Report No. 5224-%IAL! Islamic Republic of Mauritania: Issues and Options in the Energy Sector April 1985 H Report of thejoint UNDPtWorld Bank Energy Sector Assessment Program This document has a restricted distribution. Its contents may not be disclo5ed without authorization from the Government, the UNDP or the World Bank. : : : -~ -::- -:. --- . . . - :. -. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Report No. 5224-%IAL!
Islamic Republic of Mauritania:Issues and Options in the Energy Sector
April 1985
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Report of the joint UNDPtWorld Bank Energy Sector Assessment ProgramThis document has a restricted distribution. Its contents may not be disclo5edwithout authorization from the Government, the UNDP or the W orld Bank.
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JOINT UNDP/WORLD BANK ENERGY SECTOR ASSESSMENT PROGRAMREPORTS ALREADY ISSUED
Countrv Date Number
Indonesia November 1981 3543-IND
Mauritius December 1981 3510-MAS
Kenva Mav 1982 3800-KE
Sri Lanka May 1982 3792-CE
Zimbabwe June 1982 3765-ZIM
Haiti _une 1932 3672-HA
Papua New Gu:nea June 1982 3882-PNG
Burundi June 1982 3778-BU
Rwanda June 1982 3779-RW
Malaawi August 1982 3903-MAL
Bangladesh October 1932 3873-ED
Zambia _anuarv 1983 4110-ZA
Turkey March 1983 3877-TU
Bolivia Aprl! 1983 4_213-3Q
Fiji J'une 1983 4462-FIJ
Solomcn T slands Ju;ne 1983 4404-SQL
Senegal JuLv 1983 4182-SE
Sudan _Jul 1983 45il-SU
UTga nda jIL y 1983 4453-UC
Niger;a August 1983 4440-UNI
Nepal August 1983 4-74-NEP
Camb-:a November 1933 47'43-CM
?er-. January 1934 4677-PE
Costa R:ca January 1934 4655-CR
Lesithc - G anuary .94 46576-LSO
Se,:c-.- ies _anuary 19 4693-SE.
Mcroccc :'arch 1934 4157-MOR
Portu'3 A>rri 1q84 4824-PO
Nigr M ay 98A 4'62-N'R
.ttt :i a Ju-T lv 19,4 4.7'4- ICane .erde August 19.4 5073-CV
Guinea R:ssau Augutll 1934 5083-CUB
Botswana Ssztember 1934 4998-ET
St. Vinc-tnt_ andat-e Grena.d:nes September i934 5103-5TV
St. Luci a SeDtenber 1984 S111-51W
Paraguay October 1984 5145-PA
Tanzan.ia November 1984 4969-TA
Yemen Arab Republic December 198' 4892-YAR
Liberia December l934 5279-LBR
FOR OFFICIAL USE ONLYREPORT NO. 5224-MAU
ISLAMIC REPUBLIC OF MAURITANIA
ISSUES AND OPTIONS IN THE ENERGY SECTOR
APRIL 1985
This is one of a series of reports of the Joint UNDP/World Bank EnergySector Assessment Program. Finance for the work has been provided, inpart, by the UNDP Energy Account, and the work has been carried out bythe World Bank. The report has a restricted distribution. Its contentsmay not be disclosed without authorization from the Government, the UNDPor the World Bank.
ABSTRACT
Mauritania's known energy resources are scarce. They essen-tially consist of a fragile forest cover and wind and solar energy. Inspite of its relatively low level of energy consumption, less than 0.2toe per canita per year, Mauritania is faced with two pervasive problems-- rapid cieforestation aggravated by the Sahelean draught and high costof petroleum imports. Woodfuels still satisfy about one-half of netenergy consumption and over 90Z of residential energy requirements andunless their use is substantially reduced, accessible forest reserveswill be totally destroyed within 20 years or so. Petroleum importssupply all of the country's non-woodfuel energy and in 1983 absorbed 12%of export earnings. The lack of indigenous energy resources limits theoptions available for alleviating these constraints. The problem hasbeen compounded by policy inadequacies and weak institutions. Mauritaniathus faces formidable problems in meeting future energy requirements.This necessitates a well-integrated strategy which should be composed ofenergy conservation and substitution through appropriate energy pricingas well as non-price measures; forestry and woodfuels development throughfores. management and protection, tree planting, and dissemination ofimproved stoves; hydrocarbon exploration; selective wind and solar devel-opment; and strengthening of the institutional and manpower capabilitiesat the operating agencies as well as the Energy Directorate in charge ofenergy planning. Investment requirements in the energy sector during1984-95 are estimated at around US$150-165 mn. In an effort to improvecoordination of external assistance, the report provides a priorityranking of development expenditure in the energy sector and also listspriority areas for technical assistance.
ACRONYMS
ADEREM Association pour le D6veloppement des Energies Renouvables en MauritanieAGRYHMET Agro Hydro Meterological ProjectASECNA Agence pour la Securite de la Navigation Aerienne en Afrique et & MadagascarCEAO Communaut6 Economique d'Afrique de l'OuestCEST College d'Etudes Superieures TechniquesCFPP Centre de Formation et de Perfection ProfessionelleCNEA Cellule Nationale des Energies AlternativesCRES Centre Regional d'Energie Solaire (Bamako, Mali)DPN Direction de Protection de la NatureEOF Electricite de FranceEIB European Investment BankESIE Ecole Superieure Interafricaine de l'Electricit6LCT Lycee et Callege TechniqueMEPP Societe Mauritanienne d'Entreposage des Produits P&troliersOMVS Organisation de Mise en Valeur du Fleuve SenegalSMCPP Soci6te Mauritanienne de Commercialisation des Produits P6troliersSNIM Societe Nationale Industrielle et MiniereSOMIR Societe Mauritanienne d'lndustrie de RaffinageSONADER Societe Nationale pour le D6veloppement RuralSONELEC Societe Nationale d'Eau et ElectriciteSTPN Societ6 des Transports Publiques NationauxUNSO United Nations Sudano-Sahelian Office
CURRENCY EQUIVALENTS
Currency Unit: Ouguiya (UM)US$ I.- = UM 55.-a = UM 80. - b/UM 1.0 million = USS18182af = USS12,500 b/
MEASUREMENTS
Bbi Barrel of Oil =0.15899 Cubic Meter; 42 US GallonsGallon =3.7853 LitersGWh Gigawatt-hour = 1,000,000 kilowatt-hours (kWh)K (k) Kilo = 1,000km Kilometer = 0.62 miles = 1,000 meterskV Kilovolt = 1,000 Voltsk¶h Kilowatt hours = 1,000 Watts Hoursm cubic meter = 6.289 barrelskVA Kilovolt ampere =1,000 volt amperesMW Megawatt = 1,000 Kilowatt (kW)MWh Megawatt hour =1,000 kilowatt hoursM.T. metric ton = 1,000 kilograms (kg); 2,204.6
Pounds (lb)TOE (toe) Tonne of oil equiv. = 39.68 million BTUBpd Barrels per dayTpy tonnes per year
Source: World Bank, Guidelines for the Presentation of Energy Data in Bank
Reports.
This report is based on the findings of an energy assessment mission which
visited Mauritania in December 1983. Its members were: Joerg-Uwe Richter
(mission leader), Jean-Eugene Gorse (forest specialist), Michel Poinsot
(power engineer, consultant), William Matthews (petroleun marketing special-
ist, consultant), Mario Delorme (petroleum refining engineer, consultant),
Paul Bussmann (stove specialist, consultant), Erik Lyson (renewable energy
specialist, consultant), and Jean-Philippe Pillet (transport specialist,
consultant). Mr. David P. Hughart assisted the mission in the field.
TABLE OF CONTENTS
Page
MAIN FINDING S AND RECONDDATIONS ......................... i
I. ENERGY IN THE ECONOMY ..................................... 1Economic Position ....................................... 1Energy Constraints on Economic Development . . 2Energy Resource Base ....... 2Primary Energy Supplies and Conversion .................. 4Net Energy Consumption ..... . . 5Energy Outlook, 1984-95 . . ............................... 8Introduction .......................................... 8Energy Demand Scenarios ............................... 8Woodfuels .......................... ; .................. 10Electricity ........................................... 12Petroleum Products .......... a....................... 12Projected Energy Imports .............. ........... 13
Institutional and Policy Framework ............ 15Basic Constraints ..................................... 15Institutions in the Energy Sector ..................... 15
II. ENERGY DEMAND MANAGEMENT . . . 17Introduction ... 17Energy Pricing . .. 17Background ... 17Petroleum Products . . . 17Electricity ... 22Fuelwood and Charcoal . . . 24Comparative Energy Prices . . . 25
Energy Conservation and Substitution ... 27Introduction .......................................... 27Residential Sector . . . 27Transport Sector . . . 29Mining and Industry . . . 30Institutional Issues . . . 32
III. FORESTRY AND WOODFUELS ............................. ..... 33Introduction .......................................................... 33Development Constraints.*...... o ....................... . 33Institutional Issues .......... .................. , 34Forestry Options . . . 35Investment Strategy, 1984-95 . . .......................... 37
IV. ELECTRICITY ............................................... 39Introduction .... 39SONELEC .. ............................................... 39
Loss Reduction .... 41Fuel Conversion .... 41Coordination with Self-Producers . .. 42Electricity Planning and Project Analysis . . 43Training Requirements ................................ . 43
Investment Strategy, 1984-95 ................. 44
V. PETROLEU M ................................................. 48Introduction ........... .......... .. 48Petroleum Product Marketing. ................. 48Institutional Constraints...e...... .. .......... see 48Butane .e....9*.... ............. ....................... ........ 49Fuel Oil ...... 51Fuel Supply to the Fisheries Sector . . 51
VII. INSTITUTIONAL ISSUES .................................... .. 63Energy Planning and Policy Coordination . . 63Manpower and Training Needs ............................. 64
VIII. INVESTMENT AND TECHNICAL ASSISTANCE REQUIREMENTS . . 66Investment Requirements .. 66Technical Assistance Requirements .. 68
ANNEXES
1 Estimated Energy Supply/Demand Balance, 1975 .............. 712 Estimated Energy Supply/Demand Balance, 1983 . . 723 Assumptions on Energy Demand for Action-Oriented
Scenario (AOS) and Trend-Based Scenario (TBS), 1984-95.. 734 Projected Energy Supply/Demand Balance, 1990 -
Action-Oriented Scenario .. 755 Projected Energy Supply/Demand Balance, 1995 -
Action-Oriented Scenario .. 766 Projected Energy Supply/Demand Balance, 1990 -
Trend-Based Scenario .. 777 Projected Energy Supply/Demand Balance, 1995 -
Trend-Based Scenario .................................... 8010 Petroleum Product Pricing Structure, December 1983 .. 8111 Comparative Residential Energy Cost, 1983 . .8212 Pilot Project for Application and Dissemination of
Improved Stoves - Draft Terms of Reference. . 84
13 Study on Charcoal Imports - Draft Terms of Reference .. 8814 Study on Fuel Conservation for the Government Vehicle
Fleet -Draft Terms of Reference . . 9215 Electricity Generation and Consumption, 1974-83 . . 9616 Projected ELectricity Ceneration, Own Use and Losses,
and Consumer Groups, 1984-95 .. 9717 Projected Electricity Consumption by Load Centers and
Draft Terms of Reference ..................................... . 10020 Study on Strengthening SONELEC's Project Analysis
and Electricity Planning Capacity -Draft Terms of Reference .................. 104
21 Petroleum Products Consumption, 1974-83 . ........... 10622 Options to Improve Petroleum Product Marketing ........... 10723 Study on Petroleum Product Marketing System -
Draft Terms of Reference .................. 11324 Renewable Energy Options ................... 12025 Study on Utilization of Alternative Energy Sources -
Draft Terms of Reference .................. 12326 Study on the Stengthening of the Energy Directorate
of the Ministry of Hydrology and Energy -Draft Terms of Reference .................. 130
MAPS
IBRD 18404: RenewabLe Energy ResourcesIBRD 18403: Commercial Energy Activities
MAIN FINDINGS AND RECOMMENDATIONS
1. Mauritania's known energy resources are scarce and essentiallyconsist of a fragile forest cover and, potentially, wind and solarenergy. Hydrocarbon exploration has not yet resulted in commercial dis-coveries. Despite the importance of iron ore mining and ocean fishing,energy consumption is low, about 0.18 TOE per capita, or 200 TOE permillion US$ of CDP in 1983. Like most other Sahelian countries,Mauritania faces the twin problems of rapid deforestation and high fuelimports. Deforestation is the more serious of the two and unless a well-designed strategy to reduce woodfuel consumption and raise the sustain-able forest yields is put into place soon, the accessible forest covercould be completely destroyed within 20 years. Energy imports consist ofpetroleum products and, more recently, charcoal from Senegal. They wereequivalent to an estimated 12.5Z of foreign exchange earnings and 6.5% ofCDP in 1983.
