21 May 2014

Rwanda: Africa Urged to Initiate Regional Energy Markets

For Africa to manage the high demand for energy, regional blocs must devise ways of improving power trade between them, the UN Secretary-General's Special Representative for Sustainable Energy for All, Dr Kandeh Yumkella, has said.

Dr Yumkella, who is the country to attend the ongoing African Development Bank Annual Meetings, made the remarks after paying a courtesy call on President Paul Kagame at Village Urugwiro in Kigali yesterday.

"We discussed (with President Kagame) the issue of regional integration through integrating energy markets and our idea here is to have a group of African leaders for East Africa, West Africa and also SADC [Southern Africa Development Community] to be the champions of integrating power market in Africa," said Yumkella.

"You cannot have one power market; you must have sub-regional power markets built around the power pools and regional economic communities. I requested the President to be part of that leadership group to which he is willing because he strongly believes that the future of energy systems in Africa will be through integrating our energy resources."

"The next step is to have a set of champions made up of African leaders with African businesses that can help integrate the markets and look at big energy generation projects."

Financial sources:

Yumkella's proposal would require quite some large resources. But, one of the financial sources, he said, would be bi-lateral and multi-lateral aid.

"The approach is how we use official development assistance to leverage private capital. Use aid funds to help governments develop long-term energy strategies, enhance sector reforms, ensure utility corporations are working, and regulatory mechanisms that encourage private sector to come in," he said.

The second way to do it, he added, is to put aid money into risk guarantee facilities.

"When the private sector comes into the country and invests in energy, they expect public policies to be stable for 20 or 30 years. They want to ensure that when governments change, the policies do not change. This is what we call political risk; you use some of the aid money to cover such risks."

Yumkella also hinted on an upcoming maiden forum of sustainable energy for all to be held in New York where Rwanda would be showcased as one of the success stories in Africa.

"The President has agreed to have Prof. Silas Lwakabamba [the minister for infrastructure] go to New York and present the Rwandan model, meet with financial institutions and bilateral and multilateral donors to present the Rwanda case, he said.

Prof. Lwakabamba said Rwanda's approach is to "humanise energy; energy should serve the people not to run machine," he said.

He said the goal of giving out energy is people-centred.

"That is why the sustainable energy for all is going for three objectives, one of them is to increase the populace's access to energy. People don't want energy for only cooking and lighting, they want it for productivity; to have a healthy and long life," he said.

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