An Overview of Energy Sector Activities in EAC Dr. Nyamajeje Calleb Weggoro Director Productive & Social Sectors June 8, 2009

2 Contents of Presentation Introduction EAC Integration Process Role of Projects and Programmes Projects and Programmes in The Energy Sector - New and Renewable Energy sub-sector - Fossil Fuels sub-sector - Power sub-sector Conclusion

3 Introduction Members Burundi, Kenya, Rwanda, Tanzania & Uganda The Vision a prosperous, competitive, secure and politically united East Africa. The Mission to widen and deepen economic, political, social and cultural integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investment.

4 EAC Integration Process The East African regional integration is a progressive process The Treaty provides that the Customs Union shall be followed by a Common Market, then a Monetary Union and subsequently a Political Federation Movement from one level of integration to another is through negotiated protocols, starting with EAC Customs Union Protocol EAC Customs Union was launched in January 2005 Target for the launched of EAC Common Market is January 2010 Negotiations on a Draft Common Market Protocol are ongoing Monetary Union target is 2012 Political Federation

5 Role of Regional Programmes and Projects in the Integration Process Attracts investments to the region Contributes to poverty eradication Promotes intra-regional trade and cooperation Promotes value addition to raw materials Enhances competitiveness of the region Contributes to the attainment of MDGs Enhances peace and security Significant achievements have been made in a)confidence building measures; b)harmonization of Partner States’ policies; and c)Implementation of various sectoral programmes and projects. Significant achievements have been made in a)confidence building measures; b)harmonization of Partner States’ policies; and c)Implementation of various sectoral programmes and projects.

6 ENERGY SECTOR IN EAC Role of Energy Sector -to facilitate realisation of EAC’s broad objectives of socio- economic development, increased competitiveness, value added production, trade and investment. Development Objective -increased access to sufficient, reliable, affordable and environmentally sound energy sources in the Region The sector is organized into three sub-sectors -New and Renewable Energy Sources and Energy Conservation and Efficiency -Fossil Fuels -Power

7 NEW AND RENEWABLE ENERGY SOURCES SUBSECTOR Objectives To promote development of New and Renewable Energy Sources for which the region has vast potential but have so far not been adequately exploited To initiate programmes on energy efficiency and conservation To prepare a comprehensive energy conservation and efficiency strategy and plan To prepare a Renewable Energy Master Plan that will feed into the Regional Energy Master Plan

8 Ongoing Activities Regional Strategy on Scaling Up Access to Modern Energy Services in order to achieve the Millennium Development Goals and Poverty Reduction TOR for comprehensive energy conservation and efficiency strategy and plan developed and approved by Sectoral Council – funding being sourced TOR for a Renewable Energy Master Plan that will feed into the Regional Energy Master Plan developed and approved by Sectoral Council – funding being sourced Promotion of Development of Modern Biomass, Wind and Biogas– concept paper prepared and is under discussion with India NEW AND RENEWABLE ENERGY SOURCES SUB-SECTOR

9 STRATEGY ON SCALING UP ACCESS TO MODERN ENERGY SERVICES The Strategy seeks to engage Partner States in an initiative to scale up access to modern energy services to support the achievement of the Millennium Development Goals and poverty reduction. The Strategy focuses on four key targets: 1.Access to modern cooking practices for 50% of traditional biomass users 2.Access to reliable modern energy services for all urban and peri-urban poor 3.Access to electricity for all schools, clinics, hospitals and community centres 4.Access to mechanical power within the community for all productive services Recruitment of a Project Development Officer to coordinate implementation of the Strategy is underway – funded by Royal Norwegian Government A Programme Coordination Unit (PCU) headed by a Programme Manager will be set up at the Secretariat

10 FOSSIL FUELS SUB-SECTOR Objectives To promote all aspects of fossil fuel sub sector To promote petroleum exploration, production and development To prepare a Fossil Fuel Master Plan that will -appraise all aspects of fossil fuel sub sector -formulate a comprehensive plan for fossil fuel development, utilization and conservation -determine demand, procurement, marketing and supply structure of fossil fuels in East Africa -develop strategies for promotion of exploration of hydrocarbons in the Partner States

11 Oil and Gas Pipeline Projects Extension of Eldoret-Kampala Oil Pipeline ongoing and expected to be completed last qtr Kampala- Kigali - Bujumbura Oil Pipeline  Feasibility Study for Kampala - Kigali portion expected to commence before end of June 2009  Funding being for feasibility study for Kigali-Bujumbura portion is being arranged with AfDB Dar es Salaam – Tanga – Mombasa Natural Gas Pipeline  Feasibility study is funded by AfDB under a grant of USD 561,700  Preparation of procurement documents ongoing  Feasibility Study expected to commence by October 2009

12 Refineries Development Strategy Strategy on Development of Regional Refineries finalized in 2008 EA has lowest distribution of Refineries in Africa Existing Refinery is unable to cope with demand Strategy on Development of Refineries in the Region makes the following recommendations : -Develop a new refinery in Uganda in order for the oil discovered in Uganda to provide optimal benefits to the region; -Accelerate planned upgrading of the Mombasa refinery; and -Improve the handling, transportation, storage and distribution facilities in the Region for efficient and economic distribution of petroleum products

