Leslie Lai, MPA
In 2000, the UN established the Millennium Development Goals (MDGs) to improve the social and economic conditions of the world’s poorest countries by 2015. Of the eight MDGs, two specifically target the reduction of child mortality and the improvement of maternal health. Despite increased aid in the past decade from foundations, bilateral donors, and multilateral organizations, several countries in Sub-Saharan Africa will fail to reach these two goals in the next four years.
The main reason for this is the lack of an equity focus in the planning processes of national health ministries. For economic and political reasons, governments have focused on targeting “low hanging fruit,” or populations that are most easily reached, through the expansion of traditional delivery service mechanisms such as hospitals. While there has been significant progress in health outcomes due to increased international aid, improvements in national averages conceal widening disparities in poverty and worsening health outcomes for the most marginalized populations. Furthermore, the perceived difficulty and economic inefficiency in reaching the poorest hinders donors from targeting technical assistance to those who need the most help.
A practical solution to this challenge is to show evidence that integrating an equity focus into health planning can actually be cost-effective. Organizations such as the United Nations Children’s Fund (UNICEF) has proven this with a bottleneck analysis budgeting software created with the World Bank to assess the marginal costs of scaling up coverage of proven high-impact interventions. The tool incorporates over 186,000 input variables including the building of new facilities, vaccine transport costs, training of community health workers, etc. It also measures the potential number of lives saved per US $1 million invested depending on the mix of health services delivered and to whom.
Using health data from 68 developing countries, UNICEF used the software to show that each of these countries could not only provide essential health services to the most deprived in an economical fashion, but could also potentially achieve the health-related MDGs by 2015. Surprisingly, UNICEF’s analysis also showed that countries ignoring the hardest-to-reach would miss the MDG targets. So just what exactly does a country need to do to reach the MDGs and expand coverage to its hardest-to-reach beneficiaries?
Ethiopia is a successful example of a country that has successfully incorporated the bottleneck analysis tool into its national health plan to expand coverage to its underserved. Ethiopia’s key intervention is the training and deployment of Health Extension Workers (HEWs), young women who provide immunizations and maternal health services to children and women in rural areas. Based on marginal budgeting calculations, Ethiopia could potentially save 68.1 children’s lives per US $1 million spent with the HEW program compared to only 52.9 lives saved without. To achieve this, donors and technical assistance would need to enhance the HEW program or implement similar types of interventions.
Since Ethiopia has historically experienced serious health problems among women and children, it is an ideal model for Sub-Saharan African countries with similar issues. Unfortunately, political matters may obstruct successful implementation in other countries. And in the meantime, the clock is running out…
Showing posts with label MDGs. Show all posts
Showing posts with label MDGs. Show all posts
Friday, November 11, 2011
Sunday, October 23, 2011
African Energy Access: Is China a game-changer?
Phillip M. Hannam, PhD candidate
This summer in Nairobi, Kenya, I would often go vegetable shopping at a local open-air market. To my surprise, many of the vendors – native Kenyans – spoke Mandarin with the Chinese clientele, who had a distinct presence throughout the market. Nearby, massive concrete pillars and cantilevered steel beams rising above the city – the first elevated highway system in Kenya, courtesy of China – are a visible manifestation of growing development cooperation between China and Africa. Many Chinese and African scholars regard these investments as “win-win” partnerships, though Chinese state-owned institutions have also garnered criticism over resource interests and the disregard of humanitarian and environmental concerns in project planning.[1]
Beyond highways, hospitals, municipal water and waste systems, stadiums, and government buildings, China is also heavily invested in Africa’s electricity generation infrastructure. The scale of China’s involvement could provide electricity to millions in Africa who need it. And the energy could be renewable. The Minister of Foreign Affairs of the Seychelles, Jean-Paul Adam, recently expressed his optimism to the UN General Assembly:
Approximately 1.4 billion people lack access to electricity globally, and one billion more have unreliable electricity access.[3] Lack of modern energy services impairs attainment of the UN’s Millennium Development Goals (MDGs). The World Bank predicts that an underperforming energy system results in a loss of 1-2% of annual economic growth potential.[4] Yet of the US$35-40 billion needed annually from now until 2030 to achieve universal energy access, only about 5% of this amount is expected through traditional development institutions. At this rate, the proportion of people with energy access is unlikely to improve significantly by 2030, the year the UN has called for universal access to modern energy services. Thus, China’s energy investments around the world – though hardly altruistic – could still help bring this goal into reach.
