NILE BASIN INITIATIVE SHARED VISION PROGRAM REGIONAL POWER TRADE PROJECT Part II: Minutes of the First Meeting of the Nile Basin Ministers Responsible for Electricity Dar es Salaam, Tanzania May 20­21, 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 informa l documents that are not readily available. 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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 1. Opening Ceremony..................................................................................................1 2. Session 1 ..................................................................................................................3 3. Session 2 ..................................................................................................................5 4. Session 3 ..................................................................................................................7 5. Session 4 ..................................................................................................................9 Annexes Annex 1: Welcome Statements................................................................................11 Annex 2: Participants ................................................................................................13 Annex 3: Agenda........................................................................................................23 Annex 4: Opening Remarks......................................................................................27 Annex 5: Session 2 Presentations...........................................................................37 Annex 6: Session 3 Presentations...........................................................................47 Annex 7: Long-term Vision--Nile Basin Power Forum.........................................53 Annex 8:Dar es Salaam Declaration on Regional Electric Power Trade.............55 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 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 The opening ceremony of the First Nile Basin Meeting of Ministers Responsible for Electricity was attended by the honorable ministers responsible for electricity of the Nile Basin countries; their technical experts, including permanent secretaries (or equivalent) from the respective ministries; chief executive officers (or equivalent) from the utilities; representatives of cooperating partner organizations; and other invited guests. 1.2 The chairman, Honorable Daniel N. Yona, minister of energy and minerals, Tanzania, welcomed the members, thanking them for turning up for this important meeting, and invited key speakers to make their remarks. 1.3 The meeting was addressed by the chairman of the Nile Basin Council of Ministers (Nile-COM), H. E. Shiferaw Jarso, minister of water resources, Ethiopia, who welcomed the participants to the ministerial meeting and thanked the Tanzania government for hosting the meeting, recognizing that Tanzania has played a significant role in the Nile Basin Initiative (NBI) process since its inception. He highlighted the main objective of the project, which is to create the institutional mechanism to develop electricity markets and promote power trade across and beyond our region, through the Nile Basin Power Forum. 1.4 Honorable Ms. Sigrid Romundset, ambassador, Royal Norwegian Embassy in Tanzania, welcomed the attainment of a Headquarters Agreement by the Nile Secretariat (Nile-SEC), pointing out it is now easy for donors to channel the funds through the Nile Basin Trust Fund (NBTF), administered by the World Bank. She pointed out that Norway welcomes the way the NBI and Power project has been able to work within the objectives of the New Partnership for Africa's Development (NEPAD). She reaffirmed the Norwegian government's commitment as was stated at the meeting of the International Consortium for Cooperation on the Nile (ICCON) in Geneva, and said they look forward to signing the Trust Fund. 1.5 Mr. David Grey, senior water adviser and Nile program manager, World Bank, on behalf of cooperating partners gave an address commending the countries for their commitment to the initiative. 1 2 Minutes of the First Meeting of the Nile Basin Ministers Responsible for Electricity Part II 1.6 The official opening address was delivered by the vice president of Tanzania, H. E. Dr. Ali Mohameid Shein. He expressed appreciation for the NBI achievements so far, and welcomed all members especially guests from outside Tanzania. He pointed out the important objectives of the meeting, emphasizing the need for economic development, which can be attained through regional power trade. He appreciated the fact that Tanzania has been given the honor to host the Power Project. He declared the meeting officially open. 1.7 Welcome statements are attached as annex 1. 2 Session 1 Participation 2.1 The meeting was attended by the honorable ministers of the NBI responsible for electricity from Burundi, Egypt, Eritrea,1 Ethiopia, Rwanda, Sudan, Tanzania, and Uganda. The minister from the Democratic Republic of the Congo (DRC) was represented by the attaché of affairs from the DRC Embassy in Dar es Salaam. Power experts from the 10 countries were also present during the meeting. Representatives from cooperating partners and other invited guests attended the meeting. The Nile-SEC and Nile Team were also in attendance. The list of participants is attached as annex 2. Selection of Rapporteur 2.2 The host country, Tanzania, was the chair. Ethiopia was elected as the rapporteur. Adoption of the Meeting Agenda 2.3 The agenda was discussed and adopted without any amendments and is appended as annex 3. Statements from Nile Basin Ministers Responsible For Electricity 2.4 The honorable ministers responsible for electricity delivered their statements in which they reaffirmed their commitment to the NBI. They expressed appreciation for the accomplishments of the NBI to date. They reaffirmed their commitment to the NBI process and encouraged power integration in the Nile Basin region, pointing out that this will encourage economic, technical, and environmental benefits. Opening remarks are appended as annex 4. 1Eritrea attended as an observer. 3 3 Session 2 International Rivers: Sharing the Benefits of Cooperation 3.1 Mr. David Grey, senior water adviser, and Nile program manager, World Bank, gave a presentation on International Rivers and the Benefits of Cooperation. The presentation provided an overview of Africa's complex and grave water challenges, identifying hydrological variability as an important factor hindering the region's economic growth and security. He highlighted the linkages between water and power in Africa and stressed the benefits of regional cooperation in addressing hydrological variability and watershed management, and power generation and trade. The presentation highlighted the relationship between regional integration through joint management of rivers, including storage and power, and regional security. He further elaborated on the multiple agendas, the different types of cooperation, and the challenges in sharing those benefits. Mr. Grey's conclusion was that investments in power trade can transform the Nile Basin countries' economies, but such transformation will need vision, innovation, and boldness. NBI and SVP Overview 3.2 Mr. Meraji Msuya, executive director, NBI Secretariat, presented the Nile Basin Initiative and Shared Vision Program Overview, highlighting the process and progress to date. Overview of Subsidiary Investment Programs 3.3 Mr. Antoine Sendama, Nile Equatorial Lakes Coordinating Unit (NEL-CU) coordinator, and Dr. Salaheldien Yousif, Eastern Nile Technical Region Office (ENTRO), presented an overview of Subsidiary Investment Programs ­ NELSAP and ENSAP, giving the progress of their respective power programs. 3.4 The presentations are appended as annex 5. 5 4 Session 3 Benefits of Power Trade and its Contribution in Regional Economic Development 4.1 Mr. Anton Eberhard, a consultant, delivered a presentation on benefits of power trade and its contribution in regional economic development. He talked about the experience of power trade in other regions including the Mekong Basin, the Common Baltic Electricity Market (CBEM), SIEPAC in Central America, and CIER in South America and further elaborated on the South African Power Pool (SAPP), because many similarities exist between the two subregions. The presentation pointed out potential benefits of power trade in the Nile Basin for the power sector and for the economies in general. The Nile Basin has huge potential for cooperative development of hydro resources and increased interconnection and trade that can bring important benefits for the economy including increased economic activity, social and developmental benefits, multipurpose and environmental benefits, and peace and regional security through economic integration. Mediterranean Power Pool 4.2 Dr. Mohamed Awad, chairman of the Egyptian Electricity Holding Company, presented a paper on the Mediterranean Power Pool. Highlighting the fact that the pool was just a dream 10 years ago, he outlined the scope of two regional electricity interconnections, linking Egypt to Europe from the east and the west. Overview of the Nile Basin Shared Vision Program Regional Power Trade Project and the Long-Term Vision for the Nile Basin Power Forum 4.3 Mr. Bashir Mrindoko, commissioner for energy and petroleum affairs, Ministry of Energy and Minerals, Tanzania, presented an overview of the project including its implementation arrangements, staffing of the project management unit, the Steering and Technical Committees, SVP coordination, and budget. Mr. Mrindoko also presented to the Nile Basin ministers the Long-Term Vision for the Nile Basin Power Forum developed by the high-level power experts during a meeting held in Dar es Salaam in February 2003. The vision was endorsed by the ministers. 7 8 Minutes of the First Meeting of the Nile Basin Ministers Responsible for Electricity Part II 4.4 The presentations are appended as annex 6 and the Long-Term Vision is included in annex7. 5 Session 4 Dar es Salaam Declaration on Regional Power Trade 5.1 The Dar es Salaam Declaration was presented to the honorable ministers. The declaration recognizes the significant socioeconomic as well as power system benefits that can be realized from regional cooperation. It further recognizes the growing cooperation in the Nile Basin, particularly as achieved through the NBI. The declaration 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 Dar es Salaam Declaration on Regional Power Trade was unanimously adopted and signed by all the ministers. 