1. This presentation will probably involve audience discussion, which will create action items. Use PowerPoint to keep track of these action items during your presentation • In Slide Show, click on the right mouse button • Select “Meeting Minder” • Select the “Action Items” tab • Type in action items as they come up • Click OK to dismiss this box • This will automatically create an Action Item slide at the end of your presentation with your points entered. Energy and Poverty Reduction Strategy Process, the Zambian Case Presented at the Energy Access for the Rural Poor Workshop Hotel VIP, Maputo, Mozambique, 12th April 2005 Geoffrey Musonda Acting Assistant Director Department of Energy Lusaka, ZAMBIA

2. contents • Introduction • Household energy • Strategy for poverty reduction • Summary of expected outputs • Progress on projects and programmes • Conclusion • The End

3. introduction • Zambia has high population of people classified as poor. • Households classified as poor at national level • 1991 (69.7%), 1996 (69.2%), 1998 (73.2%) • Poverty pronounced in rural areas • Energy sector • Firewood and charcoal 80% total national energy supply • Electricity 11% total national energy supply • 1.5% of household energy demand (20% average electrification rate at 2% in rural areas) • 400MW surplus capacity • 6000 MW hydropower potential • 1,715.5 MW installed capacity

4.   introduction cont… • Hydropower 92% of installed capacity • Proven coal reserves 30 million with several hundred millions probable reserves • Petroleum 100% imported • 421100 tonnes of crude oil imported in 1999 • Renewable energy • Solar energy, 3,000 sunshine hours annually, 4.5kWh/m2/day • Wind speed averaging 2.5m/s at 10m above the ground, mainly suitable for mechanical applications

5. Household Energy • Urban households relay on: • Electricity, charcoal, firewood and kerosene. To some extent candles are also used for lighting. • Table 1 shows the proportions of households using specified fuels for lighting and cooking.

6. Household Energy cont.

7. Household Energy cont… • Between 1996 and 1998, the proportion of households meeting their lighting needs from kerosene declined by four percent while that for electricity increased by three percent. The other one percent of the urban households probably substituted kerosene by candles as those that met their lighting needs by using candles increased by one percent over the same period.

8. Strategy for Poverty Reduction • Poverty Reduction Strategy Paper (PRSP) 2002-2004 • reduce poverty levels in the country and stimulate economic development • outlines the programmes that need to be implemented in order to improve the welfare of citizens. • translated into the Transitional National Development Plan (TNDP) 2002-2005 (MFNP, 2002). • energy sector, there is great potential for poverty reduction activities • poverty and energy consumption are directly related.

9. Strategy for Poverty Reduction cont… • TNDP has the following main programmes: • Increased access to electricity by both rural and urban households. • The aim is to increase access by rural households from the current 2% to 15% by the year 2010. In the urban areas, the target is to increase access from 48% in 1998 to 70% in 2010. • Enhance capacity of current energy infrastructure under the Power and Petroleum Rehabilitation Projects. • Create new energy infrastructure, which will include the Zambia-Tanzania-Kenya Interconnector, Zambia-DRC Interconnector, Electrification of Mkushi Farm Block, Kafue Gorge Lower and Itezhi-tezhi Hydro Electric Power Stations and Mini-hydro stations in North-Western Province.

10. Strategy for Poverty Reduction cont… • Promote efficient production and use of woodfuel. Under this programme, charcoal consumption will be reduced by 400,000 tones by the year 2010.

11. Summary of expected outputs

12. Summary of expected outputs

13. Progress on Projects and Programmes • Review of the National Energy Policy • The draft NEP document has been prepared. This followed nationwide consultative meetings with stakeholders. The consultative meetings were held in all the 9 provinces Of Zambia. The draft document has been submitted to line Ministries for comments • Establishment of Petroleum Strategic Reserves • A Technical Committee on the Establishment of Petroleum Strategic Reserves has submitted its proposals to cabinet.

14. Progress on Projects and Programmes cont… • MEWD together with the MFNP, is working out modalities on the leasing of GRZ depots so that they could be used in the building of the strategic stock. •  Establishment of the Rural Electrification Authority (REA) • The REA secretariat has been set up. The Board of Directors has been appointed and is working. Process of hiring a consultant to offer technical assistance is nearing completion (assistance from SIDA) • Negotiations for a financial package from the WB to be used to increase the rate of electrification is in progress. Funds to be managed by REA

15. Progress on Projects and Programmes cont… • Rural Electrification Programme • A review and evaluation of Rural Electrification Projects was done between January and March 2004. ZESCO has continued implementing rural electrification projects notable ones being Kasempa (completed), Kaoma and Nyimba. Preparatory work on the Chavuma project has also commenced. Electrification of farming blocks has started with Nansanga receiving US$ 1.8 Million in December 2004 •  Rural Electrification Master Plan • A Consultant has prepare a project document. The document will be sent to potential donors. Already JICA, USAID and SIDA have expressed interest in supporting the master plan. Application has been made to JICA and outcome expected this month.

16. Progress on Projects and Programmes cont… • Solar Energy Promotion • The Solar Energy Project in Eastern Province has been evaluated and an evaluation report is being prepared. Installation of 200 solar systems for traditional rulers in progress •   Improved Cook stove Promotion • A pilot project to promote the use of improved cook stoves has been commenced by the Department. A total of 800 cook stoves have been purchased for distribution at a subsidy to the community in the project areas.

17. Progress on Projects and Programmes cont… • LPG Promotion • The programme involves distributing LPG stoves and gas to targeted households at a subsidized price. So far 350 stoves with gas have been bought. A survey to identify households to benefit from the project will start 3rd week of April. •  Gel-Fuel Promotion • The process to import gel fuel and stoves from Malawi is on. An application for zero rating of gel-fuel has been submitted to the Ministry of Finance and National Planning (MFNP). The response from MFNP is being awaited.

18. Progress on Projects and Programmes cont… • Energy Information Dissemination • The Informatics section has this year produced the NEP draft document, draft Statistical Bulletin and Annual Reports for the years 2000, 2001, 2002 and 2003. •  Establishment of Global Village Energy Partnership • A GVEP Working Group has been established and a mode of operation has been developed. The DOE is the GVEP secretariat. • Zambia has received funding from GVEP, through the World Bank to facilitate the preparation of the action plan. ToRs for consultant are ready and recruitment to start before the end of the month.

19. Progress on Projects and Programmes cont… • Zambia-Tanzania-Kenya Interconnector • SADC project, progress with grants approved from ADB and the WB for studies. • Uganda and Rwanda have expressed interest to participate • Kafue Gorge Lower • ZESCO working with Chinese company to develop the 600MW hydro plant. Designs done and financing in progress • Itezhi Tezhi • ZESCO working with Iranian company to develop the 120 MW hydro site. Financing efforts in place, designs being finalized.

20. conclusion • Within its national budget, the Government of the Republic of Zambia has been allocating resources to implement energy projects in order to reduce poverty. However, there is great need for the international community to come along and partner with the government in order to scale up the projects. • Most of the required frameworks and institutional infrastructure are in place and what is required now is capacity building and funding to develop the infrastructure to enable the rural poor have access to modern energy services. Modern energy services will help all of us to reduce poverty.

21. The End Thank you very much for your attention