“Made in Africa” - SARDC · D E Net *** 6 % 20 3)

POLICY 3

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HISTORY TODAY 16

“Made in Africa”

SADC Today 20 No. 3 final.qxp_Layout 1 4/13/18 3:48 PM Page 1

C O N T I N U E D F R O M P A G E 1

“Made in Africa”

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SADC to produce medicines locally

Harnessing Public Private Partnerships

P O L I C Y

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L E A D E R S H I P

Newest President in


L E A D E R S H I P

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Regional integration key to sustainable development

n the region chairs SADC, visits neighbours

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W A T E R

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SADC moves to address water security challenge

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“Closer regional collaboration will reducedisaster risks”


IntroductionEnergy efficiency (EE) has become an important con-sideration and innovative way of reducing energyconsumption and use. This is particularly critical forthe Southern African Development Community(SADC), which is facing crippling challenges in meet-ing its energy requirements due to a combination offactors that has resulted in rising energy costs and lowaccess to clean and affordable energy across the re-gion, among others. Ultimately, inadequate accessand supply of energy has affected the pace of regionalintegration and industrial development. For example,the SADC Industrialisation Strategy and Road Map(2015 – 2063), aims to increase Competitiveness (atthe firm/industry, country and regional level) with aquantitative goal to lift the regional growth rate of realGross Domestic Product (GDP) from 4 percent an-nually (since the year 2000) to a minimum of 7 per-cent a year. However, to attain this goal, there is need forSADC to adopt energy efficient technologies to reducethe cost of production, making industries competitiveand minimise greenhouse gas (GHG) emissions thatcontribute to climate change. The region through theSADC Centre for Renewable Energy and Energy Effi-ciency (SACREEE), is developing a regional SADC In-dustrial Energy Efficiency Programme (SIEEP) insupport of the SADC Industrialisation Agenda as partof its overall EE programme. This policy brief, there-fore, presents the current status of industrial EE in theSADC region including barriers and opportunities, in-cluding, some of the key interventions proposed by theSIEEP to assist the SADC region’s industrial sector toutilise energy efficiently in a cost effective manner forits economic development and sustainable develop-ment agenda.

Brief Background on SACREEE and SIEEPSACREEE was established by the SADC ministers re-sponsible for energy in 2015 as a subsidiary agency ofthe SADC Secretariat with a mandate to contribute to:• Increased access to modern energy services, and • Improved energy security across the SADC region. The centre is also expected to contribute substan-tially to the development of thriving regional renew-able energy (RE) and EE markets through knowledgesharing and technical advice in the areas of policy and

regulation, technology cooperation, capacity develop-ment, as well as investment promotion. Based in Wind-hoek, Namibia, the centre is supported by the AustrianDevelopment Agency (ADA) and the United NationsIndustrial Development Organisation (UNIDO). The SIEEP, which is funded by the EuropeanUnion (EU) through its Technical Assistance Facility(TAF), is meant to support the implementation of theSADC Industrialization Strategy and Roadmap, 2015-2063. The SIEEP will contribute to the competitive-ness of the industrial sectors of SADC MemberStates by building their capacity to adopt, investand utilise EE technologies and practices. The targetgroup are medium and large scale industries. The ob-jectives of the Program (SIEEP) contributes to the re-gion’s goals of:• Energising SADC towards adequate, reliable, least

cost and environmentally sustainable energy serv-ice; and

• Long-term transformation of the SADC economyand creating the knowledge economy of the future.

Regional Status on Energy EfficiencyThe Scoping and Assessment Study of SIEEP con-ducted in 2017 revealed that the performance of indus-tries in the region is low based on capacity utilisationand other measures. This is attributed to the poorglobal economic environment, ageing infrastructure,labour issues, shortage of energy and quality of supply,and high energy costs. In all countries, food and bev-erages, agro-based industries and those based on nat-ural resources such as forestry are operating at

Energy Policy Brief No. 16

Energy Efficiency Key to the SADC Industrialisation Agenda


E N E R G Y E F F I C I E N C Y

relatively high capacity levels and are least affected bychanges in national and global economies. The general state of play in the region is that littleeffort has been made in the industrial sector regardingindustrial EE, save for a couple of countries such asMauritius and South Africa that have achieved a sig-nificant level of success in the promotion of EE througha combination of governmental incentives (policies,regulation and tax incentives) and of private sector ledinitiatives.

