Although low education is spread across African societies, its highest density is in sub-Saharan rural areas, where access to energy is the lowest. Implementing "energization" programmes in rural areas, with full participation by local population is constrained by the level of education of the population. This reduces their ability to act as agent of change for the design of local energy solutions including the development of local entrepreneurship for installation and maintenance of decentralized energy systems, as well as for the development of productive use activities.

Figure 13: Education level in Africa

Source: World Development Report, 2003

The strong centralized State

While most African countries have launched some level of reform of their power sector since the early nineteen, these reforms focused on solving many of the technical and mostly financial inefficiencies caused by historically bundled vertically integrated sector, under the control of governments. Power sector reforms undertaken under pressure from the Breton Woods Institution (World Bank and IMF) are aimed at increasing the competitiveness of the sector, reducing the role of states in the management of the sector and striving to attract more private sector participants in the production and distribution of electricity³⁰. Results are however marginal. Energy policies design and planning are still strongly centralized at the highest level of governments. The role of local governments, cities, regional councils and village-level communities is very weak, and usually limited to political lobbying with the central governments. Though not specific to the energy sector, this fact constitutes a significant constraint to the development of sustainable energy in non-urban areas. The non-involvement of the local population in most rural level energy projects has led to cost-ineffective investments and simple failure of many energy projects³¹.

Constraints identified by actors while implementing commitments

Poor infrastructure and high up-front energy cost barriers for access to Energy by the urban poor

In part due to poor infrastructure and prohibitively high up-front costs, the poor often face much higher energy costs than the non-poor. This is compounded by limited access to appropriate financing schemes that can allow the poor to overcome the high-up front costs of cleaner energy devices and appliances. Other important energy challenges facing the poor, include low incomes that are not sufficient for the procurement of energy services to meet their basic needs such as cooking, affordable transport, powering pumps for potable water; sterilization of medical equipment; and space heating.

There currently exists formidable market and regulatory barriers preventing the urban poor from accessing affordable and modern energy services. These barriers must be tackled in a comprehensive national and intra-regional fashion³².

Energy and urban transport constraints

As sub-Saharan African cities experience increased urbanization and motorization, air pollution, particularly from vehicles using leaded gasoline, is worsening. By providing access to business and public facilities, urban transport plays a critical role in the development of urban areas and overall economic growth; but it also generates a number of externalities in terms of accidents, noise, traffic congestion and air pollution at local as well as global levels. The latter is becoming a major environmental and health concern in sub-Sahara Africa. High rates of urbanization and motorization (4% to 8% in a number of cities) are expected to be sustained from the next decade, coupled with low-income solutions to daily commuting. Consequently, the tendency to import older vehicles; use of cheaper two-wheelers which cause more pollution; use of unsafe fuel and postponement of regular vehicle maintenance, are expected to prevail in the short and medium term.

Wood sector information, financial and institutional constraints (FAO report, 2005³³)

Fuelwood and charcoal (woodfuels) are major energy sources in most of African countries. However, they are not receiving the attention deserved by forestry and energy organizations. The lack of reliable information on woodfuel production and consumption is commonly pointed out as a critical limitation in the formulation of wood energy policies. However, more often this is the result of the absence of sectoral policies and the lack of clear institutional responsibilities of forestry and energy agencies of most countries. As a result, the level of analysis is often limited to broad generalizations leading to speculations and often biased assumptions.

The support for the implementation of wood energy activities is gradually improving but many constraints remains, such as:

• Insufficient support from national forestry services and energy agencies is weak;

• Inadequate human resources participation in wood energy planning and policy development activities; and

• Funds available are rather limited for the implementation of planned wood energy activities.

Other challenges for energy development in Africa

Analysis of the low technical, economical and environmental performance of the energy sector in Africa, reveals a bundle of challenges, all urgent, that must be addressed in order for the continent to break the cycle of energy poverty, and make progress towards sustainable development. Figure 14 shows a simplified energy production-to-service chain, with highlights on requirements and constraints to move from one stage to the next. In the context of existing energy natural resources, there is a need for capital, technology and knowledge to transform the energy resources into useful energy that is transported when infrastructure, technology and knowledge are available. It is then distributed provided there are infrastructure, human resources, knowledge and an identified market. Only with proper marketing strategies, and an established demand with buying capability, can distribution be done commercially. There are thus many challenges linked with each of these steps in the chain.

Figure 14: Simplified energy production to service chain

Source: SDD/ECA 2005

Resource Challenges

o Low energy production (untapped energy resource potential)

Though overall the continent contains abundant and a large variety of energy resources from non-renewable to renewable fossils, modern energy production is far below the needs of the population and the production facilities. This is due to the fact that the energy potential of the continent is largely untapped. The WEC estimates that only 7% of the hydropower potential is used, while wind, geothermal, solar and other renewables sources are barely exploited. This is mostly due to unavailable investment capital from public and private sources, low technology capacities of countries, and generally inadequate science and knowledge facilities, for example for resources assessment and feasibility studies.

o Uneven regional distribution of energy resources (Weak regional energy trade)

As mentioned in section I, of the 53 countries in Africa, the largest energy potential is found only in a limited number of them. Hydropower potential is the most evenly spread, but the biggest concentration is on the Congo River with a potential of more than 40,000 MW. Oil and gas are mostly concentrated in Algeria, Nigeria and Libya, while coal is mostly found in Southern Africa, and geothermal potential in Eastern Africa. Based on IEA statistics (2002), the Maghreb countries together with the Republic of South Africa account for more than 82% of the African electricity generating capacity. Therefore, many African countries suffer from scarce energy resources, and must pay high prices to import energy. This poses the challenge of developing, at a faster rate, regional energy transport networks such as Oil and Gas pipelines and cross border and sub-regional electricity networks in order to boost intra Africa energy trade.

o Weak share of renewable energy in the energy mix

A review of the proved energy potential in African presents a striking diversity of resources, which offers a unique opportunity for an optimal energy resource mix for power generation. Though oil, gas and coal are the dominant source of electricity generation (accounting for almost 80%)³⁴, African has an almost untapped hydropower, geothermal, photovoltaic, and wind potential. Combustible renewables such as biomass that constitute the dominant energy source for African households are mostly traditionally used in an unsustainable manner that poses much threat to human health and the environment. Improving the electricity generation resource mix is a predominant challenge for sustainable development. Lack of investments, inadequate policy framework and low technical capacity are, among numerous other causes, responsible for the low level of development of RE in Africa.

Transformation Challenges

o Low oil refinery capacity

The refinery capacity of Africa represented in 2004, 3.9% of world total (Table 3), the lowest of all world regions³⁵. Further, the production of refineries has been dropping steadily since 1998 due mainly to aging equipment and deficient maintenance. Even in a major oil producer country such as Nigeria, problems with refineries have led to frequent fuel shortages, and forced the Nigerian National Petroleum Corporation (NNPC) to import petroleum products³⁶. Even though all African countries consume some oil and petroleum products, half of them do not have any refinery facility. Many of them import refined products from the nearest source. African refinery capacity is mostly concentrated in North, South and West Africa, but half of the continent distillation capacity is in North Africa. Without sufficient financial and technical resources to maintain and invest in more refinery capacities, African countries are even more compelled to export their oil production, and deprive the local population and industries of the necessary fuel for development and daily energy uses, like transportation.

Table 3: World oil refineries capacities

Source: BP statistics 2005

Transport, transmission and distribution challenges

Historically, even after power sector reforms were undertaken by many countries, the transmission sector has remained under the control and management of governments. It is viewed as a strategic sector generally clustered under national infrastructure. However, the high cost of energy transport and transmission infrastructure such as high voltage power lines, oil and gas pipelines is responsible for the low progress in expanding national distribution electricity grids, and the low level of regional and sub-regional electricity, gas and oil trade among African Nations. It is established that the larger share of most rural electrification projects is the cost of medium voltage transmission lines to the village sites. Furthermore, the electricity transmission sector is often plagued with serious technical problems, leading to heavy electricity line losses while demand is still unmet³⁷.

Cross-cutting challenges

o Low private sector participation and investment in the energy sector

African governments have not been able to finance the expansion or refurbishment in the power sector or attract private sector investment. The International Finance Corporation (IFC) estimated that, between 1990 and 1998, FDI in the power sector in SSA was only 6% of all infrastructure FDI inflows into the region. In comparison, telecommunications accounted for 89% of all FDI inflows in this period. Far more popular destinations for the electric sector are East Asia and the Pacific, Latin America, and the Caribbean.