5.2 The declaration is appended as annex 8. Closing Ceremony 5.3 In closing remarks, the chairman thanked the members for their active participation at the historic meeting, the first of its kind, and expressed high hopes in the future opportunities from the Regional Power Trade Project. 9 Annex 1 Welcome Statements Address by H. E. Shiferaw Jarso, Chairman of the Nile Council of Ministers and Minister of Water Resources, Ethiopia H.E. Dr. Ali Mohammed Shein, vice president, United Republic of Tanzania, and guest of honor, Honorable ministers responsible for electricity from the Nile Basin countries, Ambassadors, NBI cooperating partners, Distinguished delegates, experts, Ladies and gentlemen, It is indeed my great pleasure and honor, on behalf of my member colleagues of the Nile Basin Council of Ministers, to welcome this first meeting of the Nile Basin Ministers responsible for electricity under the spirit of Nile Basin Initiative. The full attendance at this meeting signifies our countries' commitment to the NBI process and its important role in achieving sustainable socioeconomic development in our region. Let me also take this opportunity to thank the Government of Tanzania for hosting this meeting. And we thank you, guest of honor, for committing your valuable time to officiate this meeting-- the first of its kind in the history of the Nile Basin. Excellencies and colleagues, The commitment and contribution of Tanzania in furthering the NBI process is well recognized. The NBI was launched here in Dar es Salaam. The Agreed Minutes, which established the NBI, were signed here, in this city, on February 22, 1999. Tanzania played a significant role in brokering the process of consultation and dialogue, which resulted in the formation of this unique regional initiative. The NBI is now recognized internationally, and its Secretariat, located in Entebbe, Uganda, enjoys full legal status. Today, as host of this first meeting of the Nile Basin ministers responsible for electricity, Tanzania once again plays an important role in the history of the NBI. 11 12 Annex 1 Guest of honor and my fellow Nile Basin ministers, The NBI is promoting cooperation within the Nile Basin in many different sectors. And I believe that it is in your sector of power that the potential exists to realize the first tangible--and perhaps greatest--benefits from regional cooperation. Your technical experts have conceived and prepared the Power Trade Project of the NBI Shared Vision Program. A key objective of this project is to create the institutional mechanism--the Nile Basin Power Forum--to develop electricity markets and promote power trade across and beyond our region. In parallel, through the NBI's investment programs at the subbasin level, your technical experts are exploring options and preparing investments in hydroelectric generation and transmission interconnection so vitally needed to serve the energy needs in our countries and support power trade. Together, these parallel programs in regional, institutional building, and in infrastructure development will help to improve access to reliable and low-cost power in an environmentally sustainable manner. This, we know, is an essential element in reducing poverty in our region and achieving economic prosperity for our peoples. It is at this meeting that we, the ministers of water affairs, hope that you, the ministers responsible for electricity, will take on this challenge of promoting power trade across the region and beyond, and of collaboratively pursuing power-related investments in the Nile Basin. Our guest of honor, The NBI provides a unique forum for the countries of the Nile to build a solid foundation of trust and confidence and to design and implement cooperative programs that realize tangible benefits in the Basin. For the first time in history, all of our countries have embarked on a remarkable journey together and on a path of our own making. Hardly five years in existence, already we see some significant changes. We have forged a fruitful partnership aimed at bringing prosperity, peace, and security to our basin and the region as a whole. Fellow ministers of the Nile Basin, we thank you for your participation in this process to date and welcome your growing engagement in the NBI. We know that through sustained commitment, together we can indeed realize our shared vision: "To achieve sustainable socio-economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources" We must focus on achieving tangible results. Our shared vision must be translated into real benefits for all the peoples of our region and especially for the poor. I thank you all for your attention. Annex 2 Participants Burundi Burundi Dr. Prof. André Nkundikije Mr. Nolasque Ndayihaye Ministre de l'Energie et des Mines Director of Energy ad interim BP 745 Ministry of Energy and Mines Bujumbura, Burundi BP 745 Bujumbura, Burundi Phone: 257 22 5909/ 225101 Tel: 257 22 3888/ 226579 Fax: 257 22 3337 Fax: 257 223337 dgee@cbinf.com Burundi Burundi Mr. Désiré Florent Nzayanga Mr. SEJIJI Daniel Director General of Energy and Water Directeur de l'Electricite Ministry of Energy and Mines REGIDESO BP 745 Bujumbura, Burundi BP 660 Bujumbura Tel: 257 229 555 Tel: 257 24 3307 Fax: 257 229624 Fax: 257 22 216 dgee@cbinf.com Email: dsejiji@yahoo.fr Burundi Democratic Republic of Congo Mr. Philippe Niyongabo Hon. George Buse Falay Director General of REGIDESO Ministre de l'Energie 3 Avenue de la science Boulevard de 30 Juin BP 660 Bujumbura, Burundi Immeuble REGIDESO Tel: 257 22 2720/210553 Kinshasa/Gombe Fax: 25722 6563 Phone: 243 813 330203 phniyongabo@yahoo.fr / dgregie@cbinf.com 13 14 Annex 2 Democratic Republic of Congo Democratic Republic of Congo Mr. Vika Di Panzu Mr. Cifarha Male Andre Adviser for International Relations, SNEL Assistant to Deputy Chief Executive P.O. Box 500 Kinshasa, DRC SNEL Tel: 243 081700 5850 /089 13 027 P.O. Box 500 Kinshasa, DRC Fax: 243 12 33735/33734 Villa 557, Citemama Mobutu sneldg@ic.cd, vikadipanzu@yahoo.fr C/Mont - Ngafula Tel: 243 081700 55 10/089 13 027 Fax: 243 12 33735/33726/ 33734 maleif@yahoo.fr Democratic Republic of Congo Democratic Republic of Congo Mr. Alphonse Muyumba Kalenge Mr. Etienne Tshibangu Chief Executive Director Attaché SNEL SNEL P.O. Box 500 Kinshasa, DRC 2831 Av. De la Justice Tel: 243 8189 13674 Kinshasa, DRC Fax: 243 12 33735 Tel: 243 817005421 etshibangu@yahoo.fr Fax: 243 12 33735 almuyumba@yahoo.fr/ sneldg@ic.cd Democratic Republic of Congo Egypt Mr. Cyrille Komanda Litata Dr. Hassan Ahmed Younes Secretary of the Minister of Energy Minister of Electricity and Energy Boulevard de 30 Juin C/o P.O. Box Abbasia Immeuble REGIDESO Tel: 202 2616317/ 7610573/761 0575 Kinshasa/Gombe Fax: 7610573 Phone: 243 813 330203 Egypt Egypt Dr. Mohamed M. Awad Eng. Abdel Rahman Salah El-Din Chairman Under Secretary of State for Minister's Egyptian Electricity Holding Company Office Abbassia Nasr-City, Cairo, Egypt Ministry of Electricity and Energy Tel: 202 2616306 - 2616487 Abbassia, Extension of Ramsis St. Fax: 202 2616512 ­ 26162239 Code No. 11517 Cairo, Egypt P. Code: 11517 P.O. Box 222 Abbassia eea_awad@link.net Tel: 202 4051162/ 2616514 / 2616317 Fax: 202 2616302 Telex: 92097 POWER UN Participants 15 Egypt Egypt Eng. Abdel Rahim Ahmed Helmi Hamza Dr. Eng. Fatma Ahmed Moustafa Manager Network Studies, General Director for International Egyptian Electricity Holding Company Cooperation and Agreements Extension of Ramsis St, Abbassia, Nasr- Ministry of Electricity and Energy City, Abbassia, Extension of Ramsis St. Cairo, Egypt Code No. 11517 Cairo, Egypt Tel: 202 2616531/ 4012368 P.O. Box 222 Abbassia Fax: 202 4011630 Tel: 202 2616571/ 2616514 / 2616317 P. Code:11517 Fax: 202 2616302 Abd_rahim@yahoo.com Telex: 92097 POWER UN intcoop@hotmail.com Ethiopia Ethiopia Hon. Haile Assegide H.E. Shiferaw Jarso State Minister for Infrastructure Minister of Water Resources and C/o P.O. Box 23847-Code 1000 Nile-COM Chairman Addis Ababa, Ethiopia Ethiopia Tel: 251 1 457 7890 Fax: 251 1 461176 Ggbg1@telecom.net.et Ethiopia Ethiopia Mr. Teferra Beyene Mr. Mengesha Shiferaw Project Manager MSHPSP Director, Civil Work Projects Department Head Administrative Department Ministry of Water Resources Ethiopia Electric Power Corporation P.O. Box 23847-Code 1000 P.O. Box 1233 Addis Ababa, Ethiopia Addis Ababa, Ethiopia Tel: 251 1 457 7890 Tel: 251 1 526 519/ 509940/ 154164 Fax: 251 1 461176 Fax: 251 1 514256 Ggbg1@telecom.net.et mengesha84@hotmail.com Ethiopia Kenya Mr. Miheret Debebe Hon. Ochilo Ayako General Manager Minister for Energy Ethiopian Electric Power Corporation P.O. Box 30582 Degualle Square Nairobi, Kenya Addis Ababa, Ethiopia Phone: 254 2 330048 P.O. Box 1233 Fax: 254 2 240910 Tel: 251 1 56 0041 ps@energymin.go.ke Fax: 251 1 552345 eelpa@telecom.net.et 16 Annex 2 Kenya Kenya Mrs. Bernadette Nzioki Mr. Jasper Odour Senior Deputy Secretary Managing Director Ministry of Energy, Kenya Kenya Power & Lighting P.O. Box 30582 P.O. Box 30099 Nairobi Tel: 254 02 330048 Kenya Fax: 254 2 240910 Tel: 254 2 32014700 ps@energymin.go.ke Fax: 254 2 3750181 joduor@kplc.co.ke Kenya Kenya Mr. John Githinji Mr. Albert Mugo Chief Engineer Power System Development Manager Ministry of Energy KPLC P.O. Box 30582, Nairobi, Kenya Tel: 254 2 330048 Tel: 254 2 3201 4306 Fax: 254 2 240910 Fax: 254 2 337351 Nairobi, Kenya amugo@kplc.co.ke power@energymin.go.ke Kenya Rwanda Mrs. Wangari Githi Hon. Sam Nkusi MP Public Relations Officer State Minister in charge of Energy and Minister for Energy Communication P.O. Box 30582 Ministry of Infrastructure Nairobi, Kenya P.O. Box 24 Tel: 254 2 341843 Kigali, Rwanda Fax: 254 2 240910 Rwanda ps@energymin.go.ke Rwanda Sudan Mr. Aloys Makuza Kanamugire Hon. Ali Tamim FARTAK Director of Energy Minister of Electricity Ministry of Infrastructure Gamé Avenue P.O. Box 24 Khartoum, Sudan Kigali, Rwanda Phone: 249 11 786550/ 78374 Tel: 250 08506664/250 583706 Fax: 249 11 778036 Fax: 250 583706 mkanamugire@yahoo.fr Participants 17 Sudan Uganda Mr. Amin Sabri Ah Sudan med Hon. Daudi Migereko Secretary General State Minister for Energy Ministry of Electricity P.O. Box 7270 Game Avenue Kampala, Uganda P.O. Box 1380 dmigereko@parliament.go.ug Khartoum, Sudan Tel: 249 11 783074 Fax: 249 11778036 aminsabri@yahoo.com Uganda Uganda Mr. Watuwa Bwobi Mr. Gerald Muganga Director for Energy and Mineral Manager Engineering Services Development Uganda Electricity Transmission Co. Ltd. Ministry of Energy and Mineral P.O. Box 7625 Development Kampala, Uganda P.O. Box 7270 Tel: 256 41 233433 Kampala, Uganda Fax: 256 41 341789 Tel: 256 41 232987 muganga@uetcl.com Fax: 256 41 234732 directoremd@utlonline.co.ug Uganda Uganda Mr. Erias Kiyemba Mr. Henry Bidasala-Igaga Managing Director, Principal Energy Officer Uganda Electricity Transmission Co. Ltd. Ministry of Energy & Mineral Plot 29/33 Development P.O. Box 7625 P.O. Box 7270 Kampala, Uganda Kampala, Uganda Tel: 256 41 235889/257863 Tel: 256 (006) 41 233972/ 349 126 Fax: 256 41 349342 Fax: 256 41 341789 igaga@energy.go.ug or e.kiyemba@uetcl.com bidasala@hotmail.com Tanzania Tanzania Hon. Daniel N'yona Mshana Daniel E. Minister of Energy and Minerals P R Manager P.O. Box 2000 TANESCO Dar es Salaam, Tanzania P.O. Box 9024 Dar es Salaam, Tanzania Tel: 255 744 267046 18 Annex 2 Tanzania Tanzania Mr. Pheophillo Bwakea Mr. Bashiri Juma Mrindoko Assistant Commissioner for Electricity Commissioner for Energy & Petroleum Ministry of Energy and Minerals Affairs P.O. Box 2000 Ministry of Energy and Minerals Dar es Salaam, Tanzania P.O. Box 2000 Dar es Salaam, Tanzania Tel: 255 22 2119159 Tel: 255 222 139455 Fax: 255 22 120799 Fax: 255 022 2120799 bwakea@mem.go.tz Mrindoko@mem.go.tz Tanzania Tanzania Mr. Rudy Huysen Mr. Mathew Mbwambo Managing Director Executive Engineer (Sr.) TANESCO Ministry of Energy & Minerals Umeme Park Ubungo P.O. Box 2000 Dar es Salaam, Tanzania P.O. Box 9024 Tel: 211715618, 0741 303919 Dar es Salaam, Tanzania Fax: 2120799/2137169 Tel: 2451159 mbwambo@hotmail.com rhuysen@cats-net.com Tanzania Tanzania Mr. David Ngula Mr. Jimmy Adamson Manager, Research & Development Deputy Manager Director TANESCO TANESCO P.O. Box 9024, Umeme Park, Ubungo Dar es Salaam, Tanzania P.O. Box 9024 Tel: 255 22 451131 /22 245 1210 Dar es Salaam, Tanzania Fax: 255 22 451206 Tel: 022 245 1184/ 1984 depngula@cats-net.com , Fax: 022 245 1184/ 1984 nguladep2002@yahoo.co.uk jadamson@cats-net.com Tanzania Eritrea Mr. Butingo A.S. Luhumbika H.E. Tesfai Ghebreselassie Director Minister of Energy and Mines Ministry of Water and Livestock P.O. Box 5285 Development Jimma Senbetie St. No. 14 Asmara P.O. Box 412 The State of Eritrea Dodoma, Tanzania Tel: 291 1 116872 / 127944 Tel: 255 744 494166 Fax: 291 1 127662 Fax: 255 22 2450005 Dwr-maji@intafrica.com Participants 19 Eritrea Dr. Semere Habtezion Director Department of Energy Ministry of Energy and Mines P.O. Box 5285 or 5716 Jimma Senbetie St. No. 14 Asmara The State of Eritrea Tel: 291 1 127944 Fax: 291 1 127652 semereabhh@yahoo.com Nile Equatorial Lakes Subsidiary Eastern Nile Subsidiary Action Action Program Program Mr. Antoine Sendama Dr. Salaheldien Yousif NEL CU Coordinator Eastern Nile Technical Regional Office, Nile Equatorial Lakes Subsidiary Action ENTRO Program Tel. +251 (1) 461130 P.O. Box 192 Entebbe, Uganda +251 (1) 459407 Tel: 256 41 320208 / 321424 Cell +251 (9) 246195 Fax: 256 41 320971 Fax: +251 (1) 459407 entro@telecom.net.et P.O. Box 27173 code 1000 Addis Ababa, Ethiopia Nile Basin Discourse NBI Secretariat Mr. Jean Bigagaza Mr. Meraji Msuya Facilitator Executive Director Nile Basin Discourse Nile Secretariat Plot 56 Circular Road Entebbe P.O. Box 192 Tel: 256 41 322433 / 322 432 Entebbe, Uganda Cell: 256 77 344627 Tel: 256 41 321424 facilitator@utlonline.co.ug Fax: 256 41 320971 mmsuya@nilesec.org NBI Secretariat NBI Secretariat Ms. Helen Bugaari Ms. Hamere Wondimu Program Officer Senior Program Officer Nile Secretariat Nile Secretariat P.O. Box 192 P.O. Box 192, Entebbe, Uganda Entebbe, Uganda Tel: 256 41 320183/ 321424 Tel: 256 41 321424\ Fax: 256 41 320183 hwondimu@nilesec.com hbugaari@nilesec.org 20 Annex 2 NBI Secretariat Donors and Partners Ms. Barbara Matovu Babu Ram, Ph.D. PSEC(ED) Principal Power Engineer Nile Secretariat African Development Bank P.O. Box 192 TRA, TUNIS, TUNISIA Entebbe, Uganda Tel: 216 71 333 511 Tel: 256 41 321329/ 321424 Fax: 216 71 351 933 Fax: 256 41 320971 nbisec@nilesec.org Donors and Partners Donors and Partners Mr. Ahmed Ounalli Anders Hagwall ADB Consultant on Energy Senior Regional Advisor/Counsellor African Development Bank Swedish Embassy 14 rue IBN Sina P.O. Box 9274 Dar es Salaam 2010 Manouba Centre Tel: 255 22 2111235 Tunisia Fax: 255 22 2113420 Tel: 216 71 800 960 Anders.hagwall@sida.se Ounalli_tn@yahoo.fr Donors and Partners Donors and Partners Ms. Irene Hoel Ms. Sigrid Romundset, Adviser, Section for N. Africa & the Ambassador Middle East Royal Norwegian Embassy Tanzania Norwegian Agency for Development Mirambo Street Cooperation (NORAD) Ruselokkvn 26 Tel: 255 22 2113366 P.B. 8034 Dep N-0030 Oslo, Norway Tel: +47 22 24 20 30/02 86 F: +47 22 24 027622 24 20 31 e-mail: irene.hoel@norad.no Donors and Partners Donors and Partners Mr. Jan Moen Egil Skofteland Norway Adviser NVE Middelthunsgt 29, Oslo Norway Tel: 47 22 959595 Participants 21 Donors and Partners Donors and Partners Mark Davis Mr. Leif Sauvik Director Norway ECON P.O. Box 5 or 0051 Oslo, Norway Tel: 47 90147034 Fax: 47 22 420040 Mark.davis@econ.no Donors and Partners Donors and Partners David Grey Fadi Chidiac Sr. Advisor and Nile Team Leader Consultant The World Bank Acres International 1818 H. St, NW P.O. Box 1000 Washington, DC 20433 USA. 4342 Queen Street Tel: 1-202-473 4125 Niagra Falls, Canada Fax: 1-202-473 8301 Tel: 1 905 374 5200 / 5218 dgrey@worldbank.org Fax: 905 374 11 57 fchidiac@acres.com Donors and Partners Donors and Partners S. Thomas Lavender Barbara Miller Consultant SVP Coordinator, AFTNL Acres International World Bank Nile Team P.O. Box 1000 1818 H Street, NW 4342 Queen Street J-11 Niagara Falls, Canada Washington DC Tel: 1 905 374 5200 Tel: 1 202 473 2451 Fax: 905 374 11 57 bmiller@worldbank.org tlavender@acres.com Donors and Partners Donors and Partners Jacob Granit Anton Eberhard NELSAP Coordinator, AFTNL Professor The World Bank University of Capetown 1818 H St, NW P/Bag Rondebosch 7701 Washington DC 20433 USA Cape Town Tel: 1 202 473 3658 South Africa Fax: 1-202-473 8301 Tel: 27 4061922 jgranit@worldbank.org Fax: 27 4061412 eberhard@gsb.uct.ac.za 22 Annex 2 Donors and Partners Donors and Partners Alexandra Planas Allison Berland World Bank Nile Team, AFTEG World Bank Nile Team, AFTNL 1818 H Street, NW 1818 H Street, NW J-9-900 J11-100 Washington DC 2800 Quebec Street NW # 1027 Tel: 1 202 473 6772 Washington DC aplanas@worldbank.org Tel: 1 202 473 4442 aberland@worldbank.org Donors and Partners Donors and Partners Mangesh Hoskote Isaak Masaala Sr. Power Specialist Consultant The World Bank P.O. Box 956 50 Mirambo Street, Dar es Salaam Dar es Salaam, Tanzania Tel: 255 22 2114575 Tel: 255 741 338 749 Fax: 255 22 2113039 ilmasalla@hotmail.com mhoskote@worldbank.org Annex 3 Agenda Opening Ceremony 9:00­10:00 am Chairman: Honorable Daniel N. Yona, minister, Ministry of Energy and Minerals, Tanzania Address by the Chairman, Nile Basin Council of Ministers H.E. Shiferaw Jarso, minister of water resources, Ethiopia Address from NBI Development Partners Honorable Ms. Sigrid Romundset, ambassador, Royal Norwegian Embassy in Tanzania Address from the World Bank Mr. David Grey, senior water adviser and Nile program manager, World Bank Official Opening Address 10:00­10:45 am Coffee Break Session 1 10:45 am­12:30 pm Selection of Rapporteur Objectives and Agenda of the Meeting Statements from Nile Basin States Ministers Responsible for Electricity Burundi Rwanda Democratic Republic of Congo Kenya Egypt Sudan Ethiopia Uganda Eritrea 12:30­2:00 pm Lunch 23 24 Annex 3 Session 2 2:00­3: 30 pm International Rivers: Sharing the Benefits of Cooperation Sharing the Benefits of Cooperation Mr. David Grey, senior water adviser, and Nile program manager, World Bank Nile Basin Initiative and Shared Vision Program, An Overview Mr. Meraji Msuya, executive director, Nile Basin Initiative Secretariat Overview of Subsidiary Investment Programs­ ENSAP and NELSAP Mr. Antoine Sendama, NEL-CU coordinator Dr. Salaheldien Yousif, ENTRO Discussion 3:30­4:00 pm Coffee Break Session 3 4:00­5:30 pm Regional Power Trade Benefits of Power Trade and its Contribution in Regional Economic Development Prof. Anton Eberhard, board member of National Electricity Regulator and Graduate School of Business, University of Cape Town, South Africa Mediterranean Power Pool Dr. Mohamed Awad, chairman, Egyptian Electricity Holding Company Overview Regional Power Trade Project Mr. Bashir Mrindoko, commissioner for energy and petroleum affairs, Ministry of Energy & Minerals, Tanzania Presentation of Long-term Vision for Power Forum Mr. Patrick Rutabanzibwa, permanent secretary, Ministry of Energy and Minerals Session 4 5:30­6:00 pm Dar es Salaam Declaration Rapporteur Agenda 25 AOB Closing Ceremony 8:00 pm Formal Dinner with Address by an Invited Speaker Annex 4 Opening Remarks Remarks by H.E. Minister Dr. Hassan A. Younes, Ministry of Electricity and Energy, Arab Republic of Egypt His Excellency Minister DanielYona, Excellencies, ministers, and Distinguished guests, Ladies and gentlemen, On behalf of all of you, the Egyptian delegation and myself, please let me extend our sincere appreciation and thanks to H.E. Minister Daniel Yona for organizing and sponsoring this event. Also, thanks are due for the hospitality we are receiving during the event. Also, please allow me, on behalf of all of you, to extend our appreciation and thanks to the financing institutions who support this activity. Ladies & gentlemen, Today's event is an important step toward the enhancement of our continuous effort to be involved in the improvement of the social and economic development efforts for Africa in general and specifically for the Nile Basin countries. Also, today's event is a continuation of our individual countries' activities in seeking solutions to the energy needs of our region. We all realize our shared responsibility toward our common vision of the Nile Basin Initiative to achieve sustainable socioeconomic developments through utilization of, and benefit from, the common Nile Basin natural resources. Within the framework of the Nile Basin Initiative, and as Nile riparian countries, Egypt considers the Regional Power Trade Project a real opportunity for establishing the institutional means to coordinate the development of regional power markets among the Nile Basin countries. Power trading through interconnected power grids will certainly enhance the development of the Nile riparian countries in a cooperative manner, sharing substantial socioeconomic benefits, and promotion of regional peace and security. 