13 Refineries & Distribution System Development Strategy Burundi Existing Refinery Proposed Refinery Proposed Kampala-Kigali- Bujumbura Oil Pipeline future long-term oil pipeline projects Existing Oil Pipeline Proposed Dar-Tanga- Mombasa natural gas pipeline

14 Objectives cooperation on power sector issues of regional interest development of regional interconnections joint development of power projects for regional benefit development of regional power market exchange of technical and strategic information POWER SUB-SECTOR

15 The East African Power Master Plan (EAPMP) The EAPMP was completed in March 2005 and its implementation is one of the key items in the EAC Development Strategy for Identifies regional power generation and transmission line projects - Standing Committee on Implementation set up - Implementation action plan developed - Mobilization of resources for implementation ongoing Review and Update of the EAPMP expected to commence in July 2009 in conjunction with the Eastern Africa Power Pool (EAPP) Cross Border Electrification Programme -Under this programme, border towns are electrified from the nearest grid even if it is from the neighbouring country

16 EAC Power Master Plan Studies for key transmission lines that will result in complete interconnection of the region have been completed. These include –Mbarara - Birembo line linking Uganda and Rwanda; –Rwegura - Kigoma linking Rwanda and Burundi; –Arusha-Nairobi line; and –a second transmission line linking Kenya and Uganda Sections to be studied: –Bulyanhulu - Biharamulo within Tanzania in order to connect Tanzania electricity grid to Rwanda and Burundi.

17 East African Community Power Pool (EACPP) Establishment of pool recommended by the EAPMP Functions of the pool - platform for implementation of regional projects under EAPMP - to manage operations and transactions of power systems - EACPP market structure to manage long-term transactions, short-term transactions, open access transmission system - to undertake regional power system planning Following Committees are being set up - Technical standards, specifications and operational guidelines - Information database - System expansion planning An Association of Regulators which will play a major role in the operations of the pool has been established at the initiative of National Regulators

18 Proposed Organizational Structure for EACPP Sectoral Council on Energy Steering Committee Independent Regulator Coordinating Centre Technical Committee on Environment Technical Committee on Operations Technical Committee on Planning Expect Private Sector Participation is expected in process of developing key instruments of the pool Steering Committee Planning Expect Private Sector Participation is expected in process of developing key instruments of the pool Steering Committee Planning

19 KEY ACHIEVEMENTS East African Power Master Plan Regional Strategy on Scaling Up Access to Modern Energy Services Strategy on Development of Regional Refineries Identified regional projects for development - Electricity interconnection projects under the EAPMP -Arusha-Nairobi line; -a second transmission line linking Kenya and Uganda -Lake Victoria Transmission Ring - Cross-border electrification of border towns 1.Lunga Lunga (Kenya)/Horohoro(Tanzania) – Lunga Lunga is supplied from Tanzania since Namanga(Kenya)/Namanga(Tanzania) – Namanga(Tanzania) is supplied from Kenya since late April Taveta(Kenya)/Holili(Tanzania) – Holili to be supplied from Kenya 4.Lwakhakha(Kenya)/Lwakhakha(Uganda) – Uganda to be supplied from Kenya 5.Mutukula(Uganda)/Mutukula(Tanzania) – Tanzania to be supplied from Uganda 6.Kikagati(Uganda)/Murongo(Tanzania) – Tanzania to connect from Uganda 7.Gisoro (Uganda) is supplied from Rwanda while Byumba (Rwanda) is supplied from Uganda.

20 KEY ACHIEVEMENTS (cont’d) Identified regional projects for development - Oil pipeline Kampala – Kigali – Bujumbura: Feasibility study to be undertaken - Natural gas pipeline Dar es Salaam-Tanga-Mombasa: Feasibility study to be undertaken Petroleum Conferences : Biannual International Conference on Petroleum Potential and Investment Opportunities in East Africa. As a result a result: - increased interest in petroleum prospecting in EA - More blocks have been licensed - 15 wells drilled in Uganda since EAPC’07 - No. of wells drilled in Tanzania is 44: gas discovery approx. 3 Trillion cubic feet Emergency Petroleum Supply Plan awaiting Sectoral Council consideration

21 Looking Ahead… Implementation of EAPMP -Implementation of projects at Partner State level to continue -Review and Update Studies -Masterplans – New and Renewable Energy, Fossil Fuels -Feasibility Studies on oil and gas pipelines -Biomass, wind and biogas Development of Cross Border Electrification Policy -Preparation has commenced Establishment of EACPP Institutionalization of the Energy Regulators Association Implementation of Refineries Development Strategy -Establish a Coordinating Committee to spearhead implementation Establishment of PCU for the Scale Up Strategy

22 Conclusion Ongoing projects and programmes have the overall objective of contributing to the integration process The projects and programmes aim at creating an enabling environment for a people centred, private sector driven integration process Integration expected to result in improved quality of life for the people of East Africa by stimulating investment and competitiveness

23 Thank you for your attention