NEPAD FACILITY FOR PROMOTING BIOENERGY IN WEST AFRICA

PRESENTED BY DEMBA DIOP

ROAD MAP AND ACTION PLAN FOR IMPLEMENTATION AS FOLLOW UP OF THE DAKAR BIOENERGY INVESTMENT WORKSHOP

Background

ECOWAS: One of the most

advanced REC with regards

to energy integration:

1. ECOWAS /ECREEE

2. WAPP

3. Gas pipelines

4. UEMOA Energy programs

5. FABER

Source : Sahel and West Africa Club

Biomass resources in the ECOWAS Region

• ECOWAS: 512 million ha; pop. of 280 million in 2007.

• 4 climatic zones: Guinean, Sudanic, Sahelian and Saharan.

• Agriculture: 30% share of GDP, (18% in Senegal to 61% in Guinea Bissau); subsistence farming with export-oriented agriculture

• Growing demand for woodfuel and increasing agricultural demand leads to continued reduction in forest cover.

• untapped biomass resources includes: (i) Agricultural residues (ii) Dedicated energy crops, (III) Woody biomass and (IV) Aquatic biomass . Data source: FAO, 2009 and CIA, 2009

Access to Modern Energy Services

• Traditional biomass: 52 to 90% of final energy consumption .

• Low access to modern (fossil) cooking fuels

• Low access to electricity; Cape Verde, Côte d’Ivoire, Ghana and Nigeria (50%) Burkina Faso, Gambia, Guinea, Guinea-Bissau, Mali, Niger and Sierra Leone (12% ).

• Besides Nigeria and Ghana, the countries are net importers of petroleum products

The Rationale for a NEPAD Bioenergy Facility in WAF

1. Biomass energy accounts for the bulk of the energy consumption of households and an important share of the total final consumption

2. Major development of modern bio energy technology in last decennia and sharp increase of bioenergy production worldwide that call for a coherent policy.

3. Institutional level: regulation framework are being developed by ECREEE and UEMOA to manage the impact of bioenergy on food production, poverty and the environment.

Availability and use of biomass resources in WAF

Types of resources

Woodfuels

• almost all woodfuels used are direct;

• Wood consumption is well above the annual increment (desertification);

• Residues (e.g. sawmills) are left unused;

Agrofuels

• Ethanol: sugar cane, sweet sorghum, cassava

• Biodiesel : palm oil , palm kernel oil, cottonseed oil, peanut oil, Jatropha oil, coconut oil and the Neem tree.

Groundnuts Senegal

Availability and use of biomass resources in WAF (cont)

Types of resources

Agroresidues

• World largest producer of cocoa (7 to 9 tons of waste 1 ton of dry cocoa). Coffee, sheanuts, palm oil, rice husk, groundnuts, cotton, millet, sorghum, coconuts, etc.

Municipal by-products :

• Landfill gas for energy generation

• Avoid uncontrolled dumping

Dumped melasse in north Senegal (Demba Diop, 2004)

Potential for bioelectricity from biomass residues

Sources: UEMOA (ITLIS , 2008)

All countries studied by ITLIS show potential of bioelectricty from agricultural residues far above the

current electricity needs; Cote d’Ivoire being virtually able to cover 7 times its needs by valorising its agricultural residues

Countries Need

(billions

kWh)

Potential

(billions kWh)

Eq. Diesel

(Mio liters

Eq. Barrel of oil

(Mio)

Eq. mio USD

(year 2008)

Benin 0,60 6,20 2 336 17 1 168

Burkina Faso 0,50 10,00 3 746 27 1 874

Cote d’Ivoire 2,60 17,20 6 465 46 3 234

Guinée B 0,10 0,50 188 1 94

Mali 0,80 8,00 2 989 21 1495

Niger 0,50 6,30 2370 17 1186

Senegal 1,90 2,90 1094 8 547

Togo 0,60 4,00 1514 11 757

TOTAL 7,90 55,10 20 701 148 10 356

NEPAD Bioenergy Facility for WAF: outline of the Objectives

Objectives

Promote the development of a modern bioenergy sector in the 15 ECOWAS countries

Take into account the United Nation Economical Commission for Africa (AU) policy on sustainable biomass energy and increased access to modern energy services to the poorest.

Priorities:

(i) conversion of agricultural and industrial wastes into modern household energy and electricity

(ii)development of the liquid biofuels subsector with strong emphasis on sustainability (plantation systems, position of smallholder, food security, land use, biodiversity).

Partner(s)

NEPAD

ECOWAS /ECREEE

UEMOA Commission

Duration of the action : 48 months

NEPAD Bioenergy Facility for WAF : Target group and beneficiairies

Target

group(s)

Private companies, Smallholder cooperatives, Financial institutions Intermediary organisations, Local communities Governments institutions involved in the modern biomass energy sector.

Final

beneficiaries

Private companies / cooperatives are financially assisted to developed and implement production and distribution projects.

NEPAD Bioenergy Facility for WAF: Expected results and outcomes

1. Guidelines and tools for resources evaluation and management, supply chain, technologies, markets.

2. Business and investment profile based on sustainable criteria (environment, social equity, and food security) are defined for various type of biomass projects: stand alone and grid electricity, liquid biofuels, biogas, improved charcoal.

3. Selection of 80 to 100 projects benefiting of financial support (up to 25,000 euro per project) for feasibility studies, investment preparation and production improvement.