27 28 Annex 4 We believe that particularly in the field of energy, international and regional cooperation could lead to common understanding and great improvement in our development plans for the region countries. Cooperation in the field of energy is the sole motivation for such positive impacts which enhance the relationship among the region countries. The region is endowed with immense natural and energy resources that include oil, natural gas, and hydro. The ultimate goals to be gained from the development of these resources and mutual cooperation to secure constant supplies of energy and transferring its services to its customers, in an easy, flexible and neat way could be accomplished. The Egyptian experience with regional electrical interconnection provides a success story for the potential technical, policy, institutional, commercial, and environmental gains to the power sector and wider economy of the interconnected countries. As you all know, Arab countries' interconnection has started between the North African countries a while ago, and only lately in 1998 on the Arab eastern countries by the Egypt- Jordan link, which was followed in 2001 by the Jordan-Syria interconnection, and is currently in the process to include six countries: Egypt, Jordan, Lebanon, Syria, Iraq and Turkey. On the African side, a 220-kV link with Libya was completed in 1998, and Libya is expected to be connected to Tunisia later this year. Also, on the eastern side of Egypt, Lebanon and Syria will be connected this year. This extends the North Africa power grid, which covers Egypt, Libya, Tunisia, Algeria, and Morocco, to Europe through the existing interconnection between Morocco and Spain. This will form the first leg of the Africa-Europe link, which is projected to be upgraded to 500 and 400kV. It is planned that south and east Mediterranean countries extending from Morocco to Syria will be interconnected to the northern Mediterranean countries through a Syria- Turkey AC transmission line and a Morocco-Spain AC submarine cable. This will create the Mediterranean power pool interconnection and enhance regional power trade in the Mediterranean Basin. In fact, despite technoeconomic limitations and some electrical, geographical, and political constraints, the implementation of such interconnections among the region countries will entail economic, technical, and environmental benefits. The main economic benefits are the direct savings resulting from postponing the construction of new power plants or extensions of established plants, and the decrease of the reserve margin for every individual system without affecting the reliability or availability of power supply, as well as savings from the reduction of operation and maintenance costs. Opening Remarks 29 Interconnected systems with different daily or seasonal demand profiles can save capacity. Differences in production cost can be of great benefit for the interconnected systems. The technical benefits of electrical interconnections are mainly related to the increase of the system availability and reliability as well as the increase of dynamic stability of the system. Several environmental benefits are also obtained from electrical interconnections, such as better usage of primary energy resources, thus reducing polluting emissions and greenhouse gases. Ladies and gentlemen, These benefits certainly call for the implementation of full interregional electric interconnection within the entire Nile Basin countries and then the entire continent of Africa. During the late 1980s of the last century, a feasibility study was undertaken on utilizing the considerable hydro resources available in Democratic Republic of Congo, to generate electricity to satisfy regional demand for electricity. This will play a vital role in the economic growth and development of the region countries by providing reliable and efficient electric power to commercial, industrial, agricultural, and residential consumers. The excess of such electrical energy may be exported to Europe through grid interconnection with Egypt and North African countries. The revenues from this excess energy export will support the infrastructure projects and will enhance the social economic impacts of the same. The Nile Basin Initiative will provide the approach and will introduce the prerequisite ingredients for such important interconnection project(s), as the regional power trade project is intended to develop regional plans for expanding generation and transmission. The implementation of similar interconnections among the Nile riparian countries will allow the joint utilization of the resources in a coordinated hydrothermal economic mix. It will be a multipurpose interconnection, transmitting bulk hydroelectric power to the load centers, allowing economic interchange of energy between regions and between countries. It will make available clean, low-cost, hydroelectric energy to the consumers and provide the means of economic growth and development of the region countries. Revenues from exporting the excess electric energy to Europe would encourage foreign investors to finance such power projects in Africa, and will ensure the payback of the investments. These additional revenues will support the required development of the infrastructure of the region. It is imperative that the formed specialized committees of this gathering consider the regional concept of interconnection activities and propose the recommendations for the implementation process for such important projects. 30 Annex 4 Within this context, Egypt is willing to provide support, particularly in the field of training, covering all aspects and tools related to building and operating all different types of power generation facilities particularly for hydropower projects where Egypt has already established a training center in Aswan. It would be to the advantage of the region countries to take benefit of it for training our different aspects of O&M hydro plants. Other established training centers in Egypt would be available to provide the training in power transmission systems and power generating facilities. Ladies and gentlemen, It seems imperative that the outcome recommendations of the specialized committees of this meeting focus on specific tasks regarding regional power trading, potential generation, and interconnection that should be implemented within a time frame to be achieved before our upcoming meeting. If we manage to meet the challenge facing all of us, and obtain more balanced regional energy cooperation, then we shall be well on our way to tackling the other crucial issues of the Nile Basin region, such as alleviating widespread poverty and providing a cleaner, healthier world for future generations. It is our hope that this meeting provides significant opportunities for participants to interact and discuss key country-specific and regional issues. Thank you very much, and I wish that the outcome of our gathering will lead to a new horizon of cooperation and commitment toward the efficient use of clean and affordable energy. Opening Remarks 31 Statement of H.E. Haile Assegide, minister for Infrastructure of Ethiopia Honorable Dr. Ali Mohamed Shein, vice president of the United Republic of Tanzania; Excellencies, ministers responsible for electricity; Dear colleagues; Ladies and gentlemen; Ambassadors of our development partners; Representatives of the African Development Bank and finance institutions present in the meeting, On behalf of the Government of the Federal Democratic Republic of Ethiopia and myself I would like to thank the Government of Tanzania for extending unreserved hospitality to us. Your excellence Mr. Chairman, Dear colleagues, After the inception of the NBI (Nile Basin Initiative) under the Shared Vision, which is "to achieve sustainable socio-economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources," the cooperation of the Nile Basin countries has today reached a remarkable stage. Among the various areas in which cooperation is taking place is the Nile Basin Power Trade Projects whose fate will start to be shaped through the declaration we will pass at the end of this meeting. It is evident that power trade is taking place, within the continent among the southern African and west African countries, between Egypt and Libya, and between Uganda and Kenya to name a few. The scope of the presently outlined project, however, is much wider than any one of the above mentioned. The fact that the cooperation in the preparation of the project has thus far been successful clearly shows that the tasks ahead will also be promising. The 10 nations that share the Nile waters can benefit from power trade due to the availability of large untapped hydropower potential on the one hand and the existence of a large need for power on the other end. The development of regional power markets among the Nile Basin countries would allow exploring possibilities of optimized resource utilization. The hydropower potential of the Basin countries is enormous, DRC (Democratic Republic Congo) having the largest, followed by Ethiopia. As has been clearly indicated in the project document for "Nile Basin Regional Power Trade," the benefits that can be drawn from power trade are the securing of · Reduced operation costs due to economic power exchange 32 Annex 4 · Regionally selected least-cost project as opposed to national ones · Common reduced reserve requirement · Coincident peak load instead of average load. In Ethiopia we are working toward constructing hydropower plants, which will be commissioned during the coming few years. It is my firm belief that these plants at their initial years of operation can contribute toward the provision of energy in Ethiopia and extra capacity to the power trade. As the basin power trade project matures and many more tie lines are realized in the future, more and more hydropower plans can be commissioned in Ethiopia and the cooperating countries. Your Excellency Mr. Chairman, Dear colleagues; I would like to mention that the transmission line project between Ethiopia and Sudan as part of the Subsidiary Action Program is being carried out. I sincerely hope that the Nile Basin Power Trade Project will soon realize similar tie lines among the 10 basin countries. Finally I would like to reaffirm the commitment of the Government of Ethiopia toward the success of the project. Finally I would like to thank all our development partners who have made this meeting successful and support our future development efforts. I wish success to the present meeting. Thanking you. Opening Remarks 33 Statement of H.E. Tesfai Ghebreselassie, Minister of Energy and Mines of Eritrea Mr. Chairman, Honorable Daniel N. Yona; Honorable ministers; Representatives of development partners; Ladies & gentlemen, At the outset, on behalf of the Eritrea delegation and myself, I would like to take this opportunity to join my predecessor speakers, the honorable ministers to thank His Excellency Minister Daniel Yona and the Government of the United Republic of Tanzania for hosting this important meeting as well as for their warm and cordial hospitality. So far, Eritrea maintains an observer status in the NBI. This being the case, let me assure your excellency that my country fully recognizes the importance of and supports the cherished objectives spelled out in the Shared Vision Programs of the NBI. To repeat the well-established fact of the reality in our region, many of our countries are facing considerable power shortages. In Eritrea, as in may other countries, power shortage and its high price constitute one of the major challenges of development. Our success in combating poverty and underdevelopment will, among other things, depend on how soon and how effectively we solve the existing power-related problems. In this regard, my country, Eritrea, cannot agree more than on the need for a regional cooperative approach as formulated in the Regional Power Trade Program documents. This could be one of the effective ways to tackle the power problems in our countries and to ensure cooperation and stability in our region. For understandable reason, Eritrea's power-related data has not been incorporated in the mentioned documents. I would like to confirm that the missing data along with relevant information on what we have been doing to reform the power sector and the efforts we have been exerting on oil and gas exploration as well as studies on the potentials of renewable energies will soon be provided to the Secretariat. In conclusion, I would like to thank all those who have contributed in whatever form to the formulation of the Regional Power Trade Visionary Program and the holding of this important meeting. It is my country's sincere desire and wish that the initiative becomes a great success to benefit all peoples of the basin. Thank you for your attention. 