Energy and Poverty Reduction Strategy Process, the Zambian Case Presented at the Energy Access for the Rural Poor Workshop Hotel VIP, Maputo, Mozambique,

Energy and Poverty Reduction Strategy Process, the Zambian

Case

Presented at the Energy Access for the Rural Poor

WorkshopHotel VIP, Maputo, Mozambique, 12th April 2005

Geoffrey MusondaActing Assistant DirectorDepartment of EnergyLusaka, ZAMBIA

contents1. Introduction2. Household energy3. Strategy for poverty reduction4. Summary of expected outputs5. Progress on projects and programmes6. Conclusion7. The End

introductionZambia has high population of people classified as poor.Households classified as poor at national level

1991 (69.7%), 1996 (69.2%), 1998 (73.2%)

Poverty pronounced in rural areasEnergy sector

Firewood and charcoal 80% total national energy supplyElectricity 11% total national energy supply

1.5% of household energy demand (20% average electrification rate at 2% in rural areas)400MW surplus capacity6000 MW hydropower potential1,715.5 MW installed capacity

introduction cont…Hydropower 92% of installed capacity

Proven coal reserves 30 million with several hundred millions probable reservesPetroleum 100% imported

421100 tonnes of crude oil imported in 1999

Renewable energySolar energy, 3,000 sunshine hours annually, 4.5kWh/m2/dayWind speed averaging 2.5m/s at 10m above the ground, mainly suitable for mechanical applications

Household EnergyUrban households relay on:

Electricity, charcoal, firewood and kerosene. To some extent candles are also used for lighting.Table 1 shows the proportions of households using specified fuels for lighting and cooking.

Household Energy cont.

Table 1: Fuels for cooking and lighting for urban households – 1996 and 1998

Proportion (%)of urban population using it for Cooking Lighting

Energy Source

1996 1998 Increase/Decrease 1996 1998 Increase/Decrease Electricity 36 39 +3 45 48 +3 Kerosene - - - 39 35 -4 Charcoal 51 49 -2 - Firewood 13 12 -1 - Candles - - - 15 16 +1 Diesel - - - 1 1 -1 Total 100 100 100 100

Household Energy cont… Between 1996 and 1998, the proportion of

households meeting their lighting needs from kerosene declined by four percent while that for electricity increased by three percent. The other one percent of the urban households probably substituted kerosene by candles as those that met their lighting needs by using candles increased by one percent over the same period.

Strategy for Poverty Reduction Poverty Reduction Strategy Paper (PRSP)

2002-2004 reduce poverty levels in the country and stimulate

economic development outlines the programmes that need to be

implemented in order to improve the welfare of citizens.

translated into the Transitional National Development Plan (TNDP) 2002-2005 (MFNP, 2002).

energy sector, there is great potential for poverty reduction activities

poverty and energy consumption are directly related.

Strategy for Poverty Reduction cont…

TNDP has the following main programmes: Increased access to electricity by both rural and

urban households. The aim is to increase access by rural households from the

current 2% to 15% by the year 2010. In the urban areas, the target is to increase access from 48% in 1998 to 70% in 2010.

Enhance capacity of current energy infrastructure under the Power and Petroleum Rehabilitation Projects.

Create new energy infrastructure, which will include the Zambia-Tanzania-Kenya Interconnector, Zambia-DRC Interconnector, Electrification of Mkushi Farm Block, Kafue Gorge Lower and Itezhi-tezhi Hydro Electric Power Stations and Mini-hydro stations in North-Western Province.

Strategy for Poverty Reduction cont…

Promote efficient production and use of woodfuel. Under this programme, charcoal consumption will be reduced by 400,000 tones by the year 2010.

Summary of expected outputsTable 1: Summary of expected outputs:

Main

programme Current status Target status Required major activities

Energy Policy Review

1994 policy inadequate New policy by end 2005

(a) Energy Policy Review

Rural Electrification

2% of population with access

15% of rural population with access by 2010

(b) Rural Electrification Master Plan/Strategy

(c) Establishment of Rural Electrification Authority

(d) Implementation of priority RE projects

Urban Electrification

48% of population with access

70% of population with access by 2010

(e) Urban Electrification Strategy

(f) Implementation of priority UE projects

Enhance existing Energy

Infrastructure

(g) Power Rehabilitation

Project in progress

(h) Petroleum Rehabilitation Project on hold

Enhanced infrastructure

by 2010

Securing funding and implementation of priority

infrastructure projects

Summary of expected outputsCreate new

energy infrastructure

Existing infrastructure inadequate to meet

future demand

Implement new infrastructure

projects by 2010

(a) Zambia-Tanzania-Kenya Interconnector

(b) Zambia-DRC Interconnector

(c) Electrification of Farm Blocks (Mkushi,

Nansanga, Kalumwange, Luena, etc)

