EU commits $4.2 billion for sustainable energy in developing countries

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European Commission President José Manuel Barroso on Tuesday co-signed joint declarations on the sidelines of the Climate Change Summit in New York with five African countries as part of an effort to increase access to sustainable energy sources, particularly in rural areas where the need for electricity is greatest.

Barroso signed agreements with Cape Verde, Ivory Coast, Liberia, Togo and Rwanda.

In order to increase access to sustainable energy on a global scale, the European Union plans to allocate more than €3.3 billion worth of grants in the 2014-2020 financial period to support sustainable energy projects around the world, with €2 billion dedicated to African countries.

Ahead of the signing, Barroso said: "Sustainable energy is essential for fuelling growth and development."

Two years ago, at the EU Sustainable Energy for All Summit in Brussels, Barroso proposed the ambitious target of helping developing countries to provide access to sustainable energy services to 500 million people by 2030.

European Development Commissioner Andris Piebalgs added: "Without energy, factories cannot function, schools cannot be lighted up and families cannot cook, and this is a situation that many people are still facing today. But it is equally important that sustainable energy sources are promoted first and foremost. These declarations are a clear sign of the political commitment of all co-signatories that we want to work together and achieve faster progress in ensuring access to sustainable energy for all.”

A key goal of the agreements is to engage with the private sector to improve the conditions for investment and funding, and therefore increase access to sustainable energy or the production of sustainable and cost effective electricity, according to the European Commission.

The agreements will also aim to strengthen the political ties between energy policy commitments of signatory countries and the financial support by the EU and other co-signing donors. Austria, Luxembourg, Spain and Portugal, for example, have signed the agreement to support Cape Verde, while France has agreed to lend its support to Ivory Coast and Norway will likewise provide assistance to Liberia.

EU energy funding in development and cooperation

For the 2014-2020 period, some 30 developing countries have chosen energy as a focal sector for their cooperation with the EU. In total, the EU will provide about €3.3 billion to supporting sustainable energy in the EU’s partner countries around the globe through bilateral and regional cooperation. The EU expects this to leverage between €15 and €30 billion in loans and equity investment to fill gaps in energy infrastructure and power businesses, schools, homes and hospitals.

The funding will also support research and development and carbon pricing as a means to raise funds to invest in low carbon energy by allowing Africa nations to sell carbon credits to larger emitters.

While Rwanda is planning to increase domestic production, it is planning to do so in a sustainable manner. Rwandan President Paul Kagame has said the country wants to produce and consume more, not less energy. "But we want to do so sustainably and affordably. Ultimately, it is about faster progress for our people."

Rwanda has already established a $75 million fund (FONERWA) to run environment and climate change projects. The country currently generates generates 115 MW from hydro power (53%), thermal (46%) and a small percentage from methane and solar.

EU-supported energy projects

In Liberia, the EU is funding a €2 million project, implemented by Save the Children, to install solar panels on all public health facilities that have no electricity to provide light and power radios. The project will reach around 1.5 million beneficiaries, mainly women and children in rural areas in a country of 3.5 million people.

In Kenya, the EU is supporting the Lake Turkana Wind Power project with €25 million under the EU-Africa Infrastructure Trust Fund. This will result in the construction of a 310 MW wind farm in Kenya and unlock a total investment cost of €625 million. The project will reduce the country’s import dependency and season-sensitive hydropower production, increase energy security and improve economic activities in remote areas.

The EU and New Zealand have also created a partnership that supports projects in the Pacific, including a new hydropower plant with a capacity of less than 1 MW in Samoa that has had a positive impact on the lives of 188,000 of its residents.