Between 1990 and 1999, private investment in electricity in SSA was $2.9 billion, representing less than 2% of all private electricity projects in developing countries³⁸. The bulk of private investment in electricity was in Latin America and the Caribbean, with almost 40% of the total. More private investment is essential to mobilize resources for the development of the sector and, more importantly, alleviate the budgetary burden on African state-owned power utilities³⁹.

This low private sector's investment level has been affecting progress in the NEPAD energy programme. Box 3 identifies some of the hindrances to more private sector involvement.

o The rural energy challenge

In the framework of the modern energy access challenge, the issue of providing sustainable energy in the rural areas must be highlighted. Sixty to 70 percent of Africa's population live in rural areas and rely heavily on traditional and unprocessed biomass (wood, animal dung, agricultural waste, etc.) for their daily domestic energy needs, with limited choice and options of fuels for their productive activities. The rate of access to modern energy in these areas has dropped to as low as 1%, in some countries.

Sustainable modern energy provision in rural areas of SSA countries is hindered by numerous barriers including: i) dispersed settlements that increase investment and transactions costs of rural electrification projects; ii) low population density; iii) inadequate technology context for the rapid expansion of new appliances and technical services; iv) high illiteracy prevalence which limits their ability to act efficiently as agents of change in their environment; v) difficulty of legal recourse in case of disputes because most legal offices are in cities far from the villages; vi) low real demand for electricity; and most of all vii) low and irregular incomes of potential consumers of energy resources and services.

Acknowledging the fact that traditional African government policies based on the extension of electricity power grid have achieved a limited success in increasing access to modern energy in the rural areas, new approaches in promoting diversification of energy resources, which include modernization of the traditional wood sector, decentralized energy generation systems and innovative financial and energy delivery mechanisms based on a bottom-up approach are recommended.

o Non-efficient utilization of energy (in buildings, and industries)

Due to the inefficient use of energy, Africa uses by far more energy to create $1 of wealth (as reflected by "units of energy consumed per $ GDP") compared to other developing countries.

Pilot studies conducted through a UNDP/GEF regional project in West Africa (Senegal, Côte d'Ivoire) revealed a potential of energy savings of close to 30% in buildings, through appropriate awareness campaigns, regulatory and fiscal measures⁴⁰. This kind of savings can be achieved in other sectors such as transport, industry, and thermal power production.

On the production side, two-thirds of energy is wasted, in the form of heat, during the process of transforming⁴¹ primary energy into its useful form. Much saving potential exist in the mostly old and inefficient thermal power plants used on the continent. Also, loose regulations on quality control of the power transmitted and used led to losses in transmission lines. It is safe to say that at least 30% to 40% more electricity can be made available to Africans through a variety of energy efficiency measures. Though the investments required are cost- effective, the environment also benefits from a reduction in the emission of Green House Gases (GHG).

o Inadequate policy, regulatory and institutional framework

Most stakeholders' reports compiled in this regional review underlined the problem of inadequate institutional framework including policy and regulatory frameworks. Solving the chronic lack of public funding requires bilateral, multilateral and private partners. They would not only bring the required finance for investments in expansion and maintenance of infrastructure and equipment, but also enrich the sector with new managerial and technical skills as well as knowledge and innovative technologies. Unattractive policies, laws and non-transparent regulatory measures and bodies, and unstable institutional frameworks hinder bilateral, multilateral and private sector participation in any development sector.

The challenges and constraints compiled in this section are certainly daunting, but not insurmountable. Progress can be made! In the next and final section, specific recommendations are made to address the challenges identified.

SECTION V:

Lessons Learned and Way Forward

This section summarizes lessons learned by different participants to the review undertaken, provides some recommendations of workable approaches to address the challenges of energy for development in Africa. The recommendations are not only based on suggestions made by the respondents to the survey, but they also reflect, through several Boxes, suggestions made in several other pertinent gatherings that dealt with the issue of energy in Africa. The main goal is to gather different perspectives in order to help expedite implementation of the specific actions so as to meet the overall targets outlined in WSSD/A21/CSD.