(d) Kafue Gorge Lower and Itezhi-tezhi Hydro

Electric Power Stations (e) Mini-hydro stations in

North-Western Province. Woodfuel

management and

substitution programme

Woodfuel major source of energy

Reduce charcoal consumption by 400,000 tones by

2010

Implement efficient charcoal production and use activities

Substitute charcoal with gel-fuel

Introduce LPG as domestic fuel

National Petroleum Strategic Reserves

No strategic reserves Have national strategic

reserves by 2010

Introduce legislation on strategic reserves

Create Strategy reserves

Progress on Projects and Programmes

Review of the National Energy Policy The draft NEP document has been prepared. This followed nationwide consultative meetings with stakeholders. The consultative meetings were held in all the 9 provinces Of Zambia. The draft document has been submitted to line Ministries for comments

Establishment of Petroleum Strategic Reserves

A Technical Committee on the Establishment of Petroleum Strategic Reserves has submitted its proposals to cabinet.

Progress on Projects and Programmes cont…

MEWD together with the MFNP, is working out modalities on the leasing of GRZ depots so that they could be used in the building of the strategic stock.

Establishment of the Rural Electrification Authority (REA)

The REA secretariat has been set up. The Board of Directors has been appointed and is working. Process of hiring a consultant to offer technical assistance is nearing completion (assistance from SIDA)Negotiations for a financial package from the WB to be used to increase the rate of electrification is in progress. Funds to be managed by REA


Rural Electrification Programme A review and evaluation of Rural Electrification Projects was done between January and March 2004. ZESCO has continued implementing rural electrification projects notable ones being Kasempa (completed), Kaoma and Nyimba. Preparatory work on the Chavuma project has also commenced. Electrification of farming blocks has started with Nansanga receiving US$ 1.8 Million in December 2004

Rural Electrification Master Plan A Consultant has prepare a project document. The document will be sent to potential donors. Already JICA, USAID and SIDA have expressed interest in supporting the master plan. Application has been made to JICA and outcome expected this month.


Solar Energy Promotion The Solar Energy Project in Eastern Province has been evaluated and an evaluation report is being prepared. Installation of 200 solar systems for traditional rulers in progress

Improved Cook stove Promotion A pilot project to promote the use of improved cook stoves has been commenced by the Department. A total of 800 cook stoves have been purchased for distribution at a subsidy to the community in the project areas.


LPG PromotionThe programme involves distributing LPG stoves and gas to targeted households at a subsidized price. So far 350 stoves with gas have been bought. A survey to identify households to benefit from the project will start 3rd week of April.

Gel-Fuel PromotionThe process to import gel fuel and stoves from Malawi is on. An application for zero rating of gel-fuel has been submitted to the Ministry of Finance and National Planning (MFNP). The response from MFNP is being awaited.


Energy Information DisseminationThe Informatics section has this year produced the NEP draft document, draft Statistical Bulletin and Annual Reports for the years 2000, 2001, 2002 and 2003.

Establishment of Global Village Energy Partnership

A GVEP Working Group has been established and a mode of operation has been developed. The DOE is the GVEP secretariat. Zambia has received funding from GVEP, through the World Bank to facilitate the preparation of the action plan. ToRs for consultant are ready and recruitment to start before the end of the month.


Zambia-Tanzania-Kenya InterconnectorSADC project, progress with grants approved from ADB and the WB for studies.Uganda and Rwanda have expressed interest to participate

Kafue Gorge LowerZESCO working with Chinese company to develop the 600MW hydro plant. Designs done and financing in progress

Itezhi TezhiZESCO working with Iranian company to develop the 120 MW hydro site. Financing efforts in place, designs being finalized.

conclusionWithin its national budget, the Government of the Republic of Zambia has been allocating resources to implement energy projects in order to reduce poverty. However, there is great need for the international community to come along and partner with the government in order to scale up the projects.

Most of the required frameworks and institutional infrastructure are in place and what is required now is capacity building and funding to develop the infrastructure to enable the rural poor have access to modern energy services. Modern energy services will

help all of us to reduce poverty.

The End

Thank you very muchfor your attention

Documents

Energy and Poverty Reduction Strategy Process, the Zambian Case Presented at the Energy Access for the Rural Poor Workshop Hotel VIP, Maputo, Mozambique,