The industrial sector has been the least active indeveloping and implementing EE measures comparedto other sectors in the SADC region. The lack of activ-ities towards industrial EE can be attributed to the gen-eral lack of guiding policy frameworks for EE. TheScoping and Assessment study identified that the ma-jority of countries in the region do not have dedicatedpolicies and strategies to address EE as illustrated inTable 1, below: In the last few years, two significant programmescovering industrial EE were implemented at regionallevel. The two programmes are the SADC IndustryManagement Programme (SIEMP) and the EfficiencyEnergy Management Programme in Southern Africa(EEMP), both implemented to promote EE awarenessand capacity building in industry. The objective ofSIEMP, which was funded by the Canadian Interna-tional Development Agency (CIDA) was to promoteenergy management in industry through delivery oftraining of trainers and production of training manualsand material on energy management. Some of theachievements realized by the SIEMP that ran from1994 to 1998 included the training of technicians andengineers in the selected industries and the conductionof numerous basic energy audits and introduction ofsome level of energy management.

Country

AngolaBotswanaDRCLesothoMadagascarMalawiMauritius

MozambiqueNamibia

Seychelles

South Africa

SwazilandTanzaniaZambiaZimbabwe

ElectricityAccess rate %1

32

56

14

28

17

12

100

21

50

100

86

65

16

28

40

Energy Policy inplace (year)

2011

D

2013

2003

2015

2003

2009S

2017

2012 S

2012A

2017D

2010S

2008

2012

EE Policy /strategy/ actionplan /masterplans in place(year)

2016 S

2011A/

2016 MP/IN

IN

2016S

IN

2017(P) D

(A)D

IN

EE Target-National &Industry % savings

10N

60I***

10N

15I

20I(electricity)

RE Policy strategy/actionplan/masterplan/ Act inplace (year)-

2016S

2017

2011P

2017D

IN

RE Target Total/grid share (%)

70 by 2030

(NDC)

32 by 2030

REFIT(year)

D

E

CB

D

Net metering exists

T

T

2017D

+D

SubsidizedIndustrialtariff inUSD cents2***

6.37

5.7

5.6

2.0

7-8

2.7

16.5

1.8

9.2-16.25

25-306

8-10

7.1

7.0

1.5-3.3

7.0

Financialincentivesfor EEmeasures inindustries

P

CL

CL/TR

Share of industry inenergy consumption%

8

18

16

36

19

26

26

20

12

28

39

52

15

32

8

Share of manufacturingsector in GDP(2016)3

5.4 (2015)

64 (2015)

18

10 (est)

15

10

14.1

10

15.3 (2014)

13

36 (2014)

6 (187)

11

10

D- draft; P- Policy, IN- dedicated RE/EE institution, S- Strategy, A- action plan; CL Credit Line; TR- tax rebate, I Industry share; T- Trail net metering in municipality(South Africa) and Regional Electricity Distributor region (Namibia); N- national, I-industry, CB- competitive bidding; E-exists; p-pending; The tariffs are for energycharge only and does not include max demand and fixed charges; *** industry penetration not energy improvements; NDC – Nationally Determined Contributions.

1 Source of electricity access data is SE4ALL Global Tracking Framework database 2017 and validated by the MS during the SIEEP design.2 Estimated from various sources and converted to USD cents using exchange converter. 3 Majority of figures from https://data.worldbank.org/indicator/NV.IND.MANF.ZS4 31% including mining5 Mining is 9USD cents/kwh then commercial/industrial is 16.2 USD cents/kwh6 Spanning range of maximum demand level7 Figure from consultation is 18% from literature review is 6%

Table 1: SADC MS energy statistics, policy framework and economic contribution of manufacturing sector top GDP



The objective of the EEMP funded by the EU from2007 to 2014 was to create and enhance awareness onthe value of energy management among Small toMedium Enterprises in selected sectors to improvetheir energy consumption and improve their com-petiveness thus ensuring long term sustainability of en-ergy usage. Monitoring of energy consumption was keyin the programme to identify the need for replacing ex-isting inefficient equipment and installation of inte-grated renewable energy systems. In as much as the regional programmes were usefulin creating awareness and building some technical ca-pacity of a few consultants, their sustainability was notensured. The design and development of SIEEP, whichwill set an agenda for the region’s industrial efficiencyprogramme, will be informed by these and other pastactivities.

