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Joahannesburg Summit 2002
What's New

Electric Companies Join in Initiative to Bring Energy to Poorer Areas

New York, 24 September— A ten year old organization of nine electric utilities in Japan, Europe and North America, the "e7," entered into a series of agreements with the United Nations and its agencies during the World Summit on Sustainable Development aimed at expanding access by the poor to electricity.

About two billion people, or one third of the world's population, presently lack access to electricity or modern energy services and rely on burning firewood or biomass to meet their cooking and heating needs. Meeting the energy needs of these people with modern energy services was a major issue at the Summit, and governments committed themselves to "improving access to reliable, affordable, economically viable, socially acceptable and environmentally sound energy services and resources."

In addition, several donor governments such as the United States and the European Union announced major initiatives in Johannesburg to expand energy access and to increase the use of renewable energies, and a number of voluntary partnerships were launched by governments, NGOs, intergovernmental organizations and businesses.

The "e7," which was formed during the Earth Summit in Rio de Janeiro to support sustainable development, has embarked on 100 projects and activities of various sizes to bring electricity to areas where there was none. In addition to an umbrella agreement between the UN and the e7, memoranda of understanding were signed with the Department of Economic and Social Affairs, the United Nations Environment Programme and the United Nations Industrial Development Organization as part of an effort to tap the expertise of international organizations that have experience in pursuing projects in developing countries.

"Through its myriad initiatives and tireless efforts, the United Nations has accomplished a great many victories," said e7 Chairman E. Linn Draper Jr., who is also chairman, president and chief executive officer of American Electric Power. "It is with great hope for the future that the e7 signs this umbrella agreement with the United Nations."

Johannesburg Summit Secretary-General Nitin Desai called the new partnership collaboration between the UN and the e7 a significant outcome of the Summit that could ultimately produce major results. "We have two billion people living in what is essentially a pre-industrial energy age. We can't rely on only pilot projects or small scale projects to bring clean modern energy services to these people. We have to think big and work with the people who have the expertise, which is largely in the private sector."

To channel funds raised from internal and external sources to support selected e7 sustainable development projects in developing countries, the "e7 Fund" was created in 1998. According to Marie Nguyen, spokesperson for the e7 Fund, said, "Our expertise, our area of competency is in providing electricity. We need the help of the UN and NGOs who are working on the ground with the local population and the host governments."

She explained that the members of the group were committed to identifying new projects and pursuing feasibility studies. These studies, which she said often cost more than $1 million, are necessary to attract capital and financing, such as from regional development banks.

The new collaborative effort is also expected to identify possible projects that would qualify under the Kyoto Protocol's Clean Development Mechanism, where companies in richer countries could offset their emissions by financing greenhouse gas mitigating projects in developing countries. The mechanism is intended to provide an incentive for investments in clean energy for developing countries.

"One major problem about providing energy for all is that no one is investing in developing countries," according to Kui-nang Mak, Chief of DESA's Energy and Transport Branch.

"Johannesburg affirmed that there is a growing recognition that for sustainable development to occur in an accelerated way, electricity needs to be installed early," according to Paul Loeffelman, Director of Environmental Policy of the American Electric Power, a member of the e-7.

Loeffelman said that it was necessary for the electric utilities to have a closer relationship with the UN, the banking industry, NGOs and developing countries in order to create a market for the commercialisation of electricity in order for the private sector to provide energy. "We have to challenge countries to establish financial frameworks that will raise the capital for projects to be undertaken." He said investments of between $140-$500 billion were needed to provide everyone in the world with electricity.

The nine members of the e7 include AEP (U.S.), Electricité de France (France), Enel (Italy), Hydro-Quebec (Canada), Kansai Electric Power (Japan), Ontario Power Generation (Canada), RWE (Germany), ScottishPower (UK), and Tokyo Electric Power (Japan).

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24 August 2006