OPEC Energy Poverty

8/6/2019 OPEC Energy Poverty

1/40

OFID and Energy Poverty Challenges


2/40


3/40

OFID and Ener gy Poverty Challe nges

Vienna, Austria June 2010


4/40

2

It is my pleasure to

prese nt to yo u this

broch ure, o utlining the

approach a nd record

of the OPEC F und f or

Inter national Develop-

ment (OFID) i n the

global eff ort to alleviate

ener gy poverty, espe-

cially in the worlds low-i ncome co untries. OFID

is convinced that h uman develop ment and e ner gy

use are i ntrinsically linked: e ner gy is develop ment,

because witho ut energy to fuel industry a nd support

business hospitals a nd schools, there ca n be no eco-

nomic or social pro gress. With this i n mind, it is o f

concer n that a lar ge part o f the global pop ulation is

still without access to basic so urces o f ener gy and

close to 1.5 billio n people lack electricity.

OFID is o f the opi nion that the alleviatio n of

ener gy poverty altho ugh not a goal on its ow n is

central to the achieve ment o f the ei ght inter nationally

embraced Millennium Develop ment Goals (MDGs).

Many of us involved in develop ment cooperatio n are

pers uaded that the alleviatio n of ener gy poverty is amissing, ninth MDG.

The charts a nd graphs i n the f ollowing pages

depict vividly the glaring disproportio n in the use o f

primary ener gy sources (oil, natural gas, coal, hydro-

electricity a nd biomass) and CO 2 emissions relative

to the co mbined pop ulations o f the adva nced co un-

tries vis--vis the developi ng countries. The iss ue o f

ener gy poverty is prese nted thro ugh diff ere nt

perspectives s uch as World Pop ulation and Inequalities

in Primary Ener gy Co nsumption; Income Level and

Electricity Access; Ener gy Poverty i n Af rica; Ener gy

Poverty i n non-OECD Lati n America/Caribbea n;

Energy in the Middle East; and Energy Poverty i n non-

OECD Asia. Other areas hi ghlighted are E ner gy Mix

within Poor a nd Developed Pop ulations; Ener gy and

the Environment; Renewable Ener gy and Energy Mix;

Urba n/Rural Tre nds and Ener gy; Ener gy Eff iciency;

and Global Ener gy Dialogue.

Over the years, OFID a nd its Member Co un-

tries have show n, in words a nd deeds, their co ncer n

f or poverty a nd its atte ndant h uman misery. At the

Second Summit of the Or ganization of the Petrole um

Exporti ng Co untries (OPEC) i n Caracas, Ve nezuela,

September 2000, the Heads o f State a nd Gover nment

described poverty as the bi ggest e nvironmental

tra gedy co nf ro nting the world. I n line with this

position, the OPEC leaders at their Third S ummit in

the Kingdom of Saudi Arabia in Nove mber 2007,

committed i n the Riyadh Declaratio n to co ntinue to

align the pro grams o f our aid institutions, including those o f the OPEC F und f or I nter national Develop-

ment, with the objective o f achieving sustainable

develop ment and eradicatio n of energy poverty i n the

developi ng countries, a nd to st udy ways and means

of enhancing this e ndeavor, i n association with the

ener gy industry a nd other f inancial institutions.

Foreword


5/40

3

The issue o f ener gy poverty eradicatio n was kept at

the f ore, i n June 2008, with the procla mation of the

Ener gy f or the Poor I nitiative by the C ustodia n of the

Two Holy Mosq ues, King Abdullah Bin Abdul-Aziz

Al Saud, who called upon OFID and the World Ba nk

to play a leadi ng role i n develop ment o f the pro gram.

In May, 2009, the sa me topic was the f ocus of discus-

sions at the G8 E ner gy Ministers Meeti ng in Rome.

The meeting concluded with a joi nt state ment f rom

the G8 E ner gy Ministers, the E uropea n Co mmi-

ssioner a nd the E ner gy Ministers o f several other

countries, i ncluding OFID Member Co untries,Algeria,

Indonesia, GSP Libyan Arab Jamahiriya, Nigeria and

Saudi Arabia. In the state ment, the Ministers pled ged

their s upport to i nitiatives to co mbat e nergy poverty,

including King Abdullahs Ener gy f or the Poor I nitia-

tive. They also urged OFID a nd a number o f other

institutions to prepare strate gies and identif y f inan-

cing mechanisms to develop e ner gy networks a nd

integrate e ner gy markets i n Af rica.

Maintaining this momentum, leaders at the

September 2009 G20 S ummit in Pittsburgh, USA, also

pledged their s upport to i mproving energy access in

the worlds poorest co untries. More rece ntly, inMarch 2010, e nergy poverty was a gain in the spotli ght

when in Cancun, Mexico, world e ner gy ministers,

f rom prod ucing and co nsuming countries, met f or the

12 th Inter national Ener gy Forum (IEF). OFID deli-

vered a state ment at a special sessio n of the For umdevoted to the Role o f Energy in Fosteri ng Human

Develop ment. The state ment highlighted OFIDs

eff orts toward the alleviatio n of energy poverty. Si nce

Nove mber 2007, OFID has cha nnelled US$440 mil-

lion in support to the e ner gy sector, o f which so me

US$280 million was delivered i n 2009 alo ne (22 proj-

ects i n 17 co untries). O n a cumulative basis, OFID has

dedicated al most 20% o f the reso urces allocated to

public sector projects to e ner gy initiatives.

Alongside their drive to help eradicate e ner gy

poverty i n the developi ng countries, OFID a nd its

Member Co untries are mindful of the need to sa f e-

guard the global environment. It is OFIDs view, how-

ever, that the socio-eco nomic develop ment o f the

developing countries sho uld not be co mpro mised by

consideratio ns f or CO 2 emissions. Such emissions, it

has bee n established, wo uld re main minor o n a per-capita basis co mpared with those o f the industrialized

nations, even assuming the e nergy needs o f the poor

developing countries are fullymet.

It is my hope that the f ollowing pages will help

raise aware ness and understa nding of the many issues

surro unding ener gy poverty a nd serve as a useful

ref ere nce guide to this i mporta nt subject.

Suleiman J. Al-Herbish

Director-Ge neral


6/40

4


7/40

5

Ener gy Poverty may be de f ined as the lack o f

adequate, accessible a nd a ff ordable e ner gy to pro-

mote eco nomic growth a nd satis f y basic human

needs. The alleviatio n of ener gy poverty sho uld

there f ore f or m a key pillar in strate gies to achieve

sustainable develop ment.

In their p ursuit o f eco nomic growth, all deve-

loping co untries need reliable power s upplies

inorder to fuel industry a nd co mmerce a nd e nable

public institutio ns, such as hospitals, schools a nd

other social services, to function eff ectively. At the

botto m of the scale are the poorest o f the poor,

most o f who m live in rural areas a nd f ace h uge

obstacles i n accessing ener gy services. Such obsta-

cles include inf rastr ucture limitations, distrib ution

logistics and purchasing power.

