Wednesday, March 25, 2009

COMESA states face energy deficit

MINISTER of Energy and Water Development, Kenneth Konga, says the electricity deficit in the Common Market for Eastern and Southern Africa (COMESA) is expected to increase by 2011.

Mr Konga noted that currently, the COMESA region had a 20 per cent deficit in electricity supply and said this was expected to rise to 46 per cent by 2011 as a result of sustained economic and population growth in most countries in the region.

He said this in Lusaka yesterday at the official opening of a meeting for the launch of regional associations of energy regulators for eastern and southern Africa

“The total installed capacity of the COMESA region is around 35,000 megawatts. Almost 69 per cent of the installed capacity is thermal whereas 30 per cent of it is hydro. The region’s proven crude reserve is over 50 billion barrels and it produces about three million barrels per day of oil whereas it consumes slightly above one million,” he said.

In a speech read by the Energy deputy minister, Gladys Lundwe, Mr Konga said inadequate access to energy was one of the major supply side constraints and remained a contributing factor to lack of competitiveness of the region’s productive sectors.

Mr Konga said the establishment of a regional association of energy regulators in COMESA member countries would assist in addressing the electricity deficit in the region.

He said the development of a regional electrical power infrastructure through the adoption of an integrated approach to generation and transmission expansion would facilitate enhancement of energy reliability and reduce costs in the region.

“I am informed that the eastern Africa power pool, which is one of the specialised institutions of COMESA, is carrying out a study to develop a regional master plan for the entire eastern Africa which will be completed by March 2010,” he said.

Mr Konga said harmonisation of the regulatory frameworks in the region would, therefore, create an efficient energy sector given the available capacity and economies of scale.

He noted that inadequate access to energy had resulted in the predominant use of wood fuels due to the fact that the percentage of the population living below the poverty line in the region was high.

Mr Konga noted that 61 per cent of households in Zambia used firewood for cooking whereas the country’s installed electricity generation capacity was 1910 megawatts and dominated by hydro.

“Unfortunately, the use of wood fuels has essentially contributed to the depletion of the forest resources, which in turn has a negative environmental impact in terms of accelerating climate change, thereby threatening biodiversity and increasing soil erosion,” he said.

Mr Konga, however, said Government had reviewed the 1994 national energy policy which would address and highlight the intended actions in the energy sector.
COMESA secretary general, Sindiso Ngwenya said the cost of energy in the region was high, adding that this was due to dependence on hydro power.

Mr Ngwenya noted the need for countries in the region to develop other sources of energy such as thermal, solar and waste matter.

“For example, Germany generates over 1,300 megawatts of power out of waste matter and this has enhanced the country’s economy because the sector is diverse,” he said.

He, however, said the development of physical infrastructure was a major challenge in the region.
Mr Ngwenya said the lack of financing for agreed priority infrastructure projects had derailed development in the sector.

He, however, said that there was need for Governments in the region to put in place policies and rules to facilitate development of public-private partnerships for the advancement of the energy sector.

Mr Ngwenya further urged countries in the region to issue bonds and utilise the local stocks markets for the financing of infrastructure in the energy sector.

“Not all is lost for Africa. Prospects for financing energy projects can be sourced within the region through the issuing of bonds and the use of local stock markets despite the global financial crisis,” he said.

[Zambia Daily Mail - March 2009]