30 May 2003

East Africa: Nile Basin Power Project Launched

A REGIONAL Power Trade Project (RPT) involving ten countries through which the River Nile passes has been launched under the auspices of the Nile Basin Power Forum.

The riparian countries are Kenya, Uganda, the Sudan, Egypt, Ethiopia, Burundi, the Democratic Republic of Congo, Rwanda, Eritrea and Tanzania.

According to the executive director of the Nile Basin Initiative (NBI) Secretariat, Meraji Msuya, the forum will enhance power trade among the ten countries and, consequently, lower power tariffs in those countries.

"Power forums are proving effective in developing power trade among other regional groups of countries, notably in the Southern African Power Pool, the Mekong Regional Power Market and the Central American Regional Electricity Market in the Mercosur Region.

"The establishment of regional power markets has generally improved systems reliability, and economies of scale in planning, construction and operation of generating and transmission facilities - thereby contributing to the development and integration of regional economies," he said.

Among other things, the forum is expected to support continued discourse on the matter, and promote power trade among Nile Basin countries.

"The present limited development of national power systems in the basin imposes a constraint on the exploitation of these resources at affordable cost at the national level.

"The cost of hydropower in the Nile Basin is also increased by the large seasonal variations in hydropower output, while the costs of meeting peak loads on national power systems can be high in countries where these loads are supplied from expensive thermal plants," he noted.

Msuya expressed the belief that constraints on supplying affordable power could be overcome through expanding the market for these resources by developing power trade among Nile Basin countries.

An RPT Project steering committee will be established to provide strategic guidance, direction and oversight to ensure that the project objectives are achieved, while the project remains within the budget and on schedule.

Moreover, a technical committee will be established to provide technical guidance to the activities of the Power Forum.

While the steering committee will meet in Dar es Salaam at least once a year, the technical committee will be meeting at least twice a year at the Project Management Unit's premises - also in Dar es Salaam.

The ministers responsible for energy from the ten countries signed the Dar es Salaam Declaration on Regional Electric Power Trade, an agreement in which the countries reaffirmed their commitment to cooperation in power generation and trading.

Areas of co-operation under the Declaration include investment in hydropower generation, transmission, development and integration of electricity markets.

The RPT Project will cost US$13 million (Tsh13 billion). $8 million of that has been committed by donors.

Norway has committed $4 million, while Sweden and the African Development Bank have committed $2 million each.

According to a senior power sector specialist from the World Bank, Mangesh Hoskote, the RPT Project's long-term goal is to improve access to reliable and low cost power in the Nile Basin in an environmentally sustainable manner.

The Project will also in the long term boost rural electrification programmes in the region.

Other long term benefits of the project include inviting the private sector to finance power utilities for the development that would ease responsibility of the public sector from financing the generation and transmission of electricity.

"Resources used by the Governments in the region for power would then be used for other development projects, as other sectors would have opportunity to embark on power projects," he said.

He added that there would be job creation for the coordinating office in Tanzania, and many other opportunities in the supporting services.

"In most of the Nile Basin countries, only about ten per cent of the population has access to electricity. This situation exists despite the presence of vast and as yet untapped hydroelectric and other energy resources in the basin," Hoskote said.

He said NBI and its co-operation partners agreed to establish the Nile Basin Trust Fund (NBTF), which would be a common basket for the NBI project finances.

Sigrid Romundset, the Norwegian Ambassador in Tanzania, said donors would start channelling their financial contributions to the fund, as the NBI Secretariat has been legitimised in Uganda.

"This means that we can start channelling our financial contributions through the NBI Trust Fund, which was launched in February this year.

"Activation of the Trust Fund will allow at least $75 million in grant funds to start flowing to the Shared Vision Programme and the Subsidiary Action Programme," she said.

She added that her country had allocated 100 million Norwegian kroner (Tsh14 billion) for the NBI over five years.

Norway, which is a lead donor and partner in the RPT Project, will also sign the NBTF Agreement.

NBI was launched in February 1999 to provide a framework to fight poverty and promote socio-economic development in its jurisdiction.

There are seven other projects that are being executed by NBI in different member countries.

These are trans-boundary environmental action in the Sudan; co-ordination in Uganda; efficient water use for agricultural production in Kenya; applied training (Egypt), water resources planning and management (Ethiopia), socio-economic development and benefit-sharing (Uganda) and confidence building and stakeholder involvement - also in Uganda.

According to Hoskote, the projects are estimated to cost $132 million.

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