NILE BASIN INITIATIVE SHARED VISION PROGRAM REGIONAL POWER TRADE PROJECT Part I: Minutes of the High-Level Power Experts Meeting Dar es Salaam, Tanzania February 24­26, 2003 March 2005 Copyright © 2005 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing March 2005 ESMAP Reports are published to communicate the results of ESMAP's work to the development community with the least possible delay. The typescript of the paper therefore has not been prepared in accordance with the procedures appropriate to formal documents. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The Boundaries, colors, denominations, other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. Papers in the ESMAP Technical Series are discussion documents, not final project reports. They are subject to the same copyrights as other ESMAP publications. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the ESMAP Manager at the address shown in the copyright notice above. ESMAP encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Contents Acknowledgments ...................................................................................................... v Abbreviations and Acronyms.................................................................................. vii 1. Opening Ceremony..................................................................................................1 2. Session 1 ..................................................................................................................3 3. Session 2 ..................................................................................................................5 4. Session 3 ..................................................................................................................7 5. Session 4 ................................................................................................................13 6. Session 5 ................................................................................................................17 Annexes Annex 1: Agenda........................................................................................................19 Annex 2: Participants ................................................................................................23 Annex 3: Session 1 Presentations...........................................................................29 Annex 4: Session 2 Presentations...........................................................................35 Annex 5: Vision Exercise..........................................................................................39 Annex 6: Session 3 Presentations...........................................................................45 Annex 7: Regional Power Trade Project Profile.....................................................53 iii Acknowledgments This report compiles the minutes of the High-Level Power Experts Meeting (Part I) and the First Meeting of the Nile Basin Ministers Responsible for Electricity (Part II) organized under the leadership of the Nile Basin Initiative Secretariat under the guidance and with the support of the Nile Basin Council of Ministers and Nile Technical Advisory Committee. The meetings took place in February and May 2003, respectively, in Dar Es Salaam, Tanzania. The high-level power experts' meeting served to prepare the ministers meeting and develop a long-term vision for the Nile Basin Power Forum. The Nile Basin Ministers Responsible for Electricity unanimously adopted the Dar Es Salaam Declaration, which recognizes the significant socioeconomic and power-system benefits that can be realized from regional cooperation. The declaration also adopts the Long-Term Vision for the Nile Basin Power Forum and approves the Regional Power Trade Project Implementation Plan, including the establishment of the Nile Basin Power Forum. The power forum provides an important means for cooperating in the development of electric power resources in the Nile Basin. The Nile Basin Initiative Secretariat team included former NBI Executive Secretary Meraji Msuya, Senior Program Officer Hamere Wondimu, Helen Bugaari, and Barbara Matovu. The World Bank team included David Grey, Barbara Miller, Mangesh Hoskote, and Alexandra Planas. External consultants Moses Thompson, Anton Eberhard, and Mark Davis provided support by facilitating the discussions and providing background papers and presentations for the meetings and Andrea Heggen formatted the reports. Marjorie K. Araya from ESMAP coordinated the publication process. The organizers also would like to express their gratitude to the government of Tanzania, especially the Ministry of Energy and Minerals, for hosting the two events. Financial support for the two meetings was provided by the Energy Sector Management Development Program (ESMAP) under the Nile Basin Initiative Regional Power Trade Project, Phase II activity funded under ESMAP's UK trust fund. v Abbreviations and Acronyms EEPCO Ethiopian Electric Power Corporation ENSAP Eastern Nile Subsidiary Action Program . ESMAP Energy Sector Management Assistance Programme ICCON International Consortium for Cooperation on the Nile IPP Independent power producer KPLC Kenya Power and Lighting Company MOU Memorandum of understanding NBI Nile Basin Initiative NBTF Nile Basin Trust Fund NEC National Electric Power Corporation NELSAP Nile Equatorial Lakes Subsidiary Action Project NEPAD New Partnership for Africa's Development Nile-COM Nile Council of Ministers of Water Affairs PEWG Power Experts Working Group PIP Project implementation plan PMU Project management unit RPT Regional Power Trade SAP Subsidiary Action Program SAPP Southern Africa Power Pool SNEL Societé nationale d'éléctricité SVP Shared Vision Program TANESCO Tanzania Electric Supply Company Limited UETCL Uganda Electricity Transmission Company Ltd. vii 1 Opening Ceremony 1.1 At the opening ceremony, opening statements were made by Mr. Meraji Msuya, executive director, Nile Basin Initiative (NBI) Secretariat; Mr. Bashir Mrindoko, commissioner of energy and petroleum affairs, Tanzania; Mr. Leif Sauvik, minister counselor, Royal Norwegian Embassy in Tanzania; and Mr. Benno Ndulu, World Bank Tanzania country office manager. The Honorable Mr. Edward Lowassa, minister for water and livestock development, Government of Tanzania, and member of the Nile Council of Ministers of Water Affairs (Nile-COM), officially opened the High-Level Power Experts Meeting. The agenda for the meeting is included in annex 1, and the list of participants is included in annex 2. 1.2 The opening statements highlighted the significance of this first high-level meeting of power sector experts in engaging and building partnerships with other sectors in the NBI process. The importance of the NBI and the Regional Power Trade (RPT) Project was also highlighted in the broader context of New Partnership for Africa's Development (NEPAD) and its action plan to energize and support national and subregional efforts to eradicate poverty and collectively set Africa on a path to improved living standards and human development. 1.3 Mr. Bashir Mrindoko, chairman of this session, stressed Tanzania's commitment to host the project management unit (PMU) of the RTP Project, including its commitment to provide office space and pay for utilities for the PMU. 1 2 Session 1 Chairman: Mr. Mihret Debebe, Ethiopia Rapporteur: Mr. Salvator Sunzu Ntigambirizwa, Burundi 2.1 The first session of the meeting included the following presentations (included in annex 3): · An introduction of the objectives and expected outputs for the meeting · An overview of the NBI · An overview of the RTP Project · The potential benefits of power trade and its contribution to regional economic development. 2.2 The participants shared their expectations for the meeting, including: · Agreement on a realistic implementation plan of the RTP Project · Project initiation within one year · Determination of the date and place for the first meeting of the Nile Basin energy ministers · Agreement on a strong vision for the Power Forum. 2.3 A number of important issues were raised during this session, including: · Representation in the Technical Committee. As the countries move to a reformed power sector, representatives from the generation, transmission, and distribution companies may also need to be included in the project. · Participation of Independent Power Producers (IPPs) in the Power Forum. The participants raised the issue of the role, if any, of IPPs and the best way to involve IPPs in the Power Forum. · Other subregional investment projects. Some projects have already been identified at the Subsidiary Action Program (SAP) subregional level, 3 4 Minutes of High-Level Power Experts Meeting Part I but other power generation and transmission interconnection projects also need to be considered. · Tariffs. -- There is a need for a review of tariff levels in the context of a regional power market. Pricing of transmission networks and wheeling should be a priority study for the Power Forum. -- Tariffs for the power exchanges have to sustain investments in interconnection but also allow for financing national rural electrification projects so everybody wins. · Equitable distribution of benefits. The benefits of power trade have to be divided in an equitable way among the different parties. · Additional potential benefits of power trade. Apart from the benefits mentioned in the presentations, other nonmonetary benefits include reduced greenhouse gas emissions by using more clean, environmentally friendly energy sources, as well as communication services by using the transmission lines not only for transmitting energy but also voice and data. 3 Session 2 Visioning Exercise Chairman: Mr. Kabagambe Kaliisa, Uganda Rapporteur: Etienne Tshibangu, Democratic Republic of Congo 3.1 A vision is a statement of long-term purpose. Whereas a statement of mission describes the operational relationship between the project team and the clients it serves, the statement of vision clarifies the aspirations and expectations a group has for the future. The mission statement defines how the project team will deliver products and services to its client in the near term. The vision explores the potential opportunity facing a group and describes this at a time in the future. 