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World Bank Project to Boost Household Access to Affordable Energy

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Today, the World Bank Board of Directors approved $150 million in financing to improve access to modern energy for households, enterprises, and public institutions in Rwanda and to enhance the efficiency of electricity services. $75 million will be provided as grant funding, and $75 will be provided as a loan.  

Building on the achievement of previous World Bank support to the energy sector, the Rwanda Energy Access and Quality Improvement Project (EAQIP) will advance Rwanda’s progress towards achieving UN Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable and modern energy for all, while also contributing to the country’s aim of reducing reliance on cooking fuel by 50%.

“The proposed project is well-timed to build on the World Bank’s decade-long support to the Government’s energy sector agenda. It will contribute directly to Rwanda’s push toward universal energy access by 2024 and universal access to clean cooking by 2030”, said Rolande Pryce, World Bank Country Manager for Rwanda. “We are honored to be a long-term partner in this journey.”

Rwanda EAQIP aims to improve electricity access by providing funding for the country’s ongoing program of expanding grid connections for residential, commercial, industrial, and public sector consumers, as well as by providing grants to reduce the costs of off-grid solar home systems. The project will also enhance the availability and efficiency of low-cost renewable energy by restoring capacity at the Ntaruka Hydro-Power Project, reducing voltage fluctuations on transmission lines, and supporting the national smart meter program.

The project includes the World Bank’s largest clean cooking operation in Africa, and the first project co-financed by the recently launched Clean Cooking Fund (CCF), hosted by the World Bank’s Energy Sector Management Assistance Program (ESMAP). The CCF will provide $20 million for clean cooking, with $10 million provided as a grant and $10million extended as a loan. The project targets 2.15 million people, leveraging an additional US$30 million in public and private sector investments. By incentivizing the private sector and improving the enabling environment, the project aims to develop a sustainable market for affordable clean cooking solutions in Rwanda. 

The project is part of the Rwanda Universal Energy Access Program (RUEAP), which coordinates the efforts of development partners supporting the energy sector to contribute to the achievement of the targets set out in the National Strategy for Transformation (2017-24).

“The World Bank is proud to have led the RUEAP on behalf of the development partners, including the French Development Agency (co-financing the EAQIP). The World Bank looks forward to supporting the implementation of the ongoing program and expects to report positive outcomes in the lives of Rwandans” said Norah Kipwola, World Bank Senior Energy Specialist and the project Task Team Leader.

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Accelerating private sector investment in large-scale Renewable Energy

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Following its 2020 edition, the Economic Policy Dialogue series (EPD) is back with six new sessions that will run until June 2023. Organized by the United Nations Development Programme (UNDP) and the World Bank Group in Tunisia through TERI Trust Fund, these monthly meetings aim to bring together relevant key stakeholders to create a space for constructive, inclusive, and transparent debate, allowing to collectively address the challenges of economic and social reforms facing the country.

The six EPD sessions are organized to foster dialogue on structural reforms and collectively identify practical and operational solutions to facilitate the implementation of reforms needed to address economic and social challenges as well as economic and development priorities.

The first session will be held on Thursday, 24 November 2022, and will focus on “Accelerating private sector investment in large-scale renewable energy.” Through a frank and direct debate, this dialogue session will aim to propose solutions to accelerate the realization of large-scale renewable energy projects, find ways to overcome the identified barriers and propose innovative mechanisms for a win-win partnership to regain investor confidence and catalyze the development of these projects. Accelerating the implementation of these projects is the only way to reduce the energy deficit and contribute to achieving energy transition objectives: energy security, economic competitiveness, social equity, and climate action.

Tunisia’s interests in the energy transition are evident given the country’s increasing energy demand (1.5% per year) and the worsening of the energy deficit. All the while, the country remains, despite the adoption of several forward-looking laws, far from the objectives it had set itself – namely, 30% of renewable energy in the energy mix in 2030.

At the end of each session, proposed in a participatory format, recommendations will be formulated to initiate and fuel reflection on possible national socio-economic reforms. These reforms aim to improve access to regional development, youth employability, and economic and financial inclusion within the Sustainable Development Goals (SDGs) framework.

