Saadallah Al Fathi :
Last week I discussed the evolution of the Opec Fund for International Development (OFID) from modest beginnings in 1976 to its current status of a fund active in many fields of development in a number of developing countries. And that it has an accumulated development aid of more than $19 billion, and operates on its own or in strategic alliances with other development agencies.
Although OFID had been active in supporting energy projects since inception, the third summit of Opec heads of state that gathered in Riyadh in November 2007 identified energy poverty as one of the greatest barriers to development and instructed OFID to “take all measures necessary to widen access to modern and affordable energy services”.
But OFID recognised, like many others, that energy poverty is part and parcel of poverty itself. Empirical research shows that as poverty – measured by daily income – increases, energy access decreases. Therefore, OFID adopted the motto of uniting against poverty and included “energy poverty eradication in the [UN] 2030 Agenda for Development”.
Wikipedia defines poverty as the “general scarcity or dearth, or the state of one who lacks a certain amount of material possessions or money” and energy poverty as the “lack of access to modern energy services”. The International Energy Agency (IEA) goes on to add that “these services are defined as household access to electricity and clean cooking facilities.”
The Brookings Institute says that pollution from traditional sources such as biomass causes respiratory diseases that kill over 3.5 million people each year.
Lacking access
To put this into context, it is reported that 17 per cent of global population lack access to electricity and that 38 per cent lack clean cooking facilities. The IEA says that “nearly 1.3 billion people are without access to electricity and 2.7 billion people rely on the traditional use of biomass for cooking, which causes harmful indoor air pollution.”
People lacking in energy access are 95 per cent in sub-Saharan Africa or in developing Asia. It is no surprise then that OFID joined the effort of alleviating both poverty and energy poverty. Through OFID, Opec member countries in 2007 provided $435.5 million (Dh1.6 billion) to the International Fund for Agricultural Development (IFAD) and in 2008 launched its Energy for the Poor initiative (EPI) to join the effort to bring attention to the problem.
When in 2011 the UN Secretary-General announced the birth of a global Sustainable Energy for All (SE4ALL) initiative, OFID immediately joined the effort.
The same was adopted by world leaders in the Rio+20 summit in Brazil, which agreed that energy access shall be included in the post-2015 development agenda. OFID announced that its members pledged an additional $1 billion to specifically finance its EPI. This would become a revolving facility later on.
Renewable energy projects
To show that its efforts are genuine, the Fund did not only support oil and gas energy projects, as would have been understandable, but pursued all solutions including those involving renewable energy projects. To give an example, OFID contributed to the 117MW Tafila wind farm in Jordan, expected to cost $285 million and was allocated $221 million by a host of development organisations and banks.
The Fund extended loans to support small and medium sized projects to enhance economic growth and employment to alleviate poverty in energy, health and education. In 2015 alone $110 million went into that effort, including $18 million in outright grants.
Like in every great ideal, the way forward is not an easy task especially with the race between population growth and energy access. While a billion more people will be provided with electricity by 2040, the number of people without it in Africa is expected to be 635 million, close to what it is now.
The same goes for clean cooking facilities, where modern fuels such as LPG and kerosene will make a great difference, more efficient and affordable stoves are needed to reduce pollution.
Despite efforts by OFID and other development agencies, it is said that “$1 trillion would be required to achieve universal energy access by 2030, an average of $49 billion per year (from 2011 to 2030)”. Current investment is 20 per cent of what is needed according to 2009 estimates. The larger development organisations of the industrial countries and the World Bank must step up the effort to fill the void.
Oil producers fare well in energy access, though in Nigeria and Angola more than half the population live without access to electricity. The international oil companies who operate there must be made to participate in the provision of energy for their operations and to the local community to a reasonable extent.
In my formative years, I used to study relying on the light of a kerosene lamp and I know how electricity access can improve the life of people.
(The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.)
(Special to Gulf News)
