UNIDO’s Energy Programmes in West Africa.

1. UNIDO’s Energy Programmes in West Africa. 1

2. Outline • Context. • UN Energy/GEF Programme. • ECOWAS Regional Centre for RE&EE. • Conclusions.

3. West Africa – ECOWAS • 15 Member States • Benin. • Burkina Faso. • Cape Verde. • Cote D’Ivoire. • The Gambia. • Ghana. • Guinee. • Guinee Bissau. • Liberia • Mali • Niger • Nigeria • Senegal • Sierra Leone • Togo

4. 1. Context Socio-Economic • Total population of 262million and projected to reach 320 million by 2015 – 2.65% growth rate. • Region has 40% of population in SSA. • Rapid rural to urban migration that population in urban areas is expected to change from 43% to 50% in 10 years. • 44% of population lives on less than 1US$/day and is increasing. • 13 countries are LDCs & HIPC. • Agriculture is the main economic activity. • Studies project that most countries are not schedule to meet the MDGs by 2015

5. Energy Situation 1. Context • Underexploited and unevenly distributed energy resources • 23,000MW hydropower potential with only 16% exploited. Located in 5 countries. • Nigeria has 98% proven resources of crude oil, natural gas. • Traditional biomass, accounts for over 80% of energy consumed. • Very low energy consumption rates • 4% of global population but accounts for 1.7% of total global energy consumption. • Per capita electricity consumption is 88kWh : continental average 563 kWh • Per capita final energy consumption is 454 Kgoe : global average 1145 Kgoe • Per capita primary energy production in 915 Kgoe : global average of 1163Kgoe • Low access to energy services, huge unmet demands for modern fuels and electricity. • Household access to electricity services is about 20%. ( 40% urban & 6-8% rural). • No decentralized energy systems. • Access to modern fuels in rural areas is very low. • Energy for domestic purposes is mainly from biomass and access to LPG and kerosene 5%.

6. Energy Situation (cont’d.) 1. Context • Heavy dependence on oil – commercial energy. • 60 % of electricity generation capacity from oil. ( in some countries like Gambia, Guinea Bissau and Liberia it is 100%). • Most of the oil produced in the region is exported. • Recent high oil prices have stifled economic growth. • No coordination with other sectors. • Energy is a cross-sectoral issue hence the need for coordinated activities • Power Sector faces several challenges. • Power sector reforms have not been able to increase efficiency, attract private sector investment and ODA in the sector. • Lack of capital for expansion, maintenance and renovation projects have led to increase malfunctions and inefficiencies. • Non cost reflective tariffs that are adopted to protect the poor affect financial standing of utilities. • Lack of skilled personnel in utilities and government institutions.

7. 1. Context Energy Situation (cont’d.) • Energy efficiency not prioritized • Lack of political will to promote energy efficiency. • Policy statements have not been operationalised. • Urgent need to increase energy efficiency in industry for competitiveness and in other sectors to reduce costs. • Increased regional approaches in the energy sector • West African Power Pool - WAPP • West African Gas pipeline – WAGP • The regional policy for increase access to energy services. • Renewable energy resources unexploited. • Biomass energy largely used in its traditional forms. • Average insolation of 5-6 kWh/m2 per day throughout the year. • Wind energy resources along the coast and desert zones. • Small hydro potential largely unexploited • Notable projects underway to promote biofuels.

8. 1. Context Key Drivers of RE and EE development. • A Great Potential in the Region • Wind, Solar, biofuels (Jatropha and Cassava) • Environment, MDGs and PRSPs. • A Tremendous Technological Progress - Wide range of applications (water, irrigation, health, education, etc.) - Cost reduction and increased performance • Small Scale Pilot/Demonstration Projects: MFP, Solar PV, Solar thermal, small hydro, improved cook stoves, efficient bulbs, solar water pumping in Sahel.

9. BUT, Barriers in exist. 1. Context • Policy, Legal and regulatory frameworks. • Comprehensive policies, laws and regulations were developed in some countries but the challenge is in the operationalisation. • Consequently, interest and investment from private sector has remain very low. • Private sector has shunned large-scale grid-connected (>1MW) RE projects. • No clear terms of engaging Independent Power Producers (IPP) – feed in tariffs and technical specifications and no model power purchase agreements (PPA) at national and regional levels. • Business case for EE in all sectors is not made. • Technology Transfer and Adaptation. • Technology transfer efforts have not been based on meeting priority energy needs. • Local manufacture of technologies is minimal & ensuring quality and standards difficult. • R&D has tended to focus on prototype development, performance assessment at the expense of practical issues such as feasibility studies and policy and market research. • South-south and north-south cooperation frameworks can promote technology transfer. • Partnerships are required to support technology acquisition and ownership.