It is too early to tell if China’s investments in Africa will significantly change the outlook for the people of this resource-rich, but chronically energy-poor, continent. Nonetheless, I posit a few initial observations, expanded below:
1. China is a new major player for African energy access: According to a study by the World Bank, 34% of Chinese investments in African infrastructure are in electricity.[5] Of this, the vast majority is hydropower. A watchdog group, International Rivers, reports that Chinese financial institutions are building over 250 hydropower projects across the developing world, mostly in Africa and Southeast Asia. Large hydropower projects, on the scale that China builds them, are highly controversial. Chinese dams in Ethiopia, Sudan, Ghana, and elsewhere face intense opposition because of ecosystem damage and displacement of indigenous groups. Chinese developers remain unapologetic, and most African policymakers support the projects. The Gibe III project on the Omo River in Ethiopia, as one example, will provide 1,800MW of electricity – effectively doubling Ethiopia’s generating capacity.[6] The energy access provided by the project is weighted against the dam’s impact on hundreds of thousands of people who rely on the Omo River and its ecosystems for their livelihoods.[7]
Better governance of international development cooperation could make such projects more tolerable. The World Commission on Dams delineates how large hydropower may be sustainable in an environmental, social, and economic context, though the recommendations have largely been dismissed by Chinese developers (and the World Bank, for that matter).
Fortunately, China is investing beyond hydropower. China Longyuan Power Group is investing in several wind power projects in South Africa, on the scale of 100MW.[8] Hydrochina International Engineering Company is building wind farms at two sites in Ethiopia. Another Chinese state-owned company, Xinjiang Goldwind Science & Technology Co., is supplying the wind turbines for the project.[9] A subsidiary of Chinese oil giant Sinopec has invested US$18.7 million to develop geothermal power potential across Kenya and the Rift Valley. China is also emerging in Africa’s nuclear power sector, exporting its domestic nuclear technology. China National Nuclear Corporation is considering developing a new nuclear power station in collaboration with South Africa. A Chinese-built nuclear power station is also under discussion for east Africa.[10]
2. China views Africa as a growth market: Beyond building new power stations, Chinese firms are investing in renewable energy manufacturing across Africa. Western solar power companies were active in the Kenyan market in the 1990s, but most pulled out due to high costs and low sales.[11] Today, the African renewables market is changing. Policies to incentivize grid-connected solar power are being considered in South Africa, Kenya, Nigeria, and Uganda. For now, all solar panels demanded in Africa must be shipped from outside the continent – a financial and logistical problem that stifles growth of the industry.
China’s Tianpu Xianxing Enterprises, a prominent Chinese integrated solar manufacturer with exports around the world, is negotiating a major manufacturing hub in Nairobi. By creating a production base within Africa, shipping costs would be reduced and sale prices for panels may drop from US$310 to US$77 for a typical home system.[12]
In 2010, Suntech, China’s largest solar panel manufacturer, began investing several hundred million US dollars in a manufacturing base in South Africa capable of producing 100MW of capacity annually. The plant is expected to supply the growing South African solar market, which some analysts predict could reach US$1 billion annually. The creation of a manufacturing base within Africa increases the potential for skilled-job creation and technology transfer – desperately needed for the development of Africa’s fledgling electricity sector. It could also keep educated Africans from fleeing to jobs outside the region, as manufacturers within Africa put a premium on local skilled labor and technical skills.
3. Trends in Chinese investments following the World Bank: The World Bank has come under intense scrutiny in recent years regarding its role in financing large carbon intensive projects in energy and extractive industries. Coal is oftentimes the cheapest option when the price of carbon isn’t internalized. As a concession to international pressure, in 2011 the World Bank strictly limited future lending for coal power to the very poorest (non-IDA countries) countries. The World Bank’s energy strategy supports hydropower explicitly, calling it low-carbon electricity (though much evidence contests this) and noting that 90% of the hydropower resource in sub-Saharan Africa remains undeveloped.
Given China’s experience with coal domestically (which supplies 80% of Chinese electricity), Chinese investment in coal projects globally could fill the void left by the Bank’s exit from coal power in some countries. While no complete database exists of Chinese international projects, my own research indicates that Chinese firms have been involved in roughly 4GW of fossil power in Africa since 2000. China has several coal projects in Sudan, Zimbabwe, Senegal, and Botswana, as well as natural gas projects in Sudan, Nigeria, and Ghana.[13]
Encouragingly, none of these projects were announced in the past two years, while most of the non-hydro renewable energy projects mentioned above were initiated during that time. It remains to be seen how China’s investment portfolio will change as a result of World Bank policy, but for now I am optimistic that China is investigating opportunities beyond hydropower and coal for its African energy investments.
