Summary of discussions
1. The discussion was chaired by H.E. Mr. Jean Rénald Clérismé, Minister of Foreign Affairs of Haiti. In his introduction, Mr. Clérismé underscored the importance of energy for socio-economic development of least developed countries and invited the participants to identify energy policies which could facilitate the integration of LDCs in the world economy. He also invited them to share good practices and lessons learned.
2. Mr. Minoru Takada, Manager, Sustainable Energy Programme, Environment and Energy Group of UNDP, presented the main conclusions of the issue paper ‘Energizing the Least Developed Countries to achieve the Millennium Development Goals: the challenges and opportunities of globalization’.
3. Key messages of the intervention of Mr. Takada included the lack of political agreement on energy and climate issues, the urgent need for action, and the need to focus on public participation, including through ODA.
4. Mr. Takada stressed that LDCs need to develop efficient energy systems and diversify energy sources if they are to achieve the MDGs. He stated that the chal- lenges they face relate not only to the quantity but also to the quality of energy. He added that most of LDCs rely on traditional energy sources, such as biomass, which leads to pollution and health problems. Indeed, he said, the inhalation of indoor smoke kills more people than malaria.
5. He noted that over the last 15 years, the international community has reached a consensus on three issues: providing increased access to energy, particularly to the poor; ensuring environmental sustainability; and guaranteeing security of energy supplies through international cooperation.
6. He also noted that, at the policy level, energy issues for the poor are often ignored in macroeconomic strategies, including in the PRSPs. International sup- port did not really benefit LDCs which need capacity building and improvements in their institutional and legal frameworks to attract private sector investment. 7. It was emphasized that it is important to provide basic services to the poor. Ways
to finance these low-cost services exist. Basic energy services would not add car- bon emissions if countries were provided with alternative energy options. Beyond ensuring access to basic energy services for the poor, transport and infrastructure services should be also improved.
8. During the discussion, participants stated that LDCs need to integrate energy in their national development strategies as well as in their investment programmes. Energy development could be financed through national budgets, by donors and the private sector. Many participants stated that, unfortunately, neither FDI, nor ODA are available to energy development in LDCs, and interna- tional financial institutions usually shy away from such investments. Participants called upon international financial institutions and the international community to fund energy development projects. They also called upon LDCs to create a conducive environment for FDI. They underscored that inadequate infrastruc- ture was a serious obstacle to attracting investment, particularly to LLDCs. 9. In the view of participants, international cooperation can help to lift the financial
burden of investments and improve energy security and energy sustainability in LDCs. Cooperation between LDCs, particularly between oil producing and oil importing countries can also contribute to solving this problem.
10. Participants agreed that it was possible to finance electricity development pro- grammes if LDCs and the international community set energy as a priority. They emphasized that although energy supply is important, it is also equally impor- tant to address the issue of absorptive capacity and service delivery.
11. Participants underscored that Africa would benefit from a continental vision and national, sub-regional and regional policies. Some delegations recalled that the issue of regional integration in Africa was raised as early as in the 1960s, particu- larly by Dr. Kwame N’Krumah with reference to the United States of Africa and by H.E. Sékou Touré.
12. Despite the recognition of the importance of regional integration, African coun- tries are not integrated in the energy area, in particular hydropower. Moreover, 95 percent of Africa’s water resources remained untapped, leading to imports of electricity. Some countries have taken steps and developed interconnectivity projects. But other big projects, such as the dam on the Inga River, an African regional integration project, have failed due to lack of investment. Cross-border cooperation in the area of hydropower also remains underutilized in the South Asian LDCs. High oil prices have increased the cost of production and distribu- tion of electricity in the oil importing LDCs.
13. Because of the small size of their domestic market, small island LDCs suffer from high costs of energy delivery. Regional cooperation, that includes transport, energy, research, science and technology and infrastructure development can become a powerful mechanism for overcoming their geographical handicap and favouring the socio-economic development of these countries.
14. Participants underscored the negative effects of climate change on transport and infrastructure development. Climate change has, indeed, already led to the reduction of water levels and jeopardized the implementation of regional ener- gy development projects such as dams in Western Africa.
15. Participants recognized the importance of alternative sources of energy such as wind power, solar energy, hydropower, etc. but stated that the financial needs to develop these energy sources are high. One way of financing energy access would be through privatization, but it poses a risk of excluding the poor from the necessary energy coverage.
16. Participants concluded that in designing energy strategies, LDCs should first analyse their own situation and assess their resources. They also need to strike a balance between environmental concerns and the imperatives of development.