Sierra Leone Telegraph: 5 October 2015
Sierra Leone’s presidential hopeful – Dr. Kandeh Kolleh Yumkella arrived back in Freetown yesterday evening, after a week-long engagement at the UN in New York and then attending the G20 Summit in Istanbul, Turkey.
Speaking with the editor of the Sierra Leone Telegraph – Abdul Rashid Thomas, shortly after his arrival in Freetown last night, a cheerful Yumkella said that he has had a very busy and productive trip, and was delighted to be home to continue his political engagement.
“In the last two weeks, I was back in New York, where I was invited by the UN Secretary General – Ban Ki Moon to be part of the celebrations of the adoption of the Post 2015 Development Agenda, which replaces the Millennium Development Goals, but more specifically, the adoption of Sustainable Development Goal No. 7, which will ensure affordable, reliable, sustainable modern energy supply for all. This is what I built over ten years ago – a coalition to achieve that goal which they couldn’t do for twenty years.”
“The UN Secretary General also invited me to New York to help introduce my successor Ms. Rachel Kyte to the world, and we briefed member states that she is now taking over responsibility for Sustainable Energy For All. In addition, I was presented with an award in Washington DC at a big Gala event that was attended by some people from the US Congress, former Senators, and also the US Secretary for Energy – Professor Ernest Moniz (Photo), to recognise my work and contribution to public services.
“After that, I was in New Jersey and Houston Texas where the Mayor received me in her office, and also one of the leading Congresswomen in the Black Caucus, also flew in from Washington to attend the KKY town hall banquet. She is a very powerful, successful and influential congresswoman, and she graced our event with her presence. So this is what I was up to in the US.
“Then I went over to Kazakhstan. I was invited as a keynote speaker at the Europe Asia Energy Forum, involving Russia, Central Asia and China. Then I flew in to Istanbul for the G20, which was the first time the various G20 energy ministers met together. In January this year, the Secretariat called to ask me to put a group together to develop an Action Plan for achieving universal access to energy in Africa for the consideration of the G20 heads of State.
“The G20 countries control 70% of global GDP – the most powerful group of finance ministers and heads of state in the world. And when it comes to energy the G20 countries consume about 70% of the world’s energy. (Photo: Yumkella and the UK minister of international development – Grant Shapps).
“So for me it was really important that this work is the legacy that I am leaving for Africa, and I was delighted when the new president of the African Development Bank asked all present to stand in recognition of my efforts in putting all of this together.
“On the first day of the meeting – 1st of October, I chaired the whole of the morning session.”
But the editor of the Sierra Leone Telegraph put it to Yumkella that one of the key issues facing developing countries – especially Africa, with respect to the debate about sustainable energy is finance, and sustainable energy does not come cheap. How is Sustainable Energy for All going to be achieved in Africa without new funding?
Yumkella replied: “That was the core issue of the discussions at the G20 Summit.” He said that, “Africa needs over $40 billion annually to expand energy production capacity. We have a total of about 2 Gigawatts of power in sub-Sahara Africa and we need to raise that to about 6-8 Gigawatts in order to begin to achieve universal access to energy by 2030.
“In order to achieve this, we need as I said earlier we need $40 billion investment annually. Fortunately the new president of the African Development Bank (ADB) – Dr. Akinwumi Adesina (Photo: centre) has also adopted energy as his number one priority, and he was very clear about this.
“So you can see that my vision was correct ten years ago. This is what I have been lobbying the world about. The new president of the ADB has said that without energy, nothing will work in Africa.
“The G20 has picked this up and they’ve asked me to put this agenda together and they will look at it when the heads of state meet in November. So we are hoping that big finance will come forward. Already the European Union has committed $2.5 billion for the next seven years.
“This EU funding will leverage an additional $10 billion. So it’s not a bad start, but it’s not enough. And so we are hopeful, because China is the next Chair of the G20 and they will also take the agenda forward.
“Obama has got the Power Africa, which is pledging about $32 billion. So there is a lot of work to be done to get to the $40 billion target that Africa needs to achieve universal access to energy. These pledges will be the seed corn that will lever the additional funding.
“But what we need to know is that investment will not come, if we Africans do not put strong governance structures in place. Eighty percent of the energy utility companies in sub-Sahara Africa are bankrupt.
“And you can’t have any investor coming here to invest in independent power production if the power utility company cannot collect utility bills. You cannot ask investors to invest if the energy sector is not governed properly, and if the laws are not there to protect their investment.
“So asking people to give money is one thing; having a conducive policy environment and the transparency and sector governance to give confidence to a private investor who wants to come to Sierra Leone for example, to build a new hydro-electricity dam that will generate about 3 Megawatts of electricity to power the country, will need to have the utility bills collected for over thirty years in order to recoup their investment. (Photo: Yumkella with the CEO of General Electric Africa – Jay Ireland).
“You must have strong sector governance structures with transparency in place to attract that level of investment, without which it’s not going to work.”
Abdul Rashid Thomas then put it to Yumkella: “Given such a huge challenge for the African governments, what prospect is there for accountability, transparency, and good governance to be put in place in order to lever that level of investment in Africa’s energy resources. You are talking about $40 billion, and the change that has to take place is going to be quite huge.”
“I remain hopeful. I am an eternal optimist who believes that our governments understand that whether it is energy, agriculture, the health sector or education, you need clear and transparent public policy; you need clear and transparent sector governance structures; you need strong and credible institutions to manage those sectors, ” said Yumkella.
Kandeh also said that: “If corruption has consumed those institutions, people will not invest. So what are we going to do? In the energy sector in most African countries, there is too much corruption and that needs to change, otherwise investors will go to Asia where they will get a good and safe return for their money.
“So we need to have clear energy policy, good investment protection laws that is strongly administered and policed; you need good power purchase agreements that will guarantee their return in investment, and consumers have to know that if you want reliable electricity you have got to pay.
“It is not an easy public policy for most African governments who believe that because people are poor so energy should be cheap. But the investor has to recoup their investment. So how you achieve that balance between affordability and commercial viability is the challenge for Africa.”
Abdul Rashid Thomas agreed that; “It is going to be a challenge because we know poverty is endemic in Africa, where most people are either unemployed or earning very little, hence are living below the poverty line and cannot afford to pay for private sector generated electricity without some form of government subsidy,” but asked: “Do you think that tariff subsidy is something that the likes of the World Bank and IMF will entertain?”
Kandeh replied: Yes you can do smart subsidies and there is a lot of discussions now about subsidising energy tariff for those at the bottom of the income scale in Africa. You can do smart subsidy with a sunset clause attached, for a given period if you want to encourage renewable energy. So there are ways this can be done. These are some of the things we discussed at the G20 in Istanbul.
“This is why we need the expertise in Africa in the energy sector.”
In concluding the discussions with Yumkella upon his arrival in Freetown, Abdul Rashid Thomas asked him about his plans, now he is back at the grindstone of Sierra Leone politics.
He said: “Now I am back in Sierra Leone, its politics once again for me, engaging fully with all partners and stakeholders.”