Adegbulugbe - WB Energy Week March 2006 Energy Access for Poverty Reduction and Growth in sub-Sahara Africa: Challenges and Opportunities Professor Anthony O. Adegbulugbe Special Adviser to the President on Energy Matters, Presidency, Abuja and Chairman, ECOWAS Regional Multisectoral Committee on Energy Access

Adegbulugbe - WB Energy Week March 2006 Paper Overview… Background Background State of Energy Access in Sub-Saharan Africa State of Energy Access in Sub-Saharan Africa ECOWAS Sub-Region ECOWAS Sub-Region ECOWAS as a Case Study ECOWAS as a Case Study Financial and Resource Implications of ECOWAS Energy Initiative Financial and Resource Implications of ECOWAS Energy Initiative Challenges And Opportunities Challenges And Opportunities Way Forward Way Forward Paper Overview Office of the Special Adviser to the President on Energy Matters

Adegbulugbe - WB Energy Week March As of Energy Services for Development… Office of the Special Adviser to the President on Energy Matters Background… Energy services for sustainable development must be affordable, available and accessible; Energy services for sustainable development must be affordable, available and accessible; Absence of any of these 3 legs will likely result in a vicious cycle of energy & poverty as seen below. Absence of any of these 3 legs will likely result in a vicious cycle of energy & poverty as seen below. No money to buy: ►Energy services, or ►Energy conversion equipment Poverty: ►Very low income ►Poor living standard Lack of energy: ►To run machines for income generation activities ►For improved living standard Focus of this address is on energy access in SSA especially West Africa

Adegbulugbe - WB Energy Week March Dimensions of Energy Access in SSA… Global dimension - Access to energy in SSA low relative to other parts of the world Global dimension - Access to energy in SSA low relative to other parts of the world Office of the Special Adviser to the President on Energy Matters Background…

Adegbulugbe - WB Energy Week March Dimensions of Energy Access in SSA… Rural-Urban dimension - access lower in the rural locations Rural-Urban dimension - access lower in the rural locations Office of the Special Adviser to the President on Energy Matters Background…

Adegbulugbe - WB Energy Week March Dimensions of Energy Access in SSA… Income Dimension – Access to energy lowest amongst the poor Income Dimension – Access to energy lowest amongst the poor Office of the Special Adviser to the President on Energy Matters Background…

Adegbulugbe - WB Energy Week March 2006 ECOWAS as a case study… Most ECOWAS member states feature amongst the least developed countries and have some of the lowest levels of energy consumption on the planet Most ECOWAS member states feature amongst the least developed countries and have some of the lowest levels of energy consumption on the planet Regions 2005 Pop (‘000) HH electricity access Final energy cons/cap (kgoe/cap) 2004 GDP/pop ($/Pop) Elec Cons/Cap (kWh/cap) ECOWAS260,56220% OECD1,145, WORLD6,195,66073% Office of the Special Adviser to the President on Energy Matters ECOWAS Sub-Region…

Adegbulugbe - WB Energy Week March 2006 Energy services in most member states are met by biomass… Share of Biomass in ECOWAS Member States Energy Balance Share of Biomass in ECOWAS Member States Energy Balance Office of the Special Adviser to the President on Energy Matters ECOWAS Sub-Region…

Adegbulugbe - WB Energy Week March 2006 Resource availability in the sub-region… Significant energy resources available - Significant energy resources available - Office of the Special Adviser to the President on Energy Matters Implications… Figure shows distribution and share of proven hydrocarbon energy resources in the sub-region

Adegbulugbe - WB Energy Week March 2006 For growth, ECOWAS launched an ambitious plan … Objectives are: Objectives are: Widen access to domestic cooking fuels for people in the region’s rural and peri-urban areas; Widen access to domestic cooking fuels for people in the region’s rural and peri-urban areas; Widen access to productive energy services in particular to motive power to increase productivity; Widen access to productive energy services in particular to motive power to increase productivity; Increase access to electricity services for the whole population. Increase access to electricity services for the whole population. Office of the Special Adviser to the President on Energy Matters ECOWAS as a Case Study…

Adegbulugbe - WB Energy Week March 2006 ECOWAS Targets for 2015… 100% of the total populations or 325 million people will have access to improved cooking fuel; 100% of the total populations or 325 million people will have access to improved cooking fuel; At least 60% of people living in rural areas will reside in localities with access to motive power; At least 60% of people living in rural areas will reside in localities with access to motive power; 66% of the population, or 214 million people, who reside individually have access to electricity supply, that is - 66% of the population, or 214 million people, who reside individually have access to electricity supply, that is - 100% of urban and peri-urban areas 100% of urban and peri-urban areas 36% of rural populations 36% of rural populations Moreover 60% of the rural population will live in localities with (i) modernized basic social services etc (ii) access to lighting, audio-visual and telecommunications service, etc and (iii) the coverage of isolated populations with decentralized systems Moreover 60% of the rural population will live in localities with (i) modernized basic social services etc (ii) access to lighting, audio-visual and telecommunications service, etc and (iii) the coverage of isolated populations with decentralized systems Office of the Special Adviser to the President on Energy Matters ECOWAS as a Case Study…