2. In meeting future energy requirements, Mauritania is bound toLace formidable constraints. Barring a significant oil discovery, theproductive capacity of the energy sector will remain weak. On the demandside, ongoing structural changes in mining and the need to substitutedomestically produced woodfuels will result in higher commercial energyintensity and a substantial increase in petroleum imports. To illustratethe possible impact of alternative strategies on future energy demand,the mission has developed two scenarios: the Action-Oriented Scenario,predicated on the assumption that the Government will pursue most avail-able policy options, resulting in a significant rise in the efficiency ofenergy use and correspondingly, relatively limited increases in commer-cial and overall energy demand; and the Trend-Based Scenario, whichassumes less determined efforts to enhance energy efficiency and corres-pondingly higher increases in energy demand. However, even under theAction-Oriented Scenario, energy imports are projected to grow during1983-95 from US$45 mn to US$247 mn (US$273 mn under the Trend-BasedScenario; all in current prices). At this level imports would preempt asmuch as 25% of foreign exchange earnings by the early 1990s.
3. The weak position of the energy sector has been aggravated byinstitutional and policy inadequacies. A sector strategy and policiesconsistent with development requirements are only now beginning toemerge. Government institutions involved in the energy sector are ill-equipped to discharge their responsibilities and there is little coor-dination among them.
Priorities
4. Given these constraints, any strategy for energy development inMauritania should be based on the following objectives: (a) improvingthe efficiency of energy use; (b) enhancing the long-term reliability ofenergy supplies at least cost; and (c) strengthening sector institutions.In view of the very limited supply options, energy demand management
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through appropriate pric.ng and non-price policies is especially impor-tant. Based on its analysis of energy development options and require-ments, the mission proposes that the Government give attention to thefollowing priorities:
Immediate Priorities
(a) firm adherence to economic pricing of energy to manage properlyoverall energy demand, to allocate demand efficiently amongdifferent energy sources, and to mobilize financial resourcesfor expansion;
(b) in the electricity subsector, rehabilitation of the existingsystems, conversion to fuel oil use, loss reduction, and closercoordination between SONELEC and self-producers;
Cc) in the petroleum subsector, mothballing the refinery and recom-missioning it only if it becomes economically viable to do so;
Medium-term Priorities
(d) direct measures conducive to raising the efficiency of use of(i) woodfuels in the residential sector, through disseminationof improved stoves to reduce the pace of deforestation, and(ii) petroleum products in electricity generation, transportand industry to keep the growth of energy imports within man-ageable limits;
(e) in the forestry subsector, improving natural forest management,increasing tree planting, and strengthening the EnvironmentalProtection Directorate;
(f) in the electricity subsector, improving project analysis, sys-tems planning and training;
(g) in the petroleum subsector, strengthening the marketing systemespecially with regard to kerosene, butane, fuel oil and fuelsupplies to the fishing fleet; and continued stimulation ofpetroleum exploration;
(h) in the wind and solar energy subsector, establishing realisticobjectives and ranking priorities based on comparative costsand benefits of potentially viable options; strengthening CNEA;and establishing an efficient system of dissemination; and
(i) on the overall energy level, more adequate policy coordinationand planning through a strengthened Energy Directorate.
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Energy Pricing
5. Energy prices are high in relation to prevailing income levelsbut in the case of electricity and charcoal they have remained beloweconomic cost. Preferential prices have proliferated with little justi-fication either in economic terms or in terms of meeting stated socialobjectives, while parallel prices are substantially higher than officialprices.
6. Petroleum product prices show several anomalies such as(a) c.i.f. import prices as incorporated into the pricing structurediffer considerably from the import costs actually incurred, with theunintended effect of distorting the margin of the state marketing companySMCPP; (b) the gas oil retail price is less than 60% that of gasoline;(c) preferential prices for gas oil are widespread; and (d) a subsidy onbutane to stimulate substitution for woodfuels has primarily benefittedhigher income groups. The mission recommends that (a) the excess of theofficial c.i.f. import price over actual c.i.f. import cost be absorbedthrough a special tax which could be earmarked for financing priorityprojects in the energy sector; or conversely, the official import pricebe increased to cover costs actually incurred; (b) taxes on gas oil usedas transport fuel be raised to at least cover the road user costs;(c) preferential gas oil prices be limited to export-oriented activitiesand cover c.i.f. import costs; and (d) the butane subsidy be replaced bynon-price substitution incentives such as improving the distributionnetwork and creating credit facilities for equipment purchases.
7. Electricity tariffs have been raised infrequently and consider-ably less than increases in SONELEC's operating costs. The tariff struc-ture does not reflect the economic cost of electricity supplies as(a) the existence of uniform national tariffs results in cross-subsidiza-tion of consumers in the smaller systems by consumers in the larger sys-tems and (b) residential tariffs are too Low relative to industrial tar-iffs. In addition, consumers are not charged according to their abilityand willingness to pay. To correct the most serious shortcomings of thetariff structure, the mission recommends the following modifications as amatter of urgency: (a) increase residential relative to industrialtariffs; (b) establish lifeline tariffs in conjunction with at least onehigher tariff for residential consumption; (c) increase tariffs in thesmaller systems; and (d) establish a surcharge in the larger systems formeeting any financial deficits remaining in the smaller systems. Oncethe required information is available, a proper tariff study should becarried out for preparing a tariff structure based on long-run marginalcosts and SONELEC's financial requirements.
8. Fuelwood and charcoal prices are well below the cost of re-afforestation. Stumpage fees were raised by nearly 300% in 1983 butfurther substantial increases are needed to cover costs of tree planting.
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Non-Price Measures to Promote Energy Efficiency
9. In addition to appropriate energy pricing, a careful strategyand policies focusing on specific conservation and substitution optionsare needed.
10. The residential sector offers the largest scope for energy con-servation because of its low energy efficiency and its high share inoverall energy consumption, especially for woodfuels. An integratedapproach to resolving the issues related to residential energy consump-tion is needed. Policies should focus on the dissemination of more effi-cient stoves such as the one-pothole portable metal stove, which couldproduce fuel savings of at least 50% over present levels. Existing metalshops and marketing channels seem adequate for disseminating this stove.Nevertheless, it will be a huge task to reach a large enough segment ofthe population to make an impact on fuelwood consumption. The Governmentshould provide the technical and institutional infrastructure and incen-tives for stove production and distribution to be left to the privatesector. As regards substitution for indigenous woodfuels, kerosene seemsto be economically superior to butane and it should be promoted morestrongly to overcome the obstacles militating against its use. Charcoalimports from West African countries with forestry export potential alsomight be important, but this would depend on the resolution of a numberof technical, economic and institutional issues including the availabil-ity of maritime transport at reasonable cost and the feasibility of dis-tributing imported charcoal in urban as well as in part of the ruralareas. A study financed through the IDA petroleum exploration promotionproject will evaluate these issues. Finally, the use of solar waterheaters and air coolers could result in significant savings in resi-dential electricity consumption.
11. In the transport sector, energy efficiency could be enhancedthrough: (a) improved road maintenance; (b) improved driving habits andbetter vehicle maintenance; (c) centralized control of the Governmentvehicle fleet; (d) a strengthened public bus system; and (e) dieseliza-tion of the utility vehicle fleet. Even with conservative assumptionsregarding implementation of these options, fuel savings of about 8X withrespect to trend consumption should be attainable by the early 1990s.Establishing a service center for fishing vessels in Nouadhibou wouldcontribute to improving energy efficiency and to providing the infra-structure needed to attract offshore fishing to Mauritania.
12. In mining, SNIM meets international standards of operationalefficiency but unit energy consumption probably could be reduced somewhatby concentrating operations in the most efficient mines. The industrialsector holds out opportunities for converting from gas oil to fuel oiland, possibly, for fuel conservation, although these need to be verifiedthrough energy audits. In agriculture, substitution of wind and/or solarirrigation pumps for diesel pumps could result in some minor fuelsavings.
Supply Options: Principal Subsectors
13. Forestry. Because of the harsh conditions for tree growth,forestry activities would have to be limited mainly to protection andpromotion of minor forestry products, with fuelwood essentially as asecondary product. The severe natural obstacles to forest growth havebeen aggravated for long periods by the lack of any real Government andpopular commitment to policies designed to control over-exploitation ofaccessible forests and to step up tree planting, as well as seriousinstitutional weaknesses. The Forestry Department needs to be streng-thened to enhance its absorptive capacity for external assistance. Thiswill be provided by an UNSO-financed, Bank-executed project. Additionalrequirements are: (a) a more rational pricing and taxation policy forforest products; (b) improved natural forest management and acceleratedtree planting, with an optimistic target over the next 15 years or so of10 mn rainfed trees and 3-4 mn irrigated trees, equivalent to about28,000 ha of closed formations; (c) improving access to more distantforests; (d) an integrated approach to Land management focusing on theinteraction of forestry, agriculture, and pastoralism, in order both toreduce forest over-exploitation and increase agricultural yields;(e) adequate research to develop reforestation packages suitable for aridand semi-arid lands; and (f) increased Government support to family- andcommunity-based tree planting and forest management through a streng-thened extension service.
14. Electricity. SONELEC is seriously affected by technical,financial, and managerial inadequacies. In response to the urgent needto reestablish system reliability, the ongoing Public Enterprise Tech-nical Assistance and Rehabilitation Project jointly financed by IDA, theEuropean Investment Bank, and bilateral sources will provide assistanceto SONELEC for emergency repairs and organizational strengthening. Overthe medium term, the following additional measures are required whichalso should be addressed under the rehabilitation project:
(a) A power efficiency audit for the Nouadhibou system (SONELEC andSNIM) aimed at identifying options for reducing generation anddistribution losses. These would include: improving the effi-ciency of generators and dispatch practices; preventive mainte-nance; improved metering; and improved reporting and evaluationprocedures;
(b) With respect to conversion of SONELEC's Nouadhibou plant tofuel oil: assistance by foreign experts to establish appro-priate operating procedures and maintenance schedules forequipment using fuel oil; 1/
1/ The rehabilitation of the Nouadhibou electricity system will befinanced by EIB, as a component of the rebabilitation project.
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(c) Coordination with self-producers: In Nouadhibou, SONELEC couldmeet SNIM's electricity requirements with minor additional in-vestment buL issues related to supply reliability and thetariff to be charged to SNIM need to be resolved first. InNouakchott, the more important self-producers need to coverSONELEC's near-term capacity shortfalls, which they are in theprocess of doing;
(d) Improved project analysis and systems planning; and
(e) More systematic staff training, in cooperation with SNIM andother suitable electricity producers.
15. Petroleum. Efficient management of this subsecror is crucialfor securing future energy supplies to the modern economy and requiresaction in the folloving areas:
(a) Product flarketing. The physical infrastructure and institu-tional arrangements need to be considerably improved, especi-ally as regards SMCPP. For butane, the installation of abottling plant in Nouakchott (which is envisaged by SMCPP) andbulk transport from the Dakar refinery would reduce supplycosts by nearly 25%. The distribution network for butane andkerosene should be expanded beyond the principal cities. Fueloil is likely to become important for power generation andindustrial energy consumption, but this will require adequateprocurement arrangements and possibly, some additional storagecapacity. Fuel supplies to the fishing fleet could be substan-tially increased, which also would benefit Mauritania's balanceof payments. The installations at the Nouadhibou refineryalready provide needed storage and handling facilities andprice competitiveness could be secured through supplying marinediesel instead of automotive gas oil. A study financed throughthe IDA oetroleum exploration promotion project will evaluatethese and other issues related to investment needs, SMCPP'sinstitutional requirements and needed modifications in thepricing structure for petroleum products to be sold on thedomestic and export markets.
(b) Petroleum Refining. SOMIR's 1 mn tpy refinery has been out ofcommission since its completion, save for short periods ofoperation in 1982-83. As its minimum operable throughput fare-ceeds domestic requirements, the bulk of its output wouldhave to be exported. This would be extremely difficult, givenworldwide refining overcapacity, cost disadvantages of refiningin Mauritania, and SOMIR's inexperience in the internationalpetroleum trade. At the prevailing price relationship betweencrude oil and petroleum products, the refinery would sustainoperational losses even if it could effect substantial fuelsales to the fisheries sector. For the refinery to break evenfinancially, the ex-refinery price would have to be 20-25Z
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above the comparable c.i.f. import cost. Economic viabilitywould only seem attainable through custom refining for aregional crude exporter short of refining capacity. Barringthe early conclusion of a custom refining agreement, the mis-sion recommends that (a) the refinery's processing units bedecommissioned and properly mothballed; (b) storage and loadingfacilities be retained as a product terminal; (c) lectricitygenerators be retained as reserve units for the public grid;and (d) SOMIR's staff be reduced to the level needed to proper-ly service the facilities in use and maintain the mothballedunits. The refinery should only be reopened if market develop-ments make it economic to do so. 2!
(c) Exploration Promotion. Assisted by the IDA petroleum explora-tion promotion project, the Government has been reasonablysuccessful in attracting foreign companies and has concludedtwo exploration contracts. However, bids for seven out of nineavailable blocks have yet to be attracted. A second-roundexploration promotion campaign therefore is justified. Basedon a comprehensive evaluation of exploration results, theGovernment should prepare its strategy for attracting companiesto explore the remaining blocks. It should retain flexibilityin the conditions offered to new investors, in the light ofexploration results and the evolution of worldwide relation-ships between host Governments and foreign companies.