34 Annex 4 Statement of Hon Daudi Migereko, Minister of State for Energy, Uganda Mr. Chairman, the minister of energy minerals of the United Republic of Tanzania, Honorable Daniel Yona; The chairman, Nile Council of Ministers; Colleagues, honorable ministers from the Nile riparian countries; Your excellencies; Our development partners; Distinguished participants; Ladies and gentlemen, It gives me great pleasure and honor to address you on this historical occasion when we witness the birth of a Regional Power Trade Forum. We commend the Nile Basin Initiative Secretariat, which we are honored to house in Uganda, for your efforts and this initiative. We also commend the Tanzanian government for her traditional warm hospitality. Uganda is a country with unique characteristics. The entire territory of Uganda lies within the Nile River catchment area. Uganda is both an upper riparian and a lower riparian country. Uganda also plays host to a very big chunk of the biggest reservoir, Lake Victoria, from where the White Nile begins its long journey. These unique features have taught us lessons, which have been our guiding pillars in planning national development. Some of the main lessons learned are: · That the Nile is the source of livelihood for the entire country · That the Nile is also fed from some resources outside Uganda · That the Nile is also a source of livelihood for our brothers and sisters outside Uganda. Such lessons have influenced the formation of government policies. Government policy therefore aims at the following: · Achieving sustainable utilization and management of the Nile resource · Sharing the benefits from the Nile River with other riparian states where we have a comparative advantage · Taking into consideration the legitimate interest of other riparian states in the Nile Basin. With this background the Government of Uganda initiated and recently commissioned a comprehensive study on the Lake Victoria waters. The result of the Lake Victoria Opening Remarks 35 Management Study will lead to better understanding and management of the Nile Basin resource to the benefit of many if not all the riparian states. In the spirit of information sharing and taking other riparian interests on board, we have maintained the culture of notifying all riparian partners of any planned developments on the common Nile resource and seeking their opinion. Whereas Uganda has a long-standing history of transboundary power trade with her neighbors dating as far back as half a century, this has been on bilateral basis. And except in the case of Kenya, the other transactions are not based on an interconnected grid system but supply of isolated cross-boarder territories, i.e., with Tanzania and Rwanda. While the main objective of supplying power to those areas is achieved, the trading partners miss the other benefits that would accrue from an interconnected system. We have therefore been engaged in bilateral negotiations with most of our neighbors with a view to sourcing for funds for grid extension and strengthening. We shall need also to pursue the funding of generation capacity development seriously, in light of reduced appetite for investment in big hydro projects by Western energy companies. This forum should provide the solution to this steadily emerging reality of scarce funding from outside Africa. Short of this we shall remain the least electrified and shall not meet the millennium goals as agreed at the WSSD in Johannesburg. The need for regional power trade has been high on Uganda's agenda. We have spared no efforts at every opportunity to raise and market this idea. The East African Community is helping us come up with something concrete. The sister member countries have embarked on the East African Power Master Plan Study. It is Uganda's hope and belief that the result of that study will be a useful input for planning programs under the Nile Basin Initiative Regional Power Trade project. The Regional Power Trade project is also a big step in the right direction toward the achievement of the NEPAD objectives on energy. Mr. Chairman, it is heartening to observe that we have all heartily embraced the initiative for Regional Power Trade as a means of accessing electricity for our people and investment. This pledged commitment and support should lead to success. It is my sincere hope, however, that this initiative will generate not only well-written reports but also attract funding in addition to well-constructed physical infrastructure development, connecting and supplying quality, reliable, and clean power to the masses of our region. We have talked for a long time; it is now time to act to cease being the laughingstock of the world. I thank you. FOR GOD AND MY COUNTRY Annex 5 Session 2 Presentations 1st Meeting of the Nile Basin Ministers An overview Responsible for Electricity · Africa's water challenge Water and Power: Sharing the ­ An historical legacy of international rivers Benefits of Cooperation ­ A natural legacy of hydrological variability · Africa's power challenge: the links · The benefits of cooperation, & sharing them David Grey The World Bank May 20­21, 2003 Dar es Salaam, Tanzania Africa's historical legacy: numerous Africa's water challenge is grave international & complex.... rivers ·60+ international rivers ·Many countries per · An historic legacy: international waters basin ·Many basins per · A natural legacy: climate variability country ·Tensions in all river basins (+/-) ·International relations challenge ·Cooperation: slow, costly, complex 38 Annex 5 International rivers: complex & political systems Water wars or water for peace? e.g., the New Geography of Conflict · Entwined with cultures, complex, serious, affairs of "Possible flashpoint for resource states, sovereignty-related conflict · Management of rivers is political; management of · Jordan international rivers is very political... · Nile · Rivals... dwellers on opposite banks of a river · Tigris ­ Euphrates · Indus · The Chinese got it right long ago: · Mountain Aquifer -W. Bank/Israel" + OR: sharing the costs and benefits of cooperation.. = Political order river ++ dyke = Political order Africa's natural legacy: hydrological variability Kenya: very high hydrological variability Extreme climate variability & associated landscape vulnerability mean very high costs to African economies; Kenya: extreme rainfall variability around mean major investments are needed in watersecurity... 160% 140% 120% 100% 80% 60% 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 Rainfall affects growth... Tanzania rainfall variability and GDP 1989-2000 Correlation between GDP and rainfall in Zimbabwe 1979-1993 Rainfall variability and GDP 15.0 3.0 25 8 2.0 10.0 20 7 1.0 15 (%) 6 5.0 (Meter) % 0.0 10 5 % growth 5 0.0 -1.0 Rainfall 0 4 GDP in variability growth -2.0 -51989 Real 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1990 1991 1992 1993 1994 1995 1996 1997 1998 19993 -5.0 GDP -10 Real GDP growth (%) -3.0 Variability Rainfall 2 Variability in Rainfall (Meter) -15 rainfall variability -10.0 -4.0 -20 GDP 1 Years -25 0 Session 2 Presentations 39 Economic impacts of extreme variability Storage is the key to managing variability Kenya: 1997-98 flood & 1998-2000 drought Africa's limited water storage & the poverty trap 10/97-02/98 flood infrastructure damage $ 2.39 b 900 10/98-05/00 drought croploss $ 0.24 b 800 North America -6150 m3/person 788 Australia -4729 livestock loss $ 0.14 b 700 China - 2486 reduc. HP production $ 0.64 b 600 492 reduc. industr. production $ 1.39 b capita/ 500 400 total $ 2.41 b 363 370 307 storage300 10/97-05/00 cost of climate variability $ 4.8 b 200 approx GDP ($9b/yr) $ 22 b 114 139 142 100 variability as GDP % (48%) 22% 47 11 0 Direct recurring annual cost: catchment degradation/ Faso Africa Kenya deteriorating water quality $120m/a Lesotho Ethiopia Algeria Nigeria Tanzania Namibia Morocco Artificialstorage ­m3 per person Burkina South Storage per capita and "water security" Africa's electricity use per person Water availability versus storage 1000 2108 2,000 Spain Australia (UnitedStates consumption ­ 12,000kWh/capita/yr United States consumption - 11994 kWh/yr/capita) (m3) 800 1,800 600 1,600 capita 1,400 400 (kWh/yr)/Capita S. Africa 1,200 500 kWh/capita-year minimum consumption 200 1,000 for reasonable quality of life 900 withdrawal/ Ethiopia 0 800 0 1,000 2,000 3,000 4,000 5,000 600 581 storage/ capita (m3) 430 consumption 400 204 200 184 85 126 114 · Ethiopia needs 40km3 storage, c. US $ 32 b (at $ 0.8 / m3) = 5 X GDP Elec 21 55 38 29 0 · Assume: stable population, current storage 43 m3/cap (~~Ethiopia), Faso Kenya Ghana Egypt goal of 746 m3/cap in 20 yrs (~~S. Africa; only 12% of USA...) Nigeria Ethiopia Algeria Average Cameroon Tanzania Uganda Senegal Morocco · % GDP investment: Australia 0.1%, South Africa 0.6%, Ethiopia 25% Burkina EnergyuseperpersoninAfrica World Hydropower potential tapped Africa's economically feasible HP developed Regions - Hydropower Potential Tapped 1 0 0 % developed 100% 90% 80% 70% 80% 60% Europe 50% N America hydropower 50% 46% 60% 40% 32% 34% 30% 27% 23% 20% 17% 40% 13% feasible 10% 10% S America % 1% 2% 3% Asia (incl. 0 % 20% Faso China) Africa Egypt Kenya Africa Ethiopia Senegal Namibia Uganda Nigeria Lesotho Zimbabwe 0% Cameroon South Burkina 40 Annex 5 BUT heavy dependence on hydropower... ...can lead to vulnerability to hydrological Kenya variability 8.5% 0.2% 4,000.0 19.3% 3,500.0 3,000.0 Hydro Hydroelectric (GWH) 2,500.0 Thermal Thermal 2,000.0 Geothermal Geo-thermal Wind 