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| Statement of Dr. Kandeh K. Yumkella, Director-General on the Opening Ceremony of the International Conference on Renewable Energy in Africa |
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| Wednesday,April 30,2008 Posted: 15:44 BJT(0744 GMT) UNIDO |
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Opening Ceremony of the International Conference on Renewable Energy in Africa
Dakar, 16 April 2008
REFLECTIONS
by
Dr. Kandeh K. Yumkella, Director-General
United Nations Industrial Development Organization (UNIDO)
Your Excellency, President Abdoulaye Wade, President of the Republic of Senegal,
Distinguished delegates,
Excellencies, Ladies and Gentlemen,
Just a year after my last visit to Dakar, I am delighted to be back in the country of “Téranga” –back to a country that is truly at the crossroads of Africa and that today once again perpetuatesits long-established tradition of hospitality, which it extended just a few weeks ago with greatsuccess to the 11th Session of the Islamic Summit Conference, and is now extending to theInternational Conference on Renewable Energy in Africa.
I would like to thank my brothers from Senegal and from the African Union, as well as my colleagues from the German Technical Cooperation Corporation (GTZ) and the German Federal Ministry for Economic Cooperation and Development, for their invaluable support in organizing this Conference with UNIDO, and in bringing together decision makers from the public and the private sector, from the international community and from financial institutions. It is my hope that, by the end of this Conference, we will have developed a common plan of action, a market-oriented strategy for scaling-up the use of renewable energy in Africa, thus addressing the continent’s energy problems as well as issues related to industrial competitiveness and productivity.
Let me begin by reminding us all of the strong connections that renewable energy has with poverty reduction, the achievement of the Millennium Development Goals (MDGs) and enhancing energy security for sustainable economic development of Africa. Allow me to quote a statement that was made by Mr. Kofi Annan, then UN Secretary-General in 2006 when he drew attention of the world leaders to the critical link between energy security, economic development and achievement of MDGs as it relates to people living in developing countries: “More than a billion and a half live with no electricity at all, while many of those who do have access have to endure frequent power outages. Without more reliable energy supplies, these people are condemned to perpetual poverty.”
Your Excellency,
Only a few days ago, in your speech on the occasion of your country’s independence, you emphasized the efforts of Senegal to increase and diversify its energy sources. Indeed, your words are well-echoed in the composition of your government, which comprises, in addition to the State Ministry for Environment, a Ministry of Energy and a Ministry for Bio-fuels, Renewable Energies and Scientific Research.
As Director-General of UNIDO and as Chairman of UN-Energy, the interagency coordinating body for energy-related issues of the United Nations, I too have relentlessly advocated the crucial importance of energy for development, and for Africa’s development in particular. A recent World Bank report showed that under-investment in the energy sector can result in a significant slowdown in developmental momentum, with a net reduction in the potential rate of GDP growth of up to 4 percent. This effect can be exacerbated by rising demand, and other catalytic factors such as drought and conflict. So when there is loss of energy, there is loss of growth, there is loss of employment opportunities and there is a loss of income.
In any industry, anywhere in the world, even losing power for short periods can have dramatic implications. For example, a minimal break in the cold chain can easily result in the loss of a day’s work. Despite all efforts to produce high-quality goods, energy outages will result in production flaws that will prevent the required quality standards from being reached.
Your Excellency,
Distinguished delegates,
At this stage, let us look closely at the present energy situation in Africa. Electricity generation in Africa is only 3.1% of the total world’s production, though its population share is 14% (while the rest of world has at least 50% of people with access to electricity, in Africa it is only 25% or less). Electricity is mainly produced from thermal plants (78.1%), hydropower (18.8%), geothermal (<0.1%) and nuclear (3%).
The total installed power capacity is just over 100,000 MW, but the generation is largely skewed with Southern Africa using 47%, Northern Africa using 35%, while the remaining 40 or more countries use less than 20%. Given the rising oil prices and climate agenda, renewable energy has now emerged as a viable supply option to provide reliable and affordable energy services that have cross-cutting implications for a country’s ability to achieve the Millennium Development Goals (MDGs). For poor communities without regular access to such services, enhanced electrification or the availability of clean fuels based on renewable sources of energy could reduce poverty, improve health conditions and raise standards of living. This raises the question whether Africa’s resource endowment permits the development of adequate renewable energy sources not only to meet the continent’s growing energy demand but also to help in decarbonizing the energy sector in Africa.