16. Renewable Energy. In view of the scarcity of conventionalenergy resources, wind and solar energy could be significant for meetinglocal energy requirements. However, their development has been held backby the lack of an appropriate strategy and the infrastructure needed totest, produce, disseminate, and service suitable equipment. Externalassistance has been uncoordinated and often has not responded to realneeds. For wind and solar energy to play a more useful role, the follow-ing is needed:
(a) Realistic Objectives. Options should be ranked in prioritybased on comparative costs and benefits. The most importantoptions appear to be wind-based electricity generation inNouadhibou, wind and/or solar water pumping in the SenegalRiver Valley, and solar water heating. More detailed studiesand firmer data on the resource potential are needed beforepilot projects can be initiated.
2/ Discussions are in progress with Algeria to secure that country'sassistance in operating the refinery, among others through suppliesof crude at subsidized prices. While an arrangement of this naturecould give SOMIR a financial respite, it would not alter the eco-nomic determinants of refining in Mauritania and thus, the conclu-sions of this report.
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(b) Institutional Strengthening. The governmental National Alter-native Energy Center (CNEA) should concentrate on (a) attract-ing external assistance and channelling it towards priorityprojects; (b) elementary testing of prototypes includingimproved stoves; (c) monitoring equipment performance; and(d) carrying out needs assessments. Cooperation with SONELEC,SNIM and SONADER should be established at an early stage.
(c) Appropriate Delivery Systems. Capabilities for testing,manufacturing, distributing and servicing equipment need to beestablished. Training requirements could be met through theinvolvement of local staff in foreign-assisted projects andtraining at regional facilities, for example, in Cape Verde.
Institutional Requirements: Energy Planning and PoLicy Coordination
17. While institution-building efforts in the near term clearlyhave to focus on the operating agencies, there is need to improve theoverall sector management and consequently to strengthen the capabilitiesfor establishing rational priorities among subsectors and reconcilingenergy development objectives with macroeconomic constraints. The EnergyDirectorate is nominally in charge of these functions. However, it lacksauthority to coordinate energy-related activities, and it suffers from aweak organizational structure and grossly inadequate manpower and budget-ary resources. The Directorate's role essentially depends on the politi-cal will to entrust it with the needed authority as well as on consider-able institutional strengthening. This requires (a) a clearer focus onplanning and poLicy analysis; (b) build-up of staff competence on overallsector and subsector analysis, reinforced by the presence of expatriatespecialists as policy advisors; and (c) more systematic coordination withthe remaining sector institutions. An institutional study financedthrough the IDA petroleum exploration promotion project will analyzethese requirements in more detail. To improve policy coordination, areinforced Energy Commission composed of high-ranking officials of theGovernment Ministries with an important involvement in the energy sectorshould advise the Council of Ministers and assist in preparing policydecisions. The Energy Directorate could act as Secretariat to this Comrmission.
Manpower Issues and Training Needs
18. Professional competence in the energy sector is inadequate atall but the highest levels and imbalances prevail between various profes-sional specialities. Strategy and investment decisions of increasingcomplexity necessitate additional professional experience, particularlyin the area of economics and financial analysis. Manpower planning andtraining therefore should become an integral part of energy planning.Training should be specific, on-the-job, and be incorporated intoforeign-financed projects. An exchange of staff between the variousenergy agencies and internships in relevant institutions in neighboringcountries also should be considered.
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Investment Requirements
19. Energy investment in past years was substantial but ill-suitedto meet sector requirements. The weak financial position of the economymakes a strict priority ranking of future investment imperative, withemphasis on least-cost solutions through rehabilitation and more effec-tive utilization of existing equipment, and on increasing energy effi-ciency. On this basis, the mission projects a need for energy develop-ment expenditures during 1984-95 of approximately US$163 mn under theAction-Oriented Scenario and US$146 mn under the Trend-Based Scenario(1983 prices), with the largest individual share for electricity.SONELEC's new 28 NW Nouakchott plant is scheduled to go into service byearly 1987 but following rehabilitation of existing capacity, its fullcapacity will not be needed until the early 1990s. The mission thereforerecommends that the new plant's initial capacity be reduced to 21 MW anda multi-year option from the supplier be obtained for the fourth unit.(This recommendation has been accepted by the Government). The missionfurther recommends that an enhanced proportion of developmental expen-diture be allocated to studies in support of project preparation andinstitution building, with a stronger focus on woodfuel development andoverall energy planning.
Technical Assistance Requirements
20. Well-coordinated technical assistance is essential for addres-sing effectively the principal sector issues. In addition to the assis-tance provided through the IDA petroleum exploration promotion project,the forthcoming IDA parastatal rehabilitation project, and the UNSOforestry project, the following requirements should be given high pri-ority by external donors:
(a) Woodfuels Subsector: (a) medium-term institutional assistanceto DPN, with emphasis on planning and project preparation, ad-ministration, monitoring of field activities, and relatedtraining; (b) forest research; and (c) a woodstove pilot proj-ect including identification of requirements for a larger-scalestove dissemination program.
(b) Electricity Subsector: (a) assistance for converting SONELEC'sNouadhibou plant to fuel oil; (b) an efficiency audit ofSONELEC's Nouadhibou system to reduce generation, transmissionand distribution losses; (c) an electricity tariff study; and(d) assistance in electricity planning and project analysis.
(c) Renewable Energy Subsector: evaluation of (a) wind and soLardata; (b) the most promising wind and solar options; and(c) the institutional requirements of CNEA.
(d) Energy Conservation adn Substitution: (a) for road transport,training in fuel-efficient driving techniques and in vehicle
maintenance; technical assistance in improving public trans-port, strengthening the bus company STPM, and establishing acentralized system of maintenance and control for the Govern-ment vehicle fleet; (b) for the fisheries sector, a study onthe feasibility of a service center for fishing vessels; and(c) in the industrial sector, a study on the potential for fuelconversion and preparation of a conversion program, to be fol-lowed by energy audits of the more important industrial enter-prises to identify additional conservation options.
(e) Energy Planning and Policy Coordination: placement in theEnergy Directorate of (a) an energy adviser to assist in imple-menting the recommendations of the IDA-financed institutionalstudy, and in analyzing strategy and policy issues; (b) a spe-cialist to establish an energy efficiency unit and prepare arelevant work program; and (c) an electricity specialist toensure appropriate subsector monitoring.
I. ENERGY IN THE ECONOMY
Economic Position
1.1 Mauritania is a Sahelian country with a land area of 1 mn km2
and a population of about 1.6 mn growing at about 2.3% per year. Theurban population accounts for close to one-third of the total and isincreasing rapidly; perhaps one-half of the population is engaged inmigratory herding and the remainder in sedentary farming. Despite itsrelatively high per-capita income (US$460 in 1984) Mauritania bears manycharacteristics of least developed countries in terms of physical andhuman resources. The desert covers 75Z of the country and only 201 issuitable for extensive pastoralism. Sedentary crop farming is limited tothe Senegal River Valley and the extreme southeast, but even there rain-fall is irregular and does not exceed 600 mm/year. Agriculture, whichsupports 702 of the population, provides less than 30% of CDP, subjectingthe bulk of the population to very low living standards. Pockets ofmodern economic activity are found in the iron ore mining complex ofZouerate, the fishing center of Nouadhibou, and the administrativecapital of Nouakchott. Economic centers are geographically separatedfrom each other and there is little interaction between the modern andrural sectors of the economy.
1.2 Since the early 1970s, the economy has undergone periods of lowgrowth, stagnation and recession. This has been the combined result ofrecurrent droughts and the decline in iron ore exports which tradition-ally provided 70-80% of foreign exchange earnings, compounded by theincreases in international petroleum prices which have produced an incomeloss of roughly 6% of CDP during 1974-82. Government investment wassubstantial throughout the 1970s and early 1980s and consisted largely ofambitious projects in the transport, industrial and energy sectors, someof which proved to be unviable. It was financed through heavy inflows offinancial assistance from abroad, particularly OPEC funds and some com-mercial bank loans. The disbursed external debt of the public sectoraccumulated to nearly US$1.7 bn by 1984 and actual debt service paymentsmade in that year equalled 30Z of goods and non-factor service exports.The level of the debt service has become unsustainable for the economyand debt service arrears have been building up since 1981.
1.3 Repercussions of these developments are reflected in largefiscal and balance of payments deficits. The current account deficit in1984 was equivalent to 36% of GNP. In response, the Government hasfrozen some current budgetary expenditures, notably wages and salaries,and raised taxes including those on petroleum products. It also hasmoved to tackle the deficiencies at the state enterprises through apublic enterprise technical assistance and rehabilitation project to befinanced by IDA, EIB and bilateral donors. The Government seeks az3scheduling of its foreign debt and assistance from international
financial institutions for a medium-term recovery program.
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Energy Constraints on Economic Development
1.4 Like other Sahelian countries, Mauritania faces two majorenergy problems: complete dependence on petroleum imports for meetingcommercial energy requirements and consequently, a high energy importbill, and accelerated exhaustion of its meager fuelwood resources. Thefuelwood crisis poses the more serious problem because of its potentiallydisastrous effect on Mauritania's economy and the fabric of its society.
1.5 Fuelwood Crisis. Reflecting the stage of the country's eco-nomic development, fuelwood provides one-half of gross domestic energysupply and, together with charcoal, satisfies well over 90% of residen-tial energy requirements. Fuelwood consumption amounts to nearly 0.8 mnm3/year, eight times the natural growth of the accessible forests. Theresulting over-exploitation of the forest cover, combined with grosslyinadequate tree planting and drought-inflicted damage, has reduced theforest area by 30% over the last ten years and by as much as 50Z inparticularly afflicted regions. Accessible forests will be completelydestroyed within 20 years if exploitation continues at its presentpace. Fuelwood and charcoal are becoming increasingly scarce and expen-sive, with pervasive effects on Lower income groups which depend on thesefuels to meet their energy needs.
1.6 Import Dependence. As a result of declining fuelwood produc-tion and the dependence on petroleum as the sole primary energy source inthe modern economy, the share of imports in domestic energy consumptionhas increased sharply from 33% in 1975 to 55% by 1983. This has beencompounded by rising international petroleum prices during the 1970s.Net petroleum imports peaked in 1982 at US$57 mn for 175,000 M.T., upfrom US$21 mn for 133,000 M.T. in 1975. Petroleum imports subsequentlydeclined in 1983 to US$44 mn 3/ on account of both smaller volumes andlower prices. Imports of charcoal from Senegal also have become signif-icant. Even at their reduced 1983 level, energy imports absorbed 12.4%of earnings from non-factor service exports and equalled 6.5% of GDP.
Energy Resource Base
1.7 Mauritania's known energy resource base is small relative tothe country's needs, and underdeveloped. Forests, estimated at about3.55 mn ha or 3.5% of the national territory, are the principal resourcebut only about 0.6 mn ha are accessible and only 0.2 mn ha of savanna-type woodland located primarily in the Senegal River Basin have thepotential for sustained fuelwood production. Natural forests are widelydispersed and are composed of: woodlands, 0.1 mn ha; shrub and treesavannas, 2.65 mn ha; bush fallows, 0.3 mn ha; and agro-sylvopastoral
3/ Net of re-exports of jet fuel and domestically refined fuel oil.
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formations, 0.5 mn ha. Forest reserves amounting to 0.13 mn ha have beenseriously encroached upon. Soils are clayey in the river valley and gen-erally sandy on the plateaus but extremely low rainfall inhibits treegrowth (see Map IBRD 18404). Other biomass resources, mainly animal andplant residues, are limited and not systematically exploited. The hydro-power potential is minuscule and its development costly, although a 0.5MW scheme might be installed at the Gorgol River as part of an irrigationproject. Oil and gas exploration has not yet encountered any comnercialdeposits, although enough encouraging signs have been found to motivatecontinued exploration. In particular, the offshore is considered pros-pective for hydrocarbon deposits and is being systematically explored byforeign companies. There are indications of natural gas in southeasternMauritania, 1,000 km away from major energy consumption centers. Peatdeposits might exist in the SenegaL River Valley and the Government islooking for external assistance to explore this resource.
Table 1.1: ENERGY AND EXTERNAL TRADE, 1975-83(USS millions and Percent)
(5) as Percent of (6) 6.5 12.0 10.7 9.4(5) as Percent of (7) 10.8 21.6 18.4 12.4
a! Estimated sales of jet fuel to foreign airlines. For 1982-83,also re-exports from refinery (primarily fuel oil).
b/ Net of petroleum product re-exports.
Source: Energy Directorate; SMCPP; SOMIR; Central Bank; IMF;mission estimates.
1.8 The dearth of conventional energy resources makes wind andsolar energies potentially significant for meeting limited local require-ments. The wind regime varies considerably throughout the country. TheNouadhibou Peninsula has an excellent potential with a five-year averagewind speed of 7.3 m/sec allowing wind-based electricity generation(Nouakchott: 5.1 m/sec; further inland: 3-4 m/sec). The coastal regionalso experiences a fairly constant wind regime, with a high Weibull shape
factor (k-value) of around 3, similar to that recorded in Cape Verde,whereas further inland, lower k-values indicate a more irregular windregime. In southern Mauritania, wind-based irrigation would be feasiblein areas where the water table is high, such as around Rosso. The solarregime is characterized by a relatively high number of sunshine hoursthroughout the country (3,200 hrs/year for Nouakchott and Nouadhibou).There are no reliable estimat2s of solar radiation falling on a hori-zontal surface except for Nouakchott indicating an annual average of5 kWh/m2/day. The solar energy potential thus appears less by compa-rison, although solar-based water heating and water distillation is doneon a minor scale and offers scope for expansion.