1,500.0 1,000.0 Wind Generation 500.0 0.0 72.0% 1996 1997 1998 1999 2000 Year Addressing the water legacies: toward regional integration International waters: sharing the · Hydrological variability: manage through storage & mobility/diversity of production (incl. power) & benefits of cooperation trade à regional integration · International waters: enhance regional security 1. Why cooperate? through joint management of rivers (incl. storage & 2. The benefits of cooperation power) à regional integration 3. Types of cooperation 4. Sharing benefits Why cooperate? Multiple agendas Why cooperate? Converging cooperative agendas 3 · All sovereign states will have national agendas: obvious, 3 rational, legitimate · In a two-country river basin there will be two national agendas, & potentially a 3rd cooperative agenda 1 2 1 2 1 2 · National agendas can converge toward a cooperative Case 1 Case2 Case3 agenda, still remaining preferred agenda of each nation ...all cases can be rational. The Country 1's preferred agenda · ...when there is benefit in doing so, & when benefits choice among them will depend outweigh costs for each nation Country 2's preferred agenda upon their relative benefits. Cooperative agenda 3 Session 2 Presentations 41 Benefits: the ecological river Benefits: the economic river The Challenges The Opportunities The Challenges The Opportunities Type 1: Limited water resource Improved water quality, Type 2: Improved hydropower & management: riverflow characteristics, soil Suboptimal water agricultural production, flood- Increasing Benefits degraded watersheds, conservation, biodiversity Increasing Benefits resources drought management, development To the river wetlands, biodiversity, From the river environmental conservation & & water quality. water quality · Cornerstone of river basin management · Optimal river development at basin scale ­But many tradeoffs (pristine vs. engineered) ­ Again difficult tradeoffs ­ best at basin scale ­Unthreatening start for international ­ NOT zero sum; increasing water availability cooperation · Focus on benefits ($), not water (m3) · Many recent examples ­GEF: Baltic & Red Seas; Danube · Many examples (with tradeoffs!) ­The Rhine ­ "Salmon 2000" ­ TheSenegal Basin: co-owned power assets; Lesotho Highlands: · Watersheds & floodplains: royalties to Lesotho (5% of GDP); SA Power Pool the southern Africa case · Challenge: sharing benefits & "fairness" Benefits: the political river Benefits: the catalytic river The Challenges The Opportunities The Challenges The Opportunities Type 3: Tense (+/-) regional Policy shift to cooperation & Type 4: Integration of regional relations & political development, from dispute; from Regional Reducing Costs infrastructure, markets & economy impacts food & power self-sufficiency to Increasing Benefits fragmentation trade Because of the river security; reduced conflict risk & Beyond the the river military expenditure (+/-) · Always some tensions in all international rivers (but +/-) · Cooperation à political processes enabling other cross- ­ Control: sovereignty, strategic necessity, national pride border cooperation beyond the river ­ Nothing flows: fragmented markets, infrastructure, labor flows · Directly: through forward linkages: ­ Self-sufficiency, not security ­ e.g., power ­ Agricultural surpluses à growth in agribusiness & trade · Extreme cases: military preparedness ­ HP generation/trade à expanded/profitable industry · Shared water one contributory factor in relations between · Indirectly: diminished tensions may enable greater states (cannot "unbundle"): economic integration ­ Water can contribute to dispute, even conflict ­ Increasing flows in unrelated sectors ­ Water can be catalyst for cooperation & integration ­ The Mekong power case Benefits of international waters cooperation The Challenges The Opportunities The cooperative river: Type 1: Limited water resource Improved water quality, management: riverflow characteristics, soil Increasing Benefits the dynamics of multitype benefits degraded watersheds, conservation, biodiversity To the river wetlands, biodiversity, & water quality. Type 2: Suboptimal water Improved hydropower& · In all basins, resources agricultural production, flood - Increasing Benefits development drought management, ­ All types of benefits from cooperation From the river environmental conservation & ­ & noncooperation has costs due to opportunities foregone water quality · BUT scale & relative importance unique to each basin Type 3: Tense (+/-) regional Policy shift to cooperation & relations & political development, from dispute; from Reducing Costs ­ As transactions costs high, benefits may be too small to justify economy impacts food & power self-sufficiency to cooperation in some cases Because of the river security; reduced conflict risk & military expenditure (+/-) ­ In others, may be necessary condition for stable relations & trade, Type 4: Regional Integration of regional thus greatest benefits from apparently unrelated development Increasing Benefits fragmentation infrastructure, markets & trade ­ Thecase of the Nile Basin Initiative: all four types of benefit Beyond the the river 42 Annex 5 Types of cooperation ­ a cooperation continuum ·Identify, negotiate and implement suites of national investments ·Joint project that capture incremental assessment and ·Communication and cooperative gains design Types of cooperation notification ·Adapt national plans to ·Joint ownership ·Information sharing mitigate regional costs ·Joint institutions different types of cooperation have different ·Regional ·Adapt national plans to assessments capture regional gains ·Joint investment costs and benefits... Dispute Cooperation Continuum Integration Unilateral Coordination Collaboration Joint Action Action Type 1 benefits Type 2 benefits Type 3 benefits Type 4 benefits Types of cooperation ­ some examples Sharing benefits: challenges Indus Mekong Rhine Orange Senegal River commun- info sharing, convergent joint prep joint type of ication assessments national and equity cooperation · Optimal river development may give unacceptable agendas investment ownership distribution of benefits type of 1-3 1-4 1,3 2,3 1 -4 benefit · A mechanism for redistribution & compensation purchase type of cost sharing cost sharing agreement, joint · `Fairness' ­ subjective & situation specific benefit financing ownership sharing · Potential benefits to be shared ­ Water quantity/quality; water supply; hydropower; agricultural production; fisheries; transport; ecotourism; trade... Dispute Cooperation Continuum Integration · Political decisions ­ not just legal or economic Unilateral Coordination Collaboration Joint Action Action Sharing benefits: possible mechanisms Benefit sharing along the continuum · Water sharing · Payment for water or water markets · Joint equity ownership ­ (Re)assigning rights · Cost sharing for data · Payment for watershed gathering and management · Joint financing · Payments for water analysis · Payment for other benefits · Joint management and operations ­ Payment for use rights, bilateral sale or water markets · Cost sharing for regional assessments · Purchase agreements · Payments for benefits ­ Compensation for lost benefits, payments to allow new uses · Purchase agreements ­ power, agriculture, etc. Conflict Cooperation Continuum Integration ­ Agreed price can effect a transfer of benefits Unilateral Coordination Collaboration Joint · Financing & ownership arrangements Action Action ­ Agreed terms can effect a transfer of benefits · Bundling broader benefits ­ Trade, transport... Session 2 Presentations 43 ...Beyond the river... Water, power & benefits · In all basins there are multiple agendas, and many types of benefits · The water & power linkages in Africa are very great to be gained · Multipurpose storage (large & small) critical strategy for addressing hydrological variability & for power generation · Cooperation or dispute: choice determined by perceptions of benefits · Investments in power generation will bring great benefits to water resources & vice versa · Different types of cooperation "right" for different cases · Benefits of power interconnection & trade provide major incentives · Recognize the broadest possible bundle of benefits: some obvious, for cooperation "beyond the river": the web of interdependency others less so · Share benefits &/or water fairly; explore innovative sharing · Innovative benefit-sharing mechanisms could even include joint mechanisms ownership of assets, joint operating companies · Perception of fairness essential to sustain cooperation · Major investments in power trade can transform economies · Rivers can be obstacles or entry points ­ both directly & beyond the · Such transformation will need vision, innovation & river boldness... Nile Equatorial Lakes Subsidiary Action Program Nile Equatorial Lakes Subsidiary Action Program NELSAP Power Development and Trade Sub-Program NILE EQUATORIAL LAKES Burundi DRC SUBSIDIARY ACTION Egypt PROGRAM Kenya Rwanda Sudan (NELSAP) Tanzania Uganda NELSAP POWER DEVELOPMENT DEVELOPMENT Nile Equatorial Lakes Subsidiary Action Program AND TRADE SUB-PROGRAM TRADE SUB NELSAP ORGANOGRAM Long-term objectives as defined in 2001: Partners · Regional economic development and improved quality of life through provision of ample power NEL-COM Nile-COM supply at reasonable prices. NELTAC NEL-CU · Increased regional power supply in the NEL Role: Support & facilitate Region. Coordinator Program Officer · Improved reliability of power supply and the RPSC Exp. Committee RPSC RPSC RPSC River Basins Power Fisheries Agriculture Water Hyacinth quality of power delivered through (two) Development & Trade interconnecting the isolated networks. RPSC-SEC RPSC-SEC During · Complementarity, SVP, EAC, SAPP (in the long Implementation term), etc. 44 Annex 5 NELSAP POWER DEVELOPMENT DEVELOPMENT SSEA of Power Development Options SSEA Options AND TRADE SUB-PROGRAM Stage 1 & 2 in NEL Region Stage · Objective: undertake an inclusive and participatory Immediate objectives as agreed by power strategic/sectoral social and environmental assessment experts in Kisumu, May 2002: of power development options, including ranking of options. · Focus on the power development and the network expansion in Burundi, · Expected outcome: power strategy that will put forth Rwanda, and Tanzania different power development options, including an assessment of economic and engineering feasibility, environmental and social impacts. · Provide decisionmakers with guidance on the development steps required to achieve the long-term objectives in the · SSEA will allow for informed and transparent decision- most efficient, economic, and making in the selection of power investments taking environmentally acceptable manner into account other regional