1. Youssef Arfaoui 2009 1 Youssef Arfaoui Danida development Days June 2009 Developing the Energy Sector in Africa Private Sector involvement

2. Youssef Arfaoui 2009 2 Outline: 1.Energy Highlights from Africa 2.Infrastructure Investment in Africa 3.Way forward & Conclusion

3. Youssef Arfaoui 2009 3 Africa’s Energy resource Potential Energy resourcesPotentialEnvironmental Impact/climate change Crude OilModerateHas an impact on environment Natural GashighFriendly Hard coalhighHas impact on environment Hydro ElectricVery highFriendly GeothermalhighFriendly WindhighFriendly SolarVery highFriendly CogenModerateFriendly

4. Youssef Arfaoui 2009 4 Africa’s Energy resources Energy production in Africa is around 9,5% of the world output; but consumes …. only 3%. Energy resources Percentage % Comments Crude Oil12.1Of the world Crude oil Production Natural Gas Out6,6 Hard coal4,7of the world’s hard coal Hydro Electric3,1

5. Youssef Arfaoui 2009 5 DescriptionFiguresComments Generation Capacity 66 GW if South Africa were excluded, falls to 28GW in total for over 45 countries Coverage Less than Poland current economic growth rates 5% per year Just to sustain this growth level would require annual expansion in generation capacity of 4GW, whereas at present barely 1GW is being added Access to electricity in 2005 24% of the population of SSA compared to close to 54% in South Asia and close to 90% in East Asia, the Middle East and Latin America African countries contribute around 5% of GHG global emissions. Highlights Energy supply Africa High Need for Investment in the sector

6. Youssef Arfaoui 2009 6 Project Project Cost USD,million Participating countriesComment Construction of the HP.plants of Sambangalou and Kaleta, Interconnection Line – Grid connection 620 Senegal, Gambia, Guinea Bissau Ready for investment BOALI 3 power project and interconnection with DRC 23.00 CAR, DRC Under Preparation. Interconnection Ivory Coast-Liberia- Senegal-Guinea 300.00 Ivory Coast-Liberia- Senegal-Guinea Study ongoing Interconnection Ghana-Burkina-Mali350.00 Ghana-Burkina-MaliStudy ongoing. Interconnection Ethiopia - Kenya1000.00 Ethiopia - KenyaStudy ongoing. Interconnection Zambia-Tanzania - Kenya1000.00 Zambia-Tanzania - KenyaStudy ongoing. Interconnection of CEEAC Countries300.00 CEEAC CountriesStudy ongoing. Souapiti Hydropower Plant1200.00 Guinea - Liberria- Serra Leone Study ongoing.. Interconnection Guinea -Mali300.00 Guinea -MaliStudy ongoing. S/TOTAL5093.00 Indicative List of Regional Projects

7. Youssef Arfaoui 2009 7 CountryProjectCapacity (MW) ZambiaItezhi-Tezhi120 ZambiaKafue Gorge Lower600 ZambiaKariba North Bank Ext.350 ZimbabweKariba South Bank Ext300 DRCInga III3500 DRCGrand Inga39000 MalawiKaphichira phase II64 MozambiqueHCB North Bank850 EthiopiaGibe III1800 MultinationalOMVG Energy Program250 Indicative List of National Projects

8. Youssef Arfaoui 2009 8 Clean Energy Investments TechnologyCapacityInvestmentComments MW KUS$ BiofuelNA242Currently on hold Cogen410649Identified by the Cogen program Geothermal6001360studies are still to be done Hydro283385includes small hydro only Solar (CSP)200560Identified but excl. MENA program Wind9211860 identified but excl. Morocco & South Africa

9. Youssef Arfaoui 2009 9 Operational Results (Achievement)

10. Youssef Arfaoui 2009 10 The Eskom project is the bank’s largest non-sovereign loan Southern Africa Investment USD 30 B ADB loan USD 500 M ADB roles Long-term lender Regional partner Benefits 100% power access Jobs, growth Regional expansion

11. Youssef Arfaoui 2009 11 The Pan-African Infrastructure Development Fund (PAIDF) is one of the largest infrastructure equity funds in Africa Pan-African Investment USD 650 M ADB equity USD 50 M ADB roles –Regional sponsor –Fund mobilization Benefits –Regional infrastructure –African pension funds

12. Youssef Arfaoui 2009 12 The 250MW Bujagali Hydroelectric Power Project, a catalyst for Power Sector Reform Uganda Project Cost USD 736 M ADB loan USD 110 M ADB roles –Project Structuring –Long-term Lender Benefits –Independent power project (IPP) –Expand the supply for electricity –Reduce generation cost –Long-term socio economic benefits

13. Youssef Arfaoui 2009 13 The 15MW Sahanivotry Small Hydroelectric Power Project, a catalyst for Power Sector in Madagascar Madagascar Project Cost USD 13 M ADB loan USD 6 M ADB roles –Project Structuring –Long-term Lender Benefits –Independent power project (IPP) –Expand the supply for electricity –Reduce generation cost –Long-term socio economic benefits

14. Youssef Arfaoui 2009 14 Although ……. Africa is mostly affected by the various Crisis: A. Energy Crisis  Draughts ( Climatic change)  Oil price fluctuation B. Financial Crisis:  Revenue Drop  Foreign Direct Investments reduced

15. Youssef Arfaoui 2009 15 Way forward Africa needs to continue it investments programs in particular in the Energy sector:  New Credit facility put in place by the AfDB  AfDB Capital increase to be supported  Assistance to Low Income Countries (LIC) with concessional resources (ADF)  Support Private Sector investments in Africa

16. Youssef Arfaoui 2009 16 Donors Implementing Agency AfDB Executing Agencies (Option.1) 1. AFREPREN – Kenya 2. GTIEA- East African Tea Trade Association The project pipeline is available and Studies are done Executing Agency (Option.2) The Bank Departments ( OPSM and Public sector ) Access direct to the Funds through FAPA Grant and seed Capital Executing Agency Financial institutions  Line of credit from the AfDB a. Project financing b. Assist the sponsor to develop the project  Capacity building  Policy development  Strategy development Etc… Project developers / Project sponsor Project sponsor Africa Commission’s energy initiative implementation structure Technical assistance from The donor Country Offices participation

17. Youssef Arfaoui 2009 17 In Summary Opportunity for lucrative investment in Africa expanding rapidly. Investment climate improving, but remains challenging with region and sector specific knowledge critical. The Infrastructure Finance Team is a partner that provides the key expertise required to facilitate investors/project sponsors achieve business success in Africa whilst harnessing sustainable development.

18. Youssef Arfaoui 2009 18 THANK YOU Sidi Salem hydro-electric,Tunisia – Photo –Youssef Arfaoui