CDE

Simon Rolland

Alliance for Rural Electrification (ARE) is a non profit organization representing renewable energy sector companies (producers, installers, operators), working in developing countries. It aims to promote these technologies and support the creation of sustainable markets for these companies as well as the development of local suppliers. The long-term objective being full access to energy in rural areas of developing countries. To achieve this, ARE relies on the expertise and experience of its members and develops a range of recommendations intended for the public authorities and the private sector, concerning the financial structures and legal frameworks most favourable to the development of renewable energy.

At a time when the CDE is considering a new generation of programmes and promising industries, we met with Simon Rolland, Policy and Development Officer at the Alliance for Rural Electrification.

When one talks of renewable energy and the need to control investments and energy costs, what can one call a “good system” ?

A good system is primarily one which is adapted to consumers’ needs. One particular technology may not of course be adapted to all situations. When needs are limited and an area is sparsely inhabited (which is the case in many rural areas of Africa), simple stand-alone systems such as single photovoltaic plants which “only” cost a few hundred euro, need little maintenance, but are sufficient to cover “basic” energy needs, are often the best option. On the contrary, when one is considering densely populated urban centres or commercial/industrial applications, then small solar, wind or hybrid power plants, equipped with small electricity grids, able to generate a lot more power, but which need qualified and trained staff, are surely more appropriate. Depending on the case at hand, other technologies such as small scale hydraulic production (often the least expensive) or small scale wind production may be best adapted to local needs.

As regards the cost of such systems, the main difficulty linked to renewable energy is not so much the costs themselves but rather their structure. Whatever the system or the technology, renewable energy demands heavy initial investments, while running and maintenance costs are generally low. It is thus necessary to look at yields over the medium to long term to ascertain that they are less expensive, or even a lot less expensive, than the solutions normally used in rural areas (diesel generators, candles, car batteries, etc.).

What are, today, the main hurdles to mainstreaming renewable energy in development systems, particularly in ACP countries ?

Unfortunately there are many hurdles, which doesn’t mean they can’t be crossed !

There is the question of financing which is of course the main obstacle to renewable energy development, but also to access to energy generally. There are however a number of directions that can lead to solving this problem. First of all, public financing of fossil fuels has to be stopped and directed towards renewable energy. Each year billions of euros are spent to subsidize diesel fuel, which of course makes competition impossible for any alternative! If this amount was invested in clean, sustainable and more affordable energy, it would already be a great step forward. Thereafter, it is necessary to find the right balance between support for investment intended to encourage the building of systems and support for production, which is intended to guarantee usage of the system over the long term (which helps to demonstrate the profitability of renewable energy). Finally, there is a need for banking facilities and guarantees intended to encourage and protect banking and private sector investments.

The second group of major obstacles has to do with political will. Access to electricity still holds a secondary position among many developing countries’ funding priorities, although it is central to the achievement of many other goals (education, health, economic development, etc.). As a result, rural electrification has to be moved higher up on political agendas and follow a coherent strategy in order to clarify public priorities regarding the private sector. Overall, the energy market, just like other sectors, is affected by the private sector’s defiance towards public authorities in ACP countries.

One needs on the one hand to focus on convincing the private sector in ACP countries that there is business in the development of renewable energy, on the other hand, to focus on showing the European private sector that there are immediate market opportunities in developing countries (for example around commercial developments, telecommunications, tourism), and potential markets in the longer term.

What could the added value of the European private sector be for ACP countries, according to ARE ?

What the European private sector can bring is mature technical solutions, either adapted to a specific case, or in the longer run, through technology transfers, which should be carefully framed and supported. The second added value of the European private sector is of course linked to its capacity to invest, either through direct investment or through the development of specific partnerships with local operators.

Whatever the case, much responsibility lies with local and international public authorities. Only when a stable framework favourable to the expansion of the private sector is in place, will these investments happen in future.

Considering that rural electrification is often subsidized in ACP countries, how should the private sector approach this activity ?