In tackling the challe nges o f ener gy poverty,

OFID believes that a two-pro nged approach is

esse ntial. Firstly, the developi ng countries must be

helped to b uild capacity in the areas o f power

generatio n, tra nsmission and distrib utio n so that

electricity s upply beco mes re gular and eff icient; like-

wise their capacity to provide other types o f ener gy

such as natural gas and oil prod ucts. Seco ndly, inno-vative methods i n ter ms o f f inancing as well as

sources o f ener gy must be f ound to address the

needs o f the very poor.The sol utions, in both cases,

should not excl ude the co ntinued use o f diversif ied

f ossil fuels alongside re newable f or ms o f ener gy,

such as hydro, wi nd and solar power, as well as

seco nd-generatio n biofuels.

Energy Poverty Alleviation

P H O T O : I V

A Z I M O V A / P A N O S P I C T U R E S


8/40

6

History and governing bodies

OFID is the i nter gover nmental develop ment f inance

institution established i n 1976 by the Me mber States

of the Or ganization of the Petrole um ExportingCo untries (OPEC) as a collective cha nnel o f assis-

tance to the developi ng countries. OFID was co n-

ceived at the Co nf ere nce o f the Soverei gns and

Heads o f State o f OPEC Member Co untries,which was held i n Algiers, Algeria, in March 1975.

A Solemn Declaratio n of the Co nf ere nce rea ff irmed

the natural solidarity which unites OPEC co untries

with other developi ng countries i n their str uggle to

overco me underdevelop ment, and called f or meas-

ures to stre ngthe n cooperatio n with these co untries.

The s upre me authority o f OFID is the Mi nisterial

Co uncil,made up of the f inance ministers o f Member

Countries. The Mi nisterial Co uncil issues policy guide-

lines that are f ollowed by the Gover ning Board, which

oversees the general operatio ns. The Director-Ge n-

eral, who is the i nstitutions Chief Executive O ff icer,

is appointed by the Mi nisterial Co uncil.

The aimsOFIDs mandate is to rei nf orce f inancial coopera-

tion betwee n OPEC Member Co untries a nd other

developing countries by providi ng f inancial support

to assist the latter gro up in their eco nomic and

social develop ment as a n expressio n of South-South

solidarity. In carrying out its activities, OFID always

pays special atte ntio n to the needs o f the less

developed a mong eligible countries.

About OFID

OFID Commitme n ts as of Decembe r 31, 2009(cumulatively, in millions of dollars)

PROJECT FINANCING * 7,218

1,076PRIVATE SECTOR OPERATIONS

861IFAD

724BOP SUPPORT *

483TRADE FINANCE OPERATIONS

476GRANT OPERATIONS

333PROGRAM FINANCING *

* Public Sector operations

111 IMF TRUST FUND

270 HIPC INITIATIVE *

50 PRGF TRUST *


9/40

7

The means

In fulf illing its mission, OFID utilizes various types o f

f inancial instr uments that it has ho ned over 34 years

of experie nce. OFID is e mpowered a nd has deve-

loped all the necessary means to:

exte nd co ncessionary f inancial assistance in

the f or m of loans f or develop ment projects

and pro grams and f or bala nce o f payments

support.

exte nd f inancial assistance to the private

sector i n developing countries, thro ugh

direct s upport to projects, eq uity invest-

ments, and the provisio n of lines o f credit

to f inancial inter mediaries f or o n-lending to

private e nterprises.

support developi ng co untries trade with

loans and lines o f credit as well as with risk

sharing schemes.

provide o utri ght grants in support o f tech-

nical assistance, research a nd similar activi-

ties, f ood aid a nd humanitarian emer gency

relief .

co ntrib ute to the reso urces o f other devel-opment instit utio ns whose work be nef its

developing countries.

serve OPEC Me mber Co untries as a n agent

in the i nter national f inancial arena whe never

collective actio n is dee med appropriate.

The resources

OFIDs reso urces co nsist o f voluntary co ntributions

made b y OPEC Member Co untries a nd the acc umu-

lated reserves derived f ro m its vario us operatio ns.

At the e nd o f Dece mber 2009, the total reso urces

of OFID stood at approxi mately US$5.6 billion.

OFID partner countriesAll developing co untries, with the exceptio n of

OPEC Member Co untries, are i n principle eligible

f or OFID assista nce. The least developed co untries,

however, are granted hi gher priority a nd have co n-

seq uently attracted the greater share o f OFID's

reso urces. So f ar, 125 co untries i n Af rica, Asia, LatinAmerica, the Caribbea n, the Middle East a nd Europe

have be nef ited f ro m OFID's f inancial assistance.OFID has also cooperated, over the years, with

hundreds o f multilateral, bilateral, national, non-

gover nmental and other or ganizations worldwide,

joining reso urces a nd e ff orts to assist developi ng

countries.

THE OPEC FUND FORINTERNATIONAL DEVELOPMENT (OFID)

Parkring 8, A-1010 Vienna, Austria

Tel.: +43-1-515 64-0, Fax: +43-1-513 92-38

Email: inf o@o f id.org

Inter net: www.o f id.org


10/40

8

OFID Member Countries

Co untry Capital Head o f State Land Area Pop ulation

Algeria

Gabon

Indonesia

Iran, IR of

Iraq

Kuwait

Algiers

Libreville

Jakarta

Tehra n

Baghdad

Kuwait City

HE Abdelaziz Boute f likaPreside nt o f the De mocraticand Pop ular Republic of Algeria

2.38 m sq k m 34.36 m

HE Ali Ben BongoHead o f State o f the Rep ublic of Gabo n 103,347 sq k m 1.45 m

HE Dr. S usilo BambangYudhoyo noPreside nt o f the Rep ublic of Indonesia 1.90 m sq k m 228.25 m

HE Dr. Mah moud AhmadinejadPreside nt o f the Islamic Republic of Iran 1.64 m sq k m 71.96 m

HE Jalal TalabaniPreside nt o f Iraq 438,000 sq k m 29.49 m

Sheikh Sabah Al-Ahmad Al-Jaber Al-SabahEmir o f Kuwait 18,000 sq k m 2.73 m

Sources: OPEC, World Ba nk


11/40

9

GSP Libyan AJ

Nigeria

Qatar

Saudi Arabia

UAE

Venezuela, BR of

Co untry Capital Head o f State Land Area Pop ulation

Tripoli

Abu ja

Doha

Riyadh

Abu Dhabi

Caracas

HE Colo nel Moammar Gadha f iLeader o f the Great Al-Fatah Revol ution 1.76 m sq k m 6.28 m

HE Goodl uck Ebele Jonathan Preside nt and Co mmander i n Chief of the Ar med Forces o f theFederal Rep ublic of Nigeria

924, 000 sq k m 151.32 m

HH Sheikh Ha mad Bin Khalif a Al-ThaniEmir o f Qatar 11,000 sq k m 1.28 m

The C ustodian of the Two Holy Mosq uesKing Abdullah Bin Abdulaziz Al Saud 2.15 m sq k m 24.65 m

HH Sheikh Khalif a Bin Zayed Al Nahaya n Preside nt o f the U nited Arab E mirates 84,000 sq k m 4.48 m

