efii position papers

8/9/2019 EFII Position Papers

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ACPACP--EU Energy Facility IIEU Energy Facility II

Objectives and position papersObjectives and position papers

European CommissionEuropean Commission -- Energy Facility UnitEnergy Facility Unit

26th26th-- 27th July 201027th July 2010


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ACP-EU Energy Facility II

Specific objectives

To increase access to modern, affordable andsustainable energy services in rural and peri-

urban poor areas by focusing on renewableenergy solutions as well as on energy efficiencymeasures

To improve governance and framework

conditions in the energy sector, in particularthose promoting access to energy services,renewable energy and energy efficiency

EF II Objectives

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Expected resultso Improved access toaffordable and sustainable energy

services inrural and peri-urban areas

o Development of sector governance and regulatoryframework and reinforced capacities of key actors

Principles (cf. EUEI) Flexible instrument, open to joint financing with EU

Member States and other donors Able to adopt innovative ways of implementation

Ownership

Catalyst instrument

EF II Results and Focus

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Focus/prioritieso access to energy services for poverty relief.

o renewable energy and energy efficiency while

remaining open to other technology mixes

o use oflocal resources and decentralised solutions

o productive use of energy beyond the basic service

o coherence with partner countries' planning

frameworkso promotion of sound energy policies and strategies

o removal of obstacles to private sector's involvement

EF II Results and Focus

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Specific Position Papers - For criticalareas which need clarification:o Governance

o Private sector

o Biofuels

o Biomass

o Rural and periurban electrification

Actions not limited to those areas indicated in positionpapers! See main objectives of the Energy Facility

Position Papers

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Energy Facility aims at providing increased assistance to ACPcountries where improvements are needed to develop/implement

sound policies and frameworks in the energy sector.

Issues to be addressed:

Inadequate institutional and regulatory schemes

Weak planning and organisational capacity of the energy sectorauthorities

Low performing national utilities with reduced investment capacity

Restricted number and low capacity of private local actors

Needs in capacity development in energy sector: Differentlevels: institutional (governance), organisations

(performance) and individuals (competences);

And differentfunctions: policy, strategy, planning, service delivery(technical aspects) and service management

Position Paper:Governance and capacity building (1)

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Needs in capacity development in energy sector:

Support topublic policies of the Ministries in charge, the localauthorities, the regulatory bodies and the rural electrification agencies,notably: Institutional approaches, Tariff setting and Investment

planning.

Support to nationalutilities, to achieve improved technical,managerial and commercial performance, to increase their investmentcapacity and to secure private investment.

Support to the emergence ofnew operators and investors

Development of localtechnical skills

Possible orientations: At the institutionallevel: Energy policies, legislation and market

conditions for enabling poverty alleviation in developing countries

At the technicallevel - Strengthening local energy expertise in ACPcountries

Position Paper:Governance and capacity building (2)

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Investment needs in the energy sector are much higher than thefinancing capacity of ODA and developing countries

Energy Facility (EF) as leverage for private finance by trying toincreasingly involve the private sector in energy service provision and bysupporting public-private partnerships and innovative mechanisms

Barriers for the private sector investment and posibleactions:

The weakness of the institutional frameworks of the ruralelectrification.

Promote the legal and institutional frameworks for the rural

electrification, which establish the adequate role for the private sectorand local actors.

The absence of regulatory frameworks whichpromote investments

A sustainable contractualpublic-private relationships framework(concessions and tariffs) adapted to the needs of the population.

Position Paper:Private sector intervention (1)

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Barriers for the private sector investment and posibleactions:

Competition sometimes distorted in order to promote fossil energy,due to favourable customs and fiscal conditions but not in favour ofsustainable energy

Electrification policies must take into accountsocial andenvironmental benefits of renewable energy and integrate them ineconomic calculations.

The lack of financial instruments suited to these projects specificities

A variety oflong term instruments should be put in place to financethe investments.

Insufficient local competences of the authorities in charge of thesector, of the financial system or the private sector.

It is necessary to promote the transfer of technologies atinternational level

Position Paper:Private sector intervention (2)

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Used by a large majority of the population to meet its energy needs, itrepresents 80% of the total energy consumption in Sub-Saharan Africa.