It is true that when one looks at access to energy in sparsely populated rural areas – thus with little economic potential -, subsidies play an important role. The question is how that public money is used. In a perfect framework where the private sector was assured of the reliability of its public contractee and benefited from banking facilities for the initial investment, the ideal would be to subsidize production (to complement the price paid by the consumer), to ensure that the company has a profit margin which justifies its investment over the long term. This sort of subsidy would guarantee the running of the system over the long term, would cut the public sector cost and enable the development of local suppliers. In the actual current situation of ACP countries, the private sector certainly needs a mix of investment incentives and production support, but most of all it needs political guarantees and institutional clarity.

Lastly, it must be underlined that in many cases, the first market for the private sector is that which does not need subsidies (small self-financed businesses, telecommunication centres, village pumps, individuals purchasing stand-alone systems thanks to micro-credit etc.). For these markets, the key is the availability of systems and access to the right information.

What sort of cooperation could two organizations such as ARE on one hand, CDE on the other, consider ?

I believe the potential synergies between ARE and the CDE are at least as great as the potential of renewable energy for Africa…

On the Alliance’s part, there are a number of things we could do to help ACP companies in the area of renewable energy. The development of training material or workshops on renewable energy intended for ACP country companies or professional groupings, would be one possibility. The identification of economic partners and match-making between them in the context of specific projects could be another. Missions and visits could be organized, but we could also develop detailed information tailored to specific groups of operators and needs profiles (for example : equipment for the tourism industry, for fishing and aquaculture etc.).

Overall, "our" private sectors need to be educated on both sides. Renewable energy represents an immediate profitable solution to the energy problems of the African private sector as well as a market with strong potential.


ARE contact: Simon Rolland dev.com@ruralelec.org or www.ruralelec.org
CDE contact: Vaflahi Meite vaflahi.meite@cde.int

Rehabilitation of a barge near the port of Kinshasa

Getting from one place to another in Kinshasa, the capital of the Democratic Republic of the Congo (DRC), is like running an obstacle course. The city’s inhabitants, the "Kinois", have got used to it and manage, but if a tropical rainstorm occurs, short but brutal as always, a good part of city-life comes to a standstill, for fear of the huge ponds of rainwater which hide the crevasses and half-finished drain excavations. There is a real risk of roads flooding or even collapsing. On 29 October 2009 at about 9 :30am, such a rainstorm struck and prevented several participants from attending the Third meeting of the Support Committee of the DRC PSDP (Private Sector Development Support Programme), which gathered, as dynamic and active as ever, albeit in smaller numbers than planned.

A consensus decision had designated Ms. Thérèse Muzadi, of ASSOFE (Association des Femmes Chefs d’Entreprises) as chair of the meeting, and chair of the Committee for the next six months. Absent from Kinshasa, she was replaced for the circumstance by Ms. Jacqueline Bisimwa, ASSOFE’s president. The Committee meeting on 29 October also welcomed for the first time Mr. Jean Kalala Mukongo, newly appointed Delegate Administrator for the Fédération des Entreprises du Congo. Mr. Freddy Milambo, founding member of the Committee and advisor to the Minister for Industry, currently seconded to the Presidency, amicably honoured the meeting with his participation.

Three pieces of good news were announced on the day of the meeting : the announced intention of the Belgian Minister for Development Cooperation, Mr. Charles Michel, to extend the Belgian Cooperation’s support for the DRC PSDP beyond 2010 ; good progress of negotiations between the CDE and the European Commission to integrate the DRC PSDP within a vast “aid for trade” programme prepared by the Congo authorities and the European Commission for 2010-2014 ; and the principle of an agreement between the CDE and IFC (the International Finance Corporation, part of the World Bank group), to implement together an intervention for a group of poultry sector companies.

In Kinshasa, the laying poultry sector is developing faster than the meat poultry sector. Local production with a little support would be in a position to satisfy demand. Unfortunately, it is hampered by regular imports of eggs. In this context, along with the IFC, the DRC PSDP is setting up a programme to professionalize poultry farmers in the Western part of Kinshasa (Mount Ngafula and Lukaya) where it has identified about one hundred poultry farms. The programme will support, in the same area, the rehabilitation and expansion of a poultry feed production plant. The aim is to contribute to creating a poultry development pole in Kinshasa.