HE Hugo Chvez FriasPreside nt o f the Bolivarian Republic of Venezuela

916,000 sq k m 27.94 m


12/40

10

OFID Global Outreach and the Energy Sector

LATIN AMERICA & THE CARIBBEANAntigua & BarbudaBarbadosBelize

BoliviaChileColo mbiaCosta RicaCubaDo minicaDo minican Republic

EcuadorEl SalvadorGre nada

Guate malaGuyanaHaitiHo nduras

JamaicaNicaraguaPanama

ParaguayPeruSt. Kitts & Nevis

St. LuciaSt. Vincent & Gre nadinesSurinameUruguayVenezuela, BR of

EUROPEAlbaniaAustria

Bosnia-Herze govinaKosovo

AFRICA

Algeria

AngolaBeninBotswanaBurkina FasoBurundiCameroo nCape VerdeCe ntral A f rican RepublicChadCo morosCo ngo, DRCo ngo, Rep. o f Cte dIvoire

DjiboutiEgyptEquatorial G uinea

Eritrea

EthiopiaThe Ga mbiaGhanaGuineaGuinea BissauKenyaLesothoLiberiaMadagascarMalawiMaliMauritaniaMauritius

MoroccoMozambiqueNamibia

Niger

RwandaSo To m a nd PrncipeSenegalSeychellesSierra Leo neSomaliaSouth A f ricaSudanSwazilandTanzaniaTogoTunisiaUganda

ZambiaZimbabwe

ASIA & THE MIDDLE EAST

AfghanistanArmeniaAzerbaijanBangladeshBahrainBhutanCambodiaChinaFijiIndiaIndonesiaIran, IR of

JordanKazakhstan

KiribatiKorea, DPR.Kyrgyz RepublicLao, PDRLebanonMaldivesMoldovaMongoliaMyanmarNepalOmanPakistanPalestinePapua New G uinea

PhilippinesSamoaSolomon IslandsSri LankaSyriaTajikistanThailandTongaTurkeyTurk menistanUkraineUzbekistanVietnamYemen


13/40

11

OFID ENERGY OUTREACH*

OFID GLOBAL OUTREACH

* Co untries that have received so me f or m of f inancialsupport f rom OFID towards the e ner gy sector.

Maps are for illustration purposes only and are not to be taken as accurate representations of borders.For reasons of scale, countries/territories with small areas are not shown.


14/40

12

Although the developed co untries, i.e. members

of the OECD, collectively acco unt f or less tha n one-

f if th o f the worlds pop ulation, they co nsume close

to hal f of all global traded pri mary ener gy, such as

crude oil, natural gas, coal, nuclear a nd hydro-elec-

tricity. Other lar ge eco nomies, i.e. Brazil, Russia, India

and Chi na (BRIC), consume o ne-quarter, leavi ng there maining developing countries, which are ho me to

two- f if ths o f the worlds pop ulation, with a share o f

aro und 30 perce nt in global traded pri mary ener gy.

In the co ming years, e ner gy use is projected to co n-

tinue increasing at a f ast pace i n re gions like Asia Pa-

cif ic (especially India and China) and in the Middle

East too. Ge nerally speaking, the developi ng coun-

tries need to devise ways a nd means o f signif icantly

boosti ng investment in, and use o f , primary ener gy

in ter ms of cleaner f ossil fuels, ener gy eff iciency andre newables i n order to achieve meaningful eco-

nomic growth a nd social develop ment.

World Population and Inequalitiesin Primary Energy Consumption

OECD

18

46

BRIC

42

25

REST OF THE WORLD

40

29

Global P r ima r y E n e rg y Co n sum p tio n a n d Wo r ld Po p ulatio n 200 8(in percent)

50

40

30

20

10

0

PRIMARY ENERGY

CONSUMPTION

POPULATION

Sources: OPEC Data; BP Statistical Rev iew of World Energy 2009; World Development Indicators (WDI) database, World Bank 2 009


15/40

13

OFID and the Battleagainst Energy Poverty

To assist developi ng countries i n their f ight a gainst

Ener gy Poverty, OFID c urre ntly has at its disposal

several fully-operatio nal f inancing windows. The

diversity o f its instr uments which ra nge f ro m sof t

loans to o utri ght grants allows OFID to tackle

both aspects o f Ener gy Poverty: the provisio n of

ener gy f or basic h uman needs a nd the develop mentof ener gy inf rastr ucture ai med at pro moti ng eco-

nomic growth.

With the E ner gy and Tra nsportatio n sectors

to gether represe nting more tha n one-third o f its

total, c umulative commitments, OFID has gained

exte nsive experie nce o n the gro und. The Ener gy

sector alo ne covers nearly 20 perce nt o f all OFID

operatio ns be nef iting the p ublic sector.

In worki ng to alleviate Ener gy Poverty, OFID

supports:

the development o f ener gy inf rastr ucture

thro ugh the exte nsion of highly concessional

loans to gover nments a nd so f t loa ns to the

private sector.

the provision of micro- f inance prod ucts to

break the vicio us circle o f ener gy povertythat links e ner gy develop ment, real de mand

and inco me. Indeed, e nabling poor people

to i ncrease a nd diversi f y their i ncome by

making available appropriate f inancial ser-

vices is key to alleviati ng ener gy poverty

among the very poor.

the inter national trade o f ener gy prod ucts

benef iting developing countries.

institutional and h uman capacity building in

the f ield of ener gy thro ugh the provisio n of grant assista nce.

With a view to acco mmodating the speci f ic needs

of its part ner co untries a nd staying in tune with the

most e ff icient practices, OFID is also explori ng

additio nal f inancing mechanisms. O ne alter native

being considered is the ble nding of co ncessio nal

loans and grants to further i ncrease the co ncessio n-

ality of OFID f inancing.

OFIDs approach to tackli ng Ener gy Poverty

aims at rei nf orcing the e ff ectiveness o f the delivered

assistance by har monizing activities with sister a ndother develop ment instit utions in order to strea m-

line joint e ff ort a nd avoid d uplication or overlap.

In the sa me vein, OFID is also co nsidering using its

experie nce and part nership network to play a

stro nger catalytic role i n attracti ng more f inancial

support f ro m the global develop ment f inance co m-

munity to battle e ner gy poverty. Give n the scale o f

the i nvestments needed to address the proble m,this is a partic ularly tough challenge.


16/40

14

Accordi ng to the UNDP H uman Develop ment

Report 2007/2008, h uge inequalities exist i n electri-

city access betwee n those co untries with hi gh per

capita income and those with low i ncomes. In High

Inco me Co untries (HICs), where the avera ge per

capita GDP is US$34,759, electricity covera ge sta nds

at 100 perce nt. Altho ugh having a considerably lower

per capita GDP o f US$2,808, the Middle I nco me

Co untries (MICs) are also well served, with 90 per-

cent o f the pop ulation co nnected to the national

grid. In the Low I ncome Co untries (LICs), however,

average per capita GDP is j ust US$610 a nd elec-

tricity is available to less tha n one-half (45 perce nt)

of the pop ulation. This unsatisf actory sit uation is

clearly a co nsiderable co nstraint to develop ment

and o ne that must be addressed i f the LICs are to

achieve sustained eco nomic growth.