Conclusion
Renewable energy is playing a growing role in Africa. China is a champion of this trend, particularly as it explores investing in renewable energy manufacturing capacity in southern and eastern Africa. Western firms remain largely absent in this market. Indeed, it appears that in the arena of development aid and development finance – once dominated by western powers – China is increasingly emerging as a leading player.
While huge investments in hydropower are disastrous for biodiversity and have significant human impacts, the electricity generated bodes well for energy access goals. Moreover, while China frequently comes under direct criticism for its development projects, China’s energy investment portfolio seems to be consistent with that of the World Bank. Stronger institutions are needed to ensure that large scale projects, whether invested by China or Western institutions, maximize benefits while eliminating humanitarian and environmental costs to the extent possible.
---------------------
References:
[1] Deborah Brautigam at American University is particularly fair and thorough in her treatment of China’s engagements in Africa. Visit her blog here.
[2] UN 65th Session. Quote from AE-Africa (27 September 2010). Link.
[3] International Energy Agency (2010). “World Energy Outlook”. Executive Summary. Link
[4] World Bank (2009). “Africa’s infrastructure, a time for transformation.” World Bank Africa Infrastructure Country Diagnostic.
[5] Foster, V., Butterfield, W., Chen, C. and Pushak, N. (2009). “Building Bridges: China’s Growing Role as Infrastructure Financer for Sub-Saharan Africa”. Trends and Policy Options, No.5. Link
[6] BBC, 26 March 2009: http://news.bbc.co.uk/2/hi/africa/7959444.stm
[7] Last month’s decision by the Burmese Government to shelve the $3.6 billion Myitsone hydropower project being developed by a Chinese parastatal company was celebrated as a victory for local and international activists. Yet by most guesses, Chinese hydropower investment will continue unabated.
[8] Wee, S. and Walet, L. (26 August 2010). “UPDATE 1-Suntech signs MOU to build S.Africa solar plants.” Reuters. Link.
[9] iStockAnalyst (10 January 2011). “Goldwind signs wind poer equipment contract with HydroChina in Ethiopia.” Link.
[10] Reuters (25 May 2011). “China interested in building nuclear power plant in E.Africa, IBI Corp says” Alertnet. Link.
[11] Japan is an exception to recent Western neglect of the African solar market. Japan donated US$7.4 million to Morocco to build a 1MW PV installation, another US$13.7 million for a 1MW station in Botswana, and a grant to Malawi for construction of a solar array on the Kamuzu International airport (AE-Africa 2010b).
[12] Disenyana, T. (February 2009). “China in the African Solar Energy Sector: Kenya Case Study.” South African Institute of International Affairs: Occassional Paper No.25 – China in Africa Project. Link.
[13] Foster, V., Butterfield, W., Chen, C. and Pushak, N. (2009). “Building Bridges: China’s Growing Role as Infrastructure Financer for Sub-Saharan Africa.” Trends and Policy Options, No.5. Link.; Macauhub (13 June 2006). "China’s CITIC to finance Brazilian thermoelectric power plant in Rio Grande do Sul." Link.
This summer in Nairobi, Kenya, I would often go vegetable shopping at a local open-air market. To my surprise, many of the vendors – native Kenyans – spoke Mandarin with the Chinese clientele, who had a distinct presence throughout the market. Nearby, massive concrete pillars and cantilevered steel beams rising above the city – the first elevated highway system in Kenya, courtesy of China – are a visible manifestation of growing development cooperation between China and Africa. Many Chinese and African scholars regard these investments as “win-win” partnerships, though Chinese state-owned institutions have also garnered criticism over resource interests and the disregard of humanitarian and environmental concerns in project planning.[1]
Beyond highways, hospitals, municipal water and waste systems, stadiums, and government buildings, China is also heavily invested in Africa’s electricity generation infrastructure. The scale of China’s involvement could provide electricity to millions in Africa who need it. And the energy could be renewable. The Minister of Foreign Affairs of the Seychelles, Jean-Paul Adam, recently expressed his optimism to the UN General Assembly:
“China and Africa have an ideal opportunity to work together to set an example for the world on best practices [in] eco-friendly technology transfer, to enhance the development of renewable energy.”[2]
Approximately 1.4 billion people lack access to electricity globally, and one billion more have unreliable electricity access.[3] Lack of modern energy services impairs attainment of the UN’s Millennium Development Goals (MDGs). The World Bank predicts that an underperforming energy system results in a loss of 1-2% of annual economic growth potential.[4] Yet of the US$35-40 billion needed annually from now until 2030 to achieve universal energy access, only about 5% of this amount is expected through traditional development institutions. At this rate, the proportion of people with energy access is unlikely to improve significantly by 2030, the year the UN has called for universal access to modern energy services. Thus, China’s energy investments around the world – though hardly altruistic – could still help bring this goal into reach.
