AUDA-NEPAD Introduces Competitive Electricity Market to North Africa

AUDA-NEPAD Introduces Competitive Electricity Market to North Africa

AUDA-NEPAD joined hands with UMA (Union Arab Maghreb) and COMELEC (Magreb Electricity Committee) and organised a workshop for the UMA Countries and Egypt on the introduction of competitive electricity market to the North Africa Region. This is in order to efficiently utilise the enormous energy resources available in North Africa and to enable each country to source electricity on the most competitive prices.

Most of the electricity trade in the North Africa Region is done on a bilateral basis which tie the countries involved on long term sale agreements (years ahead), and denies the countries from utilising the opportunities available in securing electricity on short terms at competitive prices.

A mission headed by Prof Mosad Elmissiry, Senior Advisor at AUDA-NEPAD, was undertaken in Algeria, 9 to 11 September 2019. It was organised with the Southern Africa Power Pool (SAPP) which is the only power pool in Africa that allows electricity trade on an auction basis on one month ahead, one week ahead, one day ahead and even hours ahead, to transfer the knowledge and experiences gained by SAPP to the North Africa Region in the development and implementation of a competitive electricity market in UMA and Egypt.

SAPP covered the stages that the development of a competitive electricity market has to go through, the requirements on hardware and software that needs to be addressed, the intergovernmental and utilities MoUs that need to be signed, the trade rules and sales clearance arrangements and the challenges faced in the introduction of the competitive electricity market. The enormous benefits gained from the introduction of the regional electricity market were highlighted.

North Africa is one the continent’s regions that have the highest electricity access rate, that exceeds 98% and is already connected with Europe, Asia and currently being connected to the Gulf States. It is the gate of Africa to the rest of the world when it comes to electricity trade.

Prof Elmissiry says that with the enormous renewable energy resources that are available in Africa, the African continent has a good chance to export the excess in clean power to Europe and earn substantial income needed for its economic development.

“Africa needs to strategise and plan ahead when oil resources are longer available,” Prof Elmissiry said. He added that with the introduction of the competitive electricity market in North Africa and the current work going ahead with regards the connection between the Eastern Power Pool and SAPP, soon almost half of the countries in Africa will be connected together. They will be able to trade electricity among themselves and beyond, on a competitive basis.

“This is a strong achievement for which Africa should take pride in,” Prof Elmissiry declared.

The engagement in Algeria ended with identifying the challenges that are facing the introduction of the electricity competitive market in the North Africa region and drafting of a road map for solutions.

Africa has it all! One Stop Border Post (OSBP) as an Instrument to Trade Facilitation

Africa has it all! One Stop Border Post (OSBP) as an Instrument to Trade Facilitation

Trade has been a major driver of Africa’s economic growth and receives increasing emphasis in regional and national development plans. Shippers demand high performing corridors that reduce cost and time spent on transport and logistics and increase the reliability and predictability of the corridors. Hence trade facilitation is key to continued trade growth. However, recent studies conducted by World Bank indicates that 75% of the delays in the movements of goods are from trade facilitation and that 25% is attributed to infrastructure. In this regard intra-regional trade, is often hindered by long procedures involved in passing through two sets of identical controls on each side of the border. Lengthy transit times increase the cost of trade and make African businesses less competitive.  Given that Africa comprises 54 countries, 16 of which are land-locked, the negative impact of inefficient border controls on Africa’s economy is significant.

Coincide with TICAD VII, where one of the main pillars empathizes on ‘Economic Transformation and Improvement in business environment and Institutions through private investment and innovation’’ shares the same aspirations of AUDA-NEPAD to create an enabling efficient environment to facilitate trade.

To strengthen the development and operations of One Stop Border Post (OSBP), in each Regional Economic Community (REC), ‘’training of trainers (ToT) and data collection seminar for RECs’’ took place in Kigali, Rwanda from 29th to 31st July 2019. The objective of the seminar was for the REC participants to; share knowledge and experiences in the development and operations of OSBPs. The seminar was co-sponsored by African Union Development Agency (AUDA-NEPAD) and Japan International Cooperation Agency (JICA), and hosted by the East Africa Community (EAC).