10. 1. Context Barriers to RE & EE sectors (cont’d) • Capacity • Policy makers, regulators and parliamentarians need capacity to formulate and implement policies that would create a level playing field for RE. • Support institutions require capacity to effectively carryout their mandates. • Market players such as project developers, financiers etc require capacity. • Past capacity building initiatives employed a narrow set of tools like seminars, workshop that are not well integrated into actual project development and implementation. There is need to focus on practical training and learning-by-doing tools to include counterparting and twinning. • Awareness raising and advocacy • Lack of awareness about the potential benefits of RE&EE to the region. • At policy makers level – result in policies that are not supportive to RE&EE sectors. • Private sector, project developers and financial institutions – missed business opportunities. • Consumers – decisions are not based on energy considerations. • Lack of standards and performance labeling schemes results in inferior equipment and appliances flooding the local markets e.g. second-hand fridges, air conditioners etc

11. 1. Context Barriers to RE & EE sectors (cont’d) • Financing • No credit and financing facilities that are suitable to RE& EE projects. • Financial services providers tend to cite market risks such as high transaction costs for small RE systems, uncertainties on resources base, price uncertainties etc. • Project developers cannot prepare financing packages that respond to the needs of financiers • Financial service providers need to widen their products to be able to finance RE&EE projects • Public-private partnerships need to be employed to mitigate perceived and real risks. • Carbon market opportunities have not been tapped.

12. 2. UN Energy (UNIDO) / GEF Energy Programme for West Africa.

13. 18 Countries Involved

14. Objective • Take a programmatic approach in promoting renewable energy and energy efficiency projects at the national level in countries of the region. • The main focus will be on scaling up access based on renewable energy and promoting energy efficiency measures in industrial, households and public sectors • Create markets to catalyze private sector investments, public-private partnerships.

15. Initial Project Concepts Received from Countries in West Africa (overall 57 Projects) Renewable Energy

16. Projects Submitted to GEF

17. Budget Allocated to Project Types(overall 46 Mio US$)

18. Target Countries for UNIDORenewable energy based mini-grids for productive uses in rural areas Main components : demonstration projects, policy and regulatory framework, capacity building

19. 3. ECOWAS Regional Center for Renewable Energy and Energy Efficiency (ERC)

20. Background • ECOWAS/UEMOA White paper for regional policy for increasing access to energy from MDGs, adopted in 2003-2006. • 2007, ECOWAS Conference on Peace and Security, held in Burkina Faso, the Austrian Minister for European Affairs and International Affairs pledged to support the setting up of proposed Center. • ECOWAS approached UNIDO to assist in designing the proposed Center.

21. Milestones. • Consultative meetings at various levels held. • Ministerial Declaration on the establishment of the ERC, to be located in Cape Verde. • First draft presented to all parties i.e. ECOWAS, Austrian Government and UNIDO. • Second draft and business plan to be finalised soon. • Target that the MoU for the ERC to be signed during the Vienna International Energy Conference, 22-24 June 2009.

22. Vision and Goal of the ERC. Vision. • Increase access to modern energy services and improve energy security by promoting renewable energy and energy efficient technologies in ECOWAS member states thereby supporting the region’s sustainable development needs. Overall Goal • Contribute to the achievement of the MDGs in West Africa by providing at least half of the population with access to modern energy services using renewable energy and energy efficient technologies. Specific Goal. • Provide a platform to lead and co-odinate the implementation of the ECOWAS/UEMOA Regional White Paper on Energy Access focusing on renewable energy and energy efficiency.

23. Objectives of the ERC • Funds Mobilization • Raise funds for the regional plan of action and assist Member States in mobilizing funding for RE&EE programmes at national, regional and international levels. 2. Policy and Capacity Development. • Build the capacities of public and private actors for developing harmonised policy and institutional frameworks and identify, develop and realise investment projects. 3. Knowledge Management and Communications • Harvest and share knowledge on good ( and poor) practices, promote RD&D and dissemination, reinforce regional integration by promoting cross-border cooperation within the region and beyond.

24. Objectives of the ERC 4. Demonstration of RE&EE Technologies. • Facilitate the design, development and deployment of RE&EE technologies and build business models for operation and maintenance of such facilities. • Facilitate the establishment of National Systems of Innovation and a Regional System of Innovation to foster technology incubation and commercialization.

25. Priority Thematic Programmes (first 10 years) • Policy Frameworks and Quality Assurance. • Capacity Building • Advocacy, awareness raising, knowledge management and networking. • Renewable energy demonstration projects. • Energy efficiency demonstration projects.

26. Executive Board Steering Committee Executive Director Regular Staff of the Center (6 Experts) Other Staff: Seconded Staff, Projects Staff etc. Internal Structure of ERC.

27. 4. Conclusions • Enact supportive policy framework and national and regional levels. • Embark on a demand-driven approach in coming up with massive and self-sustaining scaling up strategies. • RE projects need to increasingly focus on productive uses. • New global drive towards low carbon economies offers opportunities to Africa. • Capacity building is a process. • Innovation in financing, institutions, technologies etc

28. Thanks Contact: Alois P. Mhlanga UNIDO a.mhlanga@unido.org