3.2 The meeting participants took three steps in creating a long-term, 20-year vision of a Power Forum. These steps followed the causal logic of the overall endeavor: To achieve more productive and competitive urban and rural economies and societies, increased access to reliable, affordable, and sustainable power is essential. To increase equitable access, one of the essential enabling conditions is an effective Power Forum (see annex 4 for the Results Framework used in this exercise). Based on this logic, the group first defined its expectations of what more competitive, productive urban and rural regional economies might look like. Second, it defined the success criteria for regional power trade in an interconnected, reformed, and competitive power market. Finally, the group described the features of an effective regional Power Forum 20 years from now. See annex 5 for group results of this exercise. 3.3 Working in small groups, the participants generated a set of success factors, then a set of vision statements, and finally a subgroup integrated these elements into a common statement of vision. After plenary review and refinements, the participants gave this vision statement their endorsement. 3.4 The final result is a vision of what a Power Forum would look like 20 years in the future, just as the regional power market is making a transition from a cooperative, self- regulated market to a competitive power exchange. 5 6 Minutes of High-Level Power Experts Meeting Part I Box 1. Long-Term Vision for the Nile Basin Power Forum The Power Forum is a regional, self-sustaining, legally established institution that: · Manages and updates a database of regional power systems · Develops regional plans for expanding generation and transmission · Stimulates subsidiary-level project investment for regional interconnection · Facilitates a common understanding on a power sector reform strategy and a harmonized regulatory regime · Designs the power market and establishes standards for operation of the interconnected system · Promotes cooperation in regional power trade, the development of a power market · Ensures an equitable trading regime for all participants in the regional power market · Achieves the confidence of all participants in the regional power market through a strong transparent decisionmaking process · Facilitates a learning environment for understanding the nuances of legal, regulatory, and pricing regimes required for regional power trade · Liaises with similar forums in other regions. It is expected that, over time, the Power Forum will facilitate the formation of three new entities: a regulatory forum, a regional dispatch center, and a power exchange. The Power Forum will continue to function as a regional planning agency. 4 Session 3 Chairman: Kenya Rapporteur: Mr. Amin Sabri Ahmed, Sudan 4.1 The following presentations were made during this session (See Annex 6 for presentations): · Shared Vision Program (SVP): -- Generic implementation arrangements -- Process for launching SVP projects -- Nile Basin Trust Fund (NBTF) and financing status · RPF project implementation plan (PIP) · PMU arrangements from host country. Shared Vision Program 4.2 Requirements for appraisal and project launch were discussed. Requirements for each country include the following country confirmation letters: · Confirmation of Steering Committee members · Confirmation of Technical Committee members · Confirmation letter for contribution of staff time at the national level. 4.3 Requirements from host country--Letter from competent national authority (ministry of finance or appropriate line ministry) for contribution to support PMU. 4.4 The deadline for providing those letters to the NBI Secretariat is the first meeting of ministers in charge of electricity. A sample letter will be sent by the NBI Secretariat 4.5 Issues raised by the participants during this session included: · Eligibility requirements for applying to the PMU positions. It was explained to the participants that the World Bank cannot finance government officials; therefore, after the selection process is completed 7 8 Minutes of High-Level Power Experts Meeting Part I and a candidate is offered the position, he or she needs to resign from his/her position in the government. The project manager for the PMU cannot come from the host country, which in this case is Tanzania. · Nile Basin Trust Fund. The question was raised as to why the funds that will be provided by the development partners should be channeled through the NBTF. The NBTF provides several advantages, including: -- Streamlining reporting procedures, instead of having to report to several development partners with different reporting procedures -- Untying funds that allow the project to hire the best consultants available worldwide to conduct the different studies. Regional Power Trade Project Implementation Plan 4.6 Participants raised issues regarding project design, including: · Phasing of the project. The participants were concerned about delaying the comprehensive basin-wide study, considering that the output of the study is important. The project is being phased for two main reasons. First, an additional US$4 million needs to be raised. Second, similar studies are being conducted by the Nile Equatorial Lakes Subsidiary Action Project (NELSAP) and the Eastern Nile Subsidiary Action Program (ENSAP).To incorporate results of these subregional studies as well as avoid overlap, it was proposed to delay the initiation of the comprehensive study for the third year. The preliminary study could start during the second year of the project, including preparation of terms of reference for the comprehensive basin-wide study. · Legal status. The difference between obtaining legal status for the Power Forum and the memorandum of understanding (MOU) is mutually exclusive. The Power Forum will likely be a legal entity in the future as its role in power trade evolves. The MOU is not legally binding and relates to the interutility, intergovernmental agreement to put in place the architecture of the Power Forum. · Funding limitations. How will the additional financing needed for the project be raised? Donors are willing to commit additional funds, but they want to see results. Such commitments can be expected when the project is operational or at the time of International Consortium for Cooperation on the Nile (ICCON) 2. · Staff time. Four to six weeks of ministry and utility staff time for the Technical Committee per year will be required for the project. Session 3 9 4.7 The main issues raised on budget and financing include: · Funding for the project. Getting incremental funds is not likely to be a problem if the project demonstrates to the development partners that progress is being achieved. · Funding for the Power Forum after the project ends. In the Shared Vision Program projects are designed with a finite life, but the RPF Project is expected to continue after the initial four years. Part of the work of these first four years is to raise and define ways to make it self- sustainable in the long term. Although partner support may continue as the Forum becomes fully operational, in the long term it is expected to become self-sustaining. Final Agreements 1. The project will be extended to four years within the same budget range. 2. Sequencing of project components will be as follows: a. Power Forum activities (starting first year) b. Preparatory phase of basin study (second year) c. Full basin-wide study (third year after funding is available and fully operational PMU and SAP studies). 3. Technical and Steering Committee representatives: Country Government Utility Burundi Director general of energy and water, Director general, Regideso Ministry of Energy and Mines Dem. Rep. of Congo Secretary general, Ministry of Energy Chief executive, SNEL Egypt, Arab Rep. Under secretary, Ministry of Electricity Chairman, Electricity Holding and Energy Co. Ethiopia State minister for infrastructure, Ministry General manager, EEPCO of Infrastructure Kenya Permanent secretary, Ministry of Energy Managing director, KPLC Rwanda Secretary general, Ministry of Director general, Electrogaz Infrastructure Sudan Secretary general, Ministry of Electricity General director, NEC Tanzania Permanent secretary, Ministry of Energy Managing director, TANESCO and Minerals Uganda Permanent secretary, Ministry of Energy Managing director, UETCL and Mineral Development 10 Minutes of High-Level Power Experts Meeting Part I 4. The Technical Committee will continue with current members on the power experts working group, except as changes are needed on an individual country basis. For this RPT Project, the Technical Committee will continue to retain two representatives, one from the ministry responsible for power with broad knowledge of sector reform and deregulation, and the other from the power utility with expertise in transmission and system operations. Others (that is, from generation if utility is unbundled) may participate on the committee, but at their own expense. 5. PMU staffing: · Project manager, with power system planning expertise · Lead specialist, power system operation with economics · Lead specialist, hydropower planning (with water resources) · Specialist, environment/water resources · Other technical specialist as required, on consulting basis. 6. Integration and coordination with SAPs: · Eastern Nile Technical Region Office/Nile Equatorial Lakes Coordinating Unit (ENTRO/NEL-CU) representatives invited as observers on Project Steering Committee · ENTRO/NEL-CU representatives invited to Technical Committee. · Strongly encourage same power experts involved in SAP and SVP. To avoid duplication of studies and take advantage of complementarities and linkages, other regional power trade initiatives in which NBI members also participate will be taken into account. Those regional power trade initiatives include: · EAC master plan (Tanzania, Kenya, Uganda) · SAPP (Tanzania) · Central Africa Power Pool (Democratic Republic of Congo) · Great Lakes Energy Organization (Democratic Republic of Congo, Rwanda, Burundi) · NEPAD, power component · Kenya-Tanzania Power Interconnection Study · Tanzania-Zambia Interconnection Study · North Africa-Arab countries connection study (Egypt) · Kagera Basin Organization (Uganda, Tanzania, Rwanda, and Burundi). Session 3 11 The revised project profile, which reflects the session discussions, is included in Annex 7. 5 Session 4 Chairman: Mr. Mahrez, Egypt Rapporteur: David Ngula, Tanzania 5.1 Tanzania, as the host country for the PMU and the First Meeting of the Nile Basin Ministers Responsible for Electricity, reported on the two assignments agreed upon at the Arusha Power Experts Working Group Meeting in April 2002. 5.2 The two assignments for the host country included: · Establishment of an organizing committee for the First Meeting of the Nile Basin Ministers Responsible for Electricity. The host country reported that some preliminary work has been done, and a formal committee will be established after this meeting. · PMU office. Tanzania informed participants that office space for the PMU has already being selected within the premises of the Ministry of Energy and Minerals. The project team will provide a detailed list with office space requirements. The PMU will share some facilities, such as conference facilities, with the ministry. Review and Finalization of Preparations for First Meeting of Nile Basin Ministers Responsible for Electricity Objectives of · Endorse the vision for the Nile Basin Power Forum the Meeting · Approve the RPF Implementation Plan Venue Dar es Salaam, Tanzania Output Signed agreed minutes or agreed declaration (?) (to be finalized during preparatory meeting) Dates · May 19 for preparatory meeting · May 20­21 ministerial meeting (second day to be confirmed) 13 14 Minutes of High-Level Power Experts Meeting Part I Review and Finalization of Preparations for First Meeting of Nile Basin Ministers Responsible for Electricity Participants · Nile-COM chair (1) · Nile-COM member host country (1) · Ministers responsible for electricity (9) · Power Experts Working Group (PEWG), permanent secretaries, chief executive officers (participants of Feb 24­26 meeting, Dar es Salaam) (4 x 9 = 36) · Nile Technical Advisory Committee member of host country (1) · ENSAP and NELSAP representatives (4) · Nile-SEC (3) · Partners supporting the project (4) · World Bank (5) · Eritrea minister responsible for electricity and an adviser (observer) (2) · Host ministry (3) · Tanzania organizing committee (?) · About 70 persons Organizers Nile-SEC with the committee organized by Tanzania and the World Bank Office (Tanzania) Financing Project will cover participants and organizing costs Invitation Ministers responsible for electricity will be invited jointly by Nile-COM chair and the minister of energy and minerals of the host country. Proposed · Opening Ceremony Agenda -- Welcome by the chairman of the Nile-COM -- Statement by partners -- Welcome by the minister of Energy and Minerals -- Tanzania (meeting chairman) -- Official opening of the meeting · Country energy ministers' statements · Presentation and update on NBI by Nile-SEC · Presentation by the ENSAP & NELSAP focused on power projects · Special presentations · Role of power trade in regional economic development · Experience from other power pools and interconnections (for example, SAPP, Electrical Interconnections in the Middle East, Baltic) · Presentation and endorsement of long-term vision for Power Forum · Overview and approval of the Nile Basin RPT PIP · Launching of the project and next steps · Closing ceremony Session 4 15 Review and Finalization of Preparations for First Meeting of Nile Basin Ministers Responsible for Electricity Other issues · Pre-meeting briefings to the ministers by PS and pre- · Commitments of the energy ministers to participate meeting actions· Country commitments (bring to meeting) · PMU confirmation letter · Country confirmation letters (one from ministry & one from utility, including) · Steering Committee nomination · Technical Committee nomination · Commitment for staff time · Frequency of ministers meeting (one time or regular)­to be discussed during first meeting 6 Session 5 Follow-up Actions and Launching of RPT Project Follow-Up Actions Responsible Party Targeted Time 2003 Finalize draft project appraisal document Mar 21 (PAD) and PIPs Review draft PAD and PIP PEWG, Nile-SEC April 4 and Nile-TAC, Send PIP to Nile-SEC and PAD to Nile Team Final draft PIP and PAD Nile-SEC and Nile April 14 team Internal Bank clearance and decision meeting Nile team May 5 Preparatory meeting Mon, May 19 First meeting of Ministers Responsible for Tues-Wed, May 20­ Electricity 21 (2nd day to be confirmed) Sample to be sent to the PEWG for country Nile-SEC March 7 confirmation letters (one from electricity ministry and one from power utility) including · Nominees for Steering Committee and Technical Committee · Commitment for staff time · PMU confirmation letter Submission of confirmation letters (see above) Countries May 20 (ministers' meeting) Appraisal Nile Team May 23­24 Advertise for core staff Nile-SEC/UNOPS June Negotiate agreements with Bank and UNOPS Nile-SEC July Sign agreement with Bank & UNOPS Nile-SEC Aug 17 18 Minutes of High-Level Power Experts Meeting Part I Follow-Up Actions Responsible Party Targeted Time 2003 Host country prepare PMU for occupation Host country Aug Core staff selected Nile-SEC/UNOPS Sep Full effectiveness Nov Follow-Up Actions for the First Meeting of the Nile Basin Ministers Responsible for Electricity Follow-Up Actions Responsible Party Targeted Time Confirm ministers' names PS or equivalent Feb 26 Pre-meeting briefing for the PS or equivalent As soon as possible, before ministers, including March 15 confirming date for the meeting Send invitation to participants Host country and Nile-SEC March 20 Confirmation ministers' and PS or equivalent, send to Nile- April 1 participants' attendance SEC Dispatch PTA World Bank Office/Nile-SEC May 5 Preparation of opening All Prior to meeting statements Preparatory meeting Mon, May 19, Dar es Salaam Ministers' meeting Tues­Wed, May 20­21, Dar es Salaam (need for second day to be confirmed) Annex 1 Agenda Monday, February 24, 2003 Opening 9:00­10:30 am Chairman: Mr. Bashir Mrindoko, commissioner for energy and petroleum affairs, Ministry of Energy and Minerals, Tanzania Remarks by the SVP Regional Power Trade Host Country, Tanzania Introductory Address Mr. Meraji Msuya, executive director, Nile Basin Initiative Secretariat Statement from NBI Development Partners Mr. Leif Sauvik, minister counselor, Royal Norwegian Embassy, Tanzania Statement from the World Bank Mr. Benno Ndulu, acting country manager, World Bank Country Office, Tanzania Opening Statement Honorable Mr. Edward Lowassa, minister for water affairs and livestock development, and member of the Nile Basin Council of Water Ministers (Nile-COM) 10:30­11:00 am Coffee Session 1 11:00 am­12:30 pm Chairman: Ethiopia Rapporteur: Burundi Introduction--Scope and Objectives of the Meeting Moses Thompson, Team Technologies Nile Basin Initiative and Shared Vision Program Overview Meraji Msuya, executive director, Nile Basin Initiative Secretariat Regional Power Trade Project Overview Henry Bidasala-Igaga, Uganda power expert 19 20 Annex1 Benefits of Power Trade and its Contribution in Regional Economic Development Mangesh Hoskote, team leader RPT Project, World Bank Nile Team 12:30­1:30 pm Lunch Session 2 1:30­5:30 pm Chairman: Uganda Rapporteur: Democratic Republic of Congo "Visioning Exercise" Moses Thompson, Team Technologies 5:30­5:45 pm Closing Round Tuesday, February 25, 2003 Session 3 9:00­10:30 am Chairman:Kenya Rapporteur: Sudan SVP General Implementation Arrangements and Processes Hamere Wondimu, senior program officer, Nile Basin Initiative Secretariat Review of Regional Power Trade Project and Implementation Arrangements Mengesha Shiferaw, Ethiopia 10:30­11:00 am Coffee Break 11:00 am­1:00 pm Facilitated Discussion of Key Implementation Arrangements PMU Arrangements from Host Country Mr. Bashir Mrindoko, commissioner for energy and petroleum affairs, Ministry of Energy and Minerals, Tanzania 1:00 pm­2:00 pm Lunch Session 4 2:00­5:00 pm Chairman:Egypt Rapporteur: Tanzania Review and Finalization of Preparations for First Meeting of Nile Basin Energy Ministers, including Agenda Hamere Wondimu, senior program officer, Nile Basin Initiative Secretariat Report from the Host Country on the Preparatory Committee 5:00­5:15 pm Closing Round Agenda 21 Wednesday, February 26, 2003 Session 5 9:00­10:30 am Chairman:Tanzania Rapporteur: Rwanda Wrap-Up and Next Steps: Hamere Wondimu, senior program officer, Nile Basin Initiative Secretariat · First Meeting of Nile Basin Energy Ministers · Follow-Up Actions and Launching of Regional Power Trade Project 10:30­11:00 am Coffee Break 11:00 am­12:00 pm Closing Ceremony 12:00­2:00 pm Lunch 2:00­5:00 pm Special Session for Power Expert Working Group Members--Logical Framework for the Regional Power Trade Project Annex 2 Participants Burundi Burundi Mr. Philippe Niyongabo Mr. Désiré Florent Nzayanga Director General of Director General of Energy and Water REGIDESO Ministry of Energy and Mines BP 660 BP 745 Bujumbura, Burundi Bujumbura, Burundi Tel: 257 22 2720/210553 Tel: 257 229 555 Fax: 25722 6563 Fax: 257 229624 phniyongabo@yahoo.fr dgee@cbinf.com Burundi Burundi Mr. Nolasque Ndayihaye Mr. Salvator Sunzu Ntigambirizwa Director of Energy ad interim Energy Planning and Power Expert Ministry of Energy and Mines Great Lakes Energy Organization (EGL) BP 745 BP 1912 Bujumbura, Burundi Bujumbura, Burundi Tel: 257 22 3888 Tel: 257 22 5504 Fax: 257 223337 Fax: 257 22 4157 dgee@cbinf.com ntigambirizwa@yahoo.fr Democratic Republic of Congo Democratic Republic of Congo Mr. Etienne Tshibangu Mr. Alphonse Muyumba Kalenge Director Attaché Chief Executive SNEL SNEL P.O. Box 500 Kinshasa, DRC Kinshasa, DRC Tel: 243 817005421 Tel: 243 8189 13674 almuyumba@yahoo.fr Fax: 243 12 33735 etshibangu@yahoo.fr 23 24 Annex 2 Democratic Republic of Congo Egypt Mr. Cifarha Male Andre Eng. Ezzat Abd-alla Mehrez Director Assistant to Deputy Vice Chairman Chief Executive & Energy Expert Egyptian Electricity Transmission SNEL Company (EETC) P.O. Box 500 Cairo, Egypt Kinshasa, DRC P.O. Box Abbasia Tel: 243 081700 55 10/089 13 027 Tel: 7610573/761 0575 Fax : 243 12 33735/33734 Fax: 7610573 maleif@yahoo.fr Egypt Ethiopia Eng. Ahmed Abd El-Magid Khattab Mr. Teferra Beyene General Director for Interconnection Project Manager MSHPSP Studies Ministry of Water Resources Egyptian Electricity Holding Company P.O. Box 23847-Code 1000 EEHC Addis Ababa, Ethiopia Abbassia, Egypt Tel: 251 1 457 7890 Tel: 024029814 Fax: 251 1 461176 Fax: 024011630 Ggbg1@telecom.net.et kyassin@moee.gov.eg Ethiopia Ethiopia Mr. Miheret Debebe Mr. Mengesha Shiferaw General Manager Director, Civil Work Projects Ethiopian Electric Power Corporation Administrative Department Addis Ababa, Ethiopia Ethiopia Electric Power Corporation P.O. Box 1233 P.O. Box 1233 Tel: 251 1 56 0041 Addis Ababa, Ethiopia Fax: 251 1 552345 Tel: 251 1 526 519 eelpa@telecom.net.et mengesha84@hotmail.com Kenya Kenya Mr. Joel Imitira Mr. Albert Mugo Economist Power System Development Manager Ministry of Energy KPLC P.O. Box 30582 Nairobi, Kenya Nairobi, Kenya Tel: 254 3201 4306 Tel : 254 2 244211 amugo@kplc.co.ke Fax : 254 2 240 910 imitira@yahoo.co.uk Participants 25 Kenya Kenya Mr. Kirimi Guantai Mr. John Githinji Head Planning Power Expert Ministry of Energy (Ag. Chief Engineer) P.O. Box 30582 Ministry of Energy Nairobi, Kenya P.O. Box 30582, Tel: 254 2 316199 Nairobi, Kenya Fax: 254 2 316 199 Tel: 254 2 330048 dce@energymin.go.ke Fax: 254 2 240910 power@energymin.go.ke Rwanda Rwanda Mr. Makuza Kanamugire Mr. Leopold Mugabo Director of Energy Director General Ministry of Infrastructure ELECTROGAZ P.O. Box 24 P.O. Box 2094 Kigali, Rwanda Kigali, Rwanda Tel: 250 08506664/250 583706 Tel: 250 0830 5440 Fax: 250 583706 Fax: 250 573 802 mkanamugire@yahoo.fr Mgaborw@yahoo.fr Sudan Sudan Mr. Amin Osman Mohd El- Bashari Mr. Amin Sabri Ahmed Power Expert Secretary General National Electricity Corporation Ministry of Electricity P.O. Box 6608 P.O. Box 1380 Khartoum, Sudan Khartoum, Sudan Tel: 0123 90744 Tel: 249 11 783074 Fax: 024911 795362 Fax: 249 11778036 Aminosman18@hotmail.com aminsabri@yahoo.com Sudan uganda Mr. Makkawi Mohd Awad Mr. W. K. Kiryahika Managing Director Ag. Managing Director, Uganda National Electricity Corporation Electricity Transmission Co. Ltd. P.O. Box 1380 P.O. Box 7625 Khartoum, Sudan Kampala, Uganda Tel: 249 11 770 686 Tel: 256 (006) 41 349 126 Fax: 249 11 773714 Willy.kiryahika@uetcl.com makkawi@necsudan.com 26 Annex 2 Uganda Uganda Mr. F. A. Kabagambe-Kaliisa Mr. Henry Bidasala-Igaga Permanent Secretary Principal Energy Officer Ministry of Energy and Mineral Ministry of Energy & Mineral Development Development P.O. Box 7270 P.O. Box 7270 Kampala, Uganda Kampala, Uganda Tel: 256 41 234 733 Tel: 256 41 235889/257863 Fax: 256 41 234 732 Fax: 256 41 349342 kkaliisa@energy.go.ug igaga@energy.go.ug or bidasala@hotmail.com Uganda Tanzania Mr. Esimu Michael Elimu Mr. Bashiri Juma Mrindoko Senior Engineer (Generation) Commissioner for Energy & Petroleum Uganda Electricity Generation Company Affairs Ltd. Ministry of Energy and Minerals P.O. Box 1101 P.O. Box 2000 Jinja, Uganda Dar es Salaam, Tanzania Tel: 256 43 121 416/077 510421 Tel: 255 222 139455 Fax: 043 123154 Fax: 255 022 2120799 mesimu@hotmail.com Mrindoko-mem@raha.com Tanzania Tanzania Mr. Rudy Huysen Mr. Mathew Mbwambo Managing Director Executive Engineer (Sr.) TANESCO Ministry of Energy & Minerals P.O. Box 9024 P.O. Box 2000 Dar es Salaam, Tanzania Dar es Salaam, Tanzania Tel: 2451159 Tel: 211715618 rhuysen@cats-net.com Fax: 2120799/2137169 mbwambo@hotmail.com Tanzania Tanzania Mr. David Ngula Mr. Jimmy Adamson Manager, Research & Development Deputy Manager Director TANESCO TANESCO P.O. Box 9024, P.O. Box 9024 Dar es Salaam, Tanzania Dar es Salaam, Tanzania Tel: 022 245 1210 Tel: 022 245 1984 depngula@cats-net.com Fax: 022 245 1984 jadamson@cats-net.com Participants 27 Tanzania Nile-SEC Mr. Julius M. Mihayo Mr. Meraji Msuya Assistant Director, Water Resources Executive Director Ministry of Water & Livestock Nile Secretariat Development P.O. Box 192 P.O. Box 35066 Entebbe, Uganda Dar es Salaam, Tanzania Tel: 256 41 321424 Tel: 2450005/0744-494 697 mmsuya@nilesec.org Fax: 2451457/2450005 Dwr-maji@intafrica.com Nile-SEC Norway Ms. Hamere Wondimu Jan Erik Rasmussen Senior Program Officer 1st Secretary Nile Secretariat Royal Norwegian Embassy P.O. Box 192, P.O. Box 2646 Entebbe, Uganda Dar es Salaam, Tanzania Tel: 256 41 321424 Tel: 211 3366 hwondimu@nilesec.com Fax: 211 3367 Jan.rasmussen@norad.no Sweden World Bank Ralph Karhammar Ms. Barbara Miller Regional Infrastructure Adviser SVP Coordinator, AFTNL SIDA/Swedish Embassy World Bank Nile Team P.O. Box 9274 1818 H Street, NW Dar es Salaam, Tanzania J-11 Tel: 255 22 2111235 Washington, D.C. Fax: 255 22 211 3420 Tel: 1 202 473 2451 Ralph.karhammar@sida.se bmiller@worldbank.org World Bank World Bank Mr. Mangesh Hoskote Mr. Arne Hoel Task Team Leader, RPT Project World Bank Nile Team, AFTNL World Bank Nile Team, AFTEG 1818 H Street, NW P.O. Box 2054 J-5 Dar es Salaam, Tanzania Washington, D.C. Tel: 211 4575/7 Tel: 1 202 458 0227 Fax: 211 3039 ahoel@worldbank.org mhoscote@worldbank.org 28 Annex 2 World Bank World Bank Ms. Alexandra Planas Rosalie Ferrao World Bank Nile Team, AFTEG Executive Assistant 1818 H Street, NW World Bank J-9-900 P.O. Box 2054 Washington, D.C. Tel: 211 4575/7 Tel: 1 202 473 6772 Fax: 211 3039 aplanas@worldbank.org Dar es Salaam, Tanzania rferrao@worldbank.org World Bank World Bank Immaculata Yanga Marietta Faransa Team Assistant Program Assistant World Bank World Bank P.O. Box 2054 P.O. Box 2054 Dar es Salaam, Tanzania Dar es Salaam, Tanzania Tel: 2114575/7 Tel: 211 4575/7 Fax: 211 3039 Fax: 211 3039 iyanga@worldbank.org mfaransa@worldbank.org Consultant Consultant Mr. Isaak Masalla Moses Thompson Consultant Team Technologies P.O. Box 956 P.O. Box 2033 Dar es Salaam, Tanzania Middleburg, VA 20118 Tel: 255 741 338 749 Tel: 540 687 8300 ilmasalla@hotmail.com mthompson@teamusa.com Consultant Consultant Mark Davis Andrew Ellis Consultant Consultant ECON ECON Oslo, Norway Paris, France Mark.davis@eon.no Tel : 33 (0) 1 44 61 97 22 Fax 33(0) 1 48 87 44 82 Andrew.ellis@econ.fr Annex 3 Session 1 Presentations NILE BASIN INITIATIVE SHARED VISION PROGRAM SHARED VISION PROGRAM HIGH-LEVEL POWER EXPERTS MEETING MEETING INTRODUCTION TO TO THE REGIONAL POWER TRADE PROJECT PROJECT PROJECT IDENTIFICATION AND PROJECT IDENTIFICATION AND PREPARATION PREPARATION · Scoping study · Three meetings of PEWG: December 1999, July 2000, and October 2000 · Collaborative, multicountry participatory · Detailed project document presented at the First ICCON process Meeting. · Consensus among PEWG for the establishment of a Power · Power Experts Working Group (PEWG) Forum to: · Reflects riparian perspective on national and ­ Facilitate continued dialogue and cooperation among power utilities ­ Collect and exchange information regional needs ­ Share experiences · Project components are deemed to be ­ Increase awareness implementable, confer real benefits ­ Support technical meetings ­ Review and analyze common issues of interest · Integrate lessons from other trading ­ Commission special studies relating to power trade development arrangements ­ Assist in developing the strategic framework and agreements for advancing power trade in the region 29 30 Annex 3 OBJECTIVE OF THE REGIONAL POWER TRADE PROJECT PROJECT COMPONENTS PROJECT COMPONENTS · Establish the institutional means: ­To coordinate the development of · Three main components: regional power markets among the ­ Regional coordination and project management Nile Basin countries ­ Establishment of a Nile Basin Power Forum ­Build analytical capacity ­ Comprehensive basin-wide analysis of long- term power supply, demand, and trade ­Provide technical infrastructure to opportunities manage Nile Basin resources in keeping with the NBI-SVP Vision FROM VISION TO ACTION SUBSIDIARY ACTION PROGRAMS PROGRAMS SHARED VISION PROGRAM SVP · Two Subsidiary Action Programs · Identified the first set of cooperative projects to be SAP prepared ACTION ON THE GROUND · Preparatory activities in the power subsectors have already started. NILE EQUATORIAL LAKES LAKES EASTERN NILE SUBSIDIARY SUBSIDIARY ACTION PROGRAM ACTION PROGRAM (NELSAP) (ENSAP) · Three studies will be undertaken over · Two projects have been identified the next two years: as a priority in the Hydropower ­ Strategic/Sectoral Social and Environmental Development and Regional Power Assessment of Power Development Options in Burundi, Rwanda, and Western Tanzania Trade Subprogram: ­ Review of Rusumo Falls HEP Studies ­Ethiopia-Sudan Interconnection Project ­ Strategic/Sectoral Social and Environmental Assessment of Power Development Options ­Eastern Nile Investment Program in the NEL Region Session 1 Presentations 31 STATUS OF PROJECT PREPARATION · Implementation arrangements · Host country commitments · Appraisal: June 2003 · Start-up: October 2003 NILE BASIN INITIATIVE SHARED VISION PROGRAM VISION PROGRAM HIGH-LEVEL POWER EXPERTS MEETING The role of power trade in regional economic development Potential Benefits to Power Sector Presentation outline · Lower operating costs · Potential benefits · Lower investment costs · Stimulate investment in system · Practical experience expansion · Implications for the Nile Basin · Increased reliability project · Increased energy security 32 Annex 3 Requirements to Achieve Benefits Potential Economic Benefits · To get the full benefits of interconnected networks: ­ Operational standards established · Stimulate economic activity ­ Bilateral exchanges facilitated · Rural electrification ­ Compatibility in power sector structure and regulation ­ Common use of system conditions and terms · Social and multisectoral benefits ­ Common market trading platform · Environmental benefits · Market barriers: · Multipurpose benefits ­ Institutional and public policy barriers ­ Technical barriers · Contribute toward regional cooperation ­ Commercial and financial Practical Experience Southern African Power Pool · Range of trading systems · Bilateral trade has taken place over four ­ Common Baltic Electricity Market decades ­ Central Asia · Institutional set-up imposes obligations ­ Euro-Mediterranean power market and rights ­ Mekong power market ­ Contribute to system reliability ­ Southern African Power Pool ­ SIEPAC ­ Central America ­ Allow member access ­ Snowy River, Australia · Range of trading mechanisms ­ South American Power Market ­ From firm long-term to interruptible short- ­ Tennessee Valley term ­ West African Power Pool ­ STEM ­ week/day/hour ahead market ­ UCTE, NORDEL, U.K. and U.S. pools, etc. Southern African Power Pool SAPP: Primary Power Sector Benefits Trade between SAPP members 18,000 Africa DRC ZESA BPC 16,000 SNEL ZESCO Zambia Zimbabwe Botswana EskomSouth Tanesco Tanzania General 14,000 Increase use of existing year) surplus capacity ü 12,000 per Increased viability of 10,000 interconnections ü (ü) 8,000 Reduction of power (GWh 6,000 system losses ü 4,000 Advantage from wheeling Trade ü ü ü 2,000 Postponement of new 0 generation development ü ü ü (ü) 1994 1995 1996 1997 1998 1999 2000 2001 Lower cost alternative supply sources ü ü ü (ü) ü Increased reliability of supply ü Session 1 Presentations 33 Wider Benefits of SAPP Other Markets · Exporters (DRC & Zambia) · Baltic States ­ Capital inflows ­ Highly integrated network based on bilateral trade ­ Increased investment ­ Main focus today centers on: ­ Increased employment · Institutional and sector reforms · Establishment of power pool · Importers (Botswana & Zimbabwe) · Baltic Ring ­ Reduced unit electricity costs leads to lower ­ Too soon to see wider benefits of power trading variable costs · SIEPAC ­ Central America · 36% of Zimbabwe industrial energy demand ­ Institutional set-up being established ­ Income effect leads to increased output ­ Infrastructure projects outlined ­ Potential benefits from: · Increased reliability, reduced operating costs, and optimized investments Overview of Power Trading Benefits Power Generation by Region GDP(1995$ Benefits/ Trading system Powersectorbenfits Other benefits (2000) bill.) GDP BalticRing $110 mill. per year Pollution control 20 0.55% 300,000 Central Asia Increased reliability 48 647TWh Euro-Med Integration with EU 345 250,000 MekongDelta $520 mill. per year Pollution reduction 437 0.12% SAPM $1,080 mill. per year 1,439 0.08% 200,000 SAPP $52mill.peryear 195 0.03% (GWh) South Africa SIEPAC $5-50 mill. per year 60 0.08% 150,000 SnowyRiver Regionalelectricification Irrigationmanagement Egypt Tennessee Valley AuthorityRuralelectricifation Flood management 100,000 WAPP Ruralelectricifaction 62 Generation 50,000 n There are real benefits to the power sector, but the There but the wider benefits are longer term wider benefits 0 n SAPP experience points to SAPP experience win- win situation: situation: States Asia Delta Africa Africa Basin Central America Nile Baltic Mediterranean Mekong Market West o Exporters gain from access to larger market and increased Exporters gain from access to larger market and increased Power Central Southern investments investments America o Importers gain access to lower cost electricity Importers lower cost electricity South Hydro Potential and Electricity Demand in Nile Basin Region Path to Regional Power Markets Institutional and political Power Forum 700,000 framework established Uganda 600,000 Tanzania Development of infrastructure: Sudan Subsidiary Action Rwanda · power lines Programs 500,000 Kenya ·generation capacity Ethiopia Eritrea year 400,000 Egypt Initial phase of trading: per DR Congo 300,000 Berundi ·bilateral long-termcontracts GWh ·emergency support 200,000 ·loaning 100,000 Secondary phase of trading: 0 · power pools Hydro potential 2000 2010 2020 ·spot markets 34 Annex 3 Potential Cooperation Benefits in the Nile Basin Power Sector · Power sector benefits ­ Increased reliability, reduced costs ­ Lower prices & quality of supply · Broader benefits ­ Long-term economic growth & investment ­ Poverty reduction & rural electrification ­ Security of supply ­ Water management & flood control ­ Environmental benefits ­ Contribute to institution building & integration in region Annex 4 Session 2 Presentations 35 NBI Results Framework Increased, equitable Improved livelihood Improved growth and welfare outcomes growth: outcomes: · Income/wealth · Health status generation · Education status · Job expansion Reduced More competitive, productive, People invest in other Increased regional productivity vulnerability, sustainable urban and rural economies: assets: increased · Capital inflows, investment · Improved health food security, · Business starts, expansion, behaviors resilience productivity, trade · Increased school · Agriculture/fisheries production, enrollment (M/F mix) marketing expanded · Environment quality improved Economic/welfare­enabling environment · Women increased productive time Institutional Investment Infrastructure Increased Regional power trade market: Increased Inputs market Improved Improved framework climate expanded access to Increased regional access to affordable, irrigation strengthened: water provision of strength improved: and financial & efficient, reliable, self- infrastructure human resources services: ened: political improved: business regulated/competitive, environmentally /services resources, manage- health, Legal, stability, Transport, services sustainable power land, ment education, regulatory, economic ICT, utilities, research, water and licensing, governance, industrial extension, sanitation tax, customs. stable macro- infrastructure logistics, economy, inputs openness to trade Regional Power Forum Power sector reformed: operational: Increased regional · Unbundled utilities · MOU power sector · Privatized utilities · Cooperative investments agreements · Transmission · Data guidelines · Generation Power trade­enabling environment · Standard contracts · Technical standards · Pool plans · Analytic products · Common network code · Tariff framework · Identify projects 37 Core NBI Power Trade Project Logic More competitive, productive, sustainable urban and rural economies: · Capital inflows, investment · Business starts, expansion, productivity, trade · Agriculture/fisheries/et al production, marketing expanded · Environment quality improved · Women increased productive time Regional power trade market operational: Increased regional access to affordable, efficient, reliable, regulated, environmentally sustainable power Power sector reformed: Regional Power Forum operational: Increased regional power sector · Unbundled utilities · MOU investments · Privatized utilities · Cooperative agreements · Increased transmission · Data guidelines · Expanded generation · Standard contracts · Technical standards · Pool plans · Analytic products · Common network code, · Tariff framework Annex 5 Vision Exercise Economic and social development: more competitive, productive urban and rural economies throughout the region · Global competitiveness · Regional economic integration · Improved health care, use of health services, improved health of children and women · Increased rural agricultural production, food production · Reduced environmental degradation, pollution control, less pressure on forests, less deforestation · Increase in social benefits: improved access to education, better facilities, increased enrollments · Increase in promotion of trade, use of ICT, increased communication · Increased production in industrial sector, introduction of more electricity-dependent industries · Improved profitability · Improved quality of services (communication, health, transport) · People will generate wealth in rural areas and remain there, productive · Creation of more jobs, better wages, better style of life · Introduction of improved methods of production in the rural areas · Increased climate of confidence, improved conflict resolution, sharing of interests, experiences, and information · Traction industries · Expansion of road networks and commerce transported on them · Reduced gap between rich and poor 39 40 Annex 5 · Sustained cultural heritage · Reallocation of funds to other enabling conditions (government services). An effective power trade market Five years from now: 1. Agreed institutional and investment framework 2. Strengthen existing and initiate new transmission lines 3. Power trade agreements concluded 4. Agreed technical operational standards 5. Strengthen professional networking, common database 6. Power Forum established, operating; ideas on transmission tariffs, operating standards, study on demand & supply in region completed 7. Regional power project identified and study started 8. Preparation of documents for financing completed and design started 9. Infrastructure: feasibility studies, new transmission lines 10. Trade: bilateral linked to new transmission lines 11. Intergovernmental agreements 12. Interutility agreements 13. Nile Basin regulatory forum (pricing, standardization, reforms) 14. 4+ bilateral links established (Ethiopia-Sudan, Kenya-Uganda, Rwanda-Burundi- DRC, Kenya-Tanzania, Tanzania-Uganda) 15. Human capacity strengthened 16. Agreement on power sector reform strategy. 10­20 years 1. Improved power infrastructure in place 2. Improved quality of supply 3. Increased access of supply 4. Harmonize regulatory regimes 5. Increased cross-border trade 6. Agreed investment plan 7. Bilateral and regional PT agreements finalized 8. Some priority projects operational Vision Exercise 41 9. Permanent regional (subregional) power pool established. 10. Loose pool (SAPP style) 11. Taxation tariff agreement and access terms 12. Standard contracts 13. More interconnections (E\N-NEL) 14. 3­5000 MW new hydro 15. New CCC-Ts (Egypt, Tanzania, Eritrea) 16. SAPP type trade 17. 