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ENERGY SECTOR POLICY AFRICAN DEVELOPMENT BANK GROUP

ENERGY SECTOR POLICY AFRICAN DEVELOPMENT BANK GROUP. ENERGY SECTOR POLICY Result of a broad consensus. African development bank group . THE AFRICAN ENERGY CONTEXT: CHALLENGES. Inadequate access to modern energy services: 51% in urban areas and 8% in rural areas

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ENERGY SECTOR POLICY AFRICAN DEVELOPMENT BANK GROUP

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  1. ENERGY SECTOR POLICYAFRICAN DEVELOPMENT BANK GROUP

  2. ENERGY SECTOR POLICY Result of a broad consensus African development bank group

  3. THE AFRICAN ENERGY CONTEXT: CHALLENGES • Inadequate access to modern energy services: 51% in urban areas and 8% in rural areas • High costof producing electricity: 2-3 times higher than the global average • Unreliable services: 30 countries experience recurrent interruption of services • Local and global environmental impacts African development bank group

  4. THE AFRICAN ENERGY CONTEXT: CHALLENGES • Shortage of investments: significant financing required / USD23.8 billion annually for universal access by 2030 • Inadequate policy and regulatory frameworks • Slow progress in renewable energy deployment • Ineffective regional integration • Weak capacity African development bank group

  5. THE AFRICAN ENERGY CONTEXT: OPPORTUNITIES • A variety of renewable and fossil energy resources • Increased national and regional level policy commitment • climate-related financing • Emerging financiers (Brazil, India, China, Gulf States) African development bank group

  6. AN IN-DEPTH CONSULTATION AND REVIEW PROCESS • External consultations • 2 regional consultation workshops • 60 – day online consultation • Internal consultations • Inter-departmental working group • 4 review sessions by the Boards of the Bank African development bank group

  7. A DUAL OBJECTIVE Support RMCs: • Increase access to modern, affordable and reliable energy services • Address local and global environmental concerns African development bank group

  8. THE POLICY: 9 OVERARCHING GUIDING PRINCIPLES • Ensuring energy security and increase access for all • Moving towards a cleaner energy path • Enhanced governance at the national • Innovation to increase financial flows • Integrating aid effectiveness principles • Social and environmental responsibility • Integrating responses to climate change • Fostering knowledge transfer, research-development and innovation • Mainstreaming gender dimension African development bank group

  9. THE POLICY: DO’S AND DON’TS • The Bank will invest in: • Renewable energy • Coal • Oil and gas • Power transmission and distribution • Regional cooperation • Supply side and demand side energy efficiency • The Bank will not invest in: • Nuclear energy • Oil and gas exploration African development bank group

  10. THE POLICY: DO’S • Renewable energy • Hydropower, bioenergy, wind, solar, ocean and geothermal resources • Policy and regulatory frameworks • Hybrid systems • Support for private sector investment • R&D • Oil and gas • Production, processing, distribution and export • Power generation • Governance of oil and gas resources • Power transmission and distribution • at national and regional level African development bank group

  11. THE POLICY: DO’S • Regional cooperation • Regional infrastructure: power generation and pipelines • Capacity building • Policy and regulatory frameworks • regional power pools • Supply side and demand side energy efficiency • In production, transmission, distribution and end-use • Policy dialogue African development bank group

  12. THE POLICY: OPTIONS ASSESSMENT To Strike a balance between access and sustainability objectives, Bank decisions to invest in a specific sub-sector will be based on: • A demand driven approach: RMCs/RECs circumstances, resources endowments and priorities • An options assessment taking into account (as appropriate): • energy profile • national/regional adaptation and mitigation strategies • cost-benefit analysis • social and environmental impacts African development bank group

  13. COAL-FIRED POWER PLANTS Framework for Bank support • Development impact • Transitioning towards green growth • Environmental responsibility • Technology • Offsetting measures African development bank group

  14. HYDROPOWER Framework for Bank support • Social & Environmental impacts /AfDB S&E safeguards • climate-change implications • local and national needs for water and energy development • Case of shared waters African development bank group

  15. LIQUID BIOFUELS Framework for Bank support • Food security and biodiversity • Integration into rural development plans • CO2 emissions • Impact on equality, poverty, land use and labor rights • inclusive for smallholder farmers African development bank group

  16. THE WAY FORWARD • Preparation of the medium term Energy Strategies • Preparation of the operational guidelines for coal, hydropower and biofuels African development bank group

  17. THE WAY FORWARD • Is this Policy relevant to RMCs? • Which issues/areas the implementation through the Energy strategy should prioritize? • Guidelines for coal, hydropower and biofuel projects: what matters to RMCs and which issues the AfDB should pay attention to in the preparation of the guidelines? African development bank group

  18. THANK YOU! African development bank group

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