In Lubumbashi, the meat poultry sector dominates. The PSDP has just selected an SME to benefit from a comprehensive feasibility study for a breeding farm for broiler chicken (meat poultry). It also supports this SME in its quest for funding. Up until now, day-old chicks were imported from Zambia and Zimbabwe. With the food crisis in the region, the supply of chicks is no longer ensured while local demand continues to increase. This is thus an excellent opportunity for this SME to produce day-old chicks itself locally. The SME has also won an important procurement contract to deliver one million chicks, attributed by the Ministry of Agriculture in Kinshasa.

River transport is directly relevant for the agro-industry sector. It is vital to carry goods at low cost and contributes to reducing poverty in isolated areas by facilitating communication and trade by waterway. Faced with the observation that the average age of current waterway employees is high, and that they are trained on the job, the PSDP has decided to cofinance with CICOS (Commission Internationale du Bassin Congo-Oubangui-Sangha) and GTZ (German Aid), re-training seminars for 420 people, ship captains or shipping staff, as well as a long-term training for younger waterway employees, to ensure replacement of older staff. The PSDP Committee also welcomed the proposal by the CDE to roll out a direct technical intervention, in 2010, for about ten carriers and shipowners on the Congo and other rivers.

During the previous Committee meeting (January 2009), the Committee had expressed their concern to work in a sector-wide manner, with business groups or clusters. The programme’s current direction responds to this concern since the CDE now supports skills-training for poultry farmers in the West of Kinshasa, for groups of forest-workers, in river transport, with about fifteen fish-farmers and groups of woodworkers in Kinshasa in cooperation with the province of Tuscany (Toscana Promozione).

In answer to a question from a Committee member on the use of local expertise, it was noted that among some thirty consultancy experts that the DRC PSDP has called on since it started, at least fifteen are Congolese citizens.

A large delegation of Belgian businesses was in Kinshasa at the same time as the CDE mission. Their appreciation of the mission is a hopeful sign and partnerships between Belgian and Congolese businesses are on the make, particularly in the context of the Convention signed between the CDE and export agency AWEX (Agence wallonne pour l’exportation).

Contacts :
At the CDE : Yves Dricot, national expert yves.dricot@cde.int
In Kinshasa : Adrien Kabale, CDE resident expert adrien.kabale@cde.int

Mr. Brechat of the FIPME, Ms Gosset, Ambassador of Côte d’Ivoire for the Benelux and the EU, Mr. Diby Koffi, Ivorian Minister of the Economy and Finance, Mr. Mabousso Thiam, Director of the CDE, Mr. Brou Kouadio, Special counsellor of the Ivorian President, Mr. Yebouet, Counsellor of the Presidency in charge of SMEs, Mr. Aliou Abdoullahi, CDE West Africa Regional Office Chief

Mr Diby Koffi Charles, Côte d’Ivoire Economy and Finance Minister, and Mr Mabousso Thiam, Director of the Centre for the Development of Enterprise (CDE), signed a technical assistance agreement for the implementation of a Private Sector Development Programme (PSDP) on 2 November 2009 in Abidjan, Côte d’Ivoire.

The general objective of this programme is to improve the structures and competitiveness of 150 private sector enterprises in Côte d’Ivoire. More specifically, the programme aims to:
- strengthen the competitiveness of enterprises, in particular the SMEs/SMIs,
- improve enterprise governance and management,
- strengthen the capacities of Intermediary Organisations (IOs),
- support the growth and development of selected sectors,
- improve access to financing for SMEs/SMIs,
- strengthen the capacities of national expertise in providing support to SMEs/SMIs.

The programme has four components:
- support via sectoral and transversal clusters,
- direct support to enterprises,
- direct support to intermediary organizations,
- support to finance organisations for improved access to credit by SMEs/SMIs.

In the coming weeks a steering committee, made up of public and private sector representatives, will establish the sectoral and thematic priorities which will form the basis of the road map of this programme worth some 6 million Euros over a period of three years.

Contact : Aliou Abdoullahi aliou.abdoullahi@cde.int

The regional market is dominated by Tilapia and Catfish

The CDE has undertaken a study of the fish market in East Africa in the context of its aquaculture development programme.