Primary Energy Supplies and Conversion
1.9 Indigenous energy supplies are limited to fuelwood. The pro-gressive exhaustion of Mauritania's fuelwood potential has sharply cutinto charcoal production, which now meets essentially only local require-ments in producing areas. Exports of charcoal to Senegal have ceased andinstead, charcoal imports from Senegal meet probably up to 90Z of urbanhousehold requirements. Among rural consumers, the use of agriculturalresidues seems to have become more important, although the currentdrought probably has curtailed this potential. In the absence of domes-tic hydrocarbon production, petroleum imports cover commercial energyrequirements in their entirety. Normally, only petroleum products areimported, but in 1982/83 when the refinery operated for short periods,crude also was imported (and fuel oil, which is not consumed inMauritania, was re-exported).
1.10 With charcoal production in decline and only intermittentpetroleum refining, energy conversion essentially is limited to elec-tricity generation. Installed generating capacity country-wide rose in1983 to 162 MW with the start-up of the 56 MW Guelbs plant owned andoperated by the mining company SNIM. It consists entirely of dieselplant using gas oil except for SNIM's new plant which is envisaged to usefuel oil. The public power and water utility SONELEC accounts for justover 25% of total installed capacity, i.e. 44 MW spread over five iso-lated systems and three water plants, but only about one-half of it canbe considered firm. (The new plant at Boghe, whose installed capacityamounts to about 2 MW, has not yet been commissioned because of financialproblems which are in the process of being resolved, however). AmongSONELEC's systems, the Nouakchott and Nouadhibou load centers combinedaccount for 86% of installed capacity and 90% of generation. SNIM gen-erates electricity at Point Central near Nouadhibou (16.4 MW of installedcapacity), Zouerate, and Guelbs. Other self-producers include SAMINE(14.2 MW, which is grossly underutilized since the closure of the coppermine in 1978), the refining company SOMIR (6.8 MW), and an unknown numberof industrial, commercial, and even residential establishments which haveproliferated as supplies from the public grid have become less reliable.No interconnection exists between individual systems except betweenSONELEC and SNIM/SOMIR in Nouadhibou. Distribution networks extend only
to urban centers and higher income residential areas. In Nouakchott,
SONELEC in 1983 had a total of 137 kml of high to medium voltage (15 kV)
and 150 km of low voltage (220 V) distribution lines in service.
1.11 Overall electricity generationp estimated at 150 GWh in 1983,
increased during 1974-80 at 5.4Z p.a.' accelerating to 7.8% p.a. during
1981-83. In contrast, SONELEC's generation increased at 20% p.a. during
1974-80 in the wake of considerable capacity expansion and at 14% p.a.
during 1981-82, but only at 4% in 1983 because of severe shortfalls of
firm capacity.
Net Energyv Consumption
1.12 Information on energy consumption in Mauritania is scarce andunreliable. Measured net energy consumPtion is relatively low, estimated
at about 0.3 mn TOE (0.18 TOE/capita) in 1983, and is met in about equal
parts from woodfuels and imported petrOleum (Table 1.2). Including char-
coal imports, consumption of woodfuels totalled nearly 1 mn m3 of fuel-
wood equivalent. Fuelwood and charcoal s share in net energy consumptionduring 1975-83 declined from 60X tO 50% while the share of petroleum
products increased correspondingly because of the importance of mining,
ocean fishing, and road transport. The residential sector accounts for
more than one-half (53%) of net energY consumption.
1.13 Petroleum products provide slightly more than one-half of
energy supplies. Their consumption, 0.17 mm M.T.(3,400 B/D) in 1983, has
fluctuated considerably over the paSt ten years in line with overalleconomic performance: moderate increases during 1974-77 were followed by
sharp declines in 1978-79 resulting from the closure of SAMINE's coppermine and Mauritania's withdrawal from the Western Sahara War, and by
renewed increases in 1980-82 averaging 8.6% p.a. Consumption in 1983
stagnated in the wake of the economic decline. Gas oil is the mostimportant product accounting for 75% of 1983 consumption, due to its usein power generation, mining and transport: followed by gasoline (16%),
jet fuel and aviation gasoline combined (7%), butane (1.3%), and kerosene
(0.7%). Stimulated by a substantial subsidy, the consumption of butanenearly tripled during 1982-83 and now accounts for about 9% of urbanresidential energy consumption. The mission has estimated the following
break-down of petroleum product consumption by economic activity for1983: mining and industry combined, 42%; transport including fisheries,32.5%; electricity generation, 20%; Government and commerce, 3%; resi-dential use, 2%; and agriculture, less than 0.5Z (mainly gas oil forirrigation pumping). Nouakchott and southern Mauritania account for
about 55% of total consumption, with Nouadhibou and the northern part
(especially the Zouerate mining center) absorbing the remainder.
Tablo 1.2: ENERGY INIICATORS, 1975, 1903(TOE '000 and Percentl
1.14 Electricity consumption in 1983 is estimated at 137 GWh, or86 kWh per capita. Industry's share is very high, estimated at 63.5% in1983 for mining and manufacturing combined (residential consumption, 27Z;commerce and public administration, 9.5%). With about 12,500 existinglow-voltage connections and assuming that ten persons per connection areserviced, only one-third of the urban population and less than 10% of thetotal population have access to electricity. However, at some 2,030kWh/year per connection, residential consumption per client is ratherhigh, partly due to a substantial air conditioning load. Increases inelectricity consumption during 1974-83 were just over 5% p.a. mainlybecause of stagnation in mining, but nearly 10% p.a. in the SONELEC sys-tem.
1.15 Commercial Energy Consumption and GDP. In line with thedepressed economic activity in recent years, commerciaL energy consump-tion 4/ increased only moderately, averaging 2.6% p.a. during 1976-83compared to GDP growth of 2.9% p.a., with an implied elasticity withrespect to GDP of 0.9. This low consumption growth partly reflects thecontraction in mining. A more useful relationship would seem to be theelasticity of commercial energy consumption with respect to the value-added of the modern sectors of the economy, which was very high, i.e.,3.5 during 1976-83. While the commercial energy intensity for the eco-nomy as a whole has hardly changed since the mid-1970s, it has increasedconsiderably for the modern sectors (i.e., from 424 toe per million US$of value added in 1975 to 489 toe in 1983) during a period of stagnatingper-capita GDP.
Table 1.3: COMMERCIAL ENERGY CONSUMPTION AND GOP,1975; 1982; 1983
Estimated
1975 1982 1983
Commercial Energy Consumption(toe '000) 117.2 144.6 144.1
Commercial Energy Consumptionper Capita (kgoe) 87.1 90.4 87.9
GDP (1982 UM mn) 29,739 37,305 37,362(1982 USS mn) 507.3 715,3 716.4
Modern Sector Value Added(1982 UM mn) a 16,203 18,248 15,359(1982 USS mn) 276.4 349.9 294.5
Commercial Energy perUSS mn of GOP (toe) 206 202 201
Commercial Energy per USS mn ofModern Sector Value Added (toe) 424 413 489
GDP/Capita (1982 USS) 434 447 437
a/ Mining, manufacturing, fishing, modern services.
Source: IBRD; Energy Directorate; SONELEC; mission estimates.
4/ Commercial energy consumption is defined as the consumption ofpetroleum products and electricity.
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Energy Outlook, 1984-95
Introduction
1.16 Future energy development in Mauritania will be determined byfactors such as population growth and urbanization trends, growth of theeconomy and its major components, and the income and price elasticity ofenergy demand. In addition, Government policies in the energy sector andin the more important energy consuming sectors, as well as macro-economicpolicies, will have a major impact. On the other hand, the productivecapacity of the energy sector and the availability of funds for invest-ment and for energy imports will impede the full realization of theunderlying demand growth.
1.17 Economic Prospects. The outlook for the economy is bLeak atleast over the short-term. Continued declines in GDP are expectedbecause of the drought-inflicted damage to agriculture, stagnation iniron ore mining, and slower expansion of fisheries. Weak public financescompounded by heavy external debt burden will severely curtail invest-ment. Economic growth might resume from the mid-1980s onwards, led byfisheries and to a minor extent, agricutlture, provided policies to stimu-late investment and production are enacted and sufficient externalfinancing is made avaiLable.
1.18 In meeting future energy requirements, Mauritania faces formid-able constraints. Barring a significant oil discovery, the resourceposition and productive capacity of the energy sector will remain weak.On the demand side, structural changes in iron ore mining will substan-tially raise commercial energy requirements, which will have to be metentirely through petroleum imports. The need to scale down the consump-tion of indigenous fuelwood also will create additional demand for im-ported energv. Substantial increases in energy imports therefore will beunavoidable.
Energy Demand Scenarios
1.19 There are no Government projections of economic growth or ofconcomitant energy requirements. In order to illustrate the possibleimpact of alternative strategies on future energy requirements, the mis-sion has developed two demand scenarios which differ in their assumptionsregarding Government policies to enhance energy supplies and to achievemore energy conservation and substitution. The Action-Oriented Scenariois predicated on the assumption that the Government will pursue most ofthe available policy options and that efficiency improvements will follow
in due course. The Trend-Based Scenario assumes that very few of theseoptions are implemented. 5/
1.20 Based on a projected CDP growth of 4X p.a., increases in over-all energy demand during 1984-1995 are projected to be 1.4% p.a. underthe Action-Oriented Scenario and 2.8% p.a. under the Trend-Based Scena-rio. 6/ However, commercial energy demand is projected to increaserapidly up to 1990 under both scenarios, averaging 7% p.a. mainly as aresult of mining development, and to slow down after 1990 as Little addi-tional expansion in energy-intensive sectors is likely to take place.The resulting elasticity of commercial energy demand with respect to GDPwould be 1.65-1.75 during 1984-90 and 1.13 thereafter.
1.21 The composition of energy demand is likely to change consider-ably. In Line with the required substitution of other energy sources fordomestically produced woodfuels, a continued decline in the share ofwoodfuels is projected. Conversely, on the strength of relatively fastincreases of energy demand in the modern economic sectors and in contin-uation of the historical shift within energy demand towards petroleumproducts and electricity, the combined share of petroleum products andelectricity is projected to increase during 1983-95 from less than 50% to71Z under the Trend-Based Secnario and 80% under the Action-OrientedScenario. Among petroleum products, fuel oil and marine diesel are pro-jected to become important while the share of gas oil and gasoline isexpected to decline.
Woodfuels
1.22 If the recommendations with respect to residential energy con-sumption, forest management and tree planting are effectively implementedas assumed under the Action-Oriented Scenario, the mission projects (a) areduction of about 10% p.a. in consumption of domestic woodfuels, and(b) an incremental fuelwood production of 50,000 m3 p.a. by 1995 and 0.1mn ml p.a. by the year 2000. This would save 50,000 ha of natural forestfrom destruction. Domestic woodfuels would essentially be reserved forrural consumption. The fuelwood deficit would gradually disappear and nofurther deforestation would take place after the turn of the century.Under the Trend-Based Scenario which assumes relatively high increases in
5/ These options are listed in Annex 3 and discussed in more detail inChapters II-VI. It should be noted that the alternative scenariosdeveloped here present two extremes. In reality, probably some (notall) of the measures conceivable will be taken and will be intro-duced graduaLly. The actual outcome thus is likely to be somewherebetween that indicated for the two scenarios.
6/ This low growth is attributable primarily to the higher efficiencyof end-use especially for woodfuels which would result in absolutedeclines in physical units of woodfuels consumed even though con-sumption of useful energy would continue to increase (para. 2.26).
Table 1.5i PROJECTED FUEL170 0tiS4WTI0N AND PA>tCTI0tN, 1964-2000
,Crl0N-otuENTrD SCENAMIO 2RENDIASED SCIMMIC
---------------- M Productlon From-----------------lI0roved Partly Accautlbla Cuoulatlve Productlon AccemsForest Relnted lrrlqated Woadluals Forcet Cover Increase In From Moodluele Forost I
Natural Forest% Naaaqa.uet Pleatetlons Pl`ti.tsaaa 0 tI1t Oetorestatlon Roevllnia PlantatIont Con1 ue.tloi Natural Forests D aucit Deforestatlon Re-anl(a 0001 (I '000) I '000) 1u 000) (a '000) (ha '000) t ha '000) (ha '0001 (a '000) (N '000) (ha '000) (ha '000) (he 10
ad that ICI there are about 16 a*/he ot tforst stod end (Ib annual qmWth trom natural torest cover amuAts to ebout 0.16 i%/ha. Thls ourcth Is likely to deelln vith advanclaq detorestatver, has not been taken Into CoWldeera?lan hear.
atimatch.
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residential energy consumption, slower progress in woodfuel conservationand substitution, and weak efforts to increase forestry production, thefueLwood deficit would continue to widen, left to be met through defor-estation and growing charcoal imports. Domestically produced woodfuelsby 1995 would still account for an unsustainably high proportion ofresidential energy consumption (about 52%). Irreparable damage to theaccessible forest cover would have occurred by then to ensure itsdestruction within 20 years or so.