It is common knowledge that Africa is blessed with a vast resource endowment; with resources that could and should be used to promote the industrial growth of African countries and their subsequent integration into the world economy, and thereby the broader economic development of these countries.
As highlighted in UNIDO’s paper on “Energy Security in Africa”, however, the continent’s renewable energy potential remains largely untapped. For example, while Europe and North America have already exploited 70 to 80% of their hydro potential, in Africa only around 5% of the hydro potential has been harnessed so far. The same is true almost for all other renewable energy resources (except for primary biomass fuels for household use). Despite its vast resource base, the continent thus suffers from energy poverty, which in turn that leads to energy insecurity and seriously impedes its economic and human development. Africa must therefore look towards energy diversification to secure its economic growth. In fact, the exploitation of renewable energy is truly critical in the context of promoting industrial productivity and competitiveness.
My Organization’s experts argue that increasing energy supply security and a transition to modern energy services could help break this vicious circle. Among the various renewable sources of energy, small hydro power, solar energy, wind, bioenergy and geothermal sources have vast potential for Africa. But there is a need to take a holistic approach in this context, involving the technological, trade-related and sustainability aspects of renewable energy development. This is where this Conference comes in, and where we are called to make a difference; to reflect upon scaling up the use of renewable energy for growth and development, in the context of enhancing access and energy security. UNIDO, as an international forum for debate among leading specialists, understands the complexities and challenges of the energy issue. And at the same time, it offers strategies for scaling-up the production and use of renewable energies in the interest of economic growth. These will certainly be discussed over the next few days and hopefully agreed upon.
Your Excellency,
Distinguished delegates,
Since the beginning of this year, I have had the pleasure of chairing UN-Energy, an important inter-agency coordinating mechanism on energy issues, focusing on energy access, energy efficiency and renewable energy with particular relevance to climate change. I am committed to providing strong leadership and support, and will ensure that the UN agencies will continue to bring their expertise to bear and provide relevant contributions to the international community to provide solutions to climate change.
Let me reiterate to you the ongoing efforts of UN Energy in promoting the use of renewable energy resources in Africa. The measures employed for this purpose include developing appropriate policies at local, national and regional levels; supporting the acquisition of appropriate renewable energy technologies; enhancing the capacities of the various players in renewable energy markets; and facilitating the development of viable and innovative financing mechanisms for the poor.
Your Excellency,
Distinguished delegates,
Before joining you today, I met my friends Jacques Diouf from FAO and Lennart Båge from IFAD in New Delhi, where we participated jointly in the Global Agro-Industries Forum organized with the Government of India. Like Paul Collier, author of the “Bottom Billion” and lead contributor to UNIDO’s forthcoming Industrial Development Report, I looked to the East to find answers as to why some Asian countries managed dramatic reductions in poverty levels while many countries in Africa have seen little significant change. I urged our Asian partners to continue their cooperation with Africa, to engage in South-South cooperation, and to enter into smart, win-win partnerships.
If our youth are to be provided with jobs and a secured future, they need to have a perspective upon which they can build a future. In Senegal today, over 40 percent of the population is under the age of 15. And while Senegal might become one of the few countries in Africa to achieve the Millennium Development Goals, it also well illustrates how important energy, and in particular renewable energy, is for productive capacities. Let me share with you, at this stage, some successful examples on renewable energy development in Africa:
• A number of small hydropower (SHP) and bioenergy based rural electrification projects have been successfully implemented by various agencies including UNIDO. Under UNIDO’s SHP projects in Rwanda and Nigeria, the electricity provided is off-grid and comes from locally available small hydro resources. This approach contributes to a sense of ownership by the local community. Further, while some of the electricity is used for domestic and social purposes, for UNIDO the key element is that it is also used for productive activities such as powering small rural enterprises. This would ensure financial durability and contribute to poverty reduction. Multi-Functional Platforms in rural Senegal and Mali are classic and successful examples for providing integrated services linked to renewable energy. This concept was conceived and implemented by UNIDO almost a decade ago. We are happy to see that it is now being scaled up by UNDP through Gates Foundation funds.