Intended to adjust CDE activities according to regional markets, the study is the first of its kind to reach this level of detail. It is to serve aquaculture producers (fish farmers) and fisheries to provide the necessary information to better market their produce. Three species are studied : Tilapa, Catfish and Nile Perch. The countries concerned are Burundi, the Democratic Republic of the Congo (DRC), Kenya, Rwanda, Sudan, Tanzania and Uganda.

The market for fish consumption (table fish) in East Africa is dominated by Tilapia and Catfish. These fish species are mainly caught in the lakes – particularly lake Victoria- rivers, swamps and fish farms (1% of total production). Fresh and smoked fish is mainly sold on the market packaged in polyethylene or paper.

Import and export regulations vary according to the country. Traders export produce using costly rented trucks, which they sometimes share, towards neighbouring countries, particularly Uganda and the DRC. These two countries import particularly salted and smoked Tilapia and Perch.

The farmed fish species are mainly Tilapia and Catfish. Current production in Uganda is 20 million units. Potential production is estimated at 80 million. With a survival rate of about 30%, annual production could reach 35 000 tons. The Ugandan Fisheries Department considers the potential demand for fingerlings (young fish) to be 600 million units per year. Ugandan traders are grouped in an association called WAFICOS.

Alarming decline of capture fisheries

In the DRC, aquaculture is affected by a lack of fry (young fish), which means farmers resort to taking young fish from the wild. Congolese fish-farmers are organized in associations such as the Association des Pisciculteurs des Mangobo (APM).

Species used as bait for fishing are : Catfish, Tilapia, Mormyrus and Haplochromines. There is a significant trade in fish for bait, particularly between Tanzania and Uganda, less so with the DRC, where line-fishing is less developed.

There is an alarming decline of capture fisheries in the region which reduces the supply of fish on the market, while this supply is a precious source of food for the population. There is thus an important need for alternative sources of fish. The great fresh water resources of the region (rivers, lakes), particularly in Uganda, make fish-farming an obvious solution to ensure food security. The obstacles to its development are technical weaknesses and a lack of knowledge of the market, which inhibits production sales. Finally, it is estimated that illegal fishing destroys 30% of fish species.

The situation of the aquaculture sector in the country is grave, while it could potentially play a major role. The study of the regional fish market, conducted by a consultant of the Uganda Fish Processors Association for the CDE, sets the following objectives :
- survey of species sold on the market,
- assessment of market opportunities for Catfish as bait,
- assessment of market opportunities for Tilapia fingerlings,
- identification of market opportunities for Tilapia and Catfish for consumption and breeding,
- identification of market opportunities for salted and smoked Nile Perch heads and carcasses originating from fish-processing plants.

Growing demand for consumption

The report concludes that there is a growing demand for consumption (fresh, smoked, salted and dried Catfish and Tilapia) in the DRC, Kenya, Tanzania, Rwanda and Uganda. It suggests a cold-chain could be set up between Uganda and the DRC for fresh and frozen fish.

To reduce the high cost of transport, fish-farmers should organize collectively. The use of public transport could also help reduce costs for transporting fish.

To reduce the environmental impact of polyethylene packaging, the authorities should discourage its use, and a partnership with the packaging industry could develop a less detrimental form of packaging.

The capture fishery is a major competitor for aquaculture. National and regional regulations of the fish trade should be harmonized (Tanzania for example prohibits Tilapia exports, while the DRC imposes numerous taxes on fish imports).

The potential for producing young and juvenile fish for breeding in Uganda and the DRC is enormous. Government programmes are planned to restock minor lakes in Uganda. The breeding of new species such as rainbow trout should be considered, as well as the setting up of a production centre for young fish at Kisangani (East DRC).

The consumption of fish used for bait represents 147.6 million units in Tanzania, 112.6 million in Uganda. Aquaculture could better respond to this demand, which would reduce the taking of fish for bait in the wild.