Widespread use of biomass as energy source is often linked to severeunwanted side effects on the health of the consumers and on the

environment.

Traditional cooking methods use only 10 to 15% of the energypotential from the combustion of wood

Position Paper:Biomass (1)

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Biofuels are neither THE universal solution nor the devil At certainconditions, they could represent an opportunity for ACPs (access to energyservices in rural areas, increased energy security).

We focus here on first-generation liquid biofuels, which include StraightVegetable Oil, SVO (orPurePlantOil, PPO) produced from seeds or fruits of

oil plants (colza, oil palm, jatropha curcas, ) which could substitute thegasoline as long as the motor is adapted; biodiesel, obtained from SVOtransformed by a chemical process, which areusedwithoutanymotorstransformation; and bioethanolproducedbythefermentation of sugarsorstarches.Second generationbiofuels produced from wastes, residues, non-food cellulosic and ligno-cellulosic material, are currently under development and not considered here.


Biofuels and food security:

Biofuels and environment:

Biofuels and social impacts, including land tenure

Position Paper:Biofuels (1)

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Conclusions and Recommendations

The project has to contribute to increase access to energy services in rural andperiurban areas.This implies a local production for a local use.

Biofuel production shall follow all applicable laws of the country and shallendeavour to follow all international treaties relevant to biofuels.

Participatory processes that involve all relevant stakeholders.

Biofuels shall contribute to climate change mitigation by significantlyreducing GHG emissions (35%) as compared to fossil fuels.

Biofuel production shall not violate labour rights

Biofuel production shall contribute to the social and economic development oflocal, rural and indigenous peoples and communities.

Biofuel production shall not impair food security

Biofuel production shall avoid negative impacts on biodiversity, ecosystemsand areas of high-nature-value areas, optimize surface and groundwaterresource use, including minimizing contamination

Bioenergy crop development must not result in conversion of forests, intoagricultural land.

Position Paper:Biofuels (2)

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Rural areas of ACP countries suffer from a low rate of electrification, whichin most ACP countries is less than 10%


Position Paper:Rural and peri urban electrification (1)

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Financialissues Governanceissues TechnicalChallenges

Rural electrification isoften not a

profitable business Inadequate tariffs Limited investment

capacity of thenational utilities

Inadequatesize ofprojects (small) Lack ofcreditfor

independent localproducers

Insufficientattentionto rural electrification

Coordinationbetween the nationalutility and the ruralelectrificationagency/fund

Politicalinterferencein the choices madeby the company

In peri-urban areas,reduction of losses(unpaid electricity) isa huge challenge

Improving capacityof private local actors(decentralisedsolutions)

development of newmanagementmodalities

Training of qualifiedstaff


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Possible actions to be supported by the EF:

1. Access to energy:

- Provision of electricity to dispersed populations in isolated areas

Small solar / wind / bio-energy / hydro power plants in combination witha rural distribution network;

Technical innovations for rural electrification in areas such as bio-fuelsfor village diesel motors (e.g. multifunctional platform), micro-hydro,new types of electricity distribution technology, decentralised grids, etc.;

- Electrification of rural growth centres

- Access for poor population in peri-urban areas

2. Activities for improving governance and capacity development forrural and peri-urban electrification:

Actions aiming at improving policies, legislation and of stakeholders'capacity building;


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Actions promoting communication and exchanges of views betweenstakeholders of the rural and peri-urban electrification sector;

Actions aiming at improving regulation and promoting innovativefinancing and organisational schemes which can allow for sustainablerural and peri-urban electrification;

Training of entrepreneurs, development of markets, awarenesscampaigns in rural and peri-urban electrification and renewabletechnologies;

Actions aiming at promoting small and medium enterprises to engagein small scale power generation (renewable energy), distributionnetworks, operation and maintenance of decentralized systems etc.

Actions likely to encourage private national and foreign companies to

be more involved in rural and peri-urban electrification; Actions to provide technical assistance with the aim of improving key

functions of rural electrification funds and agencies (planning, projectdesign, management, control, reporting...) and their negotiationcapacity with financial institutions.


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