Development Institutions, Power Companies Held Talks to Address Comoros Energy Crisis

Development institutions and power companies gathered in Abidjan to support the Union of the Comoros and the African Development Bank (AfDB) in efforts to address the energy crisis currently facing the island located at the northern end of the Mozambique Channel off the eastern coast of Africa between northeastern Mozambique and northwestern Madagascar.

The meeting took place on March 25, 2015 at the AfDB’s headquarters in Abidjan.  The aim of this meeting was to raise awareness, to develop a solid partnership in response to these challenges, and to build the resilience of the energy industry and enhance its contribution to sustainable development.

The electricity sector is critical to development in Comoros, yet it faces very high production and maintenance costs, as well as low recovery rates. These challenges have held back the progress of the economy towards greater diversification. While short-term remedial measures are needed to provide immediate relief, a long-term vision that provides for a holistic, coordinated and complimentary approach by all development partners is required.

The Bank has two ongoing energy sector operations in Comoros. The first involves rehabilitation of power generation plants and distribution networks, amounting to around US $20 million and known as the Energy Sector Support Project (PASEC). The second is the Energy Sector Reform Support Programme (PARSE), amounting to approximately US $6 million. Furthermore, in October 2014, the AfDB committed to fund technical assistance via the Sustainable Energy Fund for Africa (SEFA), to further enhance existing reforms in Comoros designed to encourage private-sector investment.

Emmanuel Mbi, First Vice-President of the AfDB, said, “Private investment may help to consolidate the energy industry and boost power generation. Private sector involvement is key to economic activity in general, and is particularly important in driving more inclusive growth.”

The World Bank is also involved in these efforts, having allocated US $5 million to improve management of the state-owned electricity company and enhance the quality of service.

The Islamic Development Bank (IDB), meanwhile, has made a revolving fund available to the national hydrocarbon company to guarantee an uninterrupted supply of heating oil. The IDB has reiterated its pledge of ongoing assistance to Comoros, through its commitment to fund an energy Master Plan, to send experts to the country, and to encourage the sharing of lessons learned with countries with similar experience.

The UNDP is assisting the country in the development of its geothermal resources. It has also proposed to set up a trust fund to mobilise financial resources earmarked for the energy sector.

The Union of Comoros will also benefit from South-South Cooperation. Indeed, Côte d’Ivoire has already shared its experiences and lessons learned from its own energy sector recovery plan.

In light of the urgency of the situation and the specific solutions that Comoros has adopted in this sector, the AfDB will offer further assistance via the African Legal Support Facility (ALSF). Hosted by the Bank, the ALSF provides legal advice and technical assistance to African countries in the negotiation of complex commercial transactions.

The next step will involve the drafting of an energy Master Plan. It will outline the necessary reforms, including the option of privatisation and investments needed in the sector to diversify the energy mix in Comoros. The long-term aim will be to achieve sustainable and affordable energy. This, in turn, will foster inclusive growth and trigger a transition to green growth.

A second High-Level meeting is planned in the next six months to present the key aspects of the Master Plan and to adopt the preferred options to develop the country’s energy sector. Once the Master Plan has been finalised, a new meeting is expected to take place to mobilise the necessary resources from public and private partners.

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