1. Critical Capacity needs for Power Pools and Power Utilities
17th UPDEA CONGRESS
HAMMAMET (Tunisia), MAY 2012

2. Outline Overview of Power Pools Status
Critical Capacity Issues by Power Pool
CAPP
COMELEC
EAPP
SAPP
WAPP
Summary of Critical Capacity needs for Power Pools and Utilities
The challenges for the African water infrastructure sector revealed by the AICD Flagship report "Africa's Infrastructure: A Time for Transformation”, published in 2009, are multiple and are increasingly important taking into account the implications of different crises (energy, food and financial crises) and of climate change.
Existing Funding Gap that hinders achievement MDGs.
Institutional, political and regulatory hurdles on national/ regional level to implement water investment infrastructure.
High need of cooperation amongst riparian states/various sectors for an efficient and integrated management of national and transboundary water resources.
Impact of climate change &changes in climate patterns will increase the regional hydrological variability and the need for adaptation and climate resilient approaches
->by 2020 up to 250 million people are projected to be exposed to water stress.
Preparing for a scarce future and meeting todays water, energy and food challenges require solutions that take into account all three sides of the food, water & energy nexus.
Climate change has an impacts across borders. Think regional act national! The African population is expected to double between now and 2040.
The demand for food in Africa is expected to double between now and We cannot achieve and maintain the required food per capita with rainfed agriculture but by devising measures including irrigation.
In some individual African water basins, the forecast water demand will soon outstrip available water resources if no improvements in management including water harvesting, storage and efficiency of use are made.
The competition between water use sectors and the environment is likely to increase thereby imposing greater pressure on freshwater resources.
Water needs will undoubtedly push some river basins including the Nile, Niger, Orange and Volta to the ecological brink. The same applies to the different lakes on the continent .

3. Overview of Power Pools Status (1/2)
CAPP
COMELEC
EAPP
SAPP
WAPP
Regional Master Plan prepared Y
Being prepared
Regional priority projects adopted
400 kV ring
Interconnection in operation
Regional power trade
Low
High
Medium
In 2009, these figures of annual investment needs in the water resources sector, were updated in the Africa Regional Paper for the 5th World Water Forum, at US$50 billion in the water sector; with US$ 12 billion to meet the basic water supply and sanitation services in Africa overall; and $US 5 billion to upgrade wastewater infrastructure to ensure adequate water quality standards; and then US$ 20 billion for hydro-power infrastructure, with an additional need of US$ 5 billion for storage projects.
There exists a gap between financing available and suitable bankable adaptation projects. Relabeling is not an option. Adaptation costs in Africa are estimated to be in the range of US$ billion per annum over the next 10 to 20 years; and there has been approximately $350m of adaptation funding approved for spending in Africa, of which just $130m has been disbursed.
Adequate financing mechanisms & sufficient funding are key for coping with financial challenges of climate change adaptation. A wide range of financing mechanisms & funds exists – the challenge lies in unbalanced allocation of funds and accessibility.
There is a strong need for building knowledge and capacities to develop bankable adaptation projects and access funding.
Strong need for regional cooperation to build necessary information basis for decision making.
Climate proofing and financing should be integral part of water related sector planning (national and regional development plans).
AICD: Cost of addressing Africa Infrastructure need is 93bn USD, taking into account efficiency gains this can be reduced to 31 bn USD. Irrigation 3.4 and WSS 21.9 bn USD annually