Lessons learned

The African energy sector has still a long way to go to meet the needs of most Africans, especially the urban and rural poor. Progress is slow due to many factors including: i) low investments (manifested mostly through largely untapped energy potential and underdeveloped infrastructure and energy transport networks); ii) inefficient management and planning that results in sub-optimal financial performance of the electricity sector; iii) inadequate institutional framework including policy and regulatory measures that deter a larger participation of the private sector; and iv) low technical capacity that leads to premature failing of many existing equipment.

The following lessons could be distilled from the responses to the review surveys:

• To achieve targets and commitments made by stakeholders, African countries must take full account of the specific human, economic and environmental constraints of the African energy challenge. For instance, effectiveness can only occur in rural energy when the specificities of the African rural areas are integrated in the design of solutions.

• There is great opportunity to share experiences between rural and urban poor areas so as to test innovative approaches to rural energy access (electrification and modern energy sources for household cooking fuel) within a peri-urban setting (Habitat report).

• Unless commitments of African governments are translated into stronger support for capacity-building projects, they have little chance to achieve their goals and targets (IAEA report). Governments must therefore be involved, at the earliest stage possible, in the design of the commitments to be implemented.

• There is a need to provide more opportunities for sharing innovative approaches between Asia, Latin America and Africa to address many problems related to energy for development, particularly energy access to the poor and for urban transport infrastructure investment patterns tied to air-quality management (Habitat report).

• The generation of information and the adoption of wood energy policies and programmes aimed at developing sustainable wood energy systems are vital for the contribution of wood fuels and their derived energy for food security, poverty alleviation, economic development, sustainable forestry management and climate change mitigation through carbon substitution and sequestration (FAO report).

• When building sustainable energy investment capacity within a financing organization, the approach needs to be flexible as different institutions follow different `product development' paths. Changing the way a financial organization considers new investments therefore requires better information to combine social and environmental factors - both risks and returns - as integral measures of economic performance. To enter a new sector, for instance, some banks may first focus on creating the right policies while others focus on training personnel (UNEP).

• Training in energy analysis and modeling using specific national, regional data and contexts are requested by many African decision-makers (IAEA).

• Regional financial institutions, such as ADB, have determined that internal capacity-building programmes such as FINESSE, help in understanding the risks related to investments in projects using new technologies like renewable energy and energy efficiency systems. This, ultimately, will lead to more renewable and EE projects within the Bank's investment portfolio and create awareness within the Bank on the pressing energy needs for poverty reduction.

Way Forward

Efforts undertaken by various actors must be pursued with dedication to improve the institutional, legal and regulatory environment; attract more investors and private sector participants to the energy sector; hasten the pace of regional integration projects; promote environmentally-safe energy technologies such as renewable energies; and increase access to modern energy for the rural and urban poor to reduce poverty and achieve the MDGs. Major initiatives must be taken and scaled up to make progress, particular to:

Prioritize efficient institutional, regulatory and policy framework

In order to address issues such as the lack of funding, low private sector participation and overall low performance of the energy sector, African policy-makers should pay special consideration to policy measures that clarify the role of various stakeholders (public and private); improve investments climate in general through more favorable legal and regulatory reforms; strengthen the role of independent energy regulatory bodies; and lift barriers to the realization of regional integration projects in energy (Box 4).

Increase financial flows towards the African energy sector

International development partners, including UN organizations, should enhance their support for African countries to undertake the necessary reforms for a coherent, transparent and attractive investment framework. They should increase their advocacy and funding function to significantly increase the financial flow towards investment in energy projects in Africa. Commitments made to set the NEPAD energy initiative, as priority for Africa should be reinforced.

Promote energy regional integration as a catalyst for development

All African RECs seek to increase trade among their member countries and then expand their market to other trade zones. Energy trade must be pursued with dedication by the RECs with the support of international partners as an efficient means to reduce the uneven distribution of energy resources in Africa, reduce import cost burdens of energy resources on most national economies, and increase the supply of secure and environmentally-sustainable energy (Box 5).