Electricity
1.23 The Action-Oriented Scenario is based on the assumption thatconsumers will make determined conservation efforts and that electricityproducers will effect Loss reduction and other operational improvements.Overall electricity consumption is projected to grow during 1984-90 atthe relatively high rate of 14.5% p.a. (9% p.a. in the SONELEC system) asthe combined result of the start-up of SNIM's Guelbs mine and ofSONELEC's capacity expansion in Nouakchott (para 4.16). Consumptiongrowth after 1990 is projected to taper off to about 3X p.a. as SNIM isnot likely to expand further and requirements in the SONELEC system bythen will be more adequately covered. For the Trend-Based Scenario,weaker efforts to achieve conservation and other efficiency improvementsare assumed. Overall electricity consumption would increase by more than17% p.a. during 1984-90 but at about the same low rate as for the Action-Oriented Scenario during 1991-95. Generation and related fuel require-ments by 1995 would be some 20% above that of the Action-Oriented Scena-rio, involving additional costs for fuel alone of the order of US$4 mnper year (1983 prices).
1.24 Under both scenarios, the composition of demand will shift asthe projected share of industrial load increases to about 80% by 1995,primarily as a result of SNIM's larger requirements. Most of the elec-tricity generation by 1995 would be based on fuel oil, resulting inconsiderable reductions in fuel cost.
Petroleum Products
1.25 For the Action-Oriented Scenario, the mission assumes signifi-cant conservation and other energy efficiency measures in road transport,electricity, industry, and agriculture. On the other hand, it is alsoassumed that butane and kerosene will quickly replace woodfuels consump-tion and that there will be substantial marine diesel supplies to thefisheries sector from the late 1980s onwards. The Trend-Based Scenariois predicated on the assumption of limited conservation and inter-fuelsubstitution, less substitution of butane and kerosene for woodfuels, andconsiderably smaller bunker sales to the fisheries sector. Inland demandof petroleum products (i.e., net of bunker sales) during 1984-85 is pro-jected to increase rapidly under both scenarios, at 10.5% p.a., as aresult of the quantum jump in electricity associated with the start-up ofthe Guelbs mine, and to continue to grow rapidly during 1986-90 in thewake of electricity expansion in SONELEC's Nouakchott system. Under bothscenarios, demand growth would slow during 1991-95 when mining is
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projected to remain stationary and energy requirements in other sectorsare projected to grow more slowly. Under the Action-Oriented Scenario,inland demand in 1995 is projected to be about 0.33 mn M.T., or 8Z lowerthan under the Trend-Based Scenario, primarily due to lower fuel require-ments for electricity generation. 7/
Projected Energy Imports
1.26 Imports are projected to rise from 55% of net energy consump-tion in 1983 to 80-86% by 1995. They would consist mostly of petroleumproducts but considerably larger charcoal imports also are envisaged. Itis energy imports which show most clearly the impact of alternativeenergy demand sc=varios on the economy. Under the Action-Oriented Scena-rio, their costs by 1995 would be 10% lower than those projected for theTrend-Based Scenario, i.e. US$240 mn compared to US$266 mn (currentprices). However, the growth of energy imports during 1984-95 would behigh under both scenarios, i.e., 15-16% p.a. (8-9% in 1983 prices,Table 1.7). Energy imports thus would preempt as much as 25Z of foreignexchange earnings by the early 1990s unless export growth can be substan-tially accelerated. This highlights the need to use energy more effi-ciently and to mobilize any viable domestic energy potential for meetingfuture energy requirements within the constraints imposed by the coun-try's balance of payments prospects.
1.27 Petroleum Product Imports. Based on the projected growth ofinland demand and bunkering for the fishing fleet, gross imports by 1995would reach US$345 mn under the Action-Oriented Scenario and US$270 mnunder the Trend-Based Scenario (all current prices). However, under theAction-Oriented Scenario, imports for inland consumption only would beconsiderably smaller and net earnings from bunkering higher than underthe Trend-Based Scenario (Table 1.7). These projections are predicatedon the assumption that (a) international price increases of petroleumproducts are identical to those of crude as projected by the World Bank,and (b) freight rates remain unchanged in current terms at least until1987 because of substantial overcapacity in international shipping, andsubsequently rise at the rate of international inflation. Increases inimport costs would be moderated somewhat by the substitution of gas oilfor gasoline, and of fuel oil and marine diesel for gas oil.
7/ However, incLuding bunker sales, total demand under the Action-Oriented Scenario by 1995 would be 0.47 mn M.T., i.e. nearly 0.1 mnM.T. higher than the corresponding demand under the Trend-BasedScenario.
a/ Assumed to consist of O0% qas oil, 2UJ fuel oil.b/ Inland demand only.
Source: Annexes 4-7.
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Institutional and Policy Framework
Basic Constraints
1.28 Structural weaknesses in the energy sector have been aggravatedby the absence of a sectoral strategy, inappropriate policies concerningenergy demand management and investment, and institutions beset by man-agerial, financial, and technical inadequacies. There are no clear sec-tor priorities, and projects often are not based on economically soundcriteria. No sector-wide planning exists, and energy-related aspects offorestry have been completely disregarded. In addition, the absence ofadequate information seriously hampers policy analysis and planning.There is little coordination among the sector institutions and no effec-tive supervision of the operating agencies.
Institutions in the Energy Sector
1.29 The main energy-related institutions are:
(a) at the sectoral level: the Ministry of Hydrology and Energy,which is responsible for electricity and petroleumrrelatedmatters, and which incorporates (a) the Energy Directorateresponsible for energy planning, policy coordination and super-vision of the state energy enterprises, and (b) the NationalUnit of Alternative Energy (CNEA); the Ministry of Industry andMines in charge of petroleum exploration; and the Ministry ofRural Development supervising the Environmental ProtectionDirectorate (DPN) in charge of forestry;
(b) at the macro-economic level: the Ministry of Planning andRegional Management, which screens investment projects; theMinistry of Finance, which administers fuel taxation andexercises financial control over state enterprises; theMinistry of Commerce, which issues import permits, and theCentral Bank in charge of foreign exchange allocation forpetroleum products imports; and the Council of Ministers fordecisions on energy pricing, acting on recommendation of theMinistry of Hydrology and Energy;
(c) at the operational level: the power and water utility SocieteNationale d'Eau et Electricite (SONELEC); the iron ore miningcompany Societe Nationale Industrielle et Mini&re (SNIM),Mauritania's largest individual energy consumer, which gen-erates electricity and imports petroleum products on its ownaccount; the -- inoperative -- petroleum refinery SocieteMauritanienne d'Industrie de Raffinage (SOMIR); the petroleumproduct importing and marketing entity Societe Mauritanienne deCommercialization des Produits Petroliers (SMCPP), the trans-port company Societe du Transport Publique Nationale (STPN) incharge of domestic transport of petroleum produicts, all ofwhich are state-owned; and the petroleum storage company
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Societe Mauritanienne d'Entreposage des Produits Petroliers(MEPP), which is owned by SMCPP and the private distributors,i.e. BP and Mobil.
Table 1.7: SUMMARY ENERGY IMPORT PROJECTIONS, 1985, 1990, 1995(Current and 1983 USS millions)
1985 1990 1995Estimated Current 1983 Current 1983 Current 19831983 Prices Prices Prices Prices Prices Prices
BunkeringBunker Sales, Gross 2.5 2.5 7.3 4.9 15.0 7.9Earnings from Bunkering, Net b/ -- -- 0.1 0.1 0.2 0.1
Net Imports :J 53.2 52.0 103.8 69.5 207.0 108.6
a/ Includes about 0.1 mn M.T. of crude petroleum.b/ Net of imports and other foreign exchange costs (operational and financial); for marine
diesel only.cl Imports for inland consumption less net earnings from bunkering.d/ Net of jet fuel and fuel oil re-exports.
Source: Mission estimates.
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II. ENERGY DEKAND KANACEMENT
Introduction
2.1 Any attempt by the Government to make the energy sector moreresilient calls for a comprehensive strategy which encompasses appropri-ate planning, policies consistent with sectoral objectives, and competentinstitutions for policy implementation. Such a strategy should be basedon the following objectives:
(a) enhancing long-term availability of energy supplies at leastcost;
(b) improving the efficiency of energy use; and
(c) strengthening sector policies and institutions.
2.2 In view of the very limited supply options, a more viableenergy sector hinges on efficient demand management. This requires twosets of policies. First, there should be strict adherence to economicpricing and full cost recovery to manage the overall level of energydemand, allocate demand efficiently among different sources of energy,and meet the financial requirements of the sector enterprises. Second,direct, non-price measures conducive to energy conservation and substi-tution should be undertaken to the economically feasible extent.
Energy Pricing
Background
2.3 The Government controls the prices of petroleum products, elec-tricity, and, nominally, charcoal. Prices are high, in line with thehigh economic costs of supply. However, the components of the pricestructure have not been properly analyzed for several years. There aredistortions as preferential prices are granted often with little economicjustification and low probability of meeting their stated social objec-tives. Because of scarcities and other market imperfections, parallelprices have emerged which exceed official prices by a considerablemargin.
Petroleum Products
2.4 Price Structure. Prices of most petroleum products are set bythe Ministries of Hydrology and Energy, and Finance, acting on recommen-dation of the mixed "Commission Paritaire des Produits Petroliers." Thecurrent price structure is summarized in Table 2.1. Prices are based onimport costs c.i.f. Nouakchott and Nouadhibou. Added to these arecustoms duties and taxes, operating costs and financial charges, an
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allowance for physicaL losses and a margin to arrive at SMCPP's ex-depotprice. The ex-pump (retail) price is established by further adding thetransportation cost and distributor's margin. 8/ Retail prices vary bylocation to account for differences in transport cost, although thesedifferentials (about UM2.75 or USC5 per ton-kmii) do not fully cover costs,and losses are often incurred in transporting petroleum products. Thistends to affect the availability of products in more distant locationswhere the portion of transport cost not covered by the price structure ishighest.
2.5 Domestic prices of petroleum products were adjusted with littledelay during periods of rapidly rising international petroleum prices asin 1979-81. Subsequent increases were effected through additional taxesimposed for cross-subsidization and fiscal revenue purposes. Fuel taxeshave become more important and in 1983 generated 5.6% of Government taxrevenue, up from 3.7% in 1980. However, price and tax increases havebeen limited to gasoline and kerosene. Gas oil prices and taxes during1980-1983 remained unchanged in current terms and declined by about 35Zin constant UM terms. 9/ More recently, increases in prices have fallenbehind the increases in import costs (in UM terms) associated with theaccelerating devaluation of the domestic currency. The administrativemechanism for price changes therefore needs to be reviewed with the aimto adjust prices of petroleum products more quickly to changes in costs.
2.6 There is a subsidy on butane whose retail price amounts toabout 70% of delivery cost, and on gas oil for the fishing fleet. How-ever, high prices on all other products compensate for these subsidiesand generate a significant economic surplus for the petroleum sector as awhole (Table 2.2).
2.7 Official c.i.f. Import Prices vs Actual Costs. At the officialexchange rate, c.i.f. import prices as incorporated into the pricingstructure differ substantially from actual import costs. As there is noprice stabilization fund for absorbing these differences, over or underimport costs unintentionally affects SMCPP's margin. The setting ofc.i.f. import prices for purposes of petroleum product pricing thereforeshould be reviewed. The Government should consider collecting the offi-cial c.i.f. import price over actual cost through a tax whose proceeds
8/ Prices of jet fuel and aviation gasoline are negotiated directlybetween buyers and the private distribution companies marketingthese products. For products of the Nouadhibou refinery, ex--refinery prices generally were set above comparable c.i.f. importcosts.
9/ During 1980-83, the retail price of gasoline was raised by 46.5% andthat of kerosene, by 42%. This was largely the result of higherfuel taxes whose share in the retail price of gasoline rose from 40%to 52% and of kerosene, from 11% to 24%. For gas oil, this sharehas remained unchanged at about 35%.
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among others could be allocated to financing priority projects in theoverall energy sector.
2.8 Relative and Preferential Prices. There have been wideningdifferentials in relative prices between gasoline and kerosene on the onehand, and gas oil on the other. In addition, preferential prices haveproliferated because (a) SNIM is entitled to acquire products free ofimport duties and internal taxes, and (b) gas oil sales to SONELEC, thefishing fleet, industries under incentive schemes, and agricultural usersbear only a fraction of internal taxes. The mission estimates that onlyabout 12% of gas oil consumption is fully taxed.
2.9 Because of higher taxes and margins, the retail price on gaso-line is substantially higher than that of any other product, which servesas a scheme to mobilize additional fiscal revenue from higher incomeearners. On the other hand, taxes on gas oil are considered a cost onproductive sectors and therefore are held at relatively low levels. Eventhough the gas oil retail price is only 56% of that of gasoline, itcovers the economic cost of supplies. However, taxes on gas oil are sig-nificantly below the cost of highway maintenance, 10/ a problem whichshould be addressed in the context of the Government's policy on roaduser charges. The question arises whether low gas oil prices have stimu-lated uneconomic fuel substitution. There is no evidence in Mauritaniato suggest that this has happened as the diesel-driven vehicle fleet hasremained small and its size is likely to be determined more by Governmentimport policies than by relative fuel prices. A separate issue concernsthe extent to which gas oil taxes should be used to generate higherrevenues either for financing energy-related investment or for generalfiscal purposes. This would require an analysis of the effects ofdifferent forms of taxation on the overall economy and on resource allo-cation within the economy, which goes beyond the scope of this report.
