Transcript SEMINAR / WORKSHOP ON PRIVATE SECTOR DEVELOPMENT

The Role of Infrastructure in
Development Cooperation
a Norad Perspective
Bergen 14 June 2005
Morten Svelle, Director
Department for Environment and Private Sector Development
Norad
In Wealth of Nations, Adam Smith wrote that government should:
Construct public works when these works are "of such a nature,
that the profit could never repay the expense of any individual or
small number of individuals, and which it therefore cannot be
expected that any individual or small number of individuals
should erect or maintain."
Norwegian historical experience
• From a very poor nation to one of the worlds richest nations with a
distribution of wealth that benefits the whole population
• A long term perspective management of natural resources.
• Infrastructure development: roads, railways, energy, sea transport, water
has played a major role for Norways economic development.
• Early investments in infrastructure had a long term perspective based on
political decisions.
• The development of the power sector, today a fully commercial sector,
would not have been possible without public ownership.
Some Policy Principles in Norwegian development
assistance
• Poverty focus, 40% LDC
• Focus on Sub-Saharan Africa
• Priority sectors as of today:
Education
Hiv/Aids
Private Sector Development and Trade
Sustainable Development
Good Governance
• Harmonisation, alignment, concentration (Paris declaration)
• MDG
• More emphasis on infrastructure (?)
Africa’s Infrastructural Gap
• Power - Less than 10% have access
• Water - Less than 50% have access to clean water
• Transport - Less than 17% of roads are paved
• Telecommunications - One telephone line per 100 people
• Ports – new regulations – trade hindrance
• For every 1% growth in power generation GDP grows 2-3%
• Transport costs up to three times higher in Africa than in Asia –
landlocked countries - special challenges
Challenges in addressing the gaps in Africa
•Regional conflicts
•Poverty
•Institutional challenges
– Lack of institutional capacity
– Lack of appropriate legislation and regulatory frameworks
– Un-appropriate financial systems and markets
– Lack of integrated economic policies
•Inadequate planning and decision making processes
(bureaucracy, lack of transparency)
Poverty reduction,
Millennium dev. goals
Economic Growth
Employment generation
Infrastructure
Industry, tourism, agriculture
Private Sector
Development
Social sectors,
Education & health
Renewable energy on development agenda
From the Norwegian Development Policy (St.meld. 35 2003 – 2004)
• It is a important goal to increase the use of renewable energy as
hydropower, wind, bio energy, solar energy and wave energy
– new and climate friendly technology
– development of renewable energy resources with acceptable costs
• It is a goal to work in a international context to increase the use of
renewable energy
• Important to extend services for energy to the people in the poorest
regions
• Emphasise on the recipient oriented cooperation within the energy sector
MoF and Norad instruments
• Technical Assistance
– Institutional development - Twinning cooperation
– Capacity building
– Education and Training
– Feasibility studies
– Procurement
• Investments
– Energy (power, transmission, renewable energy)
– Water and sanitation
– Transport (road, rail, maritime)
Participation in International Initiatives/Processes
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EITI Extractive Industries Transparency Initiative
Gas Flaring Initiative
Development of Maritime Transport in Mekong River
Nile Basin Initiative
Formalisation of property rigths
Power trade SAPP –Nordpool
Power Trade SAPP - Nordpool
Twinning arrangement
SAPP
Same framework:
• One region of several countries
• Electricity legislation at national levels
• National regulators
• Different levels of market opening between the
countries
• Will be two of the few regional electricity markets in
the world
Norwegian Competence on Infrastructure
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Hydro power generation and network
Sector restructuring and regulation
Water management and hydro master plans
Power Trade
Maritime transport and technology, education, maritime safety and
environmental safeguards
• Resource management and offshore technology, safety and
environment
• Road and transport, planning, technology (bridges, tunnelling)
The Norwegian Competence base on Energy (2):
• ICH International Centre for Hydropower - hydropower training programs
• Nordpool exchange (Consultancy services)
• Norwegian consultant companies with extensive experience in:
- Hydropower
- Water management
- Restructuring and regulation
- Power trade
• Power Task Force (Norad)
• Renewable energy policy work