Opportunities and Challenges Opportunities exist in the industrial sector to reduce en-ergy intensity and improve EE in their operation. TheSIEEP has identified the following possible actions to in-crease EE in the industrial sector across the SADC region:v Implementation of energy audits to identify oppor-

tunities for energy reduction; v Benchmarking energy use in different sectors of ac-

tivity and setting targets; v Ensuring that EE policies, strategies, action plans are

put in place; v Involvement of the private sector and creation of in-

dustries in the region producing energy efficienttechnologies;

v Creating awareness to the industry community aboutthe benefits of EE through demonstration pro-grammes;

v Setting up energy services companies to deal withenergy audits, monitoring and verification; and;

v Imbedded power generation from RE facilities tooffset electricity uptake from the grid.

In most member states a number of barriers still existfor mainstreaming EE in industries. Most countries areaffected by inadequate power supply and lack of invest-ment in new EE equipment and technologies. There isstill lack of dedicated or comprehensive EE policies,strategies and action plans in the countries to promoteEE. In some countries, EE appears in the National Energypolicies but without any action plans or targets whichmakes it difficult to guarantee their implementation andmeasure effectiveness. The level of cooperation betweengovernment and the private sector is lacking in most ofthe Member States. The other issue is the lack of coordi-nation and limited dialogue among the different marketplayers. The low tariffs which are not cost-reflective aswell as subsidies do not incentivise EE investments. Fur-thermore, some of the main challenges include:

• Lack of EE standards such as Minimum Energy Per-formance Standards (MEPS) to guide the selectionof technologies, and low capacity in guiding indus-try to adopt energy management standards such asISO 50001;

• Lack of understanding by key decision makers onthe use of energy by the industrial sector and whereopportunities exist for EE;

• Limited expertise in energy management includingconducting energy audits;

• Low involvement of the private sector in EE activi-ties such as Energy Service Companies (ESCOS)due to the small market, among other factors;

• Limited financing facilities for EE especially fromlocal commercial banks and direct foreign investors(DFI’s) due to lack of awareness as well as technicalexpertise in assessing energy efficiency projects;

• Complexity of integrating EE applications and tech-nologies including solar thermal applications;

• Lack of regulatory frameworks allowing for self-generation of renewable energy; and;

• Limited use of Measurement and Verification in en-ergy efficiency projects.

Legal and Institutional LandscapeDespite the challenges and opportunities, there are anumber of legal documents, policies and institutionalframeworks, aimed at facilitating availability of energyand energy security for the SADC region. The main ex-isting frameworks are:v The SADC Treaty (1992);v The SADC Protocol on Energy (1996);v The SADC Energy Cooperation Policy and Strategy

(1996);v The SADC Energy Action Plan (1997) and (2000);v The SADC Regional Energy Access Strategy and Ac-

tion Plan (2010);v The SADC Regional Indicative Strategic Develop-

ment Plan (RISDP) 2010 to 2020; v Revised Infrastructure Development Master Plan

(2015 – 2020;v The SADC Industrialisation Strategy and Roadmap

(2015 – 2063); and,v The 2015 Renewable Energy and Energy Efficiency

Strategy and Action Plan (REEESAP). These frameworks have, to a certain extent, created

an enabling environment for investment in the energysector and economic cooperation among the SADCMember States. The Directorate for Infrastructure atSADC Secretariat is tasked to coordinate developmentsin the energy sector through the Energy Division.

