(Tuesday, 10 July 2007, 10 – 11.30 a.m.)
Summary of discussions
1. The discussion was chaired by H.E. Mr. Jean Renald Clerisme, Minister of Foreign affairs of Haiti. In his introduction, Mr. Clerisme underscored the importance of energy for socio-economic development of least developed countries and invited the participants to identify energy policies which could facilitate the integration of least developed countries in the world economy. He also invited them to share good practices and lessons learned.
2. Mr. Minoru Takada, Manager of the Sustainable Energy in the Environment and Energy Group of the United Nations Development Programme (UNDP) presented the main conclusions of the issue paper “Energizing the Least Developed Countries to Achieve the Millennium Development Goals: the Challenges and Opportunities of Globalization”.
3. Key messages of the intervention of Mr. Takada included the lack of political agreement on energy and climate issues, the urgent need for action, and the need to focus on public participation, including through Official Development Assistance (ODA).
4. Mr. Takada stressed that least developed countries need to develop an efficient energy system and diversify energy sources if they are to achieve the Millennium Development Goals. He stated that the challenges they face relate not only to the quantity but also to the quality of energy. He added that most of the least developed countries rely on traditional energy sources, such as biomass, which leads to pollution and health problems. Indeed, he said, the inhalation of indoor smoke kills more people than malaria.
5. He noted that over the last fifteen years, the international community has reached a consensus on three issues: a) providing increased access to energy, particularly to the poor, b) ensuring environmental sustainability, and, c) guaranteeing security of energy supplies through international cooperation.
6. He also noted that at the policy level, energy issues for the poor are often ignored in macro-economic strategies, including in the Poverty Reduction Strategy Papers. International support did not really benefit least developed countries which need capacity building and improvements of institutional and legal framework to attract private sector investment.
7. Mr. Takada emphasized that it was important to provide basic services to the poor. Ways to finance these low cost services exist. Basic energy services would not add carbon emissions if countries are provided with alternative energy options. Beyond ensuring access to energy basic services for the poor, transport and infrastructure services should be also improved.
8. During the discussion, participants stated that least developed countries need to integrate energy in their national development strategies as well as in their investments programmes. Energy development could be financed through national budgets, by donors and the private sector. Many participants stated that, unfortunately, neither Foreign Direct Investment (FDI), nor Official Development Assistance (ODA) are available to energy development in least developed countries and international financial institutions usually shy away from such investments. Participants called upon international financial institutions and the international community to fund energy development projects. They also called upon least developed countries to create a conducive environment for foreign direct investment. They underscored that inadequate infrastructure was a serious obstacle to attracting investment, particularly to the landlocked developing countries.
9. In the view of participants, international cooperation can help to lift the financial burden of investments and improve energy security and energy sustainability in least developed countries. Cooperation between least developed countries, particularly between oil producing and oil importing countries can also contribute to solving this problem.
10. Participants agreed that it was possible to finance electricity development programmes if least developed countries and the international community set energy as a priority. They emphasized that although energy supply is important, it is also equally important to address the issue of absorptive capacity and the service delivery.
11. Participants underscored that Africa would benefit from a continental vision and national, sub-regional and regional policies. Some delegations recalled that the issue of regional integration in Africa has been raised as early as in the sixties, particularly by Dr. Kwame N’Krumah with reference to the United States of Africa and by H.E. Sékou Touré.
12. Despite the recognition of the importance of regional integration, African countries are not integrated in the energy area, in particular hydropower. Moreover, ninety-five per cent of Africa’s water resources remained untapped, leading to imports of electricity. Some countries have taken steps and developed interconnectivity projects. But other big projects, such as the dam on the Inga River, an African regional integration project, have failed due to lack of investment. Cross-border cooperation in the area of hydropower also remains underutilized in the South Asian least developed countries. The high oil prices have increased the cost of production and distribution of electricity in the oil-importing least developed countries.
13. Because of the small size of their domestic market, small island least developed countries suffer from high costs of energy delivery. Regional cooperation, that includes transport, energy, research, science and technology and infrastructure development can become a powerful mechanism for overcoming their geographical handicap and favouring the socio-economic development of these countries.
14. Participants underscored the negative effects of climate change on transport and infrastructure development. Climate change has, indeed, already led to the reduction of the water levels and jeopardized the implementation of such regional energy development projects as dams in Western Africa.
15. Participants recognized the importance of alternative sources of energy such as wind power, solar energy, hydropower, etc. but stated that the financial needs to develop these energy sources are high. One way of financing energy access would be through privatization, but it posed a risk since the poor might be excluded from the necessary energy coverage.
17. Participants concluded that in designing the energy strategies, least developed countries should first analyze their own situation and assess their resources. They also need to strike a balance between environmental concerns and the imperatives of development.