Income Level and Electricity Access

HIGH

100 %34,759

2,808610

MIDDLE

90 %

LOW

45 %

In come Level a n d Elect r ificatio n Rate

INCOME (US$/capita) ELECTRIFICATION RATE (%40,000

30,000

20,000

10,000

0

Average GDP

Source: UNDP Human Development Report 2007/2008


17/40

15

Mozambiques electricity sector co ntinues to battle

against old i nf rastr ucture a nd da mage incurred

f ro m a prolo nged civil war a nd the rec urre nce o f

severe f looding. In addressi ng these challe nges,

gover nment is seeki ng to upgrade power tra ns-

mission and distrib utio n syste ms to satis f y long-

ter m demand and improve the availability, reliability

and quality of supply. This OFID-spo nsored project

f ocuses o n the So f ala and Manica Provinces in

central Moza mbique, where o nly an estimated

5.3 perce nt o f the 2.9 million inhabitants have

access to electricity. As the co untrys seco nd indus-trial hub af ter Map uto, with strate gic access to sea-

ports, i ndustry a nd inter national trading zones, it is

an area o f extre me importa nce f or the co untrys

eco nomic develop ment. Specif ically, the project

covers the co nstr uction/rehabilitatio n of substa-

tions, the i nstallation of tra nsmission lines a nd the

provisio n of a 593-k m distrib utio n network. At

completio n, the sche me will connect so me 38,000new custo mers to the grid and provide a n additional

41,000 co nsumers with i mproved services. With

many of the be nef iciaries involved in activities such

as f ishing, f ood processi ng and co mmercial f arming,

as well as ce ment and steel prod uction, the project

will bring a welco me eco nomic boost to the

country.

MOZAMBIQUEElectricity IV Project

OFID loan: US$10.4 millionApproved: 2006Co-financier : African Development Bank

An engineer works on the new power lines that will bring electricity to 38,000 additional customers.


18/40

16

Over the years, A f rica has re mained the co ntinent

with the lowest per capita e ner gy consumptio n.

With a pop ulation of about o ne billion a number

expected to do uble by 2050 the co ntinent needs

to i nvest heavily in ener gy access in order to grow

eco nomically and meet the i ncreasi ng challenges o f lif ting its people o ut o f poverty. As the graph below

shows, A f ricas per capita e ner gy consumption is noteven one-half of the world avera ge, a sit uation that

severely co nstrains the re gions eco nomic growth.

As discussed d uring the OFID Workshop E ner gy

Poverty i n Af rica held in Abu ja Nigeria in 2008

Inadequate access to e ner gy is the most challe nging

f actor f acing Af ricas eco nomy growth a nd prod uc-

tivity. Indeed, the re gions ener gy needs are h uge,

partic ularly in sub-Saharan Af rica, which has the

lowest rate o f electri f ication in the world less

tha n 30 perce nt, accordi ng to the UNDP H uman

Develop ment Report 2007/2008. Re furbishing

and expa nding Af ricas power i nf rastr ucture will behighly capital inte nsive, with up-f ro nt investment

costs esti mated at te ns o f billions o f US dollars

a year.

Energy Poverty in Africa

En e rg y Co n sum p tio n p e r ca p ita 200 8(in tonnes oil equivalent)

OECD

3.56

0.49

AFRICA

1.36

WORLD

4

0

1

2

3

Sources: OPEC Data; BP Statistical Review of World Energy 2009; World Development Indicators (W DI) database, World Bank 2009


19/40

17

With j ust 14 perce nt o f its pop ulation en joying

access to electricity, Ethiopia has o ne o f the lowest

levels of energy consumption per capita i n the world.

While industrial and urban centers are relatively well

supplied with moder n ener gy services, r ural settle-

ments, which acco unt f or aro und 85 perce nt o f the

pop ulation, re main largely unserved. I n these areas, people use bio mass such as wood, crop waste a nd

animal dung f or cooki ng and heati ng. This high co nsumption of biomass e ner gy has led to widespreaddef orestatio n, fuelwood shorta ges a nd the de gradatio n of rural ecosyste ms. In line with gover nments planto exte nd electrical power to r ural, isolated re gions, this OFID co- f inanced project tar gets a n area so me

500 k m south o f Addis Ababa. Project activities i nvolve the co nstr uction of a new s ubstatio n in the tow n of Key Af er a nd the upgrading of an existing substatio n in Sawala. Other i nstallation works i nclude a new tra ns-

mission line betwee n the two s ubstatio ns and a distrib ution network that will co nnect over 130 tow ns to

the grid. O nce co mpleted, the new inf rastr ucture will co nsiderably improve living conditions among the

benef iciary communities. It will also bri ng substa ntial environmental be nef its.

ETHIOPIASawala Key Afer RuralElectrification Project

OFID loan: US$20 millionApproved: 2007Co-financier: Arab Bank for EconomicDevelopment in Africa

Collecting fuelwood. The expansion of Ethiopas national grid will free thousands of women from this cumbersome, daily task.

PHOTOMAGESOFAFRCAPHOTOBANKALAMY


20/40

18

As a net exporter o f ener gy, the Lati n America a ndCaribbea n (LAC) re gion has e nor mous pote ntial

in ter ms o f prod uction capacity to satis f y future

ener gy de mand. No n-OECD LAC co nsumes abo ut

5 perce nt o f the worlds total e ner gy outp ut.

As show n in the graph, per capita e ner gy consump-

tion is only 70 perce nt o f the world avera ge.Almost

45 million people i n LAC still live without moder n

electricity services, a lar ge perce ntage o f the m rely-ing on traditio nal biomass f or cooki ng and heati ng.

Moreover, LACs e ner gy reso urces are not eq ually

distrib uted. While so me co untries s upply the world

with h uge q uantities o f hydro-carbo ns, others,

notably in the Caribbea n, depe nd almost excl usivelyon imported fuel oil f or electricity generatio n.

No netheless, LAC co untries do share co mmon

challenges, such as developi ng eff icient a nd sustain-

able patter ns o f ener gy prod uction and co nsump-

tio n, and r ural electri f ication. In rural areas, the

electri f ication rate is esti mated at two-thirds, j ust

above the world r ural avera ge o f approxi mately

60 perce nt. In many cases, the exte nsion of existinggrids is a key sol utio n. However, this approach is

costly and tech nically complex, o f te n req uiring the

assistance o f re gional and multilateral develop ment

cooperatio n agencies.

Energy Poverty in non-OECD Latin Americaand the Caribbean

En e rg y Co n sum p tio n p e r ca p ita 200 8

OECD

3.56

0.95

LAC ( n o n -OECD)

1.36

WORLD

4

0

1

2

3

Sources: OPEC Data; BP Statistical Review of World Ener gy 2009; World Development Indicators (WD I) database, World Bank 2009

(in tonnes oil equivalent)


21/40

19

Although Bolivia is self -suff icient in ener gy and has

enough installed generatio n capacity to meet the

countrys electricity de mands, half a million rural

ho useholds re main unco nnected to the national

grid and depe nd o n power provided by costly

and polluting diesel generators. Gover nment th us

attaches hi gh priority to the expa nsion of the

Natio nal Interco nnectio n System to r ural areas.

This electricity tra nsmission project, co- f inanced by

OFID, is reco gnized as a key electricity sector

investment under the Natio nal Develop ment Plan

(2007-2011). Tar geting the depart ments o f La Paz

and Beni in the north ce ntral re gion of the co untry,

it involves the co nstr uction of a 374 k m-long,

115 kV tra nsmission line betwee n the cities o f

Cara navi and Tri nidad. Also included is the i nstalla-tio n of three tra nsmission substatio ns and f our

distributio n substatio ns, to gether with 150 k m of

f eeder li nes and co nnectio ns to over 55,000 ho use-

holds. The co mpleted project will i nte grate a

signif icant area o f northeaster n Bolivia into the

national grid and aid poverty red uction eff orts by

signif icantly red ucing ener gy costs.

