1. Commercial Frameworks for Energy Investment Regional Issues and Cooperation Mahama Kappiah ECOWAS Commission May 2008

2. ECOWAS VISION develop interconnection and power exchange between Member States create an open and competitive regional electricity market harmonize legislations and standards for power sector operations use flared gas in Nigeria to feed Power stations in neighbouring countries (WAGP) promote and protect private investments in energy projects create a sustainable enabling environment for Investment in the West African Power Sector

3. Rationale of the WAPP Abundant Energy Resources within ECOWAS region Uneven distribution of Energy Resources Energy Resources Inadequacy power supply to meet demand WAPP DEVELOPMENT OF A REGIONAL POWER MARKET (Optimization of resources use) DEVELOPMENT OF POWER SUPPLY INFRASTRUCTURE INFRASTRUCTURE Hydro & ThermalHydro & Thermal Interconnection linesInterconnection lines Weak Infrastructure Base for Energy Trading

4. The ECOWAS Energy Protocol A legal framework for cooperation in the Energy Sector Modeled on the European Energy Charter Drafted by the WAPP Institutional Working Group (IWG) Signed by the ECOWAS Heads of States and Governments on January 31, 2003 Ratified by Member States’ parliaments To ensure free trade of energy, equipment, products and services related to energy among Member States Define non–discriminatory rules for regulated trade activity and dispute resolution

5. Art 6: Open access to power generation and transmission facilities… Art 7: Freedom of transit without discrimination -- even in case of dispute, transit must be guaranteed until the conclusion of the dispute resolution… Art 9: Access to national capital market on a basis no less favourable than that for the national companies… Art 11: Permit investors to employ any key personnel they want regardless of nationality and citizenship… Main Provisions of the ECOWAS Energy Protocol

6. Art 12: “No less favourable treatment” principle is applicable to restitution, indemnification, compensation or other settlement following a war or armed conflict, state of national emergency, civil disturbance, or other similar events… Art 13: Nationalisation or expropriation is forbidden in the area, except when it is carried out of public interest… The amount of compensation is based on market value before the decision and includes interest for any payment delay… Main Provisions of the ECOWAS Energy Protocol

7. Art 14:Guarantee the freedom of transfer, into and out of the area without delay and in a freely convertible currency, of capital and payments related to the investment activity Art 19: Each Contracting Party shall strive to minimize in an economically efficient manner harmful environmental impacts

8. Regional Electricity Regulatory Body Need of a common framework for regional trading in electricity to ensure compliance with ECOWAS Energy Protocol principles Unrestricted power exchange among Member States within a competitive framework ; an open and competitive regional wholesale power market with non-discriminatory, transparent and fairly priced network access ; harmonization of operational, safety and tariff rules cross-border power exchanges ; harmonization of national market rules in conformity with the rules and principles of the regional regulator dispute resolution ; Protection and promotion of private investments ensure the protection of environment and development of energy efficiency.

9. withoutPPPPPP under consideration PPP R R R R R R R RR R R Régulation body Régulation in project Source : AFD / TID- Regulation mechanisms in ECOWAS region R R R R

10. MISSIONS OF THE REGIONAL REGULATOR 1.Contribute to the implementation of a local context favorable for public and private investments 2.Ensure regulation of regional electricity exchanges 3.Assist ECOWAS Commission in the definition of the strategic orientation of the regional policy and in the harmonization of policies and national power structures 4.Support the establishment of the regional market and its opening to competition

11. MISSIONS OF THE REGIONAL REGULATOR Adoption of the proposed ERERA Missions 5.Supervise regional market operation 6.Ensure communication with and between actors in the sector 7.Establish efficient procedures for dispute resolution between stakeholders (mediation, conciliation, arbitration) 8.Assist national regulators at their request 9.Provide assistance and advice to actors who request it

12. PHASE II Build-up 24 months PHASE I 1.1. Development 28 months 1.2. Transition 6 – 8 months CONTINUOUS SYSTEM ERERA Regional Regulation Development Office Régionale (RRDO) RRDO ADOPTION OF THE SUPPLEMENTARY ACT BY HEADS of GOVERNMENTS PUBLICATION OF THE SUPPLEMENTARY ACT CREATION OF ERERA VALIDATION FEASIBILITY STUDY VALIDATION OF ERERA SPECIFICATIONS ERERA Regulation Experts ERERA

13. Thank you for Your Attention