Energy-Water-Food Nexus A Path to Sustainability

Faris Hasan

Director, Strategic Planning & Economic Services

The OPEC Fund for International Development (OFID)

Establishment of OFID

The OPEC Fund for International Development (OFID) is the development finance institution established by the Member States of OPEC in 1976 as a collective channel of aid to developing countries.

Vision To aspire to a world where Sustainable Development, centred on human capacity-building, is a reality for all.

Mission To foster South-South partnership with fellow developing countries worldwide aiming at poverty eradication.

Energy for the Poor Initiative

An initiative to help mobilize the donor community to provide assistance to help the poor and low-income people to access energy in an affordable way.

About OFID

Food Security

Energy Access

Grants to CS/Entrepreneurs

Environment Protection

Economic Growth

Balance

Public Sector

Private Sector

Social Development

Integrated

Water Access

Nexus

OFID’s Approach: The Development Prism

• Energy is central to sustainable development and poverty reduction efforts.

• It affects all aspects of development — social, economic, and environmental — including livelihoods, access to water, agricultural productivity, health, population levels, education, and gender-related issues.

• The alleviation of energy poverty is central to the achievement of Sustainable Development Goals

Alleviating energy poverty is key

OFID and Energy

Riyadh

Declaration

In November 2007 at the Riyadh Summit, OPEC leaders established the eradication of energy poverty in the developing countries as an objective of OPEC aid institutions and called on these institutions to cooperate with the energy industry and other financial institutions to enhance this important endeavour.

Jeddah 2008

A few months later, in June 2008 at the Jeddah Energy Meeting, Saudi Arabia officially called for an initiative to help the poor have better access to modern energy. This call inspired the ‘Energy for the Poor Initiative’ which was supported by Energy Ministers in May 2009 and G20 Leaders at the Pittsburgh Global Summit.

UN SG High Level Group

OFID was part of a UN global initiative on Sustainable Energy for All to mobilize action from all sectors of society in support of three interlinked objectives to be achieved by 2030: providing universal access to modern energy services; doubling the global rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix.

SE4All Advisory Board

OFID has been a member of the Sustainable Energy for All (SE4All) Initiative’s Advisory Board since 2013.

Income Generating

Technology Neutral

Leveraging resources

Energy Access

OFID’s approach to Energy Access

High importance is given to energy

Approved financing in all windows

OFID Ministerial Declaration on Energy Poverty

Increasing Importance Given to Energy Projects

• 24% share in cumulative operations since 2008

• Steadily rising share in annual operations

• Commits a minimum of US$1 billion to finance OFID’s “Energy for the Poor Initiative”

• OFID stands ready to scale up its commitment if demand warrants.

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008 - 2016 2008 - 2016, w/ TFF renewals

Total

Energy

US$, million

24% 26%

7%

16% 19% 20%

23% 23% 24% 24% 24%

0%

5%

10%

15%

20%

25%

30%

2008 2009 2010 2011 2012 2013 2014 2015 2016

% Energy Commitments

2016 Regional Energy Commitments

Total: US$ 412.4 million

US$261.9m

US$97.2m

US$53.3m

Africa

Asia

Latin America &Multiregional

2016 Energy Commitments by Mechanism

Total: US$ 412.4 million

US$233.3m US$99.2m

US$77.6m

US$2.3m

Private Sector

Trade Finance

Public Sector

GrantAssistance

Sectorial Distribution of 2016 Approvals

Total: US$ 1,338.6 million

209.3

32.0

1.4

412.4

159.5

64.6

42.0

66.7

336.3

14.5

Agriculture

Education

Emergency

Energy

Financial

Health

Industry

Multisectoral

Transport

Water & Sanitation

Food

Water

Energy • Solutions often treat food security, water and energy separately

• But they need to be seen as interdependent

The Energy-Water-Food Nexus

• Water used to produce and generate energy in Africa accounts for more than one-third of water consumed in the energy sector worldwide.

• This is mainly due to a relatively high share (~25%) of traditional biomass in Africa’s energy mix.

• Traditional biomass accounts for about 10% of the energy mix in Asia.

• Hydropower in Latin America accounts for 70% of total electricity generated.

Source: World Energy Council, Water for Energy

Water for Energy

Energy for Water

• Energy is required to:

• Lift water from depth in an aquifer • Pump water in pipes • Treat water and wastewater • Desalinate brackish or sea water • Heat water for domestic and industrial use

• Globally, energy for delivering water is between 7 and 8% of

total world energy consumption.

• In California, water-related energy use consumes 19% of the electricity and 30% of the natural gas.

Source: World Energy Council, Water for Energy

Agriculture is the largest user of water withdrawals

Farming

Processing

Packaging

Transportation

Retail

The agri-food sector currently accounts, directly or indirectly, for around 30% of the world’s total end-use energy consumption and the same percentage of CO2 emissions. The agri-food waste can be used as a source of energy through biogas or other means.

Energy for Food

Energy Use in the Food Chain

• By 2030 we will need 30% more water, 40% more energy and 50% more food

• The entwining will become even more manifest

Food Water

Energy

The inter-linkages will grow

17

• 588 million people (approx. 70% of total population) lack access to electricity.

• Only 16% have water piped into their homes; 13% rely on surface water

• The challenge is significant for all regions

• But its significance is acute for developing countries

A region-specific challenge: Sub- Saharan Africa

Sustainable Development Goal Relevance of Nexus Investments

End Extreme Poverty Higher food production will improve living standards. Energy, transport investments will advance development

Achieve Development within Planetary Boundaries Nexus investments will advance development and respect countries’ constraints on use of resources

Ensure Effective Learning Education requires energy for light and communication Better nutrition will improve pupils’ performance

Achieve Gender Equality Women will benefit from access to clean water, modern energy. They will save time and effort.

Achieve Health and Wellbeing Clean water, modern energy will reduce disease and improve medical services such as local clinics

Improve Agriculture Nexus investments will increase food productivity

Empower Cities Cities will benefit from better water, sanitation and energy infrastructure

Curb Climate Change Modern energy will reduce wood-burning, deforestation

Ensure Good Management of Water and Ecosystems Careful resource planning is central to nexus investments

Transform Governance Integrated nexus approach should provide transparent and fair resolution to the allocation of scarce resources

Nexus Investments support all Sustainable Development Goals

Approaches and Initiatives

Mini-Grids (SE4All)

Food-Energy-Water Nexus (SE4All)

Oil & Gas Energy Access Platform (EAP)

Arab Coordination Group (10 Finance Institutions)

Global Partnership for Effective Development Cooperation

Arab Coordination Group – OECD Dialogue

Energy Approach

Collaboration Approaches

Focus Areas

Energy is central to sustainable development and poverty alleviation

Modern energy services improve access to water and food security

Energy, water and food are interlinked and actions should be considered holistically

The Nexus is a country- and region-specific issue

Within OFID’s 2016-2025 Corporate Plan, the Nexus is given a very high prominence

Concluding remarks