23.11.2012 | Vienna, Austria
OFID Director-General's statement delivered at GSSD Expo 2012 closing ceremony on November 23, 2012
It is an honor and pleasure to address this closing ceremony of GSSD 2012. I would like to congratulate UNIDO and the UN Office for South-South Cooperation on a successful and well-organized event.
Our proceedings this week have been highly stimulating – especially for my institution, OFID (the OPEC Fund for International Development). As practitioners of South-South cooperation for over 35 years, we welcome wholeheartedly the increased drive to promote partnerships among the countries of the South. To that end, OFID stands ready to work with all organizations represented here today, as we know that we can achieve much more if we cooperate to leverage our ideas and our resources.
These past few days have been all about finding solutions – solutions to some of the many problems that confront developing countries as they strive to climb out of poverty.
Broadly speaking, this conference is about Sustainable Development, which for us at OFID is a long journey that does not have a deadline. Regardless of which definition of sustainable development we use, we can all agree that the balance between its three pillars – economic, social, and environmental – is crucial. In fact, these three elements formed the basis for the Millennium Development Goals. However, the link between them, or the “Golden Thread” – to use Mr. Ban Ki Moon’s words – is missing. This link is Sustainable Energy.
This is why Energy Poverty is a cause so close to OFID’s heart. It is one that we have championed tirelessly for the past five years, since receiving a special mandate from our Member Countries. This mandate was reinforced in June this year through a Ministerial Declaration on Energy Poverty, and a minimum of US$1 billion resource boost to our institution, an amount which could be scaled up if demand warrants.
In recognition of our efforts in this field, OFID was invited to join the UN Secretary General’s Sustainable Energy for All Initiative, whose work was concluded at the General Assembly in September of this year. In his closing remarks, Mr. Yumkella, now the Chief Executive of the Initiative, urged the international community “to turn commitments into kilowatt”, one of many slogans in his rich arsenal. Upon hearing this, I turned to my neighbor and told him: “Welcome to my agenda”.
Indeed, this is exactly what OFID has been doing for the past 37 years.
In the past five years, we have approved almost 60 new energy projects, as part of our Energy for the Poor Initiative. As a result, the share of the energy sector in our total approvals has grown from 20 to 25 percent.
Allow me to bring to your attention two such projects, which also have the benefit of illustrating the interaction between the three pillars I mentioned earlier.
For instance, in Gambia, we financed an electricity project with the objective to light the street between the airport and the capital city. I was glad to hear that by doing so, we also helped to reduce crime rates by 50% in this same area in the evening.
In Armenia, we connected a small rural village to the gas pipeline which provided its inhabitants with sustainable energy access. Among them was an old lady who had lost her son, as he was knocked down by a falling tree while in the forest cutting wood to provide fuel to the house.
I will never forget her gratitude as she told me that she will not have to worry about her grandchildren suffering the same fate. And think of how much we could reduce the problem of deforestation with such projects.
When it comes to renewables, OFID’s position on this is unequivocal.
Let me illustrate.
- In Haiti, where 30 percent of the population relies on fuelwood and charcoal, we are rehabilitating a hydroelectric plant. Restoring the plant’s generating capacity will improve living standards for thousands of poor families.
- In Djibouti, we are co-financing a geothermal installation, which will provide a secure and sustainable source of energy and reduce the country’s dependency on electricity imports.
- Yemen is another recipient of financing for a wind farm project, with the objective of increasing generation capacity required to supply electricity at an affordable or subsidized price to selected rural areas.
- In Kenya and Tanzania, we are supporting a pioneering, social business initiative that is distributing solar lanterns to poor rural communities.
- Finally, in East Africa and Latin America, we have extended a grant to allow the rural population to have access to safe, clean and affordable energy services, specifically to lighting and clean cooking stoves.
As you can see, we finance all types of energy sources. We believe that efforts to eradicate energy poverty must be technology neutral. And while renewable solutions are appropriate where economics permit, fossil fuels will continue to contribute 70-80 percent of the energy mix for the next 25-30 years. So for now, all viable options must be brought to bear.
This includes both short-term and long-term solutions. Traditional solutions take time to implement. Power plants and electricity grids can take years to build and bring on line. In the meantime, people continue to suffer. We cannot keep poor people in developing countries waiting for sustainable energy until we have clean technologies.
After all, even if every one of the energy poor people gain access to modern energy, global carbon dioxide emissions will rise by less than one percent.
So by being open to all types of projects, even short term solutions, we take satisfaction in knowing that we are providing real solutions that are making a real difference to real people.
But still we want to do more.
In a bid to broaden our scope, we recently set up an energy for the poor project preparation facility with CAF in Latin America. Its purpose is to support the widespread identification and initiation of innovative energy solutions across the region. We expect to work with all stakeholders, from governments and the private sector to civil society organizations and grassroots communities.
Negotiations are underway to establish a similar facility with BADEA for sub-Saharan Africa and with the Asian Development Bank.
Similar discussions are taking place with the government of Tunisia for the purpose of energy project identification within the framework of the Deauville Partnership.
We have seen this week that development solutions come in all shapes and sizes. They can be simple or complex. They can be traditional or innovative. And they can be short-term or long-term.
As development practitioners, we have to consider and embrace all the options. This is exactly what we do during our missions to our partner countries. In the last few months, I have been to the Kingdom of Lesotho, Sri Lanka, the Maldives, Albania, and I will be travelling to Tunisia and Mauritania next week.
Next year I have a schedule taking me from Kenya to Tajikistan, from Nicaragua to Colombia and Cuba. The purpose of all these travels is not only to find solutions, but also to fund them. Maybe this is a slogan I can donate to your arsenal Mr. Yumkella.