BOLIVIACaranavi-Trinidad ElectricityTransmission Project

OFID loan: US$15 millionApproved: 2006Co-financier: CAF (AndeanDevelopment Agency)

Electricity pylons across theBolivian countryside, delivering modern energy services to

previously unconnected areas.

HOO

UR

ARNMARK

WORDANK


22/40

20

The Middle East re gion exports a very s ubstantial

quantity o f primary ener gy to the world.With so me

60 perce nt o f total prove n world oil reserves a nd

40 perce nt o f world gas reserves, there is little

doubt that the re gion an area o f low-cost prod uc-

tion will continue to be the worlds main supplier

of cost-e ff ective hydrocarbo ns. Its ener gy consump-

tio n per capita is well above the world avera ge

(see graph below), a nd during the period 1998-2008,

consumptio n in the re gion grew much f aster

tha n the world avera ge. However, there are still

inequalities in access to basic e ner gy services i nsome mostly non-oil and gas prod ucing co un-

tries o f the re gion. In order f or the Middle East

to obtai n more bala nced eco nomic and social devel-

op ment, e ff orts to i ncrease e ner gy access must

concentrate o n rural areas a nd those co untries thatlack natural e ner gy reso urces.

Energy in the Middle East


OECD

3.56

1.92

MIDDLE EAST

1.36

WORLD

4

0

1

2

3

Sources: OPEC Data; BP Statistical Review of World Energy 2009; World Development Indicators (W DI) database, World Bank 2009


23/40

21

The Arab Gas Pipeli ne is a re gional tra nsportatio n

and distrib utio n network that ai ms to deliver

surplus gas supplies f ro m Syria, Egypt and Iraq to

neighbori ng Jordan, Lebanon and Turkey, a nd eve n-

tually to Europe. Syrias role i n the sche me is cr u-

cial, as it provides a natural corridor f or co nnecting

prod ucing countries i n the Middle East with co n-

sumer co untries i n the Europea n Union. UnderPhases I and II, around 550 k m of pipeline was

laid thro ugh Egypt and Jorda n. The OFID loa n

supported Phase III, which saw the network

exte nded f or so me 320 k m f ro m the Syria/Jorda n

border to the Al-Raya n gas distrib ution center i n

Syrias central re gion. As well as the obvio us

eco nomic benef its to Syria, the project is expected

to i mprove the co mpetitive ness o f the re gionsener gy sector by pro moting the use o f cheaper a nd

environmentally cleaner gas over hi gh-sulfur fuel oil.

Syria has only 250 bcm (billion cubic meters) o f

prove n gas reserves, which is barely s uff icient f or

do mestic use, so developi ng multiple gas tra nsit

ro utes will provide lo ng-ter m domestic s upply and

security.

SYRIAArab Gas Pipeline Project

OFID loan: US$30 millionApproved: 2006Co-financier: Islamic Development Bank

The Al-Rayan gas distributioncenter is one of Syrias key energy installations.

HOOH

NAUUR


24/40

22

Ho me to more tha n half the worlds pop ulation,

the non-OECD Asia re gion is experie ncing thef astest predo minantly f ossil fuel-based e ner gy

demand growth o f all developing regions. The re gion

curre ntly consumes abo ut o ne-q uarter o f global

ener gy, with Chi na acco unting f or j ust over hal f of

the total. Altho ugh ener gy poverty today is mostly

concentrated i n rural areas, e ner gy demand growth

will be partic ularly f ast in cities, as urbanization and

growi ng incomes accelerate de mand f or e ner gyservices by urban households. By world sta ndards,

non-OECD Asia e ner gy consumption per capita

is still very low, as ca n be see n f ro m the graph

below. Chi nas per capita e ner gy consumption has

improved si gnif icantly in the last decades a nd is cur-

re ntly closer to the world avera ge (1.0 vs. 1.4 toe)tha n the rest o f the re gion. These f igures mask

importa nt di ff ere nces a mong countries a nd sub-

re gions. In South Asia, so me 50 perce nt o f the pop-

ulation or 700 million people lack access to elec-

tricity, all but a f ractio n of the m in rural areas. Nearly

one billion people more tha n half of the s ub-

regions population, still rely o n biomass f or cooki ng

and heati ng. He nce signif icant improve ment in ener gy access and co nsumptio n is req uired in some

sub-re gions in order to achieve f aster eco nomic and

social growth.

Energy Poverty in non-OECD Asia


OECD

3.56

0.66

ASIA

1.36

WORLD

4

0

1

2

3

Sources: OPEC Data; BP Statistical Review of World Ener gy 2009; World Development Indicators (WDI ) database, World Bank 2009


25/40

23

In the late 1990s, Viet nams power sector f aced the

challenge o f meeting the needs o f a country where

electricity de mand was growi ng at an average rate

of 13-15 perce nt a year. Abo ut 30 million people

were witho ut access to electricity, lar ge numbers o f

the m in rural co mmun es. Rural electri f ication was there f ore a critical co mpo nent o f the gover nments

strate gy to eli minate poverty, correct i mbalances in develop ment and improve overall wel f are levels. * OFID

participated i n the Natio nal Rural Electri f ication Program, supporti ng the expa nsion of services i n the Q uangNam Province, where electricity covera ge was o ne o f the lowest i n the co untry. Inhabitants o f this pri marily

agricultural re gion were f orced to r un their power-drive n irrigation equipment and other a gricultural

machinery o n diesel e ngines, oil and batteries. By expa nding the national grid, the project bro ught a

reliable electricity s upply to a n additional 13 districts, i mproving living standards f or so me 45,000 ho useholds.

In addition to i ncreased ear ning capacity, other be nef its en joyed by the pop ulation include new e mployment

opport unities and e nhanced f ood sec urity.

*World Ba nk: Implementatio n, Co mpletio n and Results Report; R ural Ener gy Project, June 25, 2007

VIETNAMRural Electrification Project Phase II

OFID loan: US$10 millionApproved: 2001Co-financier : Government of Vietnam

Access to reliable electricity supply has transformed the lives of agriculturalcommunities across Quang Nam Province,especially in terms of food security.

HOOUND


26/40

24

(in percent)

POOR COUNTRIES

GAS 7

OIL PRODUCTS 13

BIOMASS 75

ELECTRICITY 5

Source: International Energy Agency (IEA)

DEVELOPED COUNTRIES

BIOMASS 3

COAL 6

GAS 12

ELECTRICITY 31

OTHEROIL PRODUCTS

46

LPG ANDKEROSENE

2

As the graph below i ndicates, there are si gnif icant

diff ere nces in the e nergy mix consumption patter ns

of poor co untries a nd more developed pop ulations.

In the case o f poor co untries, bio mass plays a major

role. Accordi ng to st udies f ro m the World Health

Or ganization and the I nter national Ener gy Agency,

2.5 billion people rely o n traditio nal biomass (wood,

agricultural resid ues and animal dung) f or cooki ng

and heati ng. The use o f traditio nal biomass as a

primary co mponent o f the e ner gy mix has severe

drawbacks that co nstrain sustainable develop ment.