It is too early to tell if China’s investments in Africa will significantly change the outlook for the people of this resource-rich, but chronically energy-poor, continent. Nonetheless, I posit a few initial observations, expanded below:
- China is a new major player in Africa’s electricity sector: China’s presence in a range of renewable energies across the continent is welcome from the standpoint of increasing energy access and helping to achieve the UN MDGs. Unfortunately, the vast majority is in hydropower, which carries its own deleterious baggage.
- China views Africa as a growth market: Chinese companies see Africa as a new frontier for renewable energy – using China’s domestically-honed comparative advantages in solar, wind, and hydropower technology to employ Chinese firms, open market opportunities, and base manufacturing capacity within Africa. Western companies reticent to invest in Africa may miss emerging opportunities for renewable energy across the continent.
- The World Bank is shifting away from coal. China’s focus is likewise migrating to renewables: Chinese energy investments closely parallel those at the World Bank, where the focus is (slowly) shifting away from coal. While this unfortunately means a lot of new hydropower, it could also mean a lower coal and carbon trajectory for African development.
1. China is a new major player for African energy access: According to a study by the World Bank, 34% of Chinese investments in African infrastructure are in electricity.[5] Of this, the vast majority is hydropower. A watchdog group, International Rivers, reports that Chinese financial institutions are building over 250 hydropower projects across the developing world, mostly in Africa and Southeast Asia. Large hydropower projects, on the scale that China builds them, are highly controversial. Chinese dams in Ethiopia, Sudan, Ghana, and elsewhere face intense opposition because of ecosystem damage and displacement of indigenous groups. Chinese developers remain unapologetic, and most African policymakers support the projects. The Gibe III project on the Omo River in Ethiopia, as one example, will provide 1,800MW of electricity – effectively doubling Ethiopia’s generating capacity.[6] The energy access provided by the project is weighted against the dam’s impact on hundreds of thousands of people who rely on the Omo River and its ecosystems for their livelihoods.[7]
Better governance of international development cooperation could make such projects more tolerable. The World Commission on Dams delineates how large hydropower may be sustainable in an environmental, social, and economic context, though the recommendations have largely been dismissed by Chinese developers (and the World Bank, for that matter).
Fortunately, China is investing beyond hydropower. China Longyuan Power Group is investing in several wind power projects in South Africa, on the scale of 100MW.[8] Hydrochina International Engineering Company is building wind farms at two sites in Ethiopia. Another Chinese state-owned company, Xinjiang Goldwind Science & Technology Co., is supplying the wind turbines for the project.[9] A subsidiary of Chinese oil giant Sinopec has invested US$18.7 million to develop geothermal power potential across Kenya and the Rift Valley. China is also emerging in Africa’s nuclear power sector, exporting its domestic nuclear technology. China National Nuclear Corporation is considering developing a new nuclear power station in collaboration with South Africa. A Chinese-built nuclear power station is also under discussion for east Africa.[10]
2. China views Africa as a growth market: Beyond building new power stations, Chinese firms are investing in renewable energy manufacturing across Africa. Western solar power companies were active in the Kenyan market in the 1990s, but most pulled out due to high costs and low sales.[11] Today, the African renewables market is changing. Policies to incentivize grid-connected solar power are being considered in South Africa, Kenya, Nigeria, and Uganda. For now, all solar panels demanded in Africa must be shipped from outside the continent – a financial and logistical problem that stifles growth of the industry.
China’s Tianpu Xianxing Enterprises, a prominent Chinese integrated solar manufacturer with exports around the world, is negotiating a major manufacturing hub in Nairobi. By creating a production base within Africa, shipping costs would be reduced and sale prices for panels may drop from US$310 to US$77 for a typical home system.[12]
In 2010, Suntech, China’s largest solar panel manufacturer, began investing several hundred million US dollars in a manufacturing base in South Africa capable of producing 100MW of capacity annually. The plant is expected to supply the growing South African solar market, which some analysts predict could reach US$1 billion annually. The creation of a manufacturing base within Africa increases the potential for skilled-job creation and technology transfer – desperately needed for the development of Africa’s fledgling electricity sector. It could also keep educated Africans from fleeing to jobs outside the region, as manufacturers within Africa put a premium on local skilled labor and technical skills.
