WB energy access and security Addis presentation J

Africa Energy Access& Security – Some IdeasInfrastructure Consortium for AfricaAddis Ababa, June 20 2006Africa Energy UnitThe World BankS. Vijay Iyer, Sector Manager: 

Africa Energy Access & Security – Some Ideas Infrastructure Consortium for Africa Addis Ababa, June 20 2006 Africa Energy Unit The World Bank S. Vijay Iyer, Sector Manager

Overview: 

Overview Context: Africa Is Lagging Behind Strategic Objective and Country Outcomes The Challenges Ahead: Long and Short-Term Meeting the Challenges: Scaling-Up Towards Action Planning

Without Urgent Scaling-Up of EnergyAccess, Africa Will Continue to Lag: 

Global Electricity Access Rates Without Urgent Scaling-Up of Energy Access, Africa Will Continue to Lag 500+ million in sub-Saharan Africa lack access to electricity Connection rates as low as 5% in rural areas

External Shocks have contributedto deepen Energy Poverty: 

External Shocks have contributed to deepen Energy Poverty 23 out of 48 SSA countries are currently vulnerable

Improving Access to Energy Services Means Overcoming Multiple Challenges (1): 

Improving Access to Energy Services Means Overcoming Multiple Challenges (1) Weak enabling environment at central government level Energy access strategies lacking (PRSPs e.g.) Limited central funding for sector Sub-optimal policy & regulatory frameworks undermine market functioning Inappropriate policy stance leads to access bottlenecks E.g. Power generation and transmission constraints result in wires without electrons Robust & consistent regulatory oversight lacking Minimal private sector operational or capital participation

Improving Access to Energy Services Means Overcoming Multiple Challenges (2): 

Limited management capacity at operational level Utilities lack capability to roll out and operate infrastructure Poor procurement governance Utilities in poor financial health Utilities have monopoly position but financially weak, operating in a non-commercial manner E.g. Tariffs fail to cover even O&M costs Subsidies or financing for upgrading assets lacking Consumers have limited ability to pay Unit costs for network construction and fuel are high Improving Access to Energy Services Means Overcoming Multiple Challenges (2)

Access to Cooking Fuels Presents Additional Challenges : 

Access to Cooking Fuels Presents Additional Challenges Traditional biomass use is widespread 80% of SSA depends on fuel-wood and charcoal for cooking and water heating Traditional cooking stoves endanger health Over 95% of households in the poorest countries in SSA cook with biomass on open fires or primitive stoves Smoke from cooking fires is leading cause of acute respiratory disease – a major killer Biomass is harvested unsustainably Results in loss of forest cover and river silting

Strategic Objective: the ‘Big Picture’: 

Strategic Objective: the ‘Big Picture’ Support our countries to scale up “real” access, so as to ensure affordable, reliable and sustainable supplies of energy services, as part of broader efforts to stimulate growth, reduce poverty and promote inclusiveness.

Meeting Africa’s Energy Challenges Requires a Radical Scaling-Up of Access: 

Meeting Africa’s Energy Challenges Requires a Radical Scaling-Up of Access Electricity for Growth Increase coverage for households (>35% on average), productive enterprises (100% mostly in urban and peri-urban areas) and rural areas close to the grid Powering the MDGs >75% of schools, clinics, community centers & local administration electrified, using grid extensions where least cost and decentralized solutions elsewhere (solar PV, independent grids, small renewables generation) Meeting Basic Needs >50% households equipped with at least one modern, affordable light >75% households use improved cook stove or LPG and fuel-wood supply is sustainable By 2015-2020, we need to achieve “stretch” targets:

and Real Access implies increased G&T Capacity…: 

Increase generation with a focus on big, cost-effective regional supply projects Hydro, Coal, Gas Regional integration to promote energy trade SAPP, WAGP, WAPP Spearheaded by EAC, ECOWAS, SADC and other regional groupings Country push Several countries need our support for immediate generation solutions and possibly some “pain relief” for mitigating high energy costs. and Real Access implies increased G&T Capacity…

…Strategic Approach…: 

…Strategic Approach… Improved Enabling Environment Realistic, costed government strategy (via PRSP) Funding commitments Improved Management Capacity Financially Healthy Utilities Balance between affordability for consumers & for governments Robust regulation Multiple forms of access provision Enhanced supplier incentives Opportunistic approach to private sector participation Cost-recovery for O&M costs at minimum Effective subsidy transfer mechanisms for grid scale-up Capacity-building for project management & good governance Expand use of low-cost approaches & technologies Develop energy SMEs Effective Policy & Regulatory Framework

….scaling-up electricity access -network expansion: 

….scaling-up electricity access -network expansion

… Energy for the MDGs and Lighting for Basic Needs: 

… Energy for the MDGs and Lighting for Basic Needs

….Next Steps in Access Action Plan: 

….Next Steps in Access Action Plan

At Country Level, the Strategic Objective Translates into a Range of Outcomes: 

At Country Level, the Strategic Objective Translates into a Range of Outcomes Enhanced growth, productivity and competitiveness Progress towards the MDGs through expanded scope and quality of social services Meeting basic consumer needs for electricity Reduced vulnerability to shocks - greater security of energy supply including basic household fuels Decreased fiscal impact of energy sector Reduced environmental impact