For exa mple, the s moke f ro m burning biomass

indoors ca uses 1.6 million deaths per year, a death

toll greater tha n that ca used by malaria. Other dis-

advantages include ti me wasted gatheri ng fuelwood,

press ure o n the e nvironment and de f orestatio n.

In the case o f more developed pop ulations, their e n-

er gy consumptio n patter n is characterized by a

more diversi f ied fuel mix including substa ntial pro-

portio ns of oil prod ucts and electricity, i.e. the more

moder n types o f fuels that pro mote eco nomic and

social growth.

Energy Mix in Poor and Developed Populations


27/40

25

Electricity de mand in Pakistan has rise n substa ntially

in rece nt years, partly d ue to accelerated eco nomic

growth a nd also as a res ult o f an increased rate

of electri f ication. However, new capacity urgently

needs to be added to the syste m in order to avoidelectricity shorta ges, and it is esti mated that over

US$5 billion in new investments will be req uired over

the next f ew years to avoid blacko uts a nd o utages.

This OFID loa n, which was approved under the

Private Sector Facility, was given to co- f inance

the co nstr uction, operatio n and mainte nance o f a

217 MW gas-f ired gree nf ield power pla nt. Located

in Pun jab province, the new f acility is scheduled f orcompletio n in 2010. O nce operatio nal, it will help

to lower the eco nomic cost o f power generatio n

in the co untry by utilizing natural gas that wo uld

otherwise co ntinue to be wasted thro ugh f laring.

As well as e nvironmental be nef its, the project will

also create e mployment opport unities and assist in

the tra nsf er o f the latest tech nologies.

PAKISTAN

Engro Energy LimitedOFID loan: US$13 millionApproved: 2007Co-financier: InternationalFinance Corporation

Under construction a chemicalstorage tank at Engros new gas

power plant in Pakistans Punjab.HOONGRONRGYM

D


28/40

26

Although ener gy-related carbo n dioxide e missions

f ro m developing countries are growi ng very f ast,they must be viewed o n a cumulative as well as

a per capita basis i n order to understa nd the tr ue

picture. As illustrated i n the graph below, the

carbo n f ootpri nt o f developing co untries is much

lighter tha n that o f the OECD co untries, a nd

projectio ns f ro m the Depart ment o f Ener gy in

the USA indicate that this gap will remain wide

f or the f oreseeable future. It wo uld there f ore bewro ng to i mpede the social a nd eco nomic develop-

ment o f the majority o f the world's pop ulation out

of concer n f or the e nvironment. O n the co ntrary, all

three pillars of Sustainable Develop ment E c onomic

Growth, Social Develop ment a nd Protectio n of the

Environment sho uld be p ursued in a balanced way.As the UNDP H uman Develop ment Report 2008

indicates: With their historic respo nsibility f or the

ener gy emissions that are drivi ng climate cha nge

and their f ar deeper c urre nt carbo n f ootpri nts,

rich co untries have a moral obli gation to s upport

adaptatio n in developi ng countries. They also have

the f inancial reso urces to act o n that obli gation.

The b usiness-as- usual model f or adaptatio n is inde-f ensible and unsustainable. In other words, both

CO 2 mitigation and climate cha nge adaptatio n

are global issues, de manding coordi nated respo nses.

Energy and the Environment

1990 2000 2010 2020 2030

OECD

History Projections

REST OFTHE WORLD

Wo r ld E n e rg y-Related Ca r bo n Dioxide Emmissio n s(in tonnes per capita, 1990-2030)

12

10

4

6

8

2

0

Source: EIA-DOE, International Energy Outlook 2009


29/40

27

Tunisias oil reso urces have decli ned over the years,

necessitati ng the i mport o f expe nsive re f ined prod ucts,

partic ularly liquef ied petrole um gas (LPG), which is

utilized heavily f or both co mmercial and reside ntial

purposes. LPG is not o nly costly, but also req uires

special handling and stora ge, and can be hazardo us to

tra nsport. As part o f its national ener gy strate gy, gover nment has accorded hi gh priority to switchi ng f romLPG to natural gas, which is less poll uting and one of Tunisiasnatural reso urces. This project, which has received

two tra nches o f f inancing f rom OFID, is installing a total o f 250 k m of on- and o ff -shore gas pipeline in the

southeast o f the co untry. The pipeli ne passes thro ugh the i ndustrial city o f Gabes (e nabling a number o f local

industries to co nnect to the network), co ntinues so utheast to Zarzis city, a nd subsequently loops back to Jerba

Island. O n completion, the network will have the capacity to deliver 700 million m3 of natural gas per year a nd

will be partic ularly benef icial to the lar ge number o f hotels i n Zarzis city a nd Jerba Island, which are pop ular

to urist desti nations. Residential connectio ns will also be made available to ho useholds i n Zarzis a nd Jerba.

TUNISIANatural Gas Distribution DevelopmentProject Phases I and II

OFID loans: US$50 million totalApproved: 2005 and 2009Co-financier : STEG (Tunisian Gasand Electric Company)

Tunisia is laying 250-km of on- and off-shore pipeline to enable the countrystransition from LPG to cleaner, natural gas.

HOORDRKNAUMANNANO

UR


30/40

28

Re newables sha r e i n Wo r ld E n e rg y Mix(in percent)

100

80

60

40

20

0

2007

36

28

22

7

42

2010

35

29

23

7

5

3

2020

33

29

23

7

6

3

2030

31

28

24

7

7

3BIOMASS& OTHER

NUCLEAR

HYDRO

GAS

COAL

OIL

Source: OPEC World Oil Outlook 2009

Accordi ng to a rece nt OPEC st udy (World Oil O ut-

look 2009), re newable e ner gy participatio n in the

world e ner gy mix is expected to i ncrease, albeit

slowly, in the period up to 2030. D uring the sa me

period, f ossil fuels will continue to predo minate,

with a share o f more tha n 80 perce nt. It is expected,

however, that re newables will play a more critical

role i n the s ucceedi ng years, most likely f ro m themiddle o f the ce ntury o nwards. Already today,

re newables are provi ng importa nt f or both deve-

loped a nd developi ng co untries. I ndeed, many

developing countries e ndowed with hydroelectric

pote ntial have developed this type o f ener gy to

such a n exte nt that it makes a signif icant co ntrib u-

tio n to their e ner gy mix. Other re newables, s uch

as wind, solar a nd moder n biofuels have bee n slowly

increasi ng their share also. O n a cautio nary note,

however, care sho uld be take n to e nsure that the

develop ment and deploy ment o f certai n re new-

ables such as f irst-generatio n biofuels f or tra ns-portatio n does not disr upt other key sectors or

conf lict with other priorities like f ood sec urity,

as highlighted i n the OFID st udy Biofuels and Food

Security.