20­40 TWh 18. Subregional, regional, interregional grids 19. Regional grid control center established 20. Regional electricity market established 20­50 years 1. Vibrant, free competitive power market in place and working 2. Transregional and intercontinental power trade 3. Well-developed infrastructure 4. Universal access to electricity 5. Least cost power supply 6. Full network integration 7. Implementation of short term energy market (STEM) 8. Linked to SAPP, Euro Med, West Africa 9. Real time market 10. Competitive generation 11. Consolidation at a business segment level: regional genco, regional transco An effective regional power forum 5­20 years 1. Forum established, operational 2. Has a finite life in initial stages: well-established, functioning regional institution providing a learning environment, setting institutional and regulatory framework 3. Will evolve into a regulatory forum, regional dispatch center, and regional planning 42 Annex 5 4. Setting investment plans 5. Managing institutional issues 6. Identify generation projects 7. Make the collaborative market work smoothly 8. Successful in mobilizing funds 9. Managed good database 10. Database, plans, and priorities for power plant, for example, time schedule for financing, implementation, etc. 11. Managing power tariffs, cost database 12. Common regulations for the integrated system during this period 13. Legally binding agreements in place 14. Strengthening human capacity 15. Confidence of all players in industry: strong, transparent, effective decisionmaking. 20­50 years 1. No power forum, but a power exchange 2. Strong regulatory institution 3. Handling all regional matters. A Power Forum vision--elements of a statement 1. An efficient marketplace for power trade that stimulates investment in the region 2. Legal, recognized, self-sustaining institution responsible for capacity building, general planning, and regional power market facilitation and monitoring 3. A market allowing for trade in power at competitive prices for sustainable development in the region 4. Efficient promotional institution for the power trade in the region 5. Technically and institutionally formulated and functioning Forum that will lead to the emergence of spot power market 6. To be a stock market for power trade for users, transmitters, and customers 7. Would use an electric system completely interconnected and reliable and would satisfy the same norms as production and connection projects that would be planned through a long-term development plan; trade would be governed by a competitive (also to other markets, other regions) but equitable system for all parties involved Vision Exercise 43 8. Facilitating sensitization of various actors, developing tools for exchange, facilitating other structures in the trade of electricity 9. Institution to facilitate bilateral trading leading to integration and development of the regional power markets 10. Well-established, self-sustainable institution that establishes a learning environment, sets institutional and regulatory frameworks, conducts regional planning, and facilitates investment. Draft statement of a vision The Power Forum is a regional, self-sustaining, legally established institution that: · Manages and updates a database of regional power systems; · Develops regional plans for expanding generation & transmission; · Stimulates subsidiary-level project investment for regional interconnection; · Designs the power market and establishes standards for operation of the interconnected system; · Promotes cooperation in regional power trade, the development of a power market; and · Facilitates a learning environment for understanding the nuances of legal, regulatory, and pricing regimes required for regional power trade. It is expected that, over time, the Power Forum will facilitate the formation of three new entities: a regulatory forum, a regional dispatch center, and a power exchange. The Power Forum will continue to function as a regional planning agency. Annex 6 Session 3 Presentations Nile Basin Initiative Shared Vision Program Ø GenericImplementation Arrangements Ø Process for Launching SVP Projects Ø NBTF & Financing Status Nile Basin Initiative SVP Implementation Arrangements: Key Features Developing SVP Implementation Arrangements: A Consultative & Participatory Process NBI execution, thru executive arm the Nile-SEC Nile-COM discussion & endorsement of general Principles ( Aug 2000; Mar 2001; Jun 2001) UNOPS to support NBI in procurement & FM, and build ü Lessons from other regional programs, adapted to NBI capacity ü Preference for decentralized approach ü Use of project services agency Grant financed thru multidonor Nile Basin Trust Fund (>60%), Riparian consultations GEF, WB, ADB & bilateral support ü Advisory group meetings (Power, Applied Training, Benefits, Agriculture) ü Country visits (Environment, Confidence Bldg, Water) SVP Coordination Unit at Nile-SEC (program coord., financial Partner consultations mgmt & procurement, knowledge mgmt & information sharing, ü Implementation Review Meeting(Entebbe, Oct 2001) ü Partners Meeting(Oslo, Dec 2002) monitoring and evaluation and training) World Bank consultation & approval (Sr Mgt Meeting, Jan 2003) Ownership, flexibility, effective delivery & quality 45 46 Annex 6 Nile Basin Initiative For each project üRegional PMU (decentralized across basin) üProject Steering Committee Shared Vision Program Overall guidance, direction & oversight, approve annual work plans, review annual reports üNational project coordinator supervise and coordinate the project activities in Ø Generic Implementation each country Arrangements üFocus on staff from the region Ø Process for Launching SVP National NBI Office, govt funded, Projects Supports the Nile-TAC member & counterpart to the Nile- Ø NBTF and Financing Status SEC Facilitates effective interaction among the various ministries Process for Launching SVP Projected Schedule for Launching the SVP Project Start-Up Refine Project & Confirm Finalize Grant Conditions in PROJECT Pre-Appraisal Appraisal Prelim Full Define Implementation Agreement & Place to Disburse Start-Up Effectiveness Implementation Arrangements Arrangements Funds Arrangements SVP Coordination Dec-02 Apr-03 on going Jun-03 Pre- Appraisal Appraisal Negotiations Effectiveness Environment Nov-Dec02 May-02 Jan-03 Apr-03 Draft PAD Revise PAD Final PAD Confidence Building Mar 02 Dec 02 Apr-03 May-03 Jun-03 Country Visits or Grant agreement Initiate project Advisory Grp Visit PMU and/or between activities Water Resources Jul-Aug02 Apr/May-03 Jul-03 Sep-03 Meetings Nile -SEC NBI and Bank Applied Training Jun-Jul 02 Dec 02 May-03 Jul-03 Sep-03 · NBI Office ready · Draft PIP · Confirm to Bank · PMU established & · PMU facilities · Confirm to SEC PMU contrib. core staff selected Aug 02 identified PMU contrib. · PSC constituted · Final PIP and Proj Power Trade Feb 03 May-03 Aug-03 Oct-03 · Host ministry ready · Confirm national · Updated PIP Implm Manual for discussion contributions (PIM) · Draft MSA Benefit Sharing Sept 02 Mar 03 Jun-03 Sep-03 Dec-03 · NBI identifies PSA between NBI & · MSA signed & financial mgmt UNOPS system in place Agricultural Water Use Mar-03 Aug-03 Nov-03 Jan-04 Feb 03 May 03 Aug 03 Nov 03 Requirements Specific to RPT Nile Basin Initiative Requirements from each country ØNomination of Steering Committee members Shared Vision Program ØNomination of Technical Committee members ØConfirmation letter for contribution at the national level (staff time) Ø Generic Implementation Requirement from host country (Tanzania) Arrangements ØLetter from competent authority (ministry of finance or Ø Process for Launching SVP Projects appropriate line ministry) for contribution to support the regional PMU Ø NBTF and the Financing Status "Deadline for submitting the confirmation letters - during the Energy Ministers' Meeting" Session 3 Presentations 47 Partner Interest Est Cost Funding Project (million Pledge Status The Nile Basin Trust Fund (NBTF) Status of USD)* Partner (million USD)(Pledge-Cost) SVP Nile Transboundary $ 39.3 GEF/WB $ 39.3 $ - FinancingEnvironmental Action GEF/UNDP Canada Nile-COM preferred mechanism for financing by Netherlands NBTF (Water Project Coordinated, streamlined & cost-effective vehicle Project Nile Basin $ 12.0 Norway $ 8.0 $ (4.0) Regional Power Trade Sweden ADB Multidonor (six bilaterals, WB-DGF, potentially AfDB) Efficient Water Use for $ 5.0 Netherlands $ 5.0 $ - Agricultural Production Initially administered by the World Bank, but eventually to be transferred to an NBI institution Water Resources $ 28.2 Denmark $ 23.1 $ (5.1) Planning and Management GEF/WB (Envir Proj) United Kingdom NBTF Committee Germany Norway ADB Oversee its operation & use of resources Confidence Building & $ 15.0 Canada $ 5.0 $ (10.0) Consultative & advisory è foster partnerships & Nile ownership Stakeholder Involvement Norway Co-chaired by Nile -COM and World Bank Applied Training $ 20.0 Netherlands $ 20.0 $ - Norway Participants:five NBI representatives, Development Partners, Bank Sweden Socioeconomic Develp $ 11.0 United Kingdom $ 3.0 $ (8.0) and Benefit Sharing World Bank - DGF Totals $ 130.5 $ 103.4 $ (27.1) Review of the Regional Power Trade Project and Key Implementation Issues Ø Project Design Ø Implementation Arrangements Ø Budget & Financing Goal and Objective Goal and Objective PROJECT COMPONENTS Long-Term Goal · Improve access to reliable and low-cost RPT Project power in an environmentally sustainable manner Regional coordination & project management Development Objective · Establish the institutional means to Establishment of coordinate the development of regional Nile Basin Power Forum power markets among the Nile Basin countries Comprehensive basin-wide study Implemented over a three- (possibly four-) year period 48 Annex 6 REGIONAL COORDINATION 1. REGIONAL COORDINATION AND PROJECT MANAGEMENT · Project governance, management & coordination, including: · Facilitate regional cooperation, ­Project Steering Committee project implementation & ­Project Technical Committee knowledge management activities ­Project Management Unit · Two subcomponents ­Coordination with other SVP Projects ·Regional coordination & Subsidiary Action Programs (SAPs) ·Knowledge management 2. ESTABLISHMENT OF NILE NILE BASIN POWER FORUM KNOWLEDGE MANAGEMENT · Establish Power Forum: ­ Define its role & functions · Information dissemination & ­ Define long-term institutional set-up stakeholder participation ­ Initiate Forum activities · Includes following activities: ­Project newsletter ­ Long-term planning & analytical tools ­Power Forum website ­ Training and