REC participants were trained on the use of the African Infrastructure Database (AID) as a monitoring tool for infrastructure development in the continent. Hence in order to keep the database up to date, the delegates were requested to populate the data base with updates. This also acted as, a practical training in the use the facilities, ‘Virtual PIDA information Centre (VPIC)’ and AID.

The, Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC ), Economic Community of Central African States (ECCAS),  Economic Community of West African States (ECOWAS), Intergovernmental Authority on Development (IGAD),  Union Economique et Monetaire de l’ouest Africaine (UEMOA) and Union du Maghreb Arabe (UMA) were each represented by three experts in the areas of ; infrastructure, customs, and immigration.

Participants had a good perception of the training in general. Most of them were pleased to have been involved, and made the following recommendations;

OSBP procedure manual developed by EAC to be shared amongst the RECs as a model in the process of rolling out the OSBP, cross pollination of knowledge and ideas through benchmarking,  pre and post construction monitoring of the OSBP should be part a continuous process in the development and operation of OSBPs, Member states to ensure sustainable supply of utilities such as water, energy to the OBSP to reduce downtime, and AUDA-NEPAD to develop a model designs for OSBP as a continental blueprint.

OSBP plays a critical role in trade facilitation and regional integration. It goes without saying that ToT for RECs, which directly involved in raising awareness for OSBP development in each region, is the most efficient way of disseminating knowledge and sharing experiences. Instead of learning from another part of the world, this seminar reminded us of the knowledge and expertise that the continent has, where each region of the continent can learn from each other. ‘Africa has it all!’

AUDA-NEPAD Tools Supporting Implementation of Infrastructure Projects

AUDA-NEPAD Tools Supporting Implementation of Infrastructure Projects

To effectively support implementation of the Programme for Infrastructure Development in Africa Priority Action Plan (PIDA-PAP), AUDA-NEPAD relies on data generated by project owners, African Union member countries and Regional Economic Communities to monitor progress. Although work has been ongoing to improve the flow of information on regional and continental PIDA projects, challenges remain, in terms of data collection, verification and analysis. 

In order to enhance the process and quality of data collection, AUDA-NEPAD has made two information systems available to African institutions dealing with infrastructure development – the African Infrastructure Database (AID) and the Virtual PIDA Information Centre (VPic). 

AID is an online data management tool for capturing, validating and storing infrastructure projects information in Africa using standard metadata descriptors such as project characteristics, location, economic indicators, financial parameters, implementation status, et cetera. It allows Regional Economic Communities, specialised institutions, project owners and implementing agencies, to manage their infrastructure information using a harmonised user interface and clearly defined workflows. The tool also provides other information systems selected from infrastructure information, belonging to specific regions or institutions, or of certain nature, for presentation to targeted audiences.

VPic is a web-based knowledge portal focused on PIDA regional and continental infrastructure projects. Its purpose is to facilitate the sharing of PIDA-PAP information, promote participation in PIDA implementation, enable the tracking of progress in PIDA-PAP implementation (Monitoring & Evaluation), and to promote investment opportunities in PIDA-PAP projects. VPic presents validated PIDA project information stored in the African Infrastructure Database in an interactive dashboard to track project implementation. 

Deployment of the AUDA-NEPAD tools for infrastructure

Since its launch in 2013, the Virtual PIDA Information Centre has been put to use by stakeholders all over the continent and beyond, as it presents up to date information on all of Africa’s 51 cross-border infrastructure projects. These projects comprise more than 400 actionable sub-projects across four main infrastructure sectors, namely energy, transport, transboundary water and ICT.

In order to improve the flow of information on PIDA projects, training and capacity building initiatives have been undertaken on both VPic and AIDThe training methods used often take an interactive and hands-on approach where participants go through all the African Infrastructure Databaseand VPic functions. Thereafter, participants are given the opportunity to familiarise themselves with the platform and they continuously update project information relating to PIDA projects within their respective regions, and also provide recommendations on how the platform can be enhanced. To date, close to 200 stakeholders drawn from East African Community (EAC), Common Market for East and Southern Africa (COMESA), Souther Africa Development Community (SADC) and Arab Maghreb Union (UMA) have been sensitised, while more than 70 project owners have been trained to update information through theAfrican Infrastructure Databaseand VPic. In the latter half of 2019, sensitisation and training will be extended to Economic Community of Central African States (ECCAS) and Economic Community of West African States (ECOWAS).