• As of 2005, Morocco had a total installed wind capacity of 63.9 MW, but doubled it in 2006 by an increase of 60 MW through a wind farm called “Amogdoul” with a production of 200 GWh that consists of 71 generators. This project was done within 18 months. The same is true for geothermal energy which has been successfully harnessed on a commercial basis in Kenya. • One missing link so far has been industrial applications of renewable energy technologies. Using raw materials such as agricultural wastes to generate energy can add value to these products and can help to offset unreliable energy supplies from national grids. UNIDO has successfully implemented a project to recover energy from Sisal waste in Tanzania.
• Several agro-based industries in the continent such as wood based industries, palm produce, rice mills, sugar and paper and pulp use their waste to produce both process heat and power. In nearly all cases, these outputs are used internally by the facilities, with the exception for sugar industries. With increased efficiency of use and better technologies, most of such facilities can produce significant power that can be used either for nearby settlements or sold to the national grid. Presently, several countries in the continent produce sugar and in some countries it is their main exports. These industries have the potential of providing significant power for their respective countries, but at the moment only Mauritius is using electricity from sugar waste for their national electricity needs, which is about 30% of their total power needs.
Your Excellency,
Ladies and Gentlemen,
We at UNIDO believe that in the framework of the sharpened global energy agenda and the growing needs of the continent, this is the most opportune time to scale up renewable energy markets for Africa.
Building on the excellent work done together with other partners, let me mention a few key areas to set the agenda for deliberations over next two days: Integration of Renewable Energy Technologies and Systems: Different renewable energy technologies offer different energy services depending upon the availability and potential of resources. Therefore, there is a need for adopting an integrated approach to overcome technical challenges related to fluctuations and intermittency of energy supply as provided by different renewable energy systems. Technology Acquisition and Development: Africa lacks manufacturing capacity for renewable energy technologies and so most of the technologies used in the continent are imported. There is an urgent need to develop regional, sub-regional and national strategies to develop requisite R&D capacity and skills for technology adaptation and strengthening of the manufacturing base. Human and Institutional Development: Africa does not have the needed human and institutional capacities to cope with the technological and market demands for scaling up renewable energy technologies. Through establishing technology incubators, countries in Africa can strengthen required skills in operating, modifying, producing and innovating renewable energy technologies.
Policy and Regulatory Environment: The renewable energy markets in Africa are seriously constrained by lack of a coherent policy and regulatory environment, which can create a level playing field for renewable energy technologies. Countries in Africa therefore need to establish policy and regulatory environments at regional, sub-regional and national level that will facilitate the promotion of renewable energy technologies. Such policies are already in place in some developing countries like India and China, and Africa can take a cue from these and adapt them to local situations.
Financing Options: New and additional mechanisms of targeted investments needs to be developed to finance both grid-connected and stand alone renewable energy projects. Africa is yet to benefit much from both GEF and CDM funding mechanisms. A lot of efforts are needed to ensure that Africa is able to tap from these concessionary financing windows that need refocusing. As of today, over 70% of the investments in renewable energy are made in the US, the EU and Japan. We should think of different financial mechanisms to fund renewable energy programme in Africa. Among others, this may include a carbon tax or the World Bank proposal to use 1 percent of sovereign fund investment for development in Africa. My experts tell me that excluding large hydro, investments in the renewable energy sector in Africa are less than US$ 1 billion every year (when compared to more than $ 70 billion world over), which is mostly donor driven. To make a difference, at the minimum level, we may need to raise investment flows to US$ 10 billion to renewable energy sector in Africa over the next five years.
Promoting South-South Cooperation: South-south investments in Africa are on the increase. China, India and Brazil are among the countries that have recently expanded their manufacturing bases in renewable energy and Africa stands to benefit from South-South cooperation with these countries. On the continent, countries like South Africa could assume leadership in transferring technologies that they have mastered, to other countries in the region. UNIDO has set up South- South Centres in India and China and we are confident that these centres will play a meaningful role in promoting, among others, renewable energy development in the region.
Your Excellency,
Distinguished delegates,
Time is ripe for a strong political sign and commitment if we want to achieve concrete targets and results in the very near future. It is critically important to have political commitment at the highest level to lead the way. In our opinion, a ministerial body is needed to provide needed leadership and to guide the process to develop the vast renewable energy potential of the region.
I am confident that your deliberations in the next few days will help to identify how we can all work better together to finalize a plan of action for scaling up renewable energy markets in Africa.
Thank you very much for your attention.
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