Structuring and Implementation of SIEEPBased on extensive consultations with Member States,industry and other key stakeholders, the need to de-velop a regional industrial EE programme was high-



lighted to be long over-due. The design and imple-mentation of SIEEP will be focussed on addressingthe barriers and gaps and seize opportunities iden-tified in the scoping and Assessment Study. TheProgramme will be based on the following six (6)pillars as summarised in Figure 1, below:

The SIEEP will also contribute to previous andon-going efforts to establish the role of RE and EEin improving access to energy.

Policy Options/Way ForwardTo ensure a sustainable regional industrial EE pro-gramme for the region, Member States are encour-aged to develop clear EE policies and strategies fortheir implementation. The policies should have tar-gets for the industrial sector. The SIEEP will informthe formulation of such policy environment as it per-tains to industry. In creating policies, SIEEP will assist

SADC Member States to articulate standards, regu-lations, incentives, tariff structures and mechanismssuch as, net-metering for self-generation. The SIEEPcan assist Member States to develop legislations thatwill ensure EE is adopted to ensure security of energysupply in the region. Legally binding directives withtargets to be met by the SADC region and MemberStates should be considered by SIEEP. The SIEEP willensure that there is support to financial institutionsto develop financial packages and mechanisms forbusiness opportunities in energy efficiency in indus-try. Voluntary or mandatory approaches can beadopted working in partnership with the regionalstandards bodies, such as SADC Cooperation inStandardisation (SADCSTAN) and the involvementof the private sector.

ConclusionIn as much as the foundation for regional collabo-ration in developing a sustainable energy sector hasbeen laid though the SADC Energy Protocol of1996, the 2013 SADC Regional Indicative StrategicDevelopment Plan, among other regional policyinstruments, very limited programmes have beeninitiated to promote EE in the region. The regionhas an enormous task of transforming its energysupply towards a low carbon economy as well as itsindustrial sector to make its companies and prod-ucts cost competitive. It is very clear that energyplays a significant role in the overall manufacturingcosts, hence EE can contribute to improved indus-trial competitiveness. Targeting the industrial sec-tor for SIEEP is the right choice especially with theimportance the SADC region has placed on its in-dustrialisation efforts. There are recommended pil-lars, objectives and Actions for SIEEP to elaboratewith the engagement of key stakeholders to ensureownership of the programme. The SIEEP will sup-port the Member States to achieve their targets forSustainable Development Goals by doubling therate of improvement in energy efficiency.

Julius K. Nyerere House15 Downie Avenue, Belgravia, Harare, ZimbabweTel +263 4 791141 Email [email protected] Knowledge for Development

Figure 1: SIEEP Implementation Pillars

THIS POLICY BRIEF is produced by SARDC and SACREEE though the project on Communicating Energy inSouthern Africa supported by the Austrian Development Agency (ADA)/Austrian Development Cooperation(ADC). SACREEE is established through the support of SADC Secretariat, ADA and the United Nations IndustrialDevelopment Organisation (UNIDO). Responsibility for the content of this brief lies entirely with the authors.The information and analysis does not reflect the official opinion of ADA/ADC. April 2018


AfDB boost for SADC power transmission projects

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Table: SIRESS participation in March 2017

T R A D E

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SIRESS Participation

Participating countries 14Participating central banks (as participant banks) 7Participating commercial banks 76Retail client operators 1

Zimbabwe railway system to boost SADC trade

More currencies to be introduced on the regional payment system duced on the regional p


G E N D E R

SADC commemorates International Women’s Day

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nable developmentGender empowerment vital for sustai


Political situation remains stable in the region

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Mauritius witnesses a peaceful transition

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E L E C T I O N S


April – June 2018

April5-6, Azerbaijan 18th Non-Aligned Movement Ministerial Meeting

The NAM Ministerial Meeting takes place against the backdrop ofinternational debate on finding sustainable peace in a world wheretoo many conflicts are violating the most basic rights of people.Theme: "Promoting International Peace and Security for SustainableDevelopment”.

11, Botswana SADC ETG and Water/Energy Nexus Meeting The Energy Thematic Group is a coordination meeting of SADC andits subsidiary organizations with cooperating partners to review theenergy situation in the region. ETG will also meet jointly with theWater Strategy Reference Group to discuss water-energy nexusissues.

24-25, Namibia Experts Meeting on Resource Material on National LiberationMovements in SADC The experts meeting will discuss the production of resource materialon regional dimensions and linkages of national liberationmovements in the SADC region. It aims to generate awareness andeducational tools to sustain knowledge of shared heritage andcohesion across borders and contribute to regional integration. Themeeting is jointly organised by the UNESCO Regional Office forSouthern Africa and SARDC, and co-hosted by the Ministry ofHigher Education and the National Assembly of Namibia.

May8, Namibia SADC Gender-Water Focal Points Workshop

The workshop will be attended by gender and water focal points inSADC Member States as well as national gender machineries.

8-9, Namibia 8th SADC River Basin Organisations WorkshopRepresentatives of river basin organisations in SADC will meet inWindhoek to discuss pertinent issues and share experiences aboutchallenges and responses. The theme is “Securing StrategicInvestments to Realise the Benefits of Transboundary WaterCooperation”.

10-11, Namibia SADC Water Resources Technical Committee This is annual meeting of the SADC Water Resources TechnicalCommittee, which is the technical clearing body for the SADCwater sector and comprises national directors responsible for waterin SADC Member States.

14-16, Zimbabwe The First Ordinary Session of the African Union Ministerial Sub-Committee on TourismThe meeting seeks to discuss how African countries can strengthenand develop their tourism sector to promote sustainable growth.

25, Africa Africa Day Africa Day is the annual commemoration of the founding of theOrganisation of African Unity (OAU), now African Union, 55 yearsago on this date in 1963. Five years ago, on the 50th anniversary,the African Union committed to a vision for the next 50 years –Agenda 2063 The Africa We Want.

June19-22, Mauritius Africa Energy Forum

The Africa Energy Forum is the global investment meeting forAfrica’s power, energy, infrastructure and industrial sectors, andbrings together governments, power utilities and major players inthe energy sector of Africa and elsewhere to focus on delivery ofpower infrastructure in Africa.

17, Global World Day to Combat Desertification and DroughtThe day is observed each year to raise awareness on the need forthe global community to collectively work together to combatdesertification and land degradation.

E V E N T SSOUTHERN

AFRICA TODAY

SADC TODAY VOL 20 NO 3 APRIL 2018

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A shared future within a regional community

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H I S T O R YT O D A Y

Winnie Madikizela-MandelaA symbol of freedom

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Towards a united Africa

1 April Easter Sunday Madagascar, Namibia,Tanzania, Zimbabwe2 April Easter Monday Botswana, Lesotho, Madagascar, Malawi, Namibia, Seychelles, Swaziland, Tanzania, Zambia, Zimbabwe2 April Family Day/Easter Monday South Africa4 April Peace and Reconciliation Day Angola7 April Sheik Abeid Karume Day Tanzania Woman’s Day Mozambique13 April Leilat al-Meiraj Comoros18 April Independence Day Zimbabwe19 April King’s Birthday Swaziland25 April National Flag Day Swaziland26 April Union Day Tanzania27 April Freedom Day South Africa

1 May Worker’s day Lesotho, Mozambique, Namibia, Zimbabwe Labour day Angola, Botswana,Comoros, DRC, Madagascar, Malawi, Mauritius,Swaziland4 May Cassinga Day Namibia10 May Ascension day Botswana, Lesotho, Madagascar, Namibia, Swaziland14 May Kamuzu Day Malawi17 May Liberation Day DRC20 May Whit Sunday Madagascar21 May Whit Monday Madagascar25 May Africa Day Angola, Namibia, Zimbabwe Africa Day/ Heroes Day Lesotho Africa Freedom Day Zambia31 May Corpus Christi Seychelles

15 June Eid al Fitr (End of Ramadan)* Tanzania, Madagascar, Mauritius 16 June Public Holiday Tanzania16 June Youth Day South Africa18 June Constitution Day Seychelles25 June Independence Day Mozambique26 June Independence Day Madagascar29 June Independence Day Seychelles30 June Independence Day DRC

* Exact date depends on sighting of the new moon

PUBLIC HOLIDAYS IN SADCApril - June 2018


Documents

“Made in Africa” - SARDC · D E Net *** 6 % 20 3)