PIDA Job Creation Toolkit

Another important tool is the PIDA Job Creation Toolkit, developed with support from the German Government through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The Toolkit is designed as an on-line platform that enables users to estimate the job creation potential of PIDA and other African infrastructure projects. It allows users to explore ways in which to capitalise on Africa’s demographic dividend and opportunities for wider regional economic development through job creation in infrastructure. 

The Toolkit provides a scalable process enabling Project Owners to estimate job creation resulting from African infrastructure projects, especially the larger transboundary PIDA Projects. As part of beta testing, a training workshop was held in the second quarter of 2018 and estimates were developed for an initial set of PIDA projects. The workshop included a partners’ meeting in which recommendations on use cases and business models for the Toolkit were discussed. A soft launch of the PIDA Job Creation Toolkit was held during PIDA Week 2018 in Victoria Falls, Zimbabwe.  

Following the successful completion of development and testing of the PIDA Job Creation Toolkit, the inaugural PIDA Jobs Outlook will be released in the third quarter of 2019. The Outlook will feature jobs estimates from selected projects in the PIDA portfolio. This inaugural edition will profile all Member States of the African Union with information on PIDA projects that are implemented in their countries or of which they are a direct beneficiary. 

The Outlook is a tangible demonstration of the Toolkit which allows users to explore ways in which to maximise job creation from infrastructure projects. As an example, analysis of the Batoka Gorge Hydro Project shows that it has the potential to create more than 2500 direct and induced jobs annually up to completion of its construction and up to 24,000 secondary jobs annually over its 50-year lifetime. 

Most recently, the Toolkit was presented to SADC stakeholders during the VPic Data Collection and Validation workshop where it generated a lot of interest, including a recommendation to feature the Toolkit during the SADC Industrialisation Week in August. Ultimately, the SADC Secretariat aims to have the Toolkit endorsed and adopted by SADC ministers responsible for infrastructure as an integral part of SADC’s infrastructure project planning processes. AUDA-NEPAD will, going forward, undertake capacity building on the Toolkit for all the Regional Economic Communities. 

Users of the above tools include technical experts based at Africa’s regional levels, users from the African Union Member States, as well as project owners, specialised institutions, technical partners, policymakers, development partners, and both public and private providers of project preparation support and finance. The information gathered from VPic and the Job Creation Toolkit is disseminated through publication of the annual PIDA Report.

Through these tools and capacity development initiatives, AUDA-NEPAD is contributing to significantly changing the manner in which Africa reports, analyses and uses its data for policy and decision-making. The Agency is encouraging its stakeholders to place a premium on African ownership, leadership, verification and reporting.  

NEPAD IPPF flags funding gap, AUC calls on Member States to mobilize domestic resources to replenish the Special Fund

NEPAD IPPF flags funding gap, AUC calls on Member States to mobilize domestic resources to replenish the Special Fund

To bridge the financing gap of the NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF) Special Fund, concerted efforts will be required to scale up support for domestic resource mobilization by AU Member States, so as to facilitate the physical and economic integration of the continent. That is according to the African Union Director for Infrastructure and Energy, Mr. Cheikh Bedda.

The Director made the call at the 29th Oversight Committee (OC) meeting of the New Partnership for Africa’s Development – Infrastructure Project Preparation Facility (NEPAD-IPPF) Special Fund which took place at the Headquarters of the African Union Commission, in Addis Ababa, Ethiopia on 28 June 2019.

“The Programme for Infrastructure Development in Africa (PIDA), and Africa’s infrastructure priorities cannot be implemented without adequate resources committed to the NEPAD-IPPF, a critical instrument to prepare investment ready and sustainable infrastructure projects across Africa,” the Director stated.

Taking it back to Egypt, April this year, in his statement, Mr. Bedda reminded participants of the decision made by the Specialised Technical Committee on Transport Transcontinental and Interregional Infrastructure Energy and Tourism, which urged Member States to contribute and sustain project preparation and development for PIDA PAP projects by making financial contributions to the NEPAD IPPF.

“African Countries should demonstrate firm commitment to infrastructure development by making direct contribution to the African Union supported Project Preparation Instrument – the NEPAD-IPPF, through various innovative approaches,” the Director reiterated.

The question of domestic resource mobilization came to the surface during the discussions.

On his part, the Director for Infrastructure and Urban Development at the African Development Bank, Mr. Amadou Oumarou, stated that operationalization of domestic resource mobilization for the NEPAD-IPPF should be well discussed and thought of.

“To succeed the NEPAD-IPPF must identify and focus on a key priorities and active portfolio management to move more projects to closure,” Mr. Oumarou added.

NEPAD-IPPF Fund Manager, Mr. Mike Salawou, stated that cumulative contributions by donor partners including the African Development Bank amounted to US$ 102 Million out of which US$ 96.1 million had been committed to approve 91 projects. As per June 2019, 60 studies have been completed.

“While disbursements on supported projects have reached a high level, beyond that and without any new contributions to the Fund, NEPAD-IPPF will no longer be in a position to support further project preparation activities,” Mr. Salawou affirmed.

Mr. Amadou Oumarou closed the meeting by commending the Fund’s achievements in 2019 and reiterated the Bank’s commitment to the Special Fund considering the enormous infrastructure needs in the continent.

“New contributions from Spain (Euro 3.0 million) and the African Development Bank (US$ 4.13) are indications of confidence bestowed in the Fund’s ability to successfully fulfil its mandate, and also recognition that the NEPAD-IPPF is playing a critical role in infrastructure development in Africa. It is therefore expedient for the NEPAD-IPPF to be further strengthened with the necessary resources to enable it to meet its objectives and mandate,” Mr. Oumarou stated.

Michael Andres Oversight Committee Chairman & Senior Project Manager at KfW Development Bank, while commending the achievements of the special fund, noted that more resources are required given the increasing demands being made on the fund.

The meeting offered the opportunity to discuss the NEPAD-IPPF Independent Review and New Business Model, the progress report of NEPAD-IPPF, updates on continental infrastructure initiatives, and adoption of a proposed joint AUC/AUDA/AfDB Domestic Resource Mobilization Strategy for NEPAD-IPPF.

Participants noted that domestic resource mobilization should be the main strategy for financing Africa’s development in a sustainable manner. Participants also endorsed the NEPAD-IPPF Special Fund as the key instrument for project preparation to accelerate the delivery of infrastructure on the continent. They also agreed that the NEPAD-IPPF resources are managed in a sound manner under rigorous internal control, in addition to the governance around the administration of these resources, which is adequate.

The 29th Oversight Committee (OC) meeting of the New Partnership for Africa’s Development Infrastructure Project Preparation Facility (NEPAD-IPPF) Special Fund convened over 30 participants including donors providing financial support to the NEPAD-IPPF Special Fund, such as Canada, Germany, United Kingdom, Norway, Denmark, and Spain, representatives from the African Development Bank, African Union Commission, African Union Development Agency (AUDA-NEPAD) The Nile Basin Initiative/Nile Equatorial Lakes Subsidiary Action Program), Economic Commission for Africa, Regional Economic Communities, Regional Power Pools, NELSAP and Orange-Senqu River Commission (ORASECOM).

Note to the Editors

NEPAD-IPPF is a multi-donor special fund that supports African countries to translate major continental initiatives such as the African Union’s Programme for Infrastructure Development in Africa (PIDA) as well as Regional Infrastructure Master Plans of the Power Pools into bankable, investment-ready projects. The special fund is currently supported by the AfDB as host institution, Canada, Germany, United Kingdom, Norway, Denmark, and Spain. Participation in the special fund is open to donors, institutional funds and other special infrastructure funds.

The Oversight Committee (OC) of seven members provides general policy direction for NEPAD-IPPF activities. Its main function is to review the operational focus, the proposed areas of intervention and to ensure consistency with the Fund’s policy thrust. The OC also reviews the annual report of activities financed through the Fund to ensure consistency with the NEPAD mandate and regional integration.

Africa Needs US$188bn to Meet Demand for Power

Africa Needs US$188bn to Meet Demand for Power

Africa needs a staggering US$188 billion to build modern energy infrastructure and meet the continental demand for power, the main driver of economic emancipation, a recent study has revealed.

While Africa seeks alternative energy needs through solar, bio-fuels and other forms, ostensibly to bolster hydro power generation in most African states, there is a need for commitment to develop and modernise the infrastructure and enhance the transformation lives of more than 3 billion inhabitants.

Estimates by the African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD) to eradicate poverty, promote sustainable growth and development, integrate Africa in the world economy and accelerate the empowerment of women, show that Africa’s developmental agenda may veer off course without proper infrastructure to drive the continent’s economic agenda.

Ibrah Mountaka Wahabou, the AUDA-NEPAD project manager for the Service Delivery Mechanism in the Regional Integration, Infrastructure and Trade division, notes that Africa’s quest to development should remain in tandem with the need to modern and development reliable cross-country-infrastructure linking all 55-member states for it to attain economic emancipation.

Speaking during a stakeholder dialogue meeting on the domestic resource mobilisation and job creation optimisation for development of the 2,400 MW Batoka Gorge hydro-electric scheme being developed jointly by Zambia and Zimbabwe, Mountaka Wahabou stressed the call for Africa to seek financial injection in sustainable and durable projects with AUDA-NEPAD ready to act as guarantor.

It is estimated that Africa’s energy projects average 430 and need to be upgraded or developed using local resources and with help from developing partners and that AUDA-NEPAD could act as go between-for governments, private sector and financing institutions and partners to raise the resources.

“Africa has the capacity to raise these resources to develop their energy infrastructure but what is needed is to show commitment to raise the funds and we are ready to act as guarantors,” he said.

Citing the US$4 billion Batoka hydro power plant, earmarked for completion by 2024 in which the two countries are tasked to raise 5 percent each of the local resources needed using local resources, he said AUDA-NEPAD stood ready to remain instrumental in mobilising resources and speed up the project, envisioned to plug off the energy deficit buffeting the two neighbours and ultimately benefit regional member states.

The would-be developers of the project, according to the project plan, are expected to mobilise the remaining resources using various alternatives, including tapping into domestic markets and ensure the project comes to fruition as envisaged.

The chairperson of the Zambezi River Authority (ZRA), Emeldah Chola, challenged Africa to take the challenge and mobilise domestic resources for energy projects than rely on donor funds, prone to delays. The ZRA manages the shared water resources on the Zambezi River on behalf of Zambia and Zimbabwe.

As Africa comes of age, it was imperative to digress from donor dependence and mop up own resources for project development as it harbours exports of jobs and development while slowing down industrial growth and leaving local people unemployed, she said.

Zambia and Zimbabwe have since embraced the continental initiative of mobilising “home grown resources” whole heartedly for the development of the Batoka Gorge hydro electric scheme with 20 percent of the cost being local continent.

“The local content has to be in the form of local materials and infrastructure development like access roads and construction of villages,” Chola told delegates to the two-day energy meeting which she officially opened last week.

Zambia and Zimbabwe urged all players to seize the opportunities presented by the multi-billion dollar project and ensure there was maximum local ownership if the locals took up challenging roles and ensured there was maximum creation of jobs at the gorge, expected to absorb 3,000 at completion.

She commended the relationship between AUDA-NEPAD and Association of Power Utilities of Africa (APUA), which is tasked to coordinate and execute priority regional and continental projects to ensure the realisation of Agenda 2063 for its unwavering role in enhancing, human capital development, skills, youths, employment and women empowerment.

The partnership further endeavoured to accelerate regional integration, infrastructure, energy, water and ICT, transport, trade, industrialisation, science, technology and innovation, natural resources, governance and food security, among other developmental roles.

APUA director general Engineer Abel Didier Tella challenged Africa to remain innovative and mobilise own resources that would bolster economic growth for member states, unlike donor reliance to ensure ownership, a yardstick for defraying debt related costs.

The event attracted among others, representatives from the Southern African Power Pool, Zambezi River Authority (ZRA), Agency for Safety, Energy and Environment (ASEA), and the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector.

By Jeff Kapembwa