Adegbulugbe - WB Energy Week March 2006 Expected Changes in Energy Access … Office of the Special Adviser to the President on Energy Matters ECOWAS as a Case Study…

Adegbulugbe - WB Energy Week March 2006 Financial Implications of the Initiative… The financial implications are as follow: The financial implications are as follow: US$17.5 billion over ten years for cost of end-use equipment US$17.5 billion over ten years for cost of end-use equipment Additional US$34.6 billion over ten years to cover fuel costs Additional US$34.6 billion over ten years to cover fuel costs Total annual cost for program US$52 billion, or 4.3% of regional GDP Total annual cost for program US$52 billion, or 4.3% of regional GDP This translates to about US$16 per inhabitant per year This translates to about US$16 per inhabitant per year Office of the Special Adviser to the President on Energy Matters Implications…

Adegbulugbe - WB Energy Week March 2006 Challenges… Energy access remains crucial to promoting poverty reduction and sustainable development in SSA Energy access remains crucial to promoting poverty reduction and sustainable development in SSA Financial requirements to meet targets huge - $52 billion in 10 years Financial requirements to meet targets huge - $52 billion in 10 years Energy Resources are unevenly distributed Energy Resources are unevenly distributed Weak macroeconomic structure of most member states Weak macroeconomic structure of most member states Weak Institutional Capacity Weak Institutional Capacity Weak Technical (human) expertise Weak Technical (human) expertise Necessary political will to support public pronouncements and declaration Necessary political will to support public pronouncements and declaration Most member state countries are small in size Most member state countries are small in size Barriers to development of local and renewable energy sources Barriers to development of local and renewable energy sources Office of the Special Adviser to the President on Energy Matters Challenges…

Adegbulugbe - WB Energy Week March 2006 And Opportunities… Abundant availability of clean energy resources The region has huge gas resources to meet targets on electricity generation and LPG production; Abundant availability of clean energy resources The region has huge gas resources to meet targets on electricity generation and LPG production; Additional financial resources from debt forgiveness and increased donor support. Additional financial resources from debt forgiveness and increased donor support. Opportunity to tap into ‘green energy’ funds (CDM, GEF, etc) Opportunity to tap into ‘green energy’ funds (CDM, GEF, etc) Regional Cooperation to harmonize policies and resources, e.g. WAPP, WAGP, Regional Multisectoral Committee on Energy Access Regional Cooperation to harmonize policies and resources, e.g. WAPP, WAGP, Regional Multisectoral Committee on Energy Access On-going Economic Reforms at National levels will create favourable investment climate On-going Economic Reforms at National levels will create favourable investment climate Office of the Special Adviser to the President on Energy Matters Opportunities…

Adegbulugbe - WB Energy Week March 2006 Way Forward… Build networks and partnerships across government, industry/private sector, NGO/CBO & academia Build networks and partnerships across government, industry/private sector, NGO/CBO & academia Sustainability through ownership through early involvement of local communities Sustainability through ownership through early involvement of local communities Funds from Debt Relief must be tied to explicit energy access initiatives in addition to existing sectoral focus on education and health Funds from Debt Relief must be tied to explicit energy access initiatives in addition to existing sectoral focus on education and health OECD countries to increase the amount of AID to fund energy access programs in Africa OECD countries to increase the amount of AID to fund energy access programs in Africa Office of the Special Adviser to the President on Energy Matters Way Forward…

Adegbulugbe - WB Energy Week March 2006 Way Forward… Exploring renewable options to meet the needs of the poor Exploring renewable options to meet the needs of the poor Support for Human and Institutional capacity developments Support for Human and Institutional capacity developments Easier access to green energy financing by developing countries Easier access to green energy financing by developing countries Energy projects must integrate complementary services (e.g., credit, roads,) and sectors (e.g. health, education, etc) Energy projects must integrate complementary services (e.g., credit, roads,) and sectors (e.g. health, education, etc)

Adegbulugbe - WB Energy Week March 2006 NAPEP’s Integrated Community Based Micro-Credit & Infrastructure Development Model NAPEP Higher Income Well Being Economic Activity Loan Repayments Contributions Human Capital Development & Sustainable Environment PoorPeople Poor Communities Information Micro Credit Partnerships Infrastructure © 2005 NAPEP

Adegbulugbe - WB Energy Week March 2006 Thank you very much for your attention!!! Office of the Special Adviser to the President on Energy Matters