frameworks such as the EAC Master Plan. SSEA of Power Development Options in Burundi, SSEA of SSEA of Power Development Options Options Rwanda, and Western Tanzania Work includes: ·Expected start-up date: July 2003, 2-year duration · Assessment of energy policies and legal and · Regional Steering Committee to be formally administrative framework in the three countries established by August 2003 · Energy needs assessment · Estimated cost stage 1 & 2: $US1,600,000 · Power options identification · Cumulative impacts assessment · Comparative analysis of power options · Mitigation plan for selected power option alternatives Public consultations will be an integral part of the study Nile Basin Initiative Initiative Overview ENSAP Power Program Eastern Nile Subsidiary Action Transform Program (ENSAP) Vision The challenges The challenges First Meeting of Nile Basin Ministers Basin Ministers Opportunities Opportunities Responsible for Electricity Dar es Salaam, Tanzania Tanzania Status of projects May 20­21, 2003 Action 1 2 Session 2 Presentations 45 Eastern Challenges EGYPT EGYPT Nile To Eastern Countries Nile Countries SUDAN SUDAN ETHIOPIA ETHIOPIA 3 How can hydropower address Opportunities Opportunities challenges? ·· Can produce more PowerPower more · Climatic variation StorageStorage Ethiopia 30,000 MW Sudan 5,000 MW · Floods Control ·· Can Produce more Water Saving Evaporation Evaporation · Deforestation/degradationDeforestation/degradation Alternative energy ·· Can Produce More Food · Food insecurity Irrigation Irrigation 5 · Weak economies Cheaper/renewable energy 6 ENSAP power projects projects ENSAP power projects projects 1. Power interconnection between Ethiopia and Sudan 1. and Sudan 1. Power interconnection between Ethiopia and Sudan 1. and Sudan 2. 2. EasternNile power trade investment investment 2. 2. Eastern Nile power trade investment a) Transmission interconnection Transmission a)a) Transmissioninterconnection interconnection b) Site-specific projects Site specific projects b) Site-specific projects projects ·· KaradobiKaradobi, Birbir, Baro, Geba, etc. · Karadobi, BirbirBirbir, Baro, GebaGeba, etc. Baro ·· Merowe,, Upper AtbaraAtbara,, Kagbar,, Shirik, etc. Kagbar Shirik · MeroweMerowe, Upper Atbara, KagbarKagbar, Shirik,, etc. Upper Atbara Shirik 7 7 46 Annex 5 Next steps Institutional arrangements · Conduct regional assessment of EN--power trade power · Update interconnection study study · ENTRO established June 6, 2002 ENTRO · Conduct the EIA for the interconnection project. · Legal status in three countries Legal status in three countries · Develop public­private partnership (ENVEST private Forum) · Fully operational Fully · Strengthen and expand the ENSAP donor partnership 9 10 ENTRO'S APPROACH ENTRO'S APPROACH Working together the countries can get all types of all types benefits. benefits. Ensure:Ensure: Ownership, Participation,Participation, Use Regional Assessments as a tool to identify, assess,assess,and Use foster opportunities to motivate cooperation. foster cooperation Effective InformationInformation Exchange, and Consensus Consensus 11 12 ENTRO'S APPROACH Conclusion Transform Faster Implementation of Hydropower Vision Facilitateearly actions actions, Could Lead to Economic Economic Transformation Transformation pick the low hanging fruit, pick Build Confidence and Peace Confidence and Peace and seek optimum level of cooperation. level cooperation Promote Cooperation Promote Cooperation Action 13 Results in Economic Integration Results in Economic Integration Annex 6 Session 3 Presentations Contents of presentation presentation The benefits of power trade n Experiences from other regions other regions and its contribution to contribution to o Case studies from around the world regional economic development o SAPP in particular particular n Potential benefits from from First Meeting of the Nile Basin Ministers First Meeting regional trade in Nile Basin Responsible for Electricity for Electricity o For the power sector (direct benefits) sector (direct benefits) Dar es Salaam May Salaam 20­ 21, 2003 o For the economies in general (indirect benefits) general (indirect benefits) Prof Anton Eberhard University of Cape Town with assistance from Mark Davis/Econ Mark Davis/Econ The role of power trade in regional economic development power trade in regional economic development The role of power trade in regional economic development power trade in regional economic development Mekong Basin power trade Mekong South America - CIERCIER South America n Cambodia, Lao PDR, Myanmar, Thailand, Myanmar, Thailand, n Argentina,Bolivia, Brazil, Chile, Colombia, Ecuador, Bolivia, Brazil, Chile, Colombia, Ecuador, Vietnam, and China's Yunnan Province Paraguay, Peru, Venezuela and Uruguay: 80% hydro, Uruguay: 80% hydro, large T distances planning common power trade n Regional Electricity Markets Interconnection (REMI) Interconnection (REMI) n ESMAP /APECstudies initiative of World Bank/ESMAP n Investmentsneededintransmission&& needed in transmission n Stepwiseproject to strengthen existing to strengthen existing interconnections and gradual building up of bilateral bilateral generation and multilateral trade n Savingsof$10billionto2020estimated estimated n Estimated annual operating cost reductions annual operating cost reductions compared with self-sufficiency compared with o Argentina-Brazil = $650 million - o PeruPeru--EcuadorEcuador-- ColombiaColombia-Venezuela= $310 million = $310 million o Brazil-Uruguay = $60 million Uruguay million o ChileChile-Peru = $60 million million The role of power trade in regional economic development power trade in regional economic development The role of power trade in regional economic development power trade in regional economic development 48 Annex 6 Sistema de Interconexion Electrica de Electrica Common Baltic Electricity Market (CBEM) Paises de America Central (SIEPAC) America Central (SIEPAC) n Estonia,Latvia, and Lithuania in process of establishing a market for electricity trade market for electricity trade n Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua & Panama: small economies, not currently interconnected, interconnected, n Investments in place, interconnected also with Russia large infrastructure investments needed n Jointly owned, common dispatch centre (Riga) n Some national market reform, but regional interconnection n History of bilateral trades, 50­80%ofconsumption ­ consumption needed to further deliver benefits n Gradualmarketliberalization,andcontestability and contestability n Planning new 1,800-kminterconnection -> Planning new 1,800- interconnection SIEPAC << - IDB n Ministries/regulators/TSO--harmonization ofcodes harmonization codes n Institutionbuilding,regulatoryharmonization n Moving toward voluntary bilateral contract market with n Planning wholesale regional market wholesale regional market balancingpool balancing pool n BenefitsBenefits estimated:estimated: $100 millionto $1billion n BalticRing - > potential benefits Euros 110 million p.a. Ring million p.a. The role of power trade in regional economic development power trade in regional economic development The role of power trade in regional economic development power trade in regional economic development Southern African Power Pool Southern Southern African Power Pool n South Africa, Namibia, Botswana, Lesotho Lesotho Swaziland, Mozambique, Zimbabwe, Zambia, n Purpose: Malawi, Tanzania,, Angola,, DRC Angola o To allow members to coordinate planning and coordinate planning and operation of their systems while maintaining n Bilateral trade over four decades reliability, autonomy and self -sufficiency, self-sufficiency, and to n Large regionalhydro potential potential share in the benefits of operating the pool benefits of operating the pool n 1993: Integrated Operating and Planning n Organization: Committee formed between BPC, ZESA and between BPC, ZESA and o Three-tier; Executive Committee, Management tier; Management ZESCO, then Eskom and Snel and Committee and three subcommittees for Planning, n 1995: SADC signs Intergovernmental MOU ->> - Operating, and Environment and Environment created SAPP ->> InterutilityInterutility MOU -> Agreement o SAPP Coordination Center in Harare established in Coordination established in between operating members 1999 The role of power trade in regional economic development power trade in regional economic development The role of power trade in regional economic development power trade in regional economic development Southern African Power Pool Southern Increase in power trade in SAPP power trade in SAPP n A right to use available transmission capacity n Firm and nonfirmnonfirmwheeling arrangements wheeling arrangements 18,000 n 13 types of contracts with agreed set of rates for 16,000 ­ firm (>7 days) 14,000 ­ interruptible (> 7 days) year) ­ interruptible (notice up to 24 hrs) 12,000 ­ mutual support ­­ e.g., operating reserve, emergency, etc. mutual per 10,000 n New: ShortShort--Term Energy Market (STEM) 8,000 (GWh ­ Offers and bids for daily contracts, also hour ahead Offers and bids for daily contracts, 6,000 ­ Congestion constraints Congestion 4,000 ­ Trade potential outstrips transmission capacity Trade potential outstrips Trade ­ Small volumes Small volumes 2,000 0 n SAPP pool plan, capacity expansion with prioritized sequencesequence 1994 1995 1996 1997 1998 1999 2000 2001 n Estimatedsavings to 2010: $935 million savings to 2010: $935 million The role of power trade in regional economic development power trade in regional economic development The role of power trade in regional economic development regional Session 3 Presentations 49 Direct benefits of SAPP power trade Percentage dependence on electricity imports SNE SNEL ZES ZESCO ZES ZESA BPC BPC Esko Eskom Tane Gene Tanesco General L CO A m sco ral Swaziland Swaziland 77% 77% Increased use of existing surplus capacity Botswana Botswana 55% 55% Increased viability of interconnections Namibia Namibia 46% 46% Advantages from wheeling Zimbabwe Zimbabwe 43% 43% Postponement of new generation Lesotho Lesotho 10% 10% Lower cost alternative supply source South Africa 3%3% South Increased reliability of supply The role of power trade in regional economic development The role of power trade in regional economic development regional Indirect benefits of SAPP power trade Indirect benefits of Some overall observations // lessons Some overall observations lessons n Foreign currency revenues to exporting currency revenues to exporting n ManyMany intercountry power cooperation and trading initiatives intercountry power cooperation countries like DRC, Zambia, and Mozambique Mozambique around the world o Some regions involve long transmission distances n Stimulusofeconomicactivityinimporting importing o Others include poor countries countries o Many include