skills enhancement ­Stakeholder analysis ­ Financial resource mobilization ­Communications plan, based on ­ Conduct special studies results of the stakeholder analysis TRAINING AND SKILLS ENHANCEMENT LONG-TERM PLANNING AND LONG ANALYTICAL TOOLS TOOLS · Build institutional & human capacity at regional & national levels to deal with development of trade · Define role of Power Forum & long-term set-up: ­ Conduct training needs assessment ­ Options for establishing Power Forum as a legal entity ­ Define & launch training program ­ Draft a Memorandum of Understanding · For power utilities, regulators, and government ­ Develop information exchange guidelines ministries responsible for power · Conduct two study tours ­ Coordinate reporting ­ Liaise with other SVP training programs ­ Initiate long-term strategy for Power Forum ­ Create regional power sector databank ­ Working groups for demand/supply studies and methodologies ­ Convene thematic workshops and meetings Session 3 Presentations 49 CONDUCT SPECIAL STUDIES FINANCIAL RESOURCE · Series of technical studies that will foster MOBILIZATION regional dialogue & common understanding of best practices · Following priority studies identified: · Resource mobilization (for RPT Project ­ Best practices in multipurpose coordination regimes and Power Forum) ­ Institutional & regulatory frameworks to support regional power trade · Promote investment in the power sector ­ Public-private partnership models for financing & · Activities include: implementing hydropower projects ­ Frameworks & procedures for environmental impact ­ Establish liaison with development partners assessment of power projects ­ Documentation for investment promotion · Other studies to be identified during project ­ Organize investment seminars ­ Establish & manage "drawdown" facility 3. Comprehensive Basin-Wide Comprehensive Study Institutional Structure Structure STEERING COMMITTEE · Study objective TECHNICAL COMMITTEE ­ Analyze power supply, demand & trade opportunities in the region ­ In the context of multipurpose water Project Management Unit resources development Regional Project Manager · Inception study to be undertaken first Procurement/Financial Mmgt Specialist ­ Review previous studies Lead Specialists ·Power System Planning & Econ ­ Data availability & data requirements ·Hydropower Planning Envrionment/Water Specialist · Sequence full study to incorporate Ad-Hoc Support & Administrative Staff results of SAP studies and operate within Working Groups funding constraints Technical Committee to Function as National Focal Points (2 reprs: Ministry / Utility) THE NBI-SEC STEERING COMMITTEE · Will provide strategic guidance, direction · NBI will be the executing agency for & oversight for the project each of the SVP projects · Membership ­ Deal with information sharing, coordination, ­ Ministry & utility rep from each country integration, and monitoring and evaluation ­ Nile-TAC member from host country · NBI will appoint UNOPS as Project ­ NBI-SEC representative Services Agency · Observers ­ Financial management ­ ENTRO/NEL-CU representatives as link to SAPs, Partners (e.g. Norad), World Bank, UNOPS ­ Procurement · Meet at least annually in Dar es Salaam ­ Capacity building for project management ­ PMU will act as secretary 50 Annex 6 TECHNICAL COMMITTEE PROJECT MANAGEMENT UNIT · Technical Committee will · PMU's functions include ­ Provide technical guidance for RPT activities ­ Coordination & implementation of project activities ­ Guide & endorse work plans & terms of reference for within the NBI countries studies ­ Liaison between Steering & Technical Committees ­ Participate in regional meetings & activities ­ Liaison with Nile-SEC & SVP Coordination Unit to ­ Serve as national focal point for each country ensure overall integration with SVP · Membership ­ Ministry reps: expert in sector reform/deregulation · PMU will ­ Utility reps: expert in system operation/planning ­ Be located in Dar es Salaam, Tanzania, ­ ENTRO/NEL-CU representatives invited to ­ Host country provides offices & utilities participate as link to SAPs ­ Operate at the basin-wide level · Meet at least twice a year in Dar es Salaam · Ad-hoc workgroups ­ PMU as secretary ­ Special, temporary ad-hoc working groups can be convened by the PMU PMU STAFFING Role of Technical Committee at · Regional project manager the National Level ­ Provide overall leadership for project ­ Should have technical background (power system · Technical Committee members will also function as operation) national focal points, responsible for: ­ Report to: · Liaising with national ministries and institutions, Nile-SEC, · Steering Committee on sectoral & thematic activities Nile-TAC members, other NBI projects · Nile-SEC, via SVP Coordination Unit, for coordination & · Facilitating national input into regional studies and integration with SVP & NBI activities · UNOPS for general management & procurement · Helping to identify representatives on working groups & · Specialists committees ­ Lead spec: power system operations & economics · Providing national input to the PMU as required ­ Lead spec: hydropower planning (w/water resources) · Project will provide each committee member a laptop ­ Specialist: environment/water resources computer, including communications package ­ Other tech specialists as required, on consulting basis · Other staff · Country expected to contribute staff time (operating ­ Finance/procurement specialist from their own offices) ­ Information officer, administrator & support staff SVP COORDINATION PROJECT COST · Across the region SVP Coordination Unit is responsible for ­ Overall program coordination Component Cost (US$ million) ­ Oversight of financial management 1. Regional Coordination and Project 2.4 ­ Knowledge management & information sharing Management ­ Monitoring and evaluation at the program level 2. Establishment of Power Forum 4.4 · Within each country: National NBI Office 3. ComprehensiveBasin-Wide Study 5.2 ­ Govt supported, within ministry of water affairs ­ Support to Nile-TAC TOTAL 12 ­ Counterpart to Nile-SEC at national level ­ Forum for coordination of NBI activities through interagency and intersectoral committees (likely to be composed of Steering and Technical Committee members) Session 3 Presentations 51 PROJECT FINANCING KEY ISSUES FOR DISCUSSION · Extend project to four years, within the same budget range (yes) Pledges Estimated Financing · Sequence project components (yes) Cost Needed Partner Total ­ Power Forum activities ­ Inception phase of basin study Norway US$ 4 ­ Full basin-wide study million Sweden US$ 2 · Project Steering & Technical Committee US$ 12 million US$ 4 representatives (see list) million million AfDB US$ 2 ­ Project Steering Committee: Ministry (PS million equivalent); Utility (CEO equiv) TOTAL US$ 8 ­ Technical Committee: Same as working group, million except as modified by individual countries All financing through the NBTF KEY ISSUES FOR DISCUSSION KEY ISSUES FOR DISCUSSION, cont PMU Staff · Currently proposed · Integration and coordination with SAPs ­ Project manager ­ Two lead specialists ­ ENTRO/NEL-CU representatives invited as · Power system operations/planning specialist observers on PSC · Environmental/water specialist ­ ENTRO/NEL-CU representatives invited to participate on Technical Committee · Possibly more appropriate (yes) · Project manager, with power system planning expertise ­ Other · Lead spec: power system operations & economics · Encourage same power experts involved · Lead spec: hydropower planning (w/water resources) SAP and SVP · Specialist: environment/water resources · Other technical specialist as required, on consulting basis KEY ISSUES FOR DISCUSSION, cont KEY ISSUES FOR DISCUSSION, cont · 0ther regional studies ­ why important: · Other regional initiatives ­ What are they and what are the linkages? -Potential linkages ­ EAC power master plan study (Tanzania, Kenya, -Complementarities Uganda) ­ SAPP -Avoid duplication of efforts ­ Kenya-Tanzania power interconnection study -Sharing of information (database) ­ Power Pool of Central Africa (DRC) ­ Great Lakes energy project (DRC, Rwanda, Burundi, KBO (Tanzania, Burundi,Rwanda, Burundi, Uganda)) ­ NEPAD, power component ­ Tanzania-Zambia interconnection study ­ North Africa countries connection study (Egypt) ­ Study of Central Africa (Egypt) Annex 7 Regional Power Trade Project Profile Background Recognizing their common concerns and interests, the Nile riparian countries1 have taken a historic step toward cooperation with the establishment in 1999 of the Nile Basin Initiative (NBI), which is guided by a Shared Vision "to achieve sustainable socio-economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources." To translate this shared vision into action, the NBI has launched a Strategic Action Program, which includes two complementary components: (1) a basin-wide Shared Vision Program (SVP), and (2) Subsidiary Action Programs (SAPs). The NBI is led by a Council of Ministers in charge of Water Affairs from the member states (Nile-COM) with the support of a Technical Advisory Committee (Nile- TAC) and a Secretariat (Nile-SEC). The SVP is a broad-based program of collaborative action to promote exchange of experience, create an enabling environment for investment, enhance capacity, and build trust. The SVP comprises seven thematic projects ready for implementation that have been endorsed by the Nile- COM. These projects include: Trans-boundary Environmental Action; Regional Power Trade; Efficient Water Use for Agricultural Production; Water Resources Planning and Management; Confidence-Building and Stakeholder Involvement (Communication); Applied Training; and Socio- Economic Development and Benefit-Sharing. An eighth project, the SVP Coordination Project, will provide oversight and ensure the effective coordination of the program. The SVP and project documents for each of the seven SVP projects were approved in final form at the Extraordinary Meeting of the Nile Council of Ministers in Khartoum in March 2001 and were presented to the international community at the first International Consortium for Cooperation on the Nile (ICCON) in Geneva in June 2001. Detailed implementation planning for the SVP, including the development of generic guidelines for the program as a whole and the preparation of project specific Project Implementation Plans (PIPs), began in late 2001. 