Renewable Energy and Energy Mix


31/40

29

Haitis electricity sector has not escaped the

dra matic eco nomic and social proble ms the co untry

has f aced in rece nt years. Less tha n 10 perce nt o f the

pop ulation has access to electricity, making covera ge

one o f the lowest i n the world. As part o f its poverty

red uction strate gy, gover nment has pled ged to

increase the co untrys power- generatio n capacity

and e nsure a bala nced syste m of ener gy pricing that

takes into acco unt the needs o f the poor. This OFID-sponsored project i nvolves the rehabilitatio n of the

38-year-old hydroelectric pla nt at the Pli gre Da m.

The plant provides o ne-half of the co untrys e ner gy

supply and is the pri mary so urce o f re newable

ener gy. However, with o ne o f its generators

completely o ut o f service, the f acilitys average

annual electricity prod uction has dropped to j ust

162 GW-ho ur less tha n half the i nstalled capacity.The rehabilitatio n works will bri ng all three genera-

tors to full working capacity and, in so doi ng, restore

Haitis ability to generate electrical power f ro m

low-cost re newable e ner gy sources. This will red uce

the need to i mport f ossil fuels and stop the diversio n

of household funds to p urchase fuelwood a nd other

f or ms o f ener gy.

HAITIPligre HydroelectricPower Plant Rehabilitation Project

OFID loan: US$15 millionApproved: 2009Co-financier : Inter-AmericanDevelopment Bank

Rehabilitation of the PligrePower Plant will enable Haiti to

generate electrical power fromlow-cost renewable energy sources.

HOODH


32/40

30

All around the world, people move both withi n

countries a nd across borders. Mostly, they are

searching f or better opport unities, altho ugh occa-

sionally such migratio n is the res ult o f political

conf lict. Frequently, especially in the developi ng

countries, the migratio n is to urba n areas, as

poverty-stricke n rural dwellers aba ndon the co un-

tryside i n search o f work a nd a better q uality of lif e.

Although urba nization is a global tre nd, the most

signif icant movements are expected to occ ur in the

developing countries, where the urba n pop ulation

is predicted to i ncrease by 33 perce nt d uring the

period 2007-2030. This i nter nal migratio n will place

enor mous press ure o n already overb urde ned urban

inf rastr ucture a nd basic services, i ncluding housing,

health, tra nsportatio n, ed ucation and, o f co urse,

electricity. While urban investment will be impera-

tive to help meet this i ncreased de mand, it will be

equally importa nt to i nvest in rural inf rastr ucture in

order to slow dow n the mass migratio n f ro m the

countryside.

Urban/Rural Trends and Energy

U r ba n izatio n of the Wo r ld Po p ulatio n(in percent)

OECD

75

82

42

5662

68

49

61

DEVELOPINGCOUNTRIES

WORLDTRANSITIONECONOMIES

URBAN POPULATION 2007URBAN POPULATION 2030

100

80

60

40

20

0

Souce: OPEC World Oil Outlook 2009


33/40

31

Co nsumption of electricity i n Rwanda is among the

lowest i n the world, with o nly around six perce nt o f

urba n households a nd o ne perce nt o f rural co mmu-

nities having access to the national grid. Gover nment

has there f ore e mbarked o n a priority pro gram to

increase e ner gy co nnectio ns by more tha n three f old by 2012. Withi n this f ramework, OFID is co- f inancing a

grid intensif ication project that ai ms to i mprove access to reliable a nd aff ordable electricity services f or ho use-

holds a nd priority p ublic institutions in already-co nnected urba n areas. With works i nitiallyf ocusing on largercities such as Kigali, Kibuye and Ruhengeri, the project will address persiste nt supply issues, such as bottle necks

and low volta ge, in order to i mprove network capacity a nd e ff iciency. A Gree n Co nnectio n component will

be o ff ered to low-i ncome ho useholds to provide less-expe nsive ener gy alter natives, such as solar water

heaters. At its co nclusion, the project is expected to bri ng many advantages, not just to ho useholds that be nef it

directly f ro m a co nnectio n, but to society as a whole, allowi ng many schools, health ce nters a nd local admin-

istrative o ff ices to o ff er i mproved services. By s upporti ng eff orts to i ncrease prod uctive use o f electricity,

the project will also sti mulate eco nomic growth a nd job creatio n.

RWANDAElectricity Access Scale Up Project

OFID loan: US$10 millionApproved: 2009Co-financier: InternationalDevelopment Association

As well as the obvious social benefits,making electricity more widely available inRwanda will stimulate productive activity and boost economic growth.

HOOD

R

MAN

ANO

UR


34/40

32

With global ener gy demand projected to i ncrease

by some 40 perce nt by 2030 (OPEC World Oil

O utlook 2009, Re f ere nce Case), the i mporta nce o f ener gy eff iciency (EE) in ensuring sustainable eco-

nomic develop ment ca nnot be overe mphasized. AnExpert Report o f the U nited Natio ns Foundation

indicates that i n the period 1990-2006 e ner gy

eff iciency as opposed to new e ner gy supplies

met 52 perce nt o f new e ner gy service de mand inthe world (see graph below). EE e ncompasses all the

changes req uired f or a red uction in the e ner gy used

f or a given ener gy service. It is not o nly the least

expe nsive ener gy source, b ut also co ntrib utes to

environmental protectio n. EE can red uce e ner gy

inte nsity (primary e ner gy demand per unit o f real

GDP) a nd sti mulate growth a nd co mpetitive ness.

Most gover nments today co nsider e ner gy eff iciency

a priority. Ac ute e ner gy shorta ges in many develop-

ing countries, where s upply cannot cope with rapidly

growi ng de mand, highlight the need f or e ner gy

eff iciency in developi ng countries as a co mponentof the e ner gy mix f or achievi ng sustainable eco-

nomic develop ment.

Energy Efficiency

16,000

10,000

12,000

14,000

4,000

6,000

8,000

2,000

0

1990 1995 2000 2006

13,900

11,548

8,714

PROJECTED ENERGY CONSUMPTIONwithout Energy Efficiency

REAL CONSUMPTIONwith Energy Efficiency

En e rg y Efficie n cy a n d Wo r ldwide E n e rg y Use(in million tonnes oil equivalent)

Source: United Nations Foundation, Expert Report: Realizing the Potential of Energy Efficiency


35/40

33

Whe n this project was la unched i n 2006, much

of Havanas electricity distrib utio n network had

reached the e nd o f its useful lif e. Tra nsmission and

distrib utio n losses were hi gh and power c uts f re-

quent. The sit uation was exacerbated by hei ghte ned

demand f or electric power f ro m the citys b urgeo ning pop ulation. Represe nting the f irst o f a three-phase,

US$100 million investment pro gram, the OFID-spo nsored project was a key gover nment priority a nd wasinstr umental in the s uccess o f the overall redistrib utio n of ener gy reso urces a nd generatio n

capacity that C uba co mpleted betwee n 2004 a nd 2007. Speci f ically, Phase I undertook a full rehabilitation of

Havanas high-voltage tra nsmission system and medium- and low-volta ge distrib ution network, upgrading

co nnectio ns to approxi mately 435,000 ho useholds a nd to major industrial and co mmercial pre mises.

The newly-rehabilitated network has helped i mprove living standards f or so me 1.5 million people a nd has

also encouraged the develop ment o f to urism, a major so urce o f income f or the co untry.

CUBAHavana Electricity Distribution Project

OFID loan: US$10 millionApproved: 2005Co-financier: BANDES (Economic andSocial Development Bank of Venezuela)

A transformer at Havanas rehabilitated Regla substation. The citys upgraded elec-tricity network has improved living standardsfor 1.5 million people.