3. Trends in Chinese investments following the World Bank: The World Bank has come under intense scrutiny in recent years regarding its role in financing large carbon intensive projects in energy and extractive industries. Coal is oftentimes the cheapest option when the price of carbon isn’t internalized. As a concession to international pressure, in 2011 the World Bank strictly limited future lending for coal power to the very poorest (non-IDA countries) countries. The World Bank’s energy strategy supports hydropower explicitly, calling it low-carbon electricity (though much evidence contests this) and noting that 90% of the hydropower resource in sub-Saharan Africa remains undeveloped.
Given China’s experience with coal domestically (which supplies 80% of Chinese electricity), Chinese investment in coal projects globally could fill the void left by the Bank’s exit from coal power in some countries. While no complete database exists of Chinese international projects, my own research indicates that Chinese firms have been involved in roughly 4GW of fossil power in Africa since 2000. China has several coal projects in Sudan, Zimbabwe, Senegal, and Botswana, as well as natural gas projects in Sudan, Nigeria, and Ghana.[13]
Encouragingly, none of these projects were announced in the past two years, while most of the non-hydro renewable energy projects mentioned above were initiated during that time. It remains to be seen how China’s investment portfolio will change as a result of World Bank policy, but for now I am optimistic that China is investigating opportunities beyond hydropower and coal for its African energy investments.
Conclusion
Renewable energy is playing a growing role in Africa. China is a champion of this trend, particularly as it explores investing in renewable energy manufacturing capacity in southern and eastern Africa. Western firms remain largely absent in this market. Indeed, it appears that in the arena of development aid and development finance – once dominated by western powers – China is increasingly emerging as a leading player.
While huge investments in hydropower are disastrous for biodiversity and have significant human impacts, the electricity generated bodes well for energy access goals. Moreover, while China frequently comes under direct criticism for its development projects, China’s energy investment portfolio seems to be consistent with that of the World Bank. Stronger institutions are needed to ensure that large scale projects, whether invested by China or Western institutions, maximize benefits while eliminating humanitarian and environmental costs to the extent possible.
---------------------
References:
[1] Deborah Brautigam at American University is particularly fair and thorough in her treatment of China’s engagements in Africa. Visit her blog here.
[2] UN 65th Session. Quote from AE-Africa (27 September 2010). Link.
[3] International Energy Agency (2010). “World Energy Outlook”. Executive Summary. Link
[4] World Bank (2009). “Africa’s infrastructure, a time for transformation.” World Bank Africa Infrastructure Country Diagnostic.
[5] Foster, V., Butterfield, W., Chen, C. and Pushak, N. (2009). “Building Bridges: China’s Growing Role as Infrastructure Financer for Sub-Saharan Africa”. Trends and Policy Options, No.5. Link
[6] BBC, 26 March 2009: http://news.bbc.co.uk/2/hi/africa/7959444.stm
[7] Last month’s decision by the Burmese Government to shelve the $3.6 billion Myitsone hydropower project being developed by a Chinese parastatal company was celebrated as a victory for local and international activists. Yet by most guesses, Chinese hydropower investment will continue unabated.
[8] Wee, S. and Walet, L. (26 August 2010). “UPDATE 1-Suntech signs MOU to build S.Africa solar plants.” Reuters. Link.
[9] iStockAnalyst (10 January 2011). “Goldwind signs wind poer equipment contract with HydroChina in Ethiopia.” Link.
[10] Reuters (25 May 2011). “China interested in building nuclear power plant in E.Africa, IBI Corp says” Alertnet. Link.
[11] Japan is an exception to recent Western neglect of the African solar market. Japan donated US$7.4 million to Morocco to build a 1MW PV installation, another US$13.7 million for a 1MW station in Botswana, and a grant to Malawi for construction of a solar array on the Kamuzu International airport (AE-Africa 2010b).
[12] Disenyana, T. (February 2009). “China in the African Solar Energy Sector: Kenya Case Study.” South African Institute of International Affairs: Occassional Paper No.25 – China in Africa Project. Link.
[13] Foster, V., Butterfield, W., Chen, C. and Pushak, N. (2009). “Building Bridges: China’s Growing Role as Infrastructure Financer for Sub-Saharan Africa.” Trends and Policy Options, No.5. Link.; Macauhub (13 June 2006). "China’s CITIC to finance Brazilian thermoelectric power plant in Rio Grande do Sul." Link.
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