Contact : Erik Rotsaert erik.rotsaert@cde.int

Visit of a fish-farm in Italy	Meeting at Italian  foreign trade institute ICE

In the framework of its aquaculture programme launched in 2006, the CDE is providing technical assistance to the African Commercial Aquaculture Producers’ Association CAPA. This assistance, undertaken in cooperation with Italian foreign trade institute ICE, is intended to develop productivity and new markets.

The programme includes a visit to Italy by five representatives of CAPA, followed by a mission by an Italian expert to four African countries. The four companies participating are : Crystal Lake Ltd (Ghana), Lake Harvest Aquaculture Ltd (Zimbabwe), Maldeco Aquaculture Ltd (Malawi) and SON Fish Farm (Uganda).

Lasting ten days, the mission by CAPA representatives to Italy started on 22 October in Verona, to attend "Acquacoltura Med 2009", an event devoted to sustainable aquaculture and seafood. The event, which includes conferences and a trade exhibition, saw the participation of leading experts from the main producing countries. Topics debated at the event were centred on sustainable aquaculture and fish-feed, as well as the challenges confronting producers in the face of population growth and the prospect of increased imports from Asia and Africa.

During their meeting with ICE staff, CAPA representatives expressed their expectations regarding Italian support in the quest for practical solutions and financial contributions in the context of joint ventures.

The CAPA delegation visit continued with visits to the main Italian aquaculture production areas : Apulia, Lazio, Marche and Venetia. The delegation visited fish-feed plants, aquaculture equipment manufacturers, fish-farms using high tech cages and fish processing and packaging factories.

At the end of these visits, proposals were made concerning the production of nets and floating cages, the building of a fish-food production plant and the supply of Italian goods. The possibility of formulating a specific food diet for Tilapia fish using local ingredients was also discussed. This proposal was of particular interest to the delegation and will be explored in the coming months.

According to Dr Leonard of SON Fish Farm (Uganda), the mission was both educational and informative and enabled the delegates to get to know the industry better in terms of corporate governance, standards and husbandry systems. It also enabled to envisage the future implementation of sustainable aquaculture.

The mission of the Italian expert will take place in January 2010. Its aim will be to visit the four companies that are taking part in the programme and to study the local environment of the different species of Tilapia. This is of particular importance for Maldeco Aquaculture (Malawi) which produces two unique Tilapia species whose characteristics are little known by scientists.

The Italian expert will make recommendations to the four companies concerned to improve their fish-feeding systems and preserve their stocks. A protocol will then be produced to implement the study in the field.

Contacts : Simona Mussolino simona.mussolino@cde.int
                Erik Rotsaert erik.rotsaert@cde.int

The European Commission and CDE booth

The Regional Office of the CDE for Southern Africa in Gaborone (Botswana), took part, from 4 to 7 November, in the international professional trade fair “Global Expo Botswana”. The GEB fair is an annual event for international trade and investment.

Organized by the Botswana Export Development and Investment Authority (BEDIA), the multi-sectoral business-to-business fair covers the following sectors among others : food industry and agricultural produce, manufactured goods, construction, leather and associated technologies.

The CDE and the European Commission Delegation, which held a joint booth at the event, presented to participants the facilities available to support the public and private sectors.

During the event, the members of the CDE’s Regional Office studied the opportunities for cooperation with representatives of the Botswana National Productivity Centre, the Walvis Bay Port Authority and the Transkalahari Corridor.

During one of the workshops which took place on 6 November at GEB, the CDE presented the “CDE Efficient Energy Management Program in southern Africa”. This programme involves 20 SMEs from Botswana, Mozambique, Namibia and Zambia. It aims to assess energy consumption of businesses where energy is an important expense. The programme aims to then offer solutions for better energy management to improve competitiveness. The issues brought up by participants concerned : diversifying energy sources, the impact of energy savings on production cost, and on the global economy.

The dissemination of this programme to all Southern African countries will enable to reach a greater number of SMEs.

Contact : Sid Boubekeur sbu@cde.int

The representatives of the CDE’s Regional Office for Southern Africa in Gaborone (Botswana), associated BOCCIM (Botswana Confederation of Commerce Industry and Manpower), BEDIA (Botswana Export Development and Investment Agency) and BEMA (Botswana Exporters and Manufacturers Association) to the concept of a programme to implement the Ministry of Trade and Industry’s strategy to reinforce the capacity of the private sector in Botswana.

