Speech/statement | Date: 2015-06-03 | Ministry of Foreign Affairs
'It is a great pleasure to be here today to talk about the important issue of finding better solutions in the field of clean energy', said State Secretary Morten Høglund in his address at the World Economic Forum on Africa in Cape Town.
Access to energy is vital for ensuring sustainable economic and social development and reducing poverty. Inclusive economic growth cannot take place without increased access to energy.
Sub-Saharan Africa is rich in energy resources, but poor in terms of its energy supply. It has huge renewable energy resource potential – in the areas of solar power, hydropower and wind power – but this potential remains largely unexploited.
The challenge is to develop these resources to produce and distribute energy, and to use the resulting revenues to the benefit of the people. This is a demanding task, and it requires substantial investments of capital. Government assistance and aid alone are not enough. Private sector investments are crucial.
But first of all, a stable regulatory framework is essential for developing the renewable energy sector. I often use the Norwegian experience as an example. Norway has an abundance of renewable energy resources. For more than a century, hydropower has been our main source of energy, and it still accounts for almost 100 % of Norway's electricity production. When developed properly, hydropower is a clean, renewable, reliable, durable and cost-efficient source of energy.
A robust legal framework for the energy sector has been vital to our success. Regulations are essential to the management of our natural resources. They ensure that the resources are used efficiently, they dramatically reduce risk and provide security for payments for the energy delivered. Establishing a sound regulatory framework for the power sector is crucial for attracting private investors. The solution I will outline now can only work if such a framework is in place.
The new solution that I would like present here today shows how governments, private investors and aid actors can work together to accelerate access to renewable energy, and how dividends can be channeled back into the community. Since I am talking to you here in Cape Town, I would like to use a South African example as an illustration.
Norway is proud to be a partner of a unique South African programme for large-scale renewable energy generation, the Renewable Energy Independent Power Producer Procurement Programme, or REIPP for short. The Norwegian company Scatec Solar, an integrated independent power producer, is currently operating and building three solar plant projects (500 MW) under the REIPP programme in the Northern and Eastern Cape provinces.
While Scatec Solar builds, owns and operates the solar power plants, the Norwegian Investment Fund for Developing Countries – Norfund – is co-financing the project. This makes the project financially viable, and means that the risk is shared with the private investor. A trust has also been established to channel dividends from the projects into economic development initiatives in the surrounding communities. The Norwegian Government views the REIPP programme as an excellent model and innovative solution for accelerating access to clean energy.
To sum up, a stable policy environment and the involvement of the private sector are crucial for accelerating clean and sustainable energy production in Africa.