Energy for development needs a helping hand

Efficient energy services have a significant role to play in developing countries.

As in Europe they can contribute to job creation and economic growth, but, perhaps more importantly, they underpin pressing issues such as food security, provision of clean water, healthcare and education. And if the energy systems adopted by developing countries have the lowest possible impact on climate change, then everyone benefits.

The EU is in the process of consolidating its aid for energy projects in developing countries, bringing them all under the control of the EuropeAid Co-operation Office, a department of the European Commission. EuropeAid already runs the ACP-EU Energy Facility, which has €220 million to spend by the end of 2007 on projects that help the poor have access to energy services, particularly in rural areas. It also supports better governance and management in energy matters and helps large-scale investment in cross-border energy infrastructure. Some 91 projects passed the final evaluation in April for the first round of funding.

EuropeAid is also set to run a new seven-year programme on energy co-operation between the EU and developing countries, to be launched later this year. Details of the scope and budget of the successor programme have yet to be announced, although it is expected to continue the work of Coopener, part of the first Intelligent Energy Europe programme.

Coopener had a €17m budget in 2003-06 for projects that strengthened existing capabilities in developing countries, with the majority of projects being established in Africa. One project provided training on the use of biomass energy, tailored to either dry or wetland regions of sub-Saharan Africa. Another addressed the specific issue of charcoal as an energy source in Madagascar, aiming to make its production more efficient and forestry management more sustainable.

The need for continued public interventions to encourage energy projects in the poorest regions of the developing world is highlighted by the developed world’s experience with the clean development mechanism (CDM). In the context of international agreements on climate change, the CDM allows governments and companies in industrialised countries to invest in clean technologies in the developing world in exchange for credits which they can off-set against their own carbon emissions, so as to meet their commitments under the Kyoto Protocol or, eventually, the EU’s emissions trading scheme.

Renewable energy and energy efficiency projects are eligible for the CDM, but to date few have attracted investment. Instead, money has flowed into technologies that cut emissions of greenhouse gases from industrial installations, notably in China. There have been complaints about this trend, and the low number of projects being established in Africa, but this is not inconsistent with the philosophy behind the CDM. CDM projects are expected to make a contribution to sustainable development, but defining this is down to the host nation. In contrast, the requirements for emission reductions are defined centrally. The message is clear: it is emission reduction that counts.

Efficient energy services have a significant role to play in developing countries.