hydroelectric potential countries like Botswana and Zimbabwe Zimbabwe n Many studies show potential benefits n South Africa has had improved access to n Important to create & evolve institutional framework for peaking power and a wider market for Eskom's Eskom's cooperation: from bilateral to multilateral, political commitment base load.load. n Importanttostrengthentransmission interconnectors transmission n Important to n When seek harmonization of regulatory environment, grid-- SA market is opened, increased codes and market rules potential for generation investments in generation investments in n Movement to more sophisticated trading market is last step and iss neighboring countries -> more balanced contingent on the introduction of choice and competition competition economic interdependence The role of power trade in regional economic development power trade in regional economic development The role of power trade in regional economic development power trade in regional economic development Nile basin has huge potential for cooperative Direct benefits of cooperation in power sector development of hydro resources and increasedinterconnection and trade interconnection n Lower energy costs costs 700,000 o Imports could be cheaper than self cheaper than self-generation Uganda 600,000 n Lowerinvestment costs investment costs Tanzania Sudan o Economies of scale: regional projects justify larger generation Rwanda 500,000 Kenya plant Ethiopia o Shared reserve margins Eritrea year 400,000 Egypt per DR Congo n New and additional investment possible because risk possible because risk 300,000 Berundi GWh can be lower in collaborative projects projects and financing 200,000 o Innovative asset ownership and financing n Improvedreliability and security of supply reliability and security of supply 100,000 o Imports possible during emergency outages or periods of 0 insufficient firm capacity ((e.g., national drought) capacity drought) Hydro potential 2000 2010 2020 The role of power trade in regional economic development regional The role of power trade in regional economic development power trade in regional economic development 50 Annex 6 Potential benefits to wider economy Potential benefits to wider economy The way forward The way forward Path to a regional power market n Increased economicactivity o More reliable supplies at lower cost Instituational and political framework established n Social and developmental benefits developmental benefits To be able to realise to realise o Increased power availability allows parallel electrification program ­ o urban/rural/services the benefits, benefits, Development of infrastructure: - power lines n Multipurposebenefits benefits institutional and - generation capacity o e.g., irrigation, navigation, flood and drought management navigation, flood and drought management infrastructure n Environmentalbenefits benefits development must Initial phase of trading: o Reductionon fossil fuel dependence (e.g., diesel) fossil fuel dependence (e.g., diesel) be given time and - bilateral long-term contracts - emergency support n Fiscalbenefits benefits priority. - loaning o Reduced costs and increased space for private capital, reduced increased space for private capital, reduced financial burden on public sector burden on public sector Secondary phase of trading: n Peace andregionalsecuritythrougheconomic - power pools integration - spot market trading The role of power trade in regional economic development regional The role of power trade in regional economic development power trade in regional economic development Review of the Regional Review Goal and Objective Power Trade Project and Key and Long-Term Goal Implementation · Improve access to reliable and low-cost Issues power in an environmentally sustainable manner Ø Project Design Design Ø Implementation Development Objective ArrangementsArrangements · Establish the institutional means to coordinate the development of regional Ø Budget & Financing power markets among the Nile Basin countries PROJECT COMPONENTS 1. REGIONAL COORDINATION AND PROJECT IMPLEMENTATION RPT Project · Project governance & implementation Regional coordination Ø Steering & Technical committees & project implementation Ø Project Management Unit & staff Establishment of · Regional coordination with other SVP Nile Basin Power Forum and SAP projects Comprehensive · Knowledge management Basin-Wide Study Ø Information dissemination Implemented over a Ø Stakeholder analysis four-year period Session 3 Presentations 51 2. ESTABLISHMENT OF NILE 3. Comprehensive Basin-Wide BASIN POWER FORUM Study · Establish Power Forum: · Study objective ­ Define its role & functions ­ Analyze power supply, demand & trade ­ Define long-term institutional set-up opportunities in the region ­ Initiate Forum activities ­ In the context of multipurpose water · Includes following activities: resources development ­ Long-term planning & analytical tools · Inception study to be undertaken first ­ Training and skills enhancement ­ Review previous studies ­ Data availability & data requirements ­ Financial resource mobilization ­ Conduct special studies · Sequence full study to incorporate results of SAP studies and operate within funding constraints Institutional Structure Structure THE NBI STEERING COMMITTEE Project Execution Execution TECHNICAL COMMITTEE · NBI, thru NBI Secretariat, will be the Project Management Unit executing agency for each SVP project Regional Project Manager Procurement and Finance Officer · NBI appointed UNOPS as Project Lead Specialists ·Power System Planning & econ Services Agency, to assist with: ·Hydropower Planning & water ­ Financial management & procurement Environment/Water Specialist Ad-hoc Support & administrative staff working ­ Capacity building for project management Groups Technical Committee to function as National Focal Points (2 reprs: Ministry / Utility) PROJECT STEERING COMMITTEE TECHNICAL COMMITTEE · Provide strategic guidance, direction & oversight · Responsibilities ­ Provide technical guidance and endorse workplans & TORs · Membership ­ Participate in regional meetings & activities ­ Ministry PS (or equiv.) and Utility CEO (or equiv.) ­ Serve as national focal point for each country ­ Nile-TAC member from host country ­ NBI-SEC representative · Membership · Observers ­ Ministry reps: expert in sector reform/deregulation ­ Utility reps: expert in system planning ­ ENTRO/NEL-CU representatives as link to SAPs ­ ENTRO/NEL-CU reprs invited to participate as link to SAPs ­ Development partners, World Bank, UNOPS · Meet at least twice a year · Meet at least annually · Government contributes staff time · Governments contribute staff time ­ Approx 4­6 weeks per year 52 Annex 6 PROJECT MANAGEMENT UNIT SVP COORDINATION COORDINATION · Basin-wide level: NBI Secretariat, through the · PMU will: SVP Coordination project: ­ operate at the basin-wide level ­ Overall program coordination & integration ­ be located in Dar es Salaam, Tanzania, with offices ­ Oversight of financial management facilities provided by host country ­ Knowledge management & information sharing ­ Monitoring and evaluation at the program level · PMU functions include: ­ Coordinate & implement project activities · Within each country: National NBI Office ­ Liaise between Steering & Technical committees ­ Govt supported, within ministry of water affairs ­ Liaise with NBI Secretariat to ensure integration with SVP ­ Support to Nile-TAC ­ Convene temporary, ad-hoc working groups as needed ­ Counterpart to Nile -SEC at national level ­ Forum for coordination of NBI activities through intersectoral committees (likely to include PSC and TC members) PROJECT COST PROJECT FINANCING FINANCING Component Cost (US$ million) Regional coordination 4.23 Pledges and implementation Estimated Financing Cost Needed Establishment Power Partners Total Forum 3.40 Norway US$ 4 Basin-wide study 4.50 million Total base cost 12.1 Sweden US$ 2 US$ 13 million US$ 5 million million Contingencies 0.93 AfDB US$ 2 million Total project cost 13.1 TOTAL US$ 8 million All financing through the multidonor NBTF Annex 7 Long-term Vision--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. 53 Annex 8 Dar es Salaam Declaration on Regional Electric Power Trade We, the ministers responsible for electricity affairs in the countries of Burundi, Democratic Republic of Congo, Egypt, Eritrea,2 Ethiopia, Kenya, Rwanda, Sudan, Tanzania, and Uganda, make the following declaration. We recognize that Cooperation can achieve sustainable socio-economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources; Cooperation in the development of electric power resources in the Nile Basin, including, inter alia, investments in hydro-generation, transmission, and the development and integration of electricity markets, are vitally important strategies for optimizing system benefits; and this cooperation will also realize developmental benefits, including economic prosperity, poverty reduction, peace, and environmental sustainability; and Cooperation in the establishment of a Nile Basin Power Forum is a desirable means for achieving these benefits; And, we further recognize the growing cooperation in the Nile Basin, including The Shared Vision of the Nile Basin Initiative adopted by the Nile Council of Ministers in Dar es Salaam on 22 February 1999; The detailed preparation of the Shared Vision Program (SVP) through multicountry, multisectoral and participatory processes, including a Nile Basin Regional Power Trade project with the proposal to set up a Nile Basin Power Forum; Subsidiary Action Programs--the Eastern Nile Subsidiary Action Program (ENSAP) and the Nile Equatorial Lakes Subsidiary Action Program (NELSAP)--to plan and implement power sector investments and activities at a subregional level; and The importance of effective coordination with other initiatives in power generation, transmission, and trade in electricity in the Nile Basin. 2Eritrea is participating actively in the NBI in an observer capacity and has stated its intention to participate fully soon. 55 56 Annex 8 We adopt The long-term vision for the Nile Basin Power Forum that, inter alia, increases cooperation in the development of regional plans and investment for expanding generation and transmission; facilitates common understanding of power sector reform strategies and harmonized regulatory regimes; promotes power trade; ensures equitable trading regimes; facilitates learning, and supports new information and communication technologies. We approve The Regional Power Trade project implementation plan, including the establishment of a Nile Basin Power Forum. We agree To meet periodically to review progress of the SVP Regional Power Trade project and the power investment programs under the Subsidiary Action Programs May 20, 2003