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World Bank Group Announces International Low-Carbon Hydrogen Partnership

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Today, on Energy Day at COP27, the World Bank Group announced the creation of the Hydrogen for Development Partnership (H4D), a new global initiative to boost the deployment of low-carbon hydrogen in developing countries.

H4D will help catalyze significant financing for hydrogen investments in the next few years, both from public and private sources. The partnership will foster capacity building and regulatory solutions, business models, and technologies toward the roll out of low-carbon hydrogen in developing countries.   Through H4D, developing countries will gain further access to concessional financing and technical assistance to scale up hydrogen projects. 

“Low-carbon hydrogen can have a significant role in countries seeking to accelerate their clean energy transition,” said David Malpass, President of the World Bank Group. “Our new hydrogen partnership will enable developing countries to prepare low-carbon hydrogen projects and boost energy security and resilience for their people while lowering emissions.”

Low-carbon hydrogen offers a solution to decarbonize heavy industries that produce more than 25 percent of global CO2 emissions, for which there is presently no viable alternative to fossil fuels. Low-cost, low-carbon hydrogen fuel can become a viable replacement for diesel in transportation. Hydrogen also has the potential to provide long-term energy storage options and bolster the reliability of renewable energies with variable outputs, like solar photovoltaics and wind.

For low- and middle-income countries, low-carbon hydrogen has the potential to generate export revenues, creating a value-added export sector that generates jobs for skilled labor and helps promote food security, since hydrogen can be used to produce ammonia, a key component of fertilizers.  It can also generate energy capacity to meet local needs, including decarbonizing in-country manufacturing and smelting sectors, and provide energy access to remote populations.

The main activities of the H4D partnership, to be hosted in the Energy Sector Management Assistance Program (ESMAP) of the World Bank, will include:

  • Convening international cooperation to increase the knowledge base in low-carbon hydrogen technologies for developing countries.
  •  Building capacities by following a global public goods approach.
  • Understanding requirements from emerging markets and the private sector for the deployment of low-carbon hydrogen and its derivatives.
  • Creating opportunities to inform innovation and for new technologies to gain visibility.
  • Generating policy dialogue on enabling the deployment of low-carbon hydrogen across countries.
  • Fostering collaboration with private sector partners for clean hydrogen projects.
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EU leaders accuse US natural gas producers of profiteering

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European leaders are unhappy with natural gas prices. Some leaders are insisting that the EU impose a price cap on all natural gas imports, regardless of origin, – notes Oilprice.com.

France’s president Emmanuel Macron accused the United States of a “double standard” because of the difference between the price at which liquefied natural gas produced in the U.S. sells in Europe and the price at which natural gas sells within the U.S.

“The North American economy is making choices for the sake of attractiveness, which I respect, but they create a double standard,” Macron said, also adding that “they allow state aid going to up to 80% on some sectors while it’s banned here – you get a double standard.”

He wasn’t alone among European national leaders in being unhappy about gas prices. In fact, as many as 15 leaders were unhappy, and they insisted that the EU imposes a price cap on all natural gas imports, regardless of origin.

Now, the U.S. is striking back at the accusations.

“What’s happening is the companies that hold those long-term contracts with US LNG producers, they’re marking that up and earning that margin in the European market,” Brian Crabtree, an assistant secretary at the Department of Energy, – told the Financial Times. “It’s not the US LNG company, it’s basically European-headquartered international oil companies and traders.”

Indeed, producers of liquefied natural gas do not invariably sell their product directly to the consumer, in the face of a country in Europe, for instance, They work with commodity majors such as Vitol and Trafigura, or the supermajors, including BP and Shell.

This is not to say that LNG producers are not benefiting from the much stronger demand for LNG from Europe. And this is exactly the reason they have been benefiting, in the form of higher profits: demand has surged, and when demand surges, prices follow, especially if supply is not growing as fast as demand.

In other words, Europe seems to want businesses to not act as businesses and take every opportunity to make a profit, which is what businesses are all about.

Be that as it may, a Ministry of Energy analyst, told the FT that the U.S. was committed to helping Europe get enough gas “at a price that is affordable to the continent.” It’s hardly a surprise he did not go into detail on how this affordable price would be achieved.

…This is a free market, isn’t it?

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