1The NBI currently includes nine Nile riparian countries: Burundi, Democratic Republic of Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, and Uganda. Eritrea has participated in the Nile Basin Initiative as an observer since August 2000 and has stated its intention to formally join soon. 53 54 Annex 7 Objective The long-term goal of the RPT Project is to improve access to reliable and low-cost power in the Nile Basin in an environmentally sustainable manner. An important element in achieving this goal is to create an effective institutional mechanism to promote and develop power trade opportunities among the countries participating in the NBI. The creation of a regional electricity market can play a key role in furthering cooperation among the Nile Basin states and in ensuring that the hydropower resources of the Nile Basin are developed and managed in an integrated and sustainable manner. The development objective of the RPT Project is to establish the institutional means to coordinate the development of regional power markets among the Nile Basin countries. Context Adequate and reliable power supply is critical to meeting the social and economic development objectives of the Nile Basin countries. Yet in most of the Nile Basin countries, only about 10 percent of the population has access to electricity. This situation exists despite the presence of vast and as yet untapped hydroelectric and other energy resources in the Nile Basin. The present limited development of national power systems in the basin imposes a constraint on the exploitation of these resources at affordable costs at the national level. The cost of hydropower in the Nile Basin is also increased by the large seasonal variations in hydropower output, while the costs of meeting peak loads on national power systems can be high in countries where these loads are supplied from expensive thermal plants. These constraints on supplying affordable power could be overcome by expanding the market for these resources by developing power trade among Nile Basin countries. Countries in the Nile Basin are aware of the potential benefits from trading power. Therefore, although the current level of power trade among Nile Basin countries is low, many of them are considering ways to increase this trade and are looking for suitable investments to realize this objective. A recent scoping study, Opportunities for Power Trade in the Nile Basin, which was reviewed and revised by the Power Trade Working Group of the SVP, identifies several options for increasing power trade in the region. In the short term, many of these opportunities exist at the subregional level. It also appears that it is important to evaluate power trade opportunities in the context of a broader multipurpose approach to Nile Basin water resources development and management. The scoping study also found that a more focused and coordinated process for discussing ways to expand power trade in the Nile Basin would advance the development of power supply facilities. The study recommended that this objective be realized through the creation of a basin-wide forum of national power experts to facilitate continued dialogue in the region. Power forums are proving effective in developing power trade among other regional groups of countries, notably in the Southern African Power Pool, the Mekong Regional Power Market, and the Central American Regional Electricity Market in the Mercosur region. The establishment of regional power markets has generally improved systems reliability and economies of scale in planning, construction, and operation of the generation and transmission facilities, thereby contributing to the development and integration of regional economies. Regional Power Trade Project Profile 55 Expected 1. An established and operating Power Forum to support continued Outputs discourse and promote power trade among Nile Basin countries. 2. A completed basin-wide analysis of long-term power supply, demand, and trade opportunities to inform the planning of multipurpose river basin management in the NBI SAPs. 2 Major The project includes three main components: Components 1. Regional Coordination and Project Management. This component will focus on the overall management arrangements for the project, including a Project Steering Committee, a Technical Steering Committee, a Project Management Unit (PMU), and regional coordination across other SVP projects and the SAPs. This component also includes knowledge management activities in order to provide project participants and other key stakeholders across the basin with improved access to relevant information on the activities of the RPT Project. A stakeholder analysis and preparation of a public participation plan will also be undertaken under this component. 2. Establishment of Nile Basin Power Forum. The objective of this component is to establish a Nile Basin Power Forum, define its role and long-term institutional setting, and initiate its activities. The Power Forum will support continued discourse and promote power trade among Nile Basin countries. Important functions, particularly during the formative period, include: § Facilitating dialogue and cooperation among power utilities in the region § Commissioning special studies § Coordinating analytical activities with relevant SVP projects § Assisting in developing the strategic framework and agreements for advancing power trade § Preparing a consistent framework for forecasting power demand § Facilitating training programs. 3. Comprehensive Basin-wide Study. This component will launch a comprehensive basin-wide analysis of long-term power supply, demand, and trade opportunities to inform the planning of multipurpose river basin management in the SAPs of the NBI. Given the complexity of the comprehensive basin-wide study that has to integrate both power development and multipurpose project analysis, this activity will be launched pursuant to an initial assessment study carried out under the supervision of the RPT Project and in collaboration with the Water Resources Planning and Management Project. 2 In the overall framework of the NBI, the SAPs will comprise investment projects that provide mutual benefits to two or more countries. The Nile riparians have formed two subregional groupings: the Eastern Nile (ENSAP), including Egypt, Ethiopia, and Sudan; and the Nile Equatorial Lakes (NELSAP), including Burundi, Democratic Republic of Congo, Kenya, Rwanda, Tanzania, and Uganda in the equatorial lakes region, as well as Egypt and Sudan as downstream riparians. 56 Annex 7 Key Regional Level Implementation Arrangements Project Steering Committee. A Project Steering Committee will be established to provide strategic guidance, direction, and oversight to ensure that the project objectives are achieved, within the overall framework of the NBI and its shared vision, and that the project remains within budget and on schedule. The Steering Committee will be composed of two senior officials from each country, one from the ministry responsible for power and deregulation and one from the power utility; a Nile­TAC member from the PMU host country, in this case Tanzania; and a Nile- SEC representative. To provide a link to the SAPs, representatives of Eastern Nile Technical Regional Office (ENTRO) and the Nile Equatorial Lakes Coordinating Unit (NEL-CU) will be invited to participate as observers. The development partners, likely represented by Norway, the focal point partner; a World Bank representative; one representative from the Project Services Agency (PSA); and other technical experts will also be invited as observers. The Steering Committee will meet at least once a year in Dar es Salaam. Project Technical Committee. A Technical Committee will be established to provide technical guidance to the activities of the Power Forum. The Technical Committee will consist of two senior technical experts from each country, one from the ministry responsible for power, with broad knowledge of sector reform and deregulation, and one from the power utility with expertise in transmission system operations and power system planning; the project manager; and the PMU lead specialists. To provide a link to the SAPs, representatives of ENTRO and the NEL-CU will be invited to participate in the committee. The Technical Committee will meet at least twice a year, in the PMU premises in Dar es Salaam. Project Management Unit. The PMU for this project will be located in Dar es Salaam, Tanzania. The PMU will operate at the basin-wide level. In support of the NBI, the PMU's primary responsibility will be managing and implementing the RPT Project. In addition, in support of the overall SVP, the PMU will provide necessary support to the national activities of the other regional SVP projects in the country of its location. The PMU office will be staffed by a project manager, preferably with technical expertise in power system planning; a financial manager/procurement specialist; two lead specialists, one with expertise in power systems operations and economics and one with expertise in hydropower planning and water resources; an environmental/water specialist; and other administrative and support staff. National Level At the national level, Technical Committee members will also function as national focal points in each country to provide national input in the work of the RPT Project and regional studies, and to serve as liaison with relevant national ministries and institutions. These Technical Committee members/focal points will work on an as-needed basis from their respective offices. Duration Four years Regional Power Trade Project Profile 57 Indicative Cost Est. Cost Donor Pledge Mode Funding Status and Funding Status $12 million Norway $4 million NBTF To be committed after project appraisal (US$ million) Sweden $2 million NBTF Confirmed AfDB $2 million TBD To be committed after project appraisal Total pledges $8 million Deficit (Cost-pledge) $4 million