Workshop for EUEI Facilitation and Policy Dialogue By Ghirmai Abraham (PhD), Ministry of National Development and Semereab Habtetsion (PhD) Department of Energy, Maputo, April 11-15, 2005

Country Energy background 2003 Energy Consumption: 718,000 toe 66.8% by the household 13.8% by transport 9.2% by public and commercial 7.7% by the energy industry, and 2.5% by the Manufacturing industry.

 The sources of primary energy were 65% biomass, 32.3% oil products and 2.7% electricity,  According to the 2002 EDHS National access to electricity 32.2%; Asmara 99%, other urban 61%, all urban 78% Rural only 3%  Over 80% of the energy needs of rural enterprises is met by biomass or animate/human labour  Electricity consumption in 2003 was 63 kWh/capita  Forest take-off % while threshold for sustainability is 1.25%, thus, unsustainable  66% living below the poverty level.

Associated environmental and social problems  Very high dependence on unmanaged and unsustainable biomass energy  Threat to desertification  Health hazard to women and children  Too much time and energy spent to collect biomass  Loss of soil nutrients due to dung and agri-residue usage for energy  Inefficient traditional stoves, etc.  Very high prevalence of poverty

Cont’d  Rural poor unable to change their way of life due lack of modern energy  The need for more rural-focussed energy policies and institutional frameworks  Minimum penetration of the private sector  Too many barriers for promoting RETs and other energy to rural areas  Heavy dependence on imported oil

Top priority in least developed countries is poverty reduction Thus, adaptation rather than mitigation to climate change effects Nevertheless, some positive measures of GHG mitigation include:  Commissioning of new power station and transmission lines which have the potential of reducing 45,000 tons of CO 2 per year  Rehabilitation and voltage conversion in Asmara and Massawa- has the potential of reducing losses by 50% and CO 2 of 21,000 tons/yr  Efficiency improvement of traditional woodstoves; each improved stove reduces fuelwood consumption by 50% and 0.6 ton of CO 2 /year  Renewable energy resource assessment (wind, solar and geothermal) in progress pilot 4 M$ project in progress (GEF+GoE) Mitigation of GHGs Emissions

The future of the power Sector Facts about the Electricity Sector  Faces typical problems of developing country utilities  It has now been corporitised  Separation of urban/rural business will prevail  Rural Electrification in progress on cost sharing principle b/n Govt and communities  Existing tariffs averages US 11 cents/kWh

Power Policy and Strategic Plan Expansion from different sources Make power utilities financially self sufficient Avoid subsidies that are not pro-poor Facilitate private investment Establish RE Fund and operational manual Develop human and institutional Capacity

Energy and Poverty Reduction The Parallel MDGs for Energy Reduce by 2015 those without access to adequate lighting Reduce by 2015 those without access to sustainable form of cooking Energize all rural educational, health and clean water supply systems Provide Sustainable energy for rural Income Generating Activities

Power Sector Reform measures Electricity Proclamation No 141/2004 Regulatory Function Established Restructuring of EEC’s financial account Corporate restructuring of EEC Establish transparent mechanism for tariffs Consultants engaged in power sector reform and associated capacity building – all with World Bank assistance

RETs Development Initiatives 25 stations assessing wind and solar Over 600 kW solar systems installed Pilot wind energy project initiated Good prospects for geothermal energy Hydropower potential not studied 22,000 improved stoves installed 3 Biogas plants, 1 cotton briquette firm Energy Research and Training Centre formed to promote RETs

Pilot Wind Energy Project GEF/GoE supported on 50% basis  Install 3x250 kW wind farm at Assab  6 decentralised wind hybrid and 2 wind pumps  Technical Barrier removal measures to realise these  Wind and solar resource database analyses  Replication potential to be assessed in over 320 villages  Training and capacity building  Public and private awareness measures  PPA and wheeling arrangements  Innovative financing mechanisms  Local manufacture of wind energy structures

The EUEI for Africa Nairobi Conference recommended Rural energy in general and rural electrification in particular Energy for households, biomass and substitutes Strategies and policies for the energy especially pro-poor Capacity building at all levels These are very much in line with our ‘parallel MDG’ Goals