The African Energy Commission (AFREC) should receive more assistance to accelerate the achievement of energy integration between all African regions, through up-to-date energy information, as well as regional and national capacity development of pertinent energy-decisions tools.

Improve the share of RE in the African energy mix

To achieve significant progress in the development of renewable energy on the continent, governments should put in place coherent regulatory and policy frameworks that support the development of thriving markets for renewable energy technologies and recognize the important role of the private sector. These include removing barriers, enhancing fair competition in energy markets and internalizing external costs for all energy sources. Such frameworks are essential to realizing the potentials for renewable energy technologies creating favourable conditions for public and private investments, and to extending modern energy services to populations currently without access (Box 6). African decision-makers are then urged to fulfil their commitments with regards to the development of RE (Box 7).

Considering the largely untapped hydropower potential of Africa, and the emphasis put by the NEPAD Energy Action Plan on the development of large hydropower plants, African governments, with support of the international community, should accelerate the development of environmentally and socially balanced hydropower projects on the continent.

Link rural energy development programmes to poverty reduction strategies and the achievement of the MDG.

Experts agree that energy poverty is linked to economic poverty and social welfare. Thus, the low access to modern energy (for lighting, cooking and production for example) is a barrier to socio-economic development of most Africans. Energy access for the poor, particularly in rural areas should be given a priority consideration in any development policy and programme. African governments, international development partners, regional, sub-regional decision-makers should pay particular attention to problem of access to modern energy in rural areas, and view it as inseparable from poverty reduction efforts and economic growth strategies. They should therefore be willing to drastically increase their financial participation in the sector and assist in the development of key infrastructure that can sustain the minimum economic growth required to break the cycle of poverty and achieve the MDG. (Box 8).

Modernize the traditional biomass energy sector

African governments, with the support of the international community, should urgently design and implement appropriate measures to modernize and assure energy efficiency of the traditional biomass energy sector so as to reduce the negative impacts of its heavy usage on human health, the environment and other issues related to the MDGs.

Promote coordination and coherence among all international partners

Given the number and diversity of international development partners in the energy sector, more efforts should be made to create coherence, complementarities and effectiveness. This can be achieved in the framework of a collaborative mechanism such as UN-Energy/Africa (among UN programmes and Funds, key non-UN actors and regional organizations such as the AU and AU/NEPAD).

REFERENCES

2 BP energy statistics 2005, www.bp.com

3 IEA key energy statistics, 2002

4 NASA Solar Map, and WEC energy analysis

5 WEC, IEA 2002

6 IEA (2004)

7 BP (2005)

8 IEA (2002)

9 NASA

10 Compiled from BP (2005)

11 FAO Report (2005)

12 WEC, IEA (2002)

13 UNIDO IDR (2004), p.31

14 ECA/SDD (2004)

15 i.e. ECOWAS, SADEC, ECCAS, ESC, COMESA, UMA, etc.

16 In phase 1: Benin, Burundi, Cameroon, Congo, Gabon, Equatorial Guinea, Mali, Central African Republic, Democratic Republic of Congo, Rwanda and Togo. The project is to be expended in 10 more countries in the second phase.

17 www.areed.org

18 UNEP PCFV

19 ECA/SDD (2004)

20 The Department of Economic and Social Affairs (UN DESA), the Office of the Special Adviser on Africa, and the United Nations Environment Programme (UNEP) Collaborating Centre on Energy and Environment.

21 ADB report (2005)

22 GNSED

23 www.gvep.org

24 ECA ARIA (2004)

25 Interconnection between Mali and Cote d'Ivoire; Ghana-Togo-Benin; the Sambagalou hydroelectric project and interconnection between Guinea Bissau-Ghana-Senegal; Interconnection between Cote d'Ivoire-Burkina Faso, and Nigeria-Benin.

26 www.sadc.org

27 Botswana, Angola, Namibia, South Africa and DRC

28 IEA WEO (2002), and UN Statistics

29 Moulot (2005)

30 AFREPREN (2001)

31 NEXANT (2002)

32 Habitat report (2005)

33 FAO report (2005)

34 see figure 5

35 BP (2005)

36 USDOE (1999)

37 Bahgavan (1999)

38 World Bank Data

39 ECA ERA (2004)

40 UNDP/GEF (1997)

41 WEA (2000)