2.10 On the other hand, the rationale for preferential prices andsubsidies and the efficiency in achieving their ostensible objectivesneed to be carefully reviewed. While it is fairly common to price gasoil for industrial use lower than gas oil used for transport, this prac-tice should be limited to export activities such as mining and fisheries,but even prices paid by those sectors should cover c.i.f. import costs.Other users should pay the fuLl price (possibly reduced by an amount inlieu of road use not incurred). A special problem is posed by the pric-ing of gas oil for the fishing fleet which implies a subsidy of about 10%of economic import cost. The Government's aim to increase Mauritania'sshare of fuel sales to the fishing fleet ultimately depends on pricecompetitiveness. However, this should be achieved by substituting acheaper fuel such as marine diesel for gas oil (para. 5.11).
10/ To be adequate, spending on road maintenance in Mauritania should beUS$9-9.5 mn/year, or USc66/gal. of transport fuel at 1983 consump-tion levels, without taking into account the higher wear and tearcaused by (gas oil driven) trucks. Gas oil taxes amount toUSC38/gal., or about 60% of appropriate road user charges.
Table 2.1: SUMARY PETROLEU1M PRODUCT PRICE STRUCTURE, DECEMBER 1983; Oecm b r 1984(tM/Litre Unless Otherwise Indicated)
Taxes as J of Retail Price (-19.4) (-19,4) 48.5 51.5 46.9 22.0 23.8 28.5 30.1 - 14.1
a/ Consumed In Nouakchott only.b/ Average of Nouakchott and Nouadhibou prices.c/ Converted at the official exchange rate of Ut 55/USS for December 1983 and UN 68/USS for December 1984.
Source: Annex 10.
Table 2,2: ECONOMIC COSTS AND OFFICIAL PRICES OF PETROLEUM PRODUCTS, DECEMBER 1984(U.M./Litre Unless Indlceted Otherwlse)
1994 Net Surplus orEconomic Costs Adjusted Estimated Loss, 1984
CIF Import Cost Internal Total Ex-Depot Net Consumption BaseUSS/M.T, UN/I a/ Cost Cost Price b/ Dlfference (M,T. '000) (UN mn)
a/ Shadow exchange rate of UN80/USS.b/ Including taxes. Excluding financial charges and commercial margin (estimated at UN 0.30/1 for aviation gasoline and
Jet tuel).C/ UM/kg
Source: Energy Directorate; SML,JP; misslon estimates
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2.11 The butane subsidy has been very effective in increasingconsumption but might have outlived its usefulness. In the future, highequipment costs and distribution bottlenecks would seem to be moreserious obstacles to consumption growth than the fuel price itself.Furthermore, the beneficiaries of the subsidy have been higher incomeearners in urban areas who would not be likely to switch back to charcoaleven if butane prices were to be increased. While more substitution ofbutane for domestic woodfuels is needed to secure long-term energysupplies, alternative measures such as strengthening the distributionnetwork and creating credit facilities for equipment purchases might holdout a better promise for sustained increases in butane consumption.
Electricity
2.12 In contrast to petroleum product prices, electricity tariffshave been raised infrequently and for periods have not covered SONELEC'scosts. Tariffs in 1983 for the Nouakchott and Nouadhibou systems were232 higher than in 1979, which was considerably less than that period'sdomestic inflation (50X) and international petroleum price increases(125%). The last tariff increase, averaging about 7Z, was enacted inlate 1981. On that occasion, extremely simplified uniform tariffs wereint-oduced throughout the country, i.e. a tariff of UMlI (USC13.7/kWh)for industrial use and public lighting and UM13 (USc16.3/kWh) for resi-dential and all other consumers. There is no fixed kW charge or tariffdifferentiation according to volume or time-of-day consumption. Sincethere are no separate accounts for SONELEC's electricity and water opera-tions, costs of electricity generation and distribution are not preciselyknown. 11/ Present tariff levels probably are approaching financialcosts in the larger systems but barely cover the cost of fuels and lubri-cants in the smaller systems. A tariff increase of at least 16% on aver-age, expected by mid-1985, is to compensate SONELEC for the impact of therecent devaLuations of the Ouguiya.
2.13 The present tariff structure has serious shortcomings whichinclude the following:
(a) the uniform national tariff does not give appropriate signalsto consumers about the cost of their consumption, involvingsubsidization in the smaller, high-cost systems at the expenseof the larger systems;
(b) tariff levels for industrial and residentiaL consumers do notreflect their relative economic cost of supply; and
(c) because of the absence of progressiveness in the tariff struc-ture, residential consumers are not charged according to their
ll/ SONELEC estimates these costs to average about UM 18 (USC21.8)/kWhfor its six systems.
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ability and willingness to pay, and there is little incentiveto conserve electricity.
2.14 Uniform tariffs reflect the Government's objective to distri-bute the cost of electricity evenly among consumers in different systems.However, there are reasons to assume that in a country like Mauritania,with about 12,500 low-voltage connections in 1982 and an average consump-tion of about 200 kWh/month, any electricity consumers are relativelyaffluent. There exists suppressed demand at present tariff levels which:ndicates that potential consumers do not consider the price of electri-city to be too high. On the other hand, high industrial and commercialtariffs relative to eLectricity costs are passed on by these usersthrough higher prices to all consumers of their goods and services,including those not supplied with electricity at subsidized residentialtariffs. High industrial tariffs also have contributed to restrainingthe expansion of electricity-intensive industries (such as fish storagein Nouadhibou) and have complicated agreements on supplying electricityto SNIN from the public grid (para. 4.8).
2.15 Electricity tariffs should be revised to better reflect theeconomic cost of supply, stimulate energy conservation, pursue socialequity, and improve SONELEC's financial position. Electricity pricingconsistent with economic efficiency principles is best achieved throughtariffs based on long-run marginal costs of supply, adjusted regularlyfor changes in variable cost so as to ensure full cost recovery. InMauritania, this is not a realistic short-term goal inasmuch as none ofthe elements needed for proper tariff setting presently exist. Neverthe-less, such a study should be carried out as soon as feasible. An imme-diate start should be made through correcting the most serious shortcom-ings of the present tariff structure. Tariffs should reflect better therelative economic costs of supply among different systems and differentconsumer groups to promote an efficient regional allocation of electri-city-consuming activities. This would involve rearranging relativetariff levels through:
(a) increasing residential tariffs relative to industrial tariffs,which would be conducive to improving system utilization.Measures should be taken to give industrial consumers appro-priate signals about the cost of capacity;
(b) increasing tariffs in smaller load centers to approximate oper-ating costs;
(c) financing the remaining deficits in smaller systems through asurcharge on electricity consumption in the more efficient sys-tems. However, even with this surcharge, electricity prices inthe more efficient systems should be lower than those in thesmaller systems; and
(d) establishing lifeline tariffs for residential consumption tomake electricity consumption more affordable to low-income
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consumers, combined with at least one higher tariff for larger-volume consumption.
2.16 SONELEC would need technical assistance for tariff reform. Themission recommends that once an adequate cost accounting system, finan-ciaL targets, and appropriate load and investment forecasts exist, atariff study be carried out aimed at establishing a tariff structurebased on long-run marginal costs.
2.17 Even with more adequate tariffs, a lasting improvement inSONELEC's financial position wiLl require above all a strengthening ofthe entity's liquidity position, especially a reduction in arrears(para. 4.7). Any tariff reform therefore must be integrated into afinancial recovery plan for SONELEC which should include a recovery ofarrears, increases in equity, a realistic assessment of future investmentrequirements, and appropriate financial targets.
Fuelwood and Charcoal
2.18 Traditionally, fuelwood in Mauritania has been considered a"free good". There are no Government levies on fuelwood collected forown consumption although a permit is required to harvest fuelwood forsale or charcoal production. The permit price includes a stumpage fee asthe sole Government levy on the exploitation of forestry resources.Stumpage fees were increased by about 3001 in 1983 for the first timesince 1965. However, because of administrative inefficiencies, thehigher rates have not yet been applied. At their new level, stumpagefees make up 3Z of the retail price of fuelwood and 21Z of the officialretail price of charcoal. On a fuelwood-equivalent basis, however,stumpage fees on charcoal are significantly lower than those on fuelwood.
Table 2.3: STIMPAGE FEES ON FUELWOOO AND CHARCOAL
Fuelwood Equivalent1965-82 Since 1983
UI UM/MT UM UI/MTof Fuelwood of FuelwoodEquivalent Equivalent
Fuelwood (stere, about 300 kg) 30.0 100.0 100.0 333.3
Charcoal (quintal, 100 kg) 60.0 89.6 160.0 238.3
Source: OPN
2.19 Official charcoal prices have not been changed in recent years.Because of growing scarcities, parallel prices have emerged which oftenare twice as high as official prices. The widening supply-demand gap isbound to intensify price pressures, making economic pricing essential.Two issues need to be addressed in this context:
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(a) the economic cost of fuelwood, reflected by the cost of reaf-forestation or, in its absence, deforestation in terms ofdecreasing soil fertility and altimately, desertification; and
(b) the proper return to the Government as owner of forestryresources, and the degree to which the Government should cap-ture the economic rent realized by privatt _.ntrepreneuerssupplying woodfuels.
2.20 Although this type of analysis has not been undertaken inMauritania, it is evident that even the parallel prices for charcoal arenot high enough to reflect the long-run marginal cost of fuelwood. Atthe present rate of overcutting, the stumpage fee would have to be raisedmore than fourfold for fuelwood and almost sixfold for charcoal to coverreafforestation costs. 12/ While a more in-depth analysis of the costsof fuelvood production is desirable, DPN should give priority to evaluat-ing ways to improve the levying of stumpage fees.
Comparative Energy Prices
2.21 Comparative energy prices have a strong influence on consumerchoices among energy alternatives. They are determined to a large extentby relative end-use efficiencies which vary widely according to the typeof energy used, its applications, the type of equipment used, and theequipment's power output. To provide the appropriate signals to con-sumers, prices must reflect the economic cost of the energy form in ques-tion. Proper analysis also should include the investment cost of energyusing equipment as this outlay is often substantial and can influenceconsumer decisions more than the energy price itself.
2.22 Notwithstanding these qualifications, the comparison of retailprices adjusted by end-use efficiency (Table 2.4) offers some importantconclusions. First, fuelwood is by far the most expensive energy source,
12/ The approximate level of the stumpage fee is determined by thefollowing formula:
At the present rate of overgutting of about 0.7 mn m and with re-placement costs of UM 950/m , the stumpage rate should be about UM835/m (UM 418|stere) of fuelwood and UM9,350/M.T. of charcoal(assuming ll.2my of fuelwood are needed per M.T. of charcoal). Notethat the stumpage fee thus defined would not cover costs over andabove reforestation, such as for preservation of remaining forests.
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largely because of its low end-use efficiency. 13/ Second, both butaneand kerosene are relatively low-cost energy sources, with butane becauseof its subsidization having the edge over charcoal and kerosene. Third,electricity compares unfavorably with all other energy sources exceptfuelwood, which would be reinforced if the high cost of electric stoveswere taken into account.
2.23 The analysis of comparative energy prices is useful for ex-plaining the demand-related factors in energy substitution. To makepolicy recommendations, an analysis of the relative economic cost of thevarious energy forms also is required. The economic cost of woodfuelsand electricity exceed present market prices, which suggests that theeconomic cost per useful energy unit of these products are higher thanshown in Table 2.4, especialLy for charcoal. There would also be someimpact on the comparative position of butane. If butane were sold at itseconomic cost, the price per useful energy unit would nearly double.
2.24 In order to evaluate the policy requirements related to energypricing, comparative energy prices need to be studied in more depth.Particular attention should be given to the economic cost of woodfuel useand providing energy to urban consumers. These issues will be analyzedin the studies on charcoaL importation and petroleum product marketingfinanced under the IDA petroleum exploration promotion project (paras2.28, 2.29).
Table 2.4: RETAIL PRICES OF ENERGY PER USEFUL kWh,Nouakchott, December 1983
Average Price Utilization Average PriceAverage Price per Gross kWh Efficiency per Useful kWh
a/ Fuelwood is used little in Nouakchott. The consumption is concentrated in smallerurban centers and rural areas in southern Mauritania.
Source: Official data and mission calculations.
13/ However, this does not seem to influence consumer decisions verymuch, as most of the fuelwood consumed is self-harvested and conse-quently, availability rather than price tends to determine energychoices.
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Energy Conservation and Substitution
Introduction
2.25 While appropriate energy pricing based on economic cost is thecenterpiece of any policy designed to at increase energy efficiency,technical, financial and institutional obstacles hamper progress inenergy conservation and substitution. Opportunities exist despite rela-tively low levels of energy consumption in Mauritania but except forSNIM, consumers have made few efforts to save energy, nor has the Govern-ment promoted energy efficiency. Overcoming these obstacles calls for acareful strategy and policies and responsive institutions focusing onspecific options.
Residential Sector
2.26 The residential sector accounts for the largest individualshare of energy consumption. Its efficiency of energy use is very lowand consequently offers the greatest potential for energy savings. Thebulk of energy used in the residentiaL sector consists of woodfuels,which adds to the urgency of improving its efficiency.