4. Direct investment under the form of grant or attractive loan and equity to 30 projects (per project max €500.000 - min € 100.000 Euro).

NEPAD Bioenergy Facility for WAF : main activities

1. Research and documentation and various activities for mapping the resources, identifying the actors, supply chain models and the definition of sustainable investment profiles and business models.

2. Organisation of Public Private Partnership dialogues for the formulation of enabling policies and improved business environment.

3. Technical Assistance (awareness, training, capacity development) to private companies, cooperatives of smallholders associations, local experts and consultants on bioenergy technology, business development

4. Direct technical assistance to 80 - 100 projects

5. Direct investment in 30 projects

6. Evaluation and monitoring of funded projects.

NEPAD Bioenergy Facility for WAF: contribute to the 4 lines of actions defined by ECOWAS White Paper

• Capacity building of private and public actors. local operators, investors, experts , consultants, ministries, regulatory agencies, rural electrification agencies, etc.

• Availability of soft loans, grants and private sector funds for projects aimed at extending energy services to rural or peri-urban areas. Selected projects will access loans for investment costs and grant technical assistance.

• Information sharing and good practices. Guidelines and supporting documents; promotion of information exchange and dissemination of sub-regional (knowledge management).

• Promoting local production of energy goods and services. Provision of grant for technical assistance to 80 to 100 promising projects and loans / equity to 30 selected projects that can serve as blueprint for the further development of the biomass sector in West Africa.

NEPAD Bioenergy Facility for WAF: Development of sustainable bioenergy business models and investment profiles

in West Africa The expected results are:

• A knowledge of the resources and sustainable ways of resources mobilisation and adapted models of supply chain

• A view of the overall bioenergy market in West Africa and what it will take to develop it, price development, competition with other energy sectors, required quality norms, standards and regulations to boost the market.

• An overview of the actors (private companies, cooperatives and supporting institutions) for each zone of high interests,

• A portfolio of modern bioenergy projects outlining the technical options (inputs, outputs, process and ranges of technologies), the different utilisations and markets, the commercial, financial and economical feasibility and expected social and environmental impacts.

• An implementation strategy including the roles of the different actors and the needs for capacity building and policy support.

• Compliance of the selected projects with the biomass sustainability criteria as defined by the Netherlands Government.

NEPAD Bioenergy Facility for WAF: : Strengthening the West African Private Sector and public actors

Expected results

• Strengthening of existing business association

• Creation of a permanent PPP (public private partnership) dialogue between the private sector associations, the civil society representing the producers of feedstock and government bodies to address the relevant issues and obstacles for the development of the sector.

• Capacity development, mobilisation and sensibilisation of the private sector through regulars training and awareness raising sessions where companies and farmers association are educated on the opportunities and feasibility of converting biomass resources into energy services.

• Development of local competence and expertise in cooperation with specialised universities, training of local consultants, experts and companies on biofuels project development, technology, supply chain development,

• Information sharing and dissemination. Creation of an internet site to provide updated political, scientific, technological, commercial, financial information on the bioenergy sectors.

NEPAD Bioenergy Facility for WAF: Technical Assistance Facility (TAF)

Expected results

• A maximum of 100 projects will be selected during the project duration with a maximum grant of €20 000 per project under the form of co financing (up to 75%). Project to be selected must be presented by existing companies / cooperatives that can present at least the two last certified balances and financial reports in which it appears a minimum turnover of 100 000 Euro.

• At least 60% of the intervention lead to direct investment in the production and distribution of energy service based modern bioenergy projects

NEPAD Bioenergy Facility for WAF: mobilisation of funds for investment

Expected results

• +/_ 30 projects are directed funded through a loan. The minimum amount for a loan is fixed at 100,000 Euro and maximum 500,000 Euro providing financial room for 10 to 20 projects.

• Each project should create at least 20 permanents jobs and 50 indirect jobs connected with small scale farmers / collectors of feedstock.

• Project should contribute to rural energy access

• Each project should reduce CO2 emission to at least 40 % as compared to the use of petroleum based feedstock

NEPAD Bioenergy Facility for WAF: Proposed Institutional settings

Steering committee /Board • Meet twice a year • Set the policies and guidelines • Provide General Guidance • Keep a close supervision over the project activities through

reports, audits and evaluation NEPAD • Manage the contract as applicant and implementer • Provide 10% of the project finance • Set the project, its infrastructure and hire the personnel • Manage the project finance • Provide banking expertise in project selection and contract

management • Manage the contracts with the beneficiaries of the

Investment and Equity Funds (component 4 of the project).

UEMOA and ECREEE • Provide 10% of the project finance • Overall political support • Care for proper ownership by the country member • Public Private Partnership development • Policy formulation in country members

NEPAD Bioenergy Facility for WAF: Project Management Unit (PMU)

Coordinator • Overall responsibility toward the steering

committee • Daily management and coordination of the

activities • Accountable to the steering committee • Reporting Fund Management / Financial Management • Account Manager • Procurement, Resource • Resource Mobilization Expert • Contracts Expert Programme Management • Unit Coordinator • Social, economic, financial analyst *Gender Expert • Communication /Promotion Expert *Research

Expert • Capacity Building/ Training Expert

NEPAD Bioenergy Facility for WAF

Merci, thank you !