HOOUNON

RAOHAVANA


36/40

34

Global Energy Dialogue

OFID believes that a n inter national dialogue

involving both developed a nd developi ng nations

could have a critical i mpact in ter ms o f alleviating

ener gy poverty. While i ntri nsically a developingcountry iss ue, e ner gy poverty is still a global

concer n. Indeed, the achieve ment o f sustainable

develop ment over the lo ng ter m, f or developed a nd

developing countries alike, has as a prereq uisite the

implementatio n of globally accepted a nd shared

solutions. Environmental issues o f ten remind us that

rich and poor are livi ng on the sa me planet.

Ener gy poverty f or the developi ng nations

and e ner gy security f or the developed nations

are two f aces o f the sa me coin. Both issues req uire

inter national dialogue and cooperatio n. A leading example in this respect is the I nter national Ener gy

Forum (IEF), which has its Secretariat i n Riyadh,

Saudi Arabia. The IEF represe nts the lar gest re gular

gatheri ng of countries which to gether acco unt f or

more tha n 90 perce nt o f global oil and gas supply

and de mand. This kind o f dialogue a nd cooperatio n

should be f ostered further.

And it is in this spirit o f dialogue and coopera-tion that OFID is doi ng its share.

In 2008, OFID or ganized in Abu ja, Nigeria,

an inter national workshop o n Ener gy Poverty i n

Af rica, which gathered experts f ro m all over the

world to address the proble m of ener gy covera ge

on a co ntinent where three o ut o f f our people lack

access to electricity. I n other i nter national f ora o n

ener gy issues, OFID always pro motes the co ncer ns

of poor developi ng countries o n the global ener gy

security agenda.

OFID also co ntributes to the i nter national

debate o n ener gy matters by co mmissioning studies

on subjects o f direct releva nce to poor co untries.

In March 2009, at a special sessio n of the Fo urth

OPEC Seminar in Vienna, OFID released a st udy

on biofuels. Prepared by a rep utable research i nsti-

tution under the title Bio fuels and Food Sec urity,

this se minal study highlights clearly the vario us

negative impacts o f an anticipated worldwide s urge

in f irst-generatio n biofuels prod uction. With so me

developed co untries strivi ng to achieve bio fuels

co nsumption tar gets set f or the year 2020 a ndbeyond, o f partic ular co ncer n is the i mpact o f such

a tre nd on f ood sec urity in the developi ng countries.

Ref erri ng to the developi ng world at their

Septe mber 2009 S ummit in Pittsb urgh, USA, G20

leaders pled ged to pro mote the deploy ment o f

clean, aff ordable e ner gy reso urces to the developi ng

world...a nd to fund pro grams that achieve this

objective, s uch as the Scali ng Up Renewable Ener gyPro gram and the E ner gy f or the Poor I nitiative.

While e ner gy poverty is j ust o ne o f the many

challenges that developi ng countries have to over-

come, it is OFIDs belie f that it is also a mong the

most pressi ng. Ener gy poverty will th us co ntinue

to f igure hi gh o n OFIDs agenda, as it sho uld at a

global level also.


37/40

35

Expert panellists during the session Petroleum for Sustainable Developmentat the 4 th OPEC International Seminar, Vienna, March 2009. From left:HE Edison Lobao, Minister of Energy and Mines of Brazil;

HE Derlis Palacios Guerrero, Minister of Mines and Petroleum of Ecuador;HE Abdullah bin Hamad Al Attiyah, Deputy Premier and Minister of Energy and Industry of Qatar;Suleiman J. Al-Herbish, Director-General, OFID;Paulo Scaroni, CEO, Eni; Jim Mulva, CEO, ConocoPhillips.

HOOODRANAWN

R

NR


38/40

36

Glossary

Biomass Wood, crop waste, a nimal dung, etc.

BOP Balance o f Payments

BRIC Brazil, Russia, India and China

Carbo n f ootpri nt Total set o f gree nhouse gasemissions f ro m a de f ined so urce

CO 2 Carbo n Dioxide

EIA-DOE Ener gy Inf or mation Administra-tion Depart ment o f Ener gy, USA

G8 Canada, France, Ger many, Italy, Japan, Russia, the U nited Kingdomand the U nited States

G20 Argentina, Australia, Brazil, Canada,China, France, Ger many, India,Indonesia, Italy, Japan, Mexico,Russia, Saudi Arabia, South A f rica,South Korea, T urkey, the U nitedKingdom and the U nited States,as well as the E uropea n Union

Ener gy eff iciency Changes req uired f or a red uction in ener gy used f or a given ener gyservice

Ener gy mix The co mbination of diff ere ntener gy sources withi n the totalener gy supply of a pop ulation during a given time

First-generatio n Biofuels prod uced f ro mbiofuels f ood crops

Fossil fuels Peat, coal, oil a nd natural gas

GDP Gross Do mestic Prod uct

GW Gigawatt (billion watt)

HICs High Income Co untries

HIPC Heavily Indebted Poor Co untries

Hydrocarbo ns Co mpounds co nsisting of hydro gen and carbo n, such as oiland natural gas

IEA Inter national Ener gy Agency

IEF Inter national Ener gy Forum

IFAD Inter national Fund f or A griculturalDevelop ment

IMF Inter national Monetary F und

kV Kilovolt

LICs Low Income Co untries

LPG Liquef ied Petrole um Gas

MDGs Millennium Develop ment Goals

MICs Middle Income Co untries

MW Megawatt ( million watt)

No n-OECD LAC Ce ntral, So uth American andCaribbea n countries excl udingMexico

No n-OECD Asia Asian countries excl uding South Korea a nd Japan

OECD Or ganization f or Eco nomicCooperatio n and Develop ment

O FID OPEC Fund f or I nter nationalDevelop ment

OPEC Or ganization of the Petrole um Exporting Co untries

PRGF Poverty Red uctio n andGrowth Facility

Primary e ner gy Cr ude oil, natural gas, coal, nuclear,hydro-electricity a nd biomass

Renewable e ner gy Ener gy generated f ro m renewablenatural reso urces, s uch as wind,

water, s un, crops, etc.Second-generatio n Biofuels prod uced s ustainablybiofuels f ro m non-f ood crops

toe Tonnes oil eq uivalent

UNDP United Natio ns Develop mentProgramme

Urbanization Growth o f urban areas res ultingf ro m pop ulation migratio n f ro mrural areas


39/40

THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT (OFID)Parkring 8, A-1010 Vienna, Austria

P.O. Box 995, A-1011 Vie nna, AustriaTel.: +43-1-515 64-0, Fax: +43-1-513 92-38

Inter net: www.o f id.orgEmail: inf o@o f id.org

Prod uction: OFIDDesign: etage.cc, Vienna, Austria

Printing: Dr uckerei Odysse us, Himber g, Austria


40/40

THE OPEC FUND FOR

INTERNATIONAL DEVELOPMENT (OFID)

Parkring 8, A-1010 Vienna, Austria

Tel.: +43-1-51564-0, Fax: +43-1-51392-38

OPEC Energy Poverty

Documents

Transcript of OPEC Energy Poverty