2.27 l proving Stove Efficiency. Conservation policies need tofocus on the dissemination of more efficient stoves as most residentialfuel is consumed ir. cooking. 141 Stove efficiencies range from less than10Z for the three-cornered stove to some 20% for the Malagache stove usedin urban centers. While consumers have become aware of woodfuel scar-cities and are ready to acquire more efficient stoves, experience inother Sahelian countries indicates that they generally are not preparedto spend more than 5% of disposable income for this purpose despite theconsiderable fuel savings attainable. Among the available stove types,the portable one-pothole metal stove would appear to best meet therequirements for increased efficiency, low cost, and transportability.It could offer fuel savings of at least 50% over current levels. Thebasic model could be sold at UM 200-400 (US$3-5). Production and mar-keting could link up with the traditional dissemination system forMalagache stoves. The existing metal shops would seem to be able tosupply most urban and rural families over the next five to seven years.Although metal stoves FJse a certain smoke and safety problem and requireimported materials, they are preferable to mason-built or mud stoveswhich are more costly, less efficient, and less suitable for large-scaledissemination.
2.28 To make a significant dent in fuelwood consumption before sub-stitutes are available in adequate volumes, improved stoves need to bedisseminated to virtually all urban households and to at least two-thirds
14/ Changes in dietary habits resulting in reduced cooking requirementsare also important but have not been analyzed in this report.
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of rural households within the next five to seven years, at the rate of120,000-150,000 per year. Although ambitious, this goal could be attain-able if a concerted effort were made on the part of governmental, privateand communal institutions and foreign cooperation could be assured.While complex, such a program would be relatively inexpensive. AmongMauritanian institutions, only the semi-public ADEREM has some experiencein stove dissemination through its cooperation with foreign volunteers.The Government should provide the technical and institutional infrastruc-ture for the delivery system whereas stove production and distributionshould be left to the private sector. The governmental CNEA shouldmobilize foreign assistance to support a stove dissemination program.The entity also should be equipped to test stoves for their suitabilityto Mauritanian conditions. The training of blacksmiths and other arti-sans to build stoves could be carried out by the governmental Centre deFormation et Perfectionement Professionel (CFPP) in Nouakchott andthrough rural development projects. The mission recommends a pilot proj-ect to test and evaluate stove models which show potential for widerapplication, in preparation of a longer-term stove dissemination program(para. 8.12; Annex 12).
2.29 Fuel Substitution. There still will be a need to substituteimported energy for domestically produced woodfuels even assumingimprovements in energy efficiency. Government efforts so far havefocused on stimulating butane although the combined fuel and equipmentcost of that energy source are higher than for most alternatives (Annex11). The economic cost of kerosene is lower than that of butane becauseof lower equipment costs and kerosene use is quite energy efficient.However, except for lighting, kerosene has received limited acceptance asa household fuel for reasons of deeply engrained cultural habits, and itsconsumption has stagnated. A campaign during the 1970s to disseminatekerosene cookers failed because of technical defects in the equipmentchosen. While urban consumers probably will prefer butane beca .se of itsconvenience, kerosene as a woodfuel substitute should be seriously con-sidered at least in those cases where butane delivery would be verycostly, such as in rural areas. The obstacles to utilizing kerosene andthe options for overcoming them need to be evaluated in detail. As withbutane, increased kerosene use depends largely on improved distribu-tion. These issues will be analyzed in detail through a study onMauritania's petroleum product marketing system under the IDA petroleumexploration promotion project.
2.30 While charcoal is likely to remain an important residentialfuel, particularly for rural households, indigenous production at therequired scale no longer is possible, and imports from Senegal cannot berelied upon for any length of time as that country also suffers fuelwoodshortages. Medium- to long-term charcoal requirements therefore mighthave to be met through imports from countries with export forestry poten-tial such as Guinea-Bissau, Liberia, and Ivory Coast. However, thisoption poses difficult technical, economic, and institutional issues bothfor Mauritania and the charcoal-exoorting countries. One pivotal issueconcerns the availability of shipping at reasonable cost as this willlargely determine the viability of this option. In addition, it has to
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be established whether rural consumers would be willing to pay forimported charcoal after having access to "free" fuelwood, or whetherimported charcoal could be delivered at a price which is affordable torural consumers. While such a transition may be difficult, in the longrun some shift to paid household fuels also among rural consumers will benecessary to curb deforestation. A charcoal importation study under theIDA petroleum exploration promotion project would analyze these issuesand recommend measures for preparing a charcoal importation program,should such a program prove feasible.
2.31 Replacing Electricity. Water heating and air conditioningaccount for a substantial proportion of residential electricity consump-tion. The water heating load could be reduced through wider use of solarwater heaters whose annual cost is estimated to be about 68% of that ofelectric water heaters. 15/ Several thousand electric water heaters arein use in Nouadhibou (mainly by SNIM employees) and Nouakchott. Replac-ing 5,000 electric with solar water heaters (at a cost of about US$5 mn)would save about 1,400 M.T. a year in fuel (US$0.4 mn, 1983 prices) ornearly 7X of SONELEC's current fuel consumption. The air conditioningload could be reduced through dissemination of air coolers based on waterevapo:ation, which would be particularly well-suited to Mauritania's dryclimate. Their capital costs are about the same as for air conditionersand they provide nearly the same level of comfort for only 20X of theenergy consumed. Solar water heaters and air coolers would be bestapplied in hotels, public buildings, and residences of SNIM employees.Given the energy savings potential, a program for gradually disseminatingsolar water heaters and air coolers should be organized. Over the longerrun, applying the principles of passive use of solar energy in buildingdesign will greatly improve the internal climate of buildings and reduceair conditioning loads.
Transport Sector
2.32 Fuel efficiency in road transport is low because of poorvehicle maintenance, an obsolete fleet, and inadequate public transport.In addition, the Government lacks the capability to supervise the trans-port sector and monitor fuel consumption. There are several options toenhance fuel efficiency in road transport: (a) improving road mainte-nance; (b) augmenting the supply of spare parts for vehicles; (c) imple-menting regular, obligatory technical controls on vehicles; (d) instruc-tion in more fuel-efficient driving techniques; (e) centralizing adminis-tration and control over the Government vehicle fleet representing about10% of the nationwide fleet, which also would cut down unauthorized useand fuel waste (Annex 14); (f) rehabilitating the public bus system, both
15/ I.e., an annual capital cost of about US$215 equivalent per solarwater heater to produce about 1,000 kWh(th) needed for 17,200 litresof water a year. This compares to annual capital and operatingcosts of US$315 equivalent per electric water heater required forthe same output.
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for urban and intra-urban transport, which requires considerable effortsto strengthen the managerial, financial and t;chnical capability of thebus company STPN; and (g) dieselization of the utility vehicle fleet.Specific fuel consumption of diesel vehicles is about 80X that of gaso-line-driven vehicles. Present diesel penetration in Mauritania is 90Zfor heavy trucks but less than OZ for light utility vehicles. It shouldbe feasible to increase the latter share to 25Z by 1995. Associatedservice requirements could be provided by local representatives of dieselvehicle suppliers.
2.33 These measures eventually could bring about fuel savingsapproximating 20-25% of trend consumption. Based on more conservativeassumptions, the mission projects savings of about 8Z with respect totrend consumption by 1990-95, which would save US$1.1 mn in 1990 andUS$2.1 in in 1995 in petroleum product imports. Related investment andother development expenditures are estimated at 1983 US$3.5-4 mn. In thefishing sector, the establishment of a service center in Nouadibou at acost of 1983 US$1.2-1.7 mn would help to raise the fuel efficiency offishing vessels and contribute to expanding the facilities needed toattract more commercial fishing to Mauritania (para. 5.12).
Mining and Industry
2.34 SNIM's mining operations are well organized and generally meetinternational norms for operational efficiency. There does not seem tobe any excessive energy consumption and consequently, no significantscope for savings in the context of current operations. 16/ However,over the longer run, it may prove economic to concentrate operations inthe most productive mines, which would somewhat reduce unit energy con-sumption. The mission also has evaluated the feasibility of convertingSNIM's railway locomotives from gas oil to heavy diesel. Any savings infuel cost from such a conversion would have to be balanced against highermaintenance costs and increased wear and tear on the engines. In parti-cular, the recently acquired GM diesel locomotives could suffer enginedamage if a lower quality fuel is used than was specified by the- manu-facturer. The mission therefore has concluded that fuel conversion forSNIM's locomotives is not feasible for the time being.
16/ The sharp increase in energy consumption associated with the openingof a lower-grade ore mine at Guelbs is unavoidable and not theresult of any decrease in operational efficiency.
2.35 Little information is available about the pattern or efficiencyof industrial energy consumption. Because the industrial sector consumesonly gas oil, there seems to be potential in heat-intensive industriesfor converting boilers to fuel oil. However, any additional scope forenergy conservation needs to be evaluated through energy audits, whichalso should analyze the capital, managerial, and training requirementsassociated with an energy efficiency program in industry.
Institutional Issues
2.36 The Energy Directorate should take the lead in organizing andcoordinating an energy efficiency program (para. 7.4). The special fundfor butane subsidization and alternative energy promotion should be madeavailable to finance other energy conservation and substitution projectsas well, for which special fiscal and credit incentives also should beestablished. Technical assistance will be required for developing andimplementing a comprehensive energy efficiency program (para. 8.10).
Table 2.6: PROJECTED FUEL SAVINGS IN ROAD TRANSPORT, 1990; 1995
(TOE '000)
1990 1995Gasoline Gas Oil Gasoline Gas Oil
Improved maintenance, passenger
cars - 2.4 - 3.2
Reduced use of taxis - 1.0 - 1.7
Increased use of busses + 0.3 + 0.3Dieselization, light utility
vehicles - 1.5 t 1.2 - 1.9 + 1.2Improved maintenance, heavy trucks - 0.4 - 0.6
Total - 4.9 + 1.1 - 6.8 + 0.9
Total, M.T. '000 - 4.7 + 1.1 - 6.4 + 0.9
Savings with respect to trend (S) 5.7 7.7
(- Savings)
Source: Mission estimates.
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III. FORESTRY AND WOODFUELS
Introduction
3.1 Meeting future woodfuel requirements while preserving theforest cover presents the most difficult problem in the energy sector.Any attempt to tackle this problem will require a two-pronged approach:first, a concerted effort to reduce consumption through end-use effi-ciency improvements and substitution of other forms of energy for domes-tically produced woodfuels, and second, improved forest management andtree planting (farm trees, windbreaks, shade trees) on a substantiallyenlarged scale. However, because of extremely adverse natural condi-tions, any incremental forest growth from such programs would be verylimited relative to requirements and would have a long gestation period,notwithstanding its environmental importance.
3.2 Despite the depletion of the forest cover, per capita consump-tion of woodfuels has changed little over time. 17/ However, fuelwoodnow essentially is consumed only by rural households. Urban consumershave switched almost completely over to charcoal, and commercial estab-lishments to butane and electricity. There is also significant yetunrecorded charcoal consumption in rural areas.
Development Constraints
3.3 Forest management through protection and yield regulation andreforestation to date have been costly and largely ineffective because of
(a) the difficulty of preventing over-exploitation of accessibleforests, which has taken the form of overcutting, excessiveclearing, and overgrazing;
(b) the difficulty of obtaining full and sustained Government andpopular commitment to policies designed to control over-exploi-tation as short-term gains through increased agricultural pro-duction have tended to outweigh the need to protect and developforestry resources, the benefits of which may be slow incoming; and
(c) the absence of technical packages well adapted for reaffores-tation of marginal lands in arid and semi-arid zones.
17/ Per capita consumption is estimated at 0.6 m3 /year, which includesthe fuelwood equivalent of charcoal whose consumption is estimatedat 55 kg/capita/year in urban areas.
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3.4 Competition for scarce arable land leads directly to the over-use of natural forests. Improved forest management is needed to provideprotection against over-use and uncontrolled bush fires. Under the bestconditions, with effective popular participation, improved forest manage-ment could bring about an increase of 20-25X in fuelwood growth, to anaverage of 0.2 m /ha/year. Thus, with increments of 30,000 ha/year undesimproved management, annual production increases of 10,000-15,000 mwould be feasible from about the twelfth year onwards.
3.5 Because most of the country receives considerably less than500 mm/year of erratic rainfall, tree planting is severely limited.Moreover, pressures on arable land mean that forestry plantations need tobe fenced and guarded, which is expensive. Fuelwood production from on-going rainfed plantation projects is rather low, averaging 1.2 m3/ha/yearin the best case, at an establishment cost of well above US$1,000 perequivalent ha. An alternative would be to produce wood under irriga-tion. However, irrigated tree plantations are very costly and directlycompete with agricultural development schemes for land and water re-sources. They would only be feasible through intercropping certainspecies and agricultural products, or as windbreaks, along canals androads, and around houses.
Institutional Issues
3.6 The lack of Government and popular support for forestry devel-opment is closely tied to institutional and administrative weaknesses inthe subsector. Serious deficiencies persist in program and managementand manpower development. There is no forestry master plan based oncost-effective programs and on a correct assessment of managerialcapabilities to implement projects. The Environmental Protection Direc-torate (DPN) lacks the necessary resources to prepare strategies andpolicies, implement projects, and organize an effective extension ser-vice. Only 75 of its 160 staff have received any forestry training. Onthe other hand, graduates returning from universities abroad find them-selves quickly discouraged unless they are assigned to foreign-financedprojects. Partial planning and inventory control have just begun, andmanagement of field operations is weak. Of DPN's US$370,000 budget for1983, less than 5Z was mobilized through stumpage fees. Foreign-financedprojects are few and have not always addressed priority needs, and pro-gram proposals developed with foreign assiscance often have been tooambitious.