4. Overview of Power Pools Status (2/2)
CAPP
COMELEC
EAPP
SAPP
WAPP
Grid code adopted N
Being processed Y
Market rules adoped
Y: DAM
Being prepared
Bilateral contracts in operation
Few
28 contracts
Coordination Centre
Being develop-ped
Staffing level
Low
Very low
Medium
Mainly technical
Adequate
There exists a gap between financing available and suitable bankable adaptation projects. Relabeling is not an option. Adaptation costs in Africa are estimated to be in the range of US$ billion per annum over the next 10 to 20 years; and there has been approximately $350m of adaptation funding approved for spending in Africa, of which just $130m has been disbursed.
It is unlikely that the Copenhagen Financing will be available and even more unlikely that half of it will be earmarked for adaptation. According to estimates, even this financing would probably not be enough.
Cost estimates:
Oxfam: 200b per year from 2020 for mitigation and adaptation, 100b for mitigation and 100b for adaptation;
World Bank: b per year for adaptation ( ) assuming a temperature increase of 2°C by 2050
UNFCCC: 28-67b for adaptation by 2030+
Note: Required volumes as stated by World Bank or Oxfam are close to total ODA in 2008.
Financing:
Copenhagen: „developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries”  allocation between adaptation and mitigation is unclear
Fast Start: „approaching USD 30 billion for the period with balanced allocation between adaptation and mitigation”

5. Capacity needs for CAPP
Tools for operating HV interconnected systems
Approach for regulation of the power systems
Methodology for designing power trade tariffs
Specific approaches for the development of respectively small, medium and large hydro- power programs/projects
CB for sustaining the development of the information system
Only 12 % of MDB climate finance was dedicated to African Countries in > funding concentrated on mitigation. If mitigation is about energy – adaptation is about water.
After two years of declining commitments, ICA members assistance to the water sector rose by 72 % to USD 3.8 bn in 2010.
Support increased in all regions.
TOP 3 donors were WB (38%), Japan (16%) and Germany (13.6)
Almost 80% in the form of ODA
Total commitment for Infrastruuture in Africa were at 55.9 bn in 2010 – commitments by ICA members: 29.1 bn USD (more than half of the volume).

6. Capacity needs for COMELEC
Approach for implementing regional market structure and rules
Approach for developping power trade on a commercial basis through medium and LT bilateral contracts
Approach for integrating regional trade into power investment planning for regional market
Approach for adopting a regional regulatory framework
Defining a regional strategy for developing RE for export to neightbouring countries
Strengthening regional institution with an adapted mandate and structure for COMELEC

7. Capacity needs for EAPP
Approach for mobilizing the required funding
CB as pre-condition for developing regional power trade and its implementation
Targeted training programs on:
Technicians dealing with power systems and interconnection operations
Finance staff dealing with market operations, contract preparation and negotiation
Staff dealing with implementation of market rules, design of wheeling tariffs,…
Setting up and Implementing the data base

8. Capacity needs for SAPP
Approach for leveraging SAPP regional trade market as asset for guaranteeing future investments
Approach for funding multi-users regional transmission projects through SPVs
Strengthening SAPP Coordination Centre for coping with regional market developing activities:
Promoting the funding of SAPP priority projects
Managing the fast growing SADC power regional market (adapting the mandate, recruiting additional staff, training staff on mobilizing funding and managing power market).

9. Capacity needs for WAPP
Conducting in depth capacity building program for securing the implementation of an efficient information and operation system
Training program fo the development of market tools
In depth knowledge and experience for increasing competence in regional legal, commercial and financial framework of utility operation and power pools; PPP, PPA, tariff policy, …
Comprehensive approach on Quality Management Control at utility level: (i) technical and commercial management, (ii) tariff setting, (iii) human resources management.

10. Summary of Critical Capacity needs for Power Pools and Utilities
Approach for funding regional projects (PPP,IPP, SPV) √
Standard template for bilateral contracts
CB on wheeling tariffs
CB on market design and rules, grid codes and market operation
CB on information and operation systems
CB on management quality control (technical, commercial, financial) _

11. ICA Energy Sector Platform: Callixte KAMBANDA (ckambanda@afdb.org)
ICA SECRETARIAT African Development Bank BP 323 – 1002 Tunis Belvedere Tunisia
Contact us:
ICA Energy Sector Platform: Callixte KAMBANDA