EU, Africa unveil 'ambitious' energy partnership
The partnership will involve investments worth over €600 million to support electrification in Africa as well as renewable energy projects that would help diversify Europe's energy supplies. A further agreement could be reached on Wednesday on a Transaharan Gas Pipeline, nicknamed the 'African Nabucco'.
European Commissioner for Development and Humanitarian Aid Louis Michel and Andris Piebalgs, his colleague in charge of energy, launched the partnership yesterday (8 September) together with African Union representatives in Addis Ababa, Ethiopia.
The partnership includes a joint statement on an "Action Plan of the Africa-EU Energy Partnership," signed with Dr. Elham Mahmoud Ahmed Ibrahim, the African Union's commissioner for infrastructure and energy.
The statement stressed "the urgent need to promote Africa electrification" and "agreed to launch as soon as possible the process for the elaboration of an Electricity Masterplan for Africa". The masterplan and joint statement will be officially endorsed during an AU-EU meeting on 1 October in Brussels, the Commission said.
The initiative forms part of a wider EU-Africa energy dialogue that will involve regular meetings between the two sides, with a high-level EU-Africa energy meeting to be organised every two years at ministerial level. Meetings would also be held on a regular basis at expert level "at least once a year to coordinate the various activities foreseen in the Action Plan". A forum involving civil society, research institutes and the private sector on both continents would be organised every two years around the ministerial meeting.
Piebalgs' spokesperson Ferran Tarradellas said the partnership would involve the following sums from the EU budget:
- €220m to 77 projects from the 9th European Development Fund (49 on renewable energy sources; one on energy efficiency; one on LPG; 11 on governance; 15 on grid extension).
- €10m in support to the four regional African power pools.
- €146m of the EDF and €250m from the European Investment Bank in support of the infrastructure projects. These will come in the form of interest rate subsidies, direct grants for insurance premiums, technical assistance and feasibility studies.
Furthermore, the European Commission said it is planning to make more sums available in the future. Tarradellas said these could include:
- €88m from the 10th EDF for countries that have identified energy as one of the sectors for bilateral development aid.
- €200m from the ACP-EC Energy facility II currently under preparation (these would cover activities on renewable energy, energy efficiency and transport as well as electricity distribution and governance).
- Up to €300m from the Africa-EU Infrastructure Partnership and its trust fund (these would cover investments in Africa's transport energy and ICT networks).
Agreement on 'African Nabucco'?
The visit of the two commissioners will continue today in Nigeria, where they will meet on Wednesday with President Yar'Adua.
Nigeria "has large quantities of gas and oil reserves" and "could be an important partner in EU's diversification efforts," Tarradellas said. European oil companies including Shell, Total and ENI have made significant investments in Nigeria and "are likely to invest more," he added.
"The Trans-Saharan Gas Pipeline project could become key strategic infrastructures and attract investments from EU companies," Tarradellas went on. According to the spokesperson, "Nigeria and Algeria seem very committed to this project".
A conference in Brussels last year aimed at attracting partners for the project which would involve Algeria's Sonatrach and the Nigerian National Petroleum Corporation. When completed, the pipeline would be able to transport up to 30 billion cubic metres of Nigerian natural gas across more than 4,300km of desert to EU markets via Algeria. Under current plans, the pipeline could start operating as of 2015.
Europe renewed its interest in African energy imports in November 2006 in the wake of failure to reach agreement with Russia over a new co-operation and partnership agreement (PCA) that would formalise their energy relations (EurActiv 29/11/06). Negotiations on the PCA were put on hold again recently following the Russia-Georgia crisis (EurActiv 02/09/08).
The EU currently imports almost 15% of its oil and gas from Africa and it is believed that this figure could be substantially increased by investing more in infrastructure, such as off-shore pipelines to Spain and Italy. Algeria is currently the third largest exporter of gas to the EU behind Russia and Norway.
Moreover, massive solar power installations in the Sahara desert could feed Europe's growing energy demand via a new supergrid under plans being considered by the EU. The idea received backing from France and the UK but no concrete funding commitments have yet been made (EurActiv 25/07/08).
- 1 Oct.: Official signature of the partnership in Brussels.