The programme was presented on 13 November on BEDIA premises to the representatives of BOCCIM, BEDIA, BEMA, the Ministry of Trade and Industry, the Finance Ministry, the Local Enterprise Authority, the Botswana Bureau of Standards, the Citizenship Enterprise Development Authority, the Botswana Export Credit Insurance and the Botswana National Productivity Centre.

The concept is founded on the three areas where the CDE provides added value: capacity building for Intermediary Organizations, SMEs and Intermediary Financial Institutions.

At the end of the presentation which was followed by a debate, participants validated the programme concept and asked the CDE to launch the next phase. A consultancy firm will be charged with formulating a programme and submitting it for funding to the Botswana authorities, the African Development Bank (AfDB), and the international donors.

Delta Dairies Ltd premises in Gaborone

The representatives of the CDE’s Regional Office in Southern Africa at Gaborone (Botswana), visited dairy company Delta Dairies Ltd on 26 October. The company benefited from CDE support in 2004 for a feasibility study.

Based in the capital, it is one of the two milk producers in the country. Delta Dairies utilizes the latest generation of milk industry equipment.

The company is currently seeking financing to improve its production and meet growing demand. The CDE Regional Office is assisting this initiative of Delta Dairies Ltd to approach venture capital funds.

The Botswana National Productivity Centre (BNPC) held on 6 November, a Forum on micro, small and medium enterprises (MSMEs). The event was an opportunity for representatives of the CDE’s Regional Office for Southern Africa to present the CDE and its facilities.

The BNPC’s role is to "facilitate a culture of excellence within the private sector with a particular focus on MSMEs, to enable targeted local business to achieve a regionally competitive rating on the business excellence model".

To fulfil this role, BNPC offers capacity building programmes in enterprise management and finance. A meeting is planned between the CDE and BNPC representatives to sign a Memorandum of Understanding to support small and medium enterprises in Botswana.

MD2 pineapples

The CDE is providing support to MD2 variety pineapple producers in the Dominican Republic. This variety is known for its sweetness, the quality and quantity of its juice and its high vitamin C content.

The product was originally developed by Del Monte in Costa Rica, the largest supplier of pineapples to Europe with a market share of 75%. The world market’s demand for MD2 pineapples has doubled over the last ten years.

The CDE commissioned an expert to do market research in France, Germany and Spain, which are, with the UK, the main EU consumers of this product.

The Economic Partnership Agreement (EPA) between the Caribbean economic community CARIFORUM and the EU now enables customs-free import of pineapples into the EU. The CDE facilitated contacts with buyers, importers and processors at the Fruit Logistica trade fair (Berlin) and the Salon international d’agriculture (Paris) in February 2009.

The CDE’s assistance programme also aims at improving production, quality, size and colour of the fruit to respond to the demands of export markets for fresh pineapple. It comprises improving plantation quality, eliminating the use of pesticide and fungicide, sanitary measures after the harvest and training farmers in managing the costs of production and harvest.

The CDE programme responds to the recommendations of the CARIFORUM-EU agreement in terms of supporting production and marketing of agricultural and fish produce.

Contact : Marie-Louise Norton-Murray marie-louise.norton-murray@cde.int

Participants of the Madang training seminar

The Commonwealth Secretariat and the CDE organized from 26 to 30 October in Madang (Papua-New Guinea) a training seminar for some twenty managers from eight SMEs from Fiji, Papua-New Guinea, Tonga and Vanuatu.

For the training’s organization, the CDE relied on its financial partner Aureos Capital, an international venture capital company which invests primarily in SMEs, including the SMEs that took part in the training. The Commonwealth Secretariat for its part, catered for the provision of trainers from the Administrative Staff College of India (ASCI).

The training’s objective was the improvement of SME’s operational performance. The emphasis of the course was mainly on effective cooperation between the financial and sales services within businesses, and it was based on case studies.

Contact : Klaus Nierderländer klaus.niederlander@cde.int