Genesis Morocco: Energy in MENA

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Genesis Morocco

Project Genesis is a strategic sustainable development framework for Morocco to translate from being a net importer of energy and a country facing water shortage issues, into the number one producer both of clean renewable energy and water in the region.

Sunday, April 24, 2011    <<Home

Energy in MENA

Personal Notes : Interesting piece by the World Bank. It shows their level of
commitment in bringing about a successful energy reconversion in the region, 
I believe that the World Bank is fully aware that for developing countries with
no proven fossil fuel reserves, energy imports are a heavy burden and that we 
could cut at least the part that is either imported as bulk energy, Spain and 
possibly Algeria. As for gasoline, it will continue to account for a large part of 
our energy imports until we dispose of a mature technology. Hydrogen
storage is very promising, and could someday replace oil at the pump.
And guess what, we could use renewable energy to produce hydrogen and
thus become self sufficient in energy for the transportation post.
Now, either this could take a few decades or, the skyrocketing price of oil 
could bring everyone to look fast for a replacement strategy, based on hydrogen.

The Middle East and North Africa (MENA) region has about 57% of the
world’s proven oil reserves and 41% of proven natural gas resources.
MENA is also endowed with unique solar resources. However, great gaps
exist between countries rich in natural resources and
countriesndependent on such resources;

Many countries have close to 100% access to electricity, but an
estimated 28 million people still lack access to electricity,
especially in rural areas, and about 8 million people rely on
traditional biomass for all their energy needs;

In many MENA countries, petroleum product prices are distorted, cost
recovery in electricity is low, efficiency of supply leaves a lot to
be desired and energy intensity is relatively high. Carbon intensity
is, on average, higher than in industrialized countries, and the
potential for renewable energy is under-explored;

The region is lagging behind in implementing reforms in the
electricity sector and lack private sector investment;

Population growth, rapid urbanization and economic growth are putting
pressure on existing infrastructure and relatively high demand for new
investments. Over the next 30 years, the total investment needs in
energy in MENA are estimated at over US$ 30 billion a year, or about
3% of the region’s total projected GDP (which is three times higher
than the world’s average);
The continued high and volatile prices of fuels are straining the
finances of many net importing countries, both at the government and
the utility level, and increasing costs of subsidized energy at home
for the oil exporters.

Key Issues in the Sector

There are considerable differences in the situation of the energy
sector in the MENA region and solutions have to be tailored to
individual countries and situation. There are, however, a number of
common issues:

In most countries where oil and gas resources are large, price
distortions are considerable and cost recovery in electricity is low.
In many countries this has led to inefficient use of supply, high
energy intensity in energy use, increasing environmental problems, and
a rapidly increasing burden on government finances;

In countries which are net importers of fossil fuels, price
distortions are generally less and cost recovery in the electricity
sector has been somewhat better. However, the challenges they face on
how to cope with high oil prices while financing the rapidly growing
demand for energy in general, and electricity in particular, remain;

The MENA region is highly susceptible to the risk of climate change
impact due to: water scarcity, concentration of economic activities in
coastal areas and reliance on climate-sensitive agriculture. Despite
relatively low total greenhouse gas emission as compared to other
regions, MENA has the world’s third largest growth of carbon emissions
compounding the risk of climate change. The high carbon emissions are
predominantly from oil-producing countries which make up 74 percent of
the region.

Overall in the region, there is much scope for improving the
efficiency of energy supply and energy conservation, as well as the
development of renewable energy resources. MENA has begun to exploit
its renewable energy potential on a large scale and the Bank is fully
supportive of this effort.

World Bank Recommendations

To respond to the many regional challenges, the World Bank’s lending,
technical assistance and
analytical work is focused on:

Reducing the burden of the energy sector as a whole on government
finances, a key pre-requisite for fiscal stability in MENA countries;

Ensuring the delivery of energy services in line with economic growth
in a financially sustainable manner, and increasing access to energy

Safeguarding the environment and its key natural resources by
improving the efficiency of resources management, and increasing
energy efficiency, and the role of renewable energy.

Promoting intra-regional cross-border energy trade.

World Bank Lending and Analytical Activities

The Bank energy portfolio has shown substantial growth over the past
year, reflecting the increasing client demand for its assistance in
the sector, consistent with the Bank’s renewed emphasis on
infrastructure services to alleviate poverty.

The Bank counts today seventeen investment projects under supervision
aggregating to about US$ 2.1 billion [the Djibouti Power Access and
Diversification project, the Egypt El-Tebbin project, the Egypt Ain
Sokhna Power project, the Egypt Natural Gas Connections project, the
Egypt Giza North Project, the Egypt Windpower Development project, the
Yemen Power Sector project, the Yemen Rural Energy Access project, the
Iraq Dokan and Derbandikhan Emergency Hydropower project, the Iraq
Emergency Electricity Reconstruction project, Iraq Integrated National
Energy Strategy, the Lebanon Emergency Power Reform, the West Bank and
Gaza Electric Utility Management project, the Morocco ONE Support
project and the Tunisia Energy Efficiency project], plus a Partial
Risk Guarantee for the Jordan Amman East Power Plant project, four
Global Environmental Fund (GEF) operations amounting to a total of
US$107.5 million (the Jordan Promotion of a Wind Power Market, the
Tunisia Energy Efficiency Program project, the Morocco Integrated
Solar project and the Egypt Kureimat Solar Thermal Power project).

With nine additional projects under preparation, the portfolio
continues to grow. This growth is reinforced by the potential of
recent developments in the carbon finance area. Of particularly great
potential for climate change mitigation is the new Climate Investment
Fund, the Clean Technology Fund which has allocated a total of US$1.2
billion for MENA: (a) US$750 million to design and implement a MENA
Concentrated Solar Power (CSP) Scale-up plan; (b) US$275  million to
develop wind power and energy efficiency in Egypt; and (iii) US$200
million to develop wind power and energy efficiency in Morocco.
In addition to its investment portfolio, the Bank is currently
carrying out analytical and advisory energy work in most countries of
the region, including a strategic dialogue on the sector with:
Djibouti on developing an energy sector master plan;
Egypt on a developing a commercial wind framework, energy pricing, the
design of a load management program and review of risk allocation for
private sector participation;
Syria on developing a strategy for the electricity sector;
Jordan on energy efficiency, developing a financial and institutional
framework for energy and energy strategy;
Lebanon on power sector reform,
Tunisia on developing energy efficiency and renewable energy and
reviewing energy
management policy;
Morocco on developing a framework for wind power, an energy supply
strategy and an investment plan;
West Bank and Gaza on electricity sector net lending, and
Yemen on developing an institutional framework for energy efficiency,
gas sector development, gas to power models and energy subsidy reform.
In addition to the already completed regional study on Energy
Efficiency, the Bank is undertaking regional studies on the Maghreb
Energy Market as well as Maghreb Energy Integration and Trade.
Finally, the Middle-East and North Africa Energy Group is involved in
a technical co-operation program with the GCC countries on a
refundable basis, notably in Saudi Arabia, Kuwait, Oman, Israel, Malta
and Libya.

While the MENA region uses a large range of trust fund and grant
facilities [e.g. Public-Private
Infrastructure Advisory Facility (PPIAF), Energy Sector Management
Assistance Program (ESMAP), the Carbon Fund, the Gas Flaring
Initiative, etc.], many of the activities above are also carried in
close partnership with donors in the region.
All dollar figures are in US dollar equivalents.  September 2010

For more information, please contact:
In Washington: Najat Yamouri, Phone: 1 (202) 458-1340; Email: