Energy Business Opportunities in the East African Community BRUSSELS INTERNATIONAL ENERGY CHARTER FORUM: MOBILISING INVESTMENTS FOR SUSTAINABLE ENERGY FUTURE Energy Business Opportunities in the East African Community By HON. CHRISTOPHE BAZIVAMO, DEPUTY SECRETARY GENERAL (PRODUCTIVE & SOCIAL SECTORS)

Overview Introduction to East African Community Snapshot of EAC Energy Sector Energy Resources in East Africa Current Investment conditions in the energy Sector Business Opportunities Conclusion

The East African Community (EAC)

GDP at Current Market Prices GDP per Capita at Current Prices EAC Key Statistics Country Area (‘000 sq. km) Population (2016) (Million) GDP at Current Market Prices Million US$ GDP per Capita at Current Prices US$ Real GDP Growth Rates (2010) % Burundi 27.8 10.0 1,498.1 173 3.9 Kenya 582.7 44.2 32,171.0 833.4 5.6 Rwanda 26.3 11.2 5,628.5 540.0 7.5 Tanzania 939.3 48.8 22,914.6 546.7 7.0 Uganda 241.6 35.5 17,914.9 525.9 Total 1,817.7 149.7 79,231.2 685 5.9

Introduction to EAC The East African Community (EAC) is the regional intergovernmental organisation of the Republics of Burundi, Kenya, Rwanda, South Sudan, Uganda and the United Republic of Tanzania EAC was established by Treaty on 30-Nov-99; its headquarters are in Arusha, Tanzania Objective is to widen and deepen economic, political, social and cultural integration to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investment.

EAC Integration Process The East African regional integration is a progressive process through four major pillars Political Federation Movement from one level of integration to another is through negotiated protocol complete social, cultural and economic integration with common foreign and security policies Monetary Union Common monetary policy and a single currency Common Market free movement of people, capital, labour, services and right of establishment and residence Customs Union No duties for intra EAC goods and Common External Tariff

How Energy is Structured at the EAC Secretariat Role: to facilitate realization of EAC’s broad objectives of socio- economic development, increased competitiveness, value added production, trade and investment. Development Objective: increased access to sufficient, reliable, affordable and environmentally sound energy sources in the Region Organized into three sub-sectors: Fossil Fuels Power New and Renewable Energy Sources and Energy Conservation and Efficiency

Energy Resources in East Africa East Africa is endowed with various energy resources spread throughout the region (Fossil Fuels, Power, New and Renewable Energy resources, etc.) However, most of the resources remain underdeveloped or untapped Region is characterised by High dependence on traditional energy sources –biomass(87%) with its health and environmental negative impacts : including deforestation and use of agricultural crops harvest residues, then causing agro-land fertility loss and decrease of production Low access to modern energy services Low per capita energy consumption – approx. 136kWh Development of energy resources is, therefore, crucial for stimulating investments in the region

Energy Consumption in EAC Tables below shows approx %age proportion of final energy consumption ( more than 87% biomass) Burundi Kenya Rwanda Tanzania Uganda Biomass 94 68 93 90 93.2 Petroleum 5 22 7 6 Electricity 1 9 1.4 0.8 Others 1.6 Total 100

The Potential of East Africa vs Installed Electricity Capacity MW

Energy Business Opportunities in the Petroleum Sectork Consultancy Services required for the following studies Fossil Fuels Master Plan Prudent Management of Petroleum Revenues Construction Eldoret-Kampala-Kigali–Bujumbura Oil Pipeline Harmonisation of Petroleum Policies , Fiscal Regimes and Procedures Oil Refinery in Uganda : Feasibility Studies on the Refinery completed; 60,000 barrels per day capacity to be implemented in 3 phases; GOU has invited Partner States to co-invest as part of the public share of the PPP; Investors are required to develop the refinery.

Energy Business Opportunities in the Petroleum Sector ...2 Natural Gas Pipelines Dar es Salaam-Tanga-Mombasa (Feasibility Study complete) Investor required Tanzania Natural Gas Master Plan complete (business and investment opportunities available) Oil and Gas Exploration and associated services in all Partner States Methane Gaz exploitation and peat in Rwanda Downstream services Liberalised (Retail and Distribution) East Africa Manufacturing Business Summit (23rd-25th May 2017) East Africa Petroleum Conference & Exhibition (7-10 June17)

Energy Business Opportunities in the Power Sector ...1 Projects under the Power Master Plan SDG No.7 Priority generation and transmission line projects Singida-Arusha-Nairobi 400kV interconnector by 2014; Masaka-Mwanza 220kV interconnector by 2014; Rusumo-Nyakanazi 220kV interconnector by 2015; Rusumo-Kigali 220kV interconnector by 2015; Rusumo-Bujumbura 220kV interconnector by 2015; Stieglers Gorge hydro-power project 2100MW by 2017; Kiwira coal plant in Tanzania 200MW by 2014; Rwanda Peat to Power to generate 400 MW by 2013; Burundi Peat Power Plant 200MW by 2015. Ayago hydro power plant 600MW by 2018; and Rusumo Hydro Power plant 90MW by 2016.

Energy Business Opportunities in the Power Sector ...2 750 Small Hydro Projects throughout the region Contact Rural Electrification Authorities and Regulatory Authorities Development of Integrated Regional Energy Market Strategy Subsector Master Plans Regional Energy Policy Legal and Regulatory Framework in line with the policy Regional Investment Code Strengthening the Eastern Africa Power Pool

Energy Business Opportunities in the Renewable Energy Sector Studies - Consultancy Services required for the following studies Renewable Energy and Energy Conservation and Efficiency Master Plan Support and strengthening the Regional Renewable Energy, Energy Conservation and Efficiency Centre launched June 11, 2016 at Makerere University College of Engineering, Design, Art and Technology in line with SDGs Distribution and Installation of Renewable Energy and Energy Efficiency Systems Regional Strategy on Scaling Up Access to Modern Energy – Scaling up access using solar for off grid customers.

Current Investment Conditions in the Energy Sector The Energy Sector is liberalized in the region and a number of Independent Power Producers (IPPs) and distributers are operating in the region The Region is in politically secure and Energy is priority number one backed by the political will. The Regional Economy has been growing at an average of 5.8% for the last seven years and it is continuing to grow Investors are allowed to re invest their profits elsewhere. Under the Customs Union some energy items are exempted from tax to support SDGs. Conditions for doing business has been made easier for example Governments have set up one stop centre to register business.

Conclusion East Africa is endowed with high potential of energy resources but most of the resources remain underdeveloped or untapped East Africa has very low energy generation (4000MW; 136KWH/ca/a) Low Energy Access Levels in EAC (< 18%) present enormous untapped opportunities for investment and business in the energy sector; There are ready business opportunities in fossil fuels, power and renewable energy sectors Policy, legal and regulatory framework in the energy sector supports private sector participation Favourable business environment exists and EAC is working hard to make it even better

Hon. Christophe Bazivamo cbazivamo@eachq.org www.eac.int