3.7 There are indications that the Government is attaching higherpriority to forestry development and that at least the rural populationis perceiving the need for forest protection. The Government's 1981-85Development Plan emphasizes desertification control and revegetation.New forestry legislation introduced in 1982183 strengthens protectivemeasures and thus is well attuned to requirements. An UNSO-financed,World Bank-executed technical assistance project under preparation aimsat strengthening DPN's planning and project implementation capacity.
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DPN, through its participation in the National Desertification ControlCommittee and in CNEA, is becoming more directly involved in overallenergy strategy formulation.
Forestry Options
3.8 A solution to deforestation can be expected at best only overthe very long run. Given the harsh natural conditions prevailing inMauritania, forestry activities (i.e. management of the existing naturalforest cover and multipurpose tree/shrub/bush plantings) would have to begeared mainly to protection and promotion of minor forestry products,with fuelwood essentially as a by-product. Any attempt to tackle thefuelwood problem will require a comprehensive strategy incorporating thefollowing elements:
(a) a proper mix of measures composed of improved natural forestmanagement, rainfed tree planting supported through a Govern-mental and communal tree nurseries network and irrigated treeplanting within agricultural perimeters; 18/
(b) improved access to more distant forests in the southeast torelieve pressure on forests closer to population centers;
(c) a more rational pricing and tax policy, which reflects the eco-nomic cost of fuelwood and charcoal production and whichassures adequate returns on forestry investment and generationof funds for further tree planting;
(d) changes in land management, including an integrated approach tothe interaction of forestry, agriculture, and pastoralism;
(e) a research program to develop technical packages suitable forreforestation in arid and semi-arid lands, and the establish-ment of trees, shrubs and bushes in the harsh conditions pre-vailing in Mauritania. A research unit should be establishedwithin DPN to investigate new technologies for improving treegrowth in nitrogen deficient soils; 19/
18/ An optimistic target over the next 15 years or so should be(a) extended forest management to cover 10-15Z of natural forests,(b) plant 10 mn rainfed trees, and (c) plant 3-4 mn irrigatedtrees. Such a program would be the equivalent of about 28,000 ha ofconventional closed-formation plantation. In all cases, plantingscould consist of multipurpose tree/shrub/bush plantations.
19/ E.g., the use of plant tissue cultures and manipulation of symbioticroot micro-organisms (bacteria and fungi). Such research would notbe expansive.
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(f) strengthening DPN and related institutions such as SONADERthrough more appropriate programs and budgetary and staffresources, and improving coordination among these institu-tions. Training should focus on erosion/desertificationcontrol, reforestation and forest management; and
(g) increased Government support to family- and communal-based treeplanting and forest management and protection through a streng-thened extension service.
3.9 In light of the severity of Mauritania's woodfuel crisis, thereis an economic case for shortening the c tting cycle. For rainfed treeplanting, the rotation length probably can be shortened through intensivesoil preparation (ploughing and initial weeding). For partially irri-gated planting, fertilization and closer spacing of trees might be feas-ible. More intensive livestock and agriculturaL practices would help toreduce further damage to the forest cover and at the same time allow moreeffective use of crop and animal wastes in agriculture and as an energysource. In turn, interplanting of trees with agricultural crops wouldraise the soil moisture and agricultural yields which should compensatefor the cost of tree planting and any reduction in cropland over andabove the value of wood production. (This is shown by the increased cropyields as a result of interplanting nitrogen fixing species in theSahel). However, appropriate combinations of tree species and crops needto be found before such a program can be undertaken on a large scale.The salt-tolerant Casuarina species (which are excellent for charcoalmaking) have been successfully planted in coastal areas of northernSenegal and should be considered for Mauritania as well. Roadside treeplantations would act as windbreaks and impede the migration of sanddunes. Also, the systematic recovery of wood from agricultural clearingsshould become part of integrated forest management.
3.10 DPN should be the lead institution in an accelerated treeplanting program (and, naturally, for improved natural forest manage-ment). However, its role should be limited to assisting in establishingand monitoring new planting. Flexible arrangements will be needed espe-cially in the early phases when skilled manpower and infrastructure willbe in short supply. This could be provided through mobile extensionunits of well-trained staff to support local nursery managers. Partiallyirrigated planting as part of agroforestry schemes should be the respon-sibility of the agricultural extension service, reinforced by forestryexperts. Private woodfuel producers will need incentives for long-termforest investment to avoid heavy overcutting for short-term gain.
3.11 For the envisage.s improvements to materialize, careful perform-ance monitoring and field trials are indispensible. Simple recordingprocedures at the plantation level therefore should be made an essentialcomponent of a national forestry management information system.
3.12 In charcoal production, use of the technically simple andinexpensive Casamance-type kiln could raise carbonization efficiency to
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approximately 20% of the fuelwood input (on a weight basis). However,since charcoal production in Mauritania already has fallen to low abso-lute levels and is likely to fall further, fuelwood savings from moreefficient charcoaling would be relatively small, i.e. about 14,000 m3 ayear or less than 3% of estimated 1983 fuelwood consumpti'n. Additionalraw material reserves for charcoal production could be mobilized throughthe use of wood wastes. Reducing losses during transport of charcoalalso should be given more attention.
Investment Strategy, 1984-95
3.13 Past expenditure on forestry development has been minimalrelative to requirements and probably totalled no more than US$3 mnduring 1975-83. The bulk was for shelter belts around Nouakchott andtree planting in some other places (probably not more than 200 ha), thepreparation of a forest inventory and training, mainly scholarships forstudies abroad. The major donors included FAO, UNSO, US-AID, CEAO, andthe World Lutheran Federation.
3.14 The mission recommendations for the woodfuels sector entail asubstantial upturn in expenditure for the 1984-95 period to US$47 mnunder the Action-Oriented Scenario and US$29 mn under the Trend-BasedScenario (1983 prices). Much of it would be for fuelwood productionthrough pilot tree planting projects and improved forest management.Costs could be contained by using rural labor and incorporating theestablishment of partially irrigated tree plantings into rural develop-ment projects. Given the need to improve DPN's absorptive capacity, aninstitutional assistance program is included, of which the UNSO-financedproject would form part (para 8.6). Some research into reforestationtechnologies also would be included. With regard to woodfuelsconservation and substitution, the mission assumes that the privatesector will carry out the investment needed for stove dissemination andmarketing of imported charcoal, with Government assistance in form of apilot project for improved stoves and a study on charcoal importation andmarketing.
3.15 Financing of US$14 mn in principle has been secured for ongoingand new forestry projects. Local funding during 1984-95 is projected atUS$5 mn. This leaves a gap of US$28 mn to implement the projects needed, eventually achieve a sustainable fuelwood balance, as envisaged underthe Action-Oriented Scenario.
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Table 3.1: PROJECTED DEVELOPMENT EXPENDITURE ON FORESTRVAN) WOOFUELS, 1984-95
(1983 USSmn)
Action-Oriented Scenario Trend-Based Scenario
1984-90 1991-95 1984-90 1991-95
Forestry, Ongoing 12.3 - 12.3 -
Reafforestation (Nouakchott Green Belt) 2.8 2.8Gum Arabica Pilot Project 1.2 1.2
Environmental Forestry 5.8 5.8Forest Management, Tree Plantations 2.5 2.5
Forestry, Under Consideration and Proposed 19.7 14.8 9.0 7.5
Gorgol Reafforestation 2.6 1.0
Improved Forest Management;
Rainfed Tree Plantations;
Partially Irrigated Plantations 9.1 9.8 4.0 4.5
Strengthening of DPN 6.0 3.0 3.0 2.0
Forestry Research 2.0 2.0 1.0 1.0
Woodfuels Conservation and Substitution 0.5 - 0.5 _
Stove Pilot Project 0.3 0.3
Charcoal Importation and Marketing Study 0.2 0.2
Total 32.5 14.8 21.8 7.5
Source: DPN; mission estimates.
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IV. ELECTRICITY
Introduction
4.1 Mauritania's electricity requirements are comparatively high,largely as resuLt of energy-intensive mining and mineral processing.However, individual load centers are small and far apart which makesinterconnection unfeasible in most cases. Operational inefficiencieshave curbed electricity growth and are jeopardizing reliability ofsupplies. The information base is weak, even on essential elements suchas firm capacity and system losses. Priorities for the subsector consistof institutional strengthening of SONELEC, closer coordination betweenSONELEC and self-producers, and investment in crucial areas of rehabili-tation and expansion.
SONELEC
4.2 SONELEC faces serious managerial, operational and financialdifficulties. Years of neglect as evidenced by excessive equipment use,investment in the wrong type of equipment, and lack of maintenance, haveseriously weakened its operational capacity. These shortcomings havebeen aggravated by serious financial problems, which have been the pri-mary reason for the shortage of technicians and spare parts. A moreprofessionally-minded management recently has been appointed and a neworganizational structure is being introduced, but lasting improvements inadministration and operations have yet to be brought about. Skill short-ages especially at the middle-management level, the absence of systemanalysis, and the lack of materials and spare parts continue to impedeoperations. Except for the relatively new Nouadhibou plant, generatingunits are worn out and inefficient. Distribution lines are overloadedand in poor condition. Because of frequent supply interruptions, aconsiderable number of larger-volume consumers have installed their owngenerators, which puts an additional drain on foreign exchange for equip-ment imports. SONELEC has sustained losses almost every year since 1977because of inadequate tariffs, lacking cost control and high financialcharges in the wake of external borrowing for the Nouadhibou plant. Itscash position is precarious Largely due to deficient billing and collec-tions, as many consumers are not metered and make no or only lump-sumpayments. In addition, arrears both by Government and private consumershave built up to equal nearly 12 months of sales at end-1982, up fromeight months in 1980.
4.3 In response to the urgent need to restore system reliabilityand operational efficiency, IDA, EIB and bilateral French sources areproviding assistance to SONELEC as a component of a parastatal rehab-ilitation project. It will consist of: (a) equipment and spare partssupplies for rehabilitating generation and distribution facilities inNouakchott and Nouadhibou; (b) technical assistance to strengthencritical services (procurement, inventory, production, accounting, and
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sales), identify additional rehabilitation needs, and to undertake tariffand other reLated financial studies; and (c) training for middle-levelpersonnel. Beyond these immediate rehabilitation objectives, SONELECneeds to address a number of medium to longer term issues. These arediscussed below.
a/ Estimated based on partial information.b/ Sales.c/ Distribution of electricity generated by SNIM.d/ Includes electricity generated by SAMINE.e/ One 5.7 MW unit was out of service in 1983.
Source: Annex 15.
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Loss Reduction
4.4 Except for Nouadhibou, SONELEC's consumption of fuel and lubri-cants is excessive due to worn-out equipment and poor load management anddispatch practices. As there is no systematic reporting of outages, pro-duction losses resulting from inadequate capacity cannot be identified.Production losses could be reduced through (a) more efficient use ofavailable generating units, and (b) preventive maintenance and adequatescheduling of major overhauls. A better reporting system would allowbetter control of generation and rapid identification of aberrations inperformance.
4.5 Distribution losses are probably considerable but not easilyestimated as neither electricity supplies to the distribution systemsnor sales are properly metered. Poor meter reading and billing practicesaccount for "administrative" losses, in addition to electricity theftwhich goes largely undetected. For example, of the 6,500 metersinstalled in Nouakchott, 6,000 need to be sealed and 350 replaced.SONELEC estimates that the US$50,000 cost of reconditioning these meterscould be recovered in six months. (1,500 new meters were ordered for theNouakchott system in earLy 1985.) Better reporting and evaluation proce-dures on a sustained basis would help to detect and eliminate the moreexcessive distribution losses. Regular technical measurements on distri-bution lines would make it possible to identify physical losses anddetect illegal connections.
4.6 The parastatal rehabilitation project will contribute to reduc-ing electricity losses by improving SONELEC's technical operations andbilling procedures and replacing deficient distribution equipment in theNouakchott and Nouadhibou systems. The mission recommends that to assistthese activities, an electricity loss reduction study be carried out forNouadhibou and, possibly, the smaller systems as part of this ongoingproject to (a) analyze the causes and extent of production and distribu-tion losses and (b) propose specific measures to bring losses down tomore acceptable levels (para. 8.7). This would ensure consistency in therehabilitation of the Nouakchott and Nouadhibou distribution networks.
Fuel Conversion
4.7 Converting SONELEC's Nouadhibou plant from gas oil to fuel oilis both technically feasible and economically viable. This pLant wasdesigned to use fuel oil but an investment of about US$0.2 mn is neededto put the equipment already in place into operating condition. Evenassuming that maintenance costs are about 50% higher than in the case ofgas oil use, savings from conversion based on comparative c.i.f. importcost 201 would be about US$0.6 mn a year at present capacity utilization,reaching US$1.1 mn a year with full plant capacity. However, to avoid
20/ I.e., US$270.-/MT for gas oil and US$200.-/MT for fuel oil.
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technical failures, it is imperative that (a) SONELEC's staff be tho-roughly trained in operating fuel oil consuming equipment, (b) technicalstandards and maintenance schedules be strictly adhered to, and (c) theