[Check Against Delivery]
European Commissioner for Development
Creating an "energy revolution" across the developing world
At the meeting of the Sustainable Energy for All Access Committee
Brussels, 1 October 2014
Friends, Ladies and Gentlemen,
Let me begin by extending a very warm welcome to you all. I’m delighted to see so many of you here at this meeting of the Sustainable Energy for All Access Committee.
Our task today is an important one: to build on the crucial recommendations put forward in Vienna at the last Access Committee meeting.
In summary these conclusions stressed the need for a comprehensive approach to ending energy poverty, combining sector reforms to ensure an investment friendly environment, and, at the same time, ensuring that the necessary support is in place to ensure that these reforms catalyse real change and growth.
They also stressed the need to promote the private and commercial sector; we all recognise that national budgets and aid will never meet the huge needs for investment to bring modern energy services to over a billion people.
I’m sure that today’s discussion will be as fruitful as ever and will see us work out ways of carrying these recommendations forward.
The EU and SE4All
The comprehensive and inclusive approach I just mentioned forms the foundation of the European Union’s action in the field of energy.
It has fed into our energy policy. This is especially true of the well-balanced portfolio that we have devised in response to the ambitious goal that President Barroso has set us. It’s a goal that will see us help developing countries provide access to sustainable energy services for 500 million people by 2030.
And we have put our money where our mouth is. We have set aside more than 3 billion euro to support sustainable energy activities in our partner countries at regional level and in individual partner countries. I’m delighted to report that 30 partner countries have chosen energy as a focal sector in their bilateral cooperation with the EU for the period 2014-2020.
When it comes to securing that all-important enabling environment for investments, we will pay particular attention to three key framework conditions.
These are firstly, strong political ownership. Without this, the necessary reforms to promote growth and investment will never flourish. I am very happy to report that in our discussions with our partner countries, and no doubt inspired by the Energy For All initiative, I see this strong political ownership very much present.
Just last week, in the margins of the UN Climate Summit in New York, the EU signed joint declarations with European and African countries that have decided to work together to defeat energy poverty and bring people sustainable energy services.
These declarations will boost our cooperation with the 5 signatory partner countries - Ivory Coast, Liberia, Rwanda, Togo and Cape Verde - and with co-signing EU Member States and donors. In the process, we will be delivering political ownership.
Secondly, we need to ensure that the necessary implementation capacity is in place to carry forward the reforms. This includes technical and financial knowledge. There is considerable work ahead of us to achieve this, but all the SE4All partners recognise its importance, and are committed to deliver.
The EU for example, has established a 80 million Euro Technical Assistance Facility to provide assistance in boosting implementation capacity and creating an enabling environment for transparency, policy reforms, cost recovery and reinvestment. This Facility, already operational in Sub-Saharan Africa, will soon be rolled out further to benefit partner countries in other regions.
The third enabling condition is delivering financing and ensuring rapid results on the ground.
Of course, the ultimate objective is that national sector reforms will progressively attract investment. But this will not happen overnight, and for years to come it is important that all SE4All partners work together to deliver; not in 10 years, but today.
To do so, we need new business models, using available national resources and development assistance in the most efficient possible manner; getting the maximum results for each Euro invested in terms of additional citizens gaining access to modern energy services.
Take our EU-Africa Infrastructure Trust Fund, for instance. Thanks to this successful mechanism, using grants as a catalyst to attract commercial and private investment, the 400 million euros we have provided in grants for sustainable energy projects is expected to catalyse investments of up to 8 billion euros.
These efforts are taking us in the right direction. However, our world is changing rapidly, particularly in Africa, where the population is set to double by 2050. As populations grow, people are moving to cities - thereby increasing the demand for energy. Therefore, we will have to adapt our efforts further to meet these - and other challenges- we are facing more effectively.
The future it is not about bringing a single light bulb to a home in rural area, as Kandeh once remarked, this only sheds a light on poverty.
It is about creating an energy revolution across the developing world, bringing sustainable and affordable electricity to all citizens, along with reliable and sufficient capacity so that businesses can grow in confidence, creating jobs, growth and wealth.
So it’s clear that if SE4All is to be successful, it will be due to the new and innovative models that we develop, perfect, and make widespread.
We are all aware that one of the biggest challenges that we face in meeting the universal access objectives lies in rural electrification; hundreds of millions of citizens living in remote areas where we can have little hope of a grid connection in the coming years.
That is why the EU has taken the initiative to convene this meeting.
For such citizens, access to electricity is vital; for education, for health; to give them a chance to escape poverty.
One of the key responsibilities of this Committee therefore is to promote and spread models that attract investment in rural off-grid areas, and rapidly deliver results.
The EU has taken steady steps forward. Back in June, in the margins of the launch of the Decade of Sustainable Energy for All, we brought together partner countries and stakeholders to discuss on new business models for rural electrification.
We followed this up with an in-depth assessment of market needs and the alternatives for boosting rural electrification and for getting industry representatives and financiers more deeply involved.
The result is a brand new initiative that we have called -the Electrification Financing Initiative, or ElectriFI for short.
Through this innovative instrument, EU grants will complement private financing, bridging potential financial gap in order to make a project bankable. This will provide the security investors and banks are expecting to boost investments. If investments are successful, the grants will be converted into loans, at concessional rate, and the EU will be “reimbursed”. We will then be able to reinvest our grants in new projects, allowing more and more people to get access to electricity services.
ElectriFi is more than a financing proposal, in that it puts forward a business model to leverage more private investments and involve more key stakeholders in all areas of expertise on a global level.
One of ElectriFi’s key benefits lies in its potential to take donor funding and increase it five or ten fold, while at the same time establishing real partnerships geared by economic results with beneficiaries and stakeholders to keep actions sustainable.
I would like to express my gratitude to those of you who have actively participated in our Rural Electrification workshop of the last two days.
The overwhelmingly positive reactions we received confirm that this new model goes in the right direction. It will now be improved further thanks to the suggestions of the participants.
We understood that we should be flexible and, for instance, accept to group projects and proposals in order to enable economies of scale and to keep management costs as low as possible.
We should reach out to civil society, and especially women, in order to increase our relevance for local communities.
We should help national authorities and stakeholders to formulate adequate strategies that reduce risk and encourage the development of private initiatives in a coordinated way.
In combination with the other available tools, I’m confident that ElectriFI will act as a catalyst for concrete action. We will now have to reflect on how this initiative can be expanded further, at a global scale, so as to realise its full potential.
I’m immensely proud to have served as European Commissioner for Development - and, before that, for Energy. I’m very glad that in that time I have been able to play a part in the global fight against energy poverty.
I am confident that my successor will carry on the fight to make energy poverty a thing of the past.
I say this because it’s clear that the world’s energy challenges will not go away overnight. Our work must go on. It must include a greater focus on those aspects where sustainable energy overlaps with other policy areas such as agriculture and food security, access to clean water, improved education and health care services. Getting this mix right will mean empowering local communities.
As in so many areas of life - and of politics - to succeed we need to work together. Cooperation has been the driving force behind Sustainable Energy for All. It will remain so in the future and take this wonderful initiative to even greater heights.