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Energy security and poverty alleviation in Africa: How intergovernmental organizations can contribute

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ep-20150506094838-s-w620-h300-q75-m1430898518By Victoria Nalule

Reducing poverty has become an international concern. Alleviating energy poverty is crucial if development is to occur in Africa and Inter-governmental organizations like the Energy Charter have a big role to play in ensuring alleviation of energy poverty.

According to the 2012 World Bank, Poverty & Equity Databank, 46.8% of the population in sub-Saharan Africa live at $1.25 per day. This is a very worrying situation and it is one of the reasons why more than 700 African migrants drowned last month while crossing the Mediterranean Sea fleeing war and poverty in their countries.

Those unfortunate deaths clearly show how poverty puts people’s lives and rights in danger and robs them of their future. With $ 1.25 or less a day, you cannot afford safe water and adequate food, you cannot afford clothing and shelter and neither can you afford education and health care. Poverty is the worst form of violence as it takes away people’s rights, their freedom, dignity and peace of mind.

The recent xenophobic attacks in South Africa are an example of how crime ranks high among the effects of poverty. The impoverished neighborhoods or entire cities show the same problems with uneducated adults and children that nurture more unemployment and crime. Poverty also is associated to alcohol & substance abuse, this is a very common self-destructing habit often taken as a way to cope with huge amounts of stress and well, despair which in return escalates the level of crime.

Governments all over Africa have put poverty alleviation as one of their priorities. This is fully illustrated in their development plans and national visions. For example the Kenya Vision of 2030 aims at transforming Kenya into a newly industrializing, middle-income country providing a high quality of life to all its citizens by 2030 and Uganda on the other hand through its 2040 Vision, aims at transforming its society from a peasant to a modern and prosperous country by 2040.

Energy Poverty in Africa

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Modern energy services are crucial to human well-being and to a country’s economic development and yet according to the 2014 World Energy Outlook Special Report, only 290 million out of 915 million people have access to electricity in sub-Saharan Africa and the total number without access in rising.

A severe shortage of essential electricity infrastructure is undermining efforts to achieve more rapid social and economic development. For the minority that has a grid connection today, supply is often unreliable, necessitating widespread and costly private use of back-up generators running on diesel or gasoline. Electricity tariffs are, in many cases, among the highest in the world, and outside South Africa, losses in poorly maintained transmission and distribution networks are double the world average.

Energy Access and Economic growth.

Economic growth can for example be directly impacted by the quality of the education systems in developing countries. A study by the International Monetary Fund (IMF) found that Asia’s increased economic performance over Africa and Latin America could be directly attributed to its higher investment in physical and human capital, such as education.

It is true quality education empowers people to take advantage of opportunities around them. It also helps children to get knowledge, information and life skills they need to realize their potential. But how can a community afford to provide good education if they have no access to energy?

Modern technology is globally recognized as essential in the day to day education system. But how can the schools use computers and carry out effective research if their communities have no access to electricity?

In the health-sector context, a 2012 UN General Assembly resolution defined universal health coverage as a top global priority, urging governments to move toward providing all people with access to affordable, quality health care services. The World Health Organization (WHO) defines access to essential medicines and technologies as one of the four key factors in ensuring universal health coverage.

The question then arises how a government can provide proper health services if there is massive energy poverty in the country?

Access to electricity is critical to health care delivery and to the overarching goal of universal health coverage. Many of health “essential technologies” require electricity, and without electricity, many health care interventions simply cannot be provided. Many essential devices used in health care services require significant electricity supply, as such proper health care services cannot be effectively provided with inefficient energy supply in hospitals, which is the case in sub-Saharan African according to Global Health Science and Practice, which reported that only 34% of hospitals have reliable electricity access in sub-Saharan African countries.

Role of Inter-governmental organizations.

Universal energy access has become a global concern, for instance in 2012, the United Nations (UN) Secretary General launched the “Sustainable Energy For All” (SE4All) initiative, which aims to achieve universal access to clean and modern energy sources in households and community settings by 2030.

Today we will concentrate on how the Energy Charter Treaty can contribute to alleviate poverty through ensuring energy access in Africa.

The Energy Charter Treaty (ECT)

The ECT is an internationally legally binding text providing clear and predictable rules in the areas of investment, trade and transit and energy efficiency, it provides dispute resolution mechanisms, while explicitly recognizing and protecting national sovereignty over natural resources. The political foundation of the ECT was the European Energy Charter of 1991, a political declaration expressing the commitment of a signatory country to move towards an upgraded international legal system.

The ECT creates an environment in which international energy markets can function, and thereby helping to create an internationally level playing field and promoting the rule of law in the energy sector. The ECT was signed in 1994 and entered into force in 1998. It currently has been signed by, or acceded to, by 54 countries, including the European Union.

The Astana Declaration of November 2014 highlights the strategic objectives of the Energy Charter to expand the principles of the Energy Charter Treaty beyond its traditional borders by maximizing on the increasing interest of new countries in different regions around the world. The adoption of the International Energy Charter in 2015 is in line with the implementation of this objective.

The International Energy Charter (IEC)

The IEC is a political declaration aiming at strengthening the energy cooperation between the signatories and does not bear any legally binding obligation. The IEC is an updated version of the European Energy Charter (EEC).

As a result of the increasingly global and interconnected energy sector, the IEC is intended to expand beyond the traditional borders in order to reach out to new countries, regions and international organizations with the aim of enhancing international cooperation in order to meet common challenges related to energy at national, regional and international levels, including the evolution of global energy architecture.

The IEC will be adopted at the Ministerial Conference in the Hague, Netherlands on 20\21 May 2015. From the African continent, Burundi, Chad, Mauritania, Namibia, Niger, Swaziland, Tanzania and Uganda have expressed interest in the IEC and will attend the Ministerial Conference at the Hague where the IEC will be adopted.

In fact Chad and Niger signed the European Energy Charter and they will start the process of acceding to the Energy Charter Treaty of 1994. We are also closely working with other African countries like Botswana, Rwanda, Ghana, Gambia, Kenya, Nigeria, Zambia and Malawi, Mozambique.

How the International Energy Charter can contribute to alleviate energy poverty in Africa:

Foreign Investments.

In order to achieve sustainable and affordable energy access in Africa, there is a need for the governments and private companies to address the challenge of energy infrastructure.

In this era of globalization, foreign direct investments (FDI) play a crucial role both in infrastructure capacity building and macroeconomic growth. It is essential for developing countries to guarantee stability on the market and transparent rules for investment flows. This will enable particular countries and energy industry to enter emerging economies with capital, staff personnel or technological know-how.

Moreover one of the important provisions of the Energy Charter Treaty is that on investment promotion and protection as well as creation of stable regulatory framework which therefore may bring potentially interested public and private sector to the country which has ratified the Treaty.

Open energy markets

Open energy markets are essential to achieve universal energy access. Within the context of the International Energy Charter, open markets imply having a competitive market for energy products, materials, equipment and services. It also includes the transparent access to energy resources, removal of barriers, promoting the development and interconnection of energy transport, promoting access to capital and facilitating the transit of the energy. Liberalization of the energy sector is also encouraged together with the promotion of market-oriented reforms and modernization of the energy sector.

Training of African energy experts and graduates

There is an ongoing capacity building programme, which for three months brings to the Secretariat in Brussels secondees from African governments. So far Nigeria, Mozambique, Tanzania and Mauritania have sent government officials in the ministry of energy to come as secondees at the Energy Charter Secretariat.

This programme is intended to introduce to the African countries the universal- market based principles enshrined in the International Energy Charter Treaty and to assess their energy sectors against these universal principles. This programme is sponsored by the European Commission through the DEVCO project.

The secretariat also offers internships to African graduates, and so far graduates from Ghana, Uganda and Guinea have benefited from these internships.

Provides Governments a level playing field when negotiating with Foreign Investors

Through training African energy experts, their governments can also be able to benefit from the necessary skills needed to negotiate with foreign investors. It has been said that some African governments make bad deals with foreign investors which deals are detrimental to their countries. This is due to the fact that these foreign companies have much experience in big energy projects which experience is mostly lacking in African countries. As such the Energy Charter Secretariat provides a level playing field whereby it can train energy experts and where need be also assist these countries in negotiating big energy projects.

Promotes Regional integration which is important in achieving universal energy access.

The International Energy Charter acknowledges the fact that enhanced energy trade is a powerful catalyst for strengthening regional cooperation for energy security and as such it firmly supports its signatories enhancing regional cooperation in order to meet common energy challenges. The IEC also recognizes how the freedom of movement of energy products, and the development of an efficient regional energy infrastructure, is essential to facilitate the development of stable and transparent trade in energy. Some African regional organizations like ECOWAS appreciated the text of the Energy Charter Treaty and this explains why they incorporated many of the provisions of the ECT into their treaty.

Conclusion

In conclusion the Energy Charter Treaty is an important tool in ensuring the alleviation of poverty in Africa, and this can be done through ensuring universal energy access since energy is a catalyst for economic development. Having a country sign the International Energy Charter and later the Energy Charter treaty enables a country to benefit from the international energy research and exchange of technology and it also upgrades the country’s energy sector according to international principles which would raise and help to attract foreign investment.

Victoria Nalule is an energy expert from Uganda currently working at the Energy Charter Secretariat in Brussels. She is a lawyer specializing in energy. She obtained an LLM: Petroleum Law and Policy from University of Dundee, Scotland UK in 2014. She worked with the Anti-Corruption court of Uganda in 2013 and also worked with Kakuru & Co. Advocates, a law firm in Uganda from 2009-2012.

[email protected]

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www.encharter.org

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