Energy

Energy

Energy

ABOUT THIS SECTOR

Without access to reliable, affordable energy services, crucial tasks – from cooking food to dispensing health care and education – can be difficult or impossible to accomplish. Many developing partners face this problem every day.

EU support enables partner countries to deploy modern, safe and sustainable energy services. It helps to save lives, improve living conditions and livelihoods and foster socioeconomic growth.

Empowering Development - Delivering results in the Decade of Sustainable Energy for All

The European Union recognises energy as a key development challenge. It has made a long-standing commitment to supporting developing countries in this field. This undertaking has led to a number of initiatives throughout the past decade.

Worldwide, 1.2 billion people live without access to electricity and the opportunities it provides for working, learning or running a business.

Access to modern energy services is a necessary precondition to achieving development goals that extend far beyond the energy sector, such as poverty eradication, access to clean water, economic growth, public health improvements and education, women's empowerment and increased food production.

Acknowledging this fact, the European Union has made energy access an increasingly high priority in its development policy.

The Agenda for Change

The Agenda for Change identifies energy as one of EU's highest priorities for the future and as a key driver for inclusive growth. It defines three main areas for action where the EU will support initiatives by providing expertise and funding in developing countries:

  • price volatility and energy security;
  • climate change, including access to low carbon technologies;
  • access to secure, affordable, clean and sustainable energy services.

Sustainable Energy for All

Energy access, energy security and climate change are clearly issues that need to be addressed in development cooperation. In line with the Agenda for Change, the EU is strongly supporting the UN initiative Sustainable Energy for All (SE4ALL), which aims at reaching three critical objectives:

  1.  ensuring universal access to modern energy services;
  2. doubling the share of renewable energy in the global energy mix;
  3. doubling the global rate of improvement in energy efficiency.

The EU target in the framework of SE4All, as announced by President Barroso during the EU SE4All Summit on 16 April 2012, is to help developing countries to provide access to sustainable energy services to 500 million people by 2030.

The EU is now turning its pledge into reality through several complementary funding instruments aimed at helping developing countries to secure access to modern, affordable and reliable energy services, in order to meet the basic needs of daily life, accelerate economic growth and improve the livelihoods of their people. These instruments provide targeted funding by combining geographical and thematic instruments and developing blending mechanisms.

The EU has initiated long-term partnerships with developing countries based on mutual accountability and political dialogue at regional, national and local level. In line with its SE4All target, the EU is involved in a policy dialogue with its partner countries to help them to develop an efficient, sustainable reform programme as well as an investment climate and support to infrastructure development where appropriate and feasible.

Previous global and regional political dialogues initiated by the EU already paved the way to poverty alleviation by bringing access to modern energy services to the poor. These include the Africa-EU Energy Partnership and the European Union Energy Initiative established in 2002 as a joint undertaking by the EU Member States and the Commission.

More information on EU regional policies and activities:

  • Africa
  • The Eastern Neighbourhood
  • The Southern Neighbourhood
  • Asia, Central Asia and the Pacific region
  • Latin America and the Caribbean region

The EU supports actions in all segments of the energy sector. In the framework of development cooperation, these activities aim at improving access to sustainable energy, enhancing energy efficiency and increasing the use of renewable energy sources. Funding is channelled through a number of instruments designed for genuine impact and concrete results. 

In the framework of the global initiative Sustainable Energy for All, the EU has committed to helping developing countries provide access to sustainable energy services to 500 million people by 2030. The EU has already mobilised €465 million, for the short term, to support actions in the energy field, with a particular focus on sub-Saharan Africa. This first ‘package’ of funding combines several components:

  • A Technical Assistance Platform with a total budget of €65 million helps developing countries to set up country action plans for energy and carry out the regulatory reforms needed to raise the necessary private capital to implement these plans.
  • The EU-Africa Infrastructure Trust Fund tool combines grants and loans from EU and Member States with the lending capacity of banks (such as the European Investment Bank) in support of local infrastructure projects. A budget of €329 million has been allocated to support concrete projects, in addition to the €392 million already in place under this fund.
  • The Global Energy Efficiency and Renewable Energy Fund (GEEREF) provides risk sharing and co-funding opportunities for both commercial and public investors. An allocation of €20 million has been added to the €108 million already in place under this fund. GEEREF finances a broad mix of energy projects and technologies, such as small hydropower, biomass and wind farms, and contributes to the global fight against climate change and world-wide poverty by combining financial viability with sustainable social and environmental returns.
  •  The EU-EDFIs (European Development Finance Institutions) Private Sector Development Facility acts as a risk-sharing mechanism to enable EDFIs to engage with private project developers and other private financiers in energy related projects that provide additionality to their current portfolio. It has a budget of €50 million.

For regions other than Africa, financing is provided through the regional blending facilities: the Neighbourhood Investment Facility, the Asia Investment Facility, the Central Asia Investment Facility, the Pacific Investment Facility, the Caribbean investment Facility and the Latin America Investment Facility.

These facilities have already proven their ability to leverage substantial complementary non-grant financing and therefore provide opportunities to unlock additional financing for sustainable energy in the short term.

Other financing instruments

Various other funding instruments support the EU’s objectives of Sustainable Energy for All:

  • The ACP-EU Energy Facility is a co-financing instrument launched in 2005, with an overall  budget of €445 million. It supports projects aiming to increase and improve access to modern, affordable and sustainable energy services for the rural poor in African, Caribbean and Pacific (ACP) countries. The second call for proposals under the ACP-EU Energy Facility II, with a budget of €55 million, has recently closed. The resulting new projects, targeting rural electrification, are expected to be contracted by the end of 2013.
  • Dedicated funding for fragile states will help beneficiary partner countries to tackle energy challenges. A specific Call for Proposals, with a budget of €15 million, has been recently launched for projects aiming at increased access to energy in rural and peri-urban areas in Burundi, Central African Republic, Liberia, Mali and Somalia. Deadline for submitting applications is 14/02/2014.
  • The Africa-EU Renewable Energy Cooperation Programme (RECP) aims to assist in stimulating sustainable economic and social development in Africa through clearly defined targets to increase the use of the continent's vast renewable energy sources. It has a budget of €6.6 million.
  • National and Regional Energy Programmes in developing countries offer further possibilities. The national and regional indicative programmes (NIPs and RIPs) are funded under the ‘geographical’ instruments and include financing for energy cooperation projects. The main instruments are the European Development Fund (for the African, Caribbean and Pacific countries), the Development Cooperation Instrument (for Asia, Latin America and South Africa) and the European Neighbourhood & Partnership Instrument (for the countries neighbouring the EU).
  • EU provides complementary funding to important development areas through thematic instruments and programmes. More specifically, for energy, these thematic funding mechanisms include the Thematic Programme for Environment and Sustainable Management of Natural Resources including Energy and the Partnership Dialogue Facility of the EU Energy Initiative (EUEI-PDF).

Overall, the EU has already put in place over €2 billion of financing assistance and infrastructure for energy (between 2005 and 2011), which together with expected leveraging from the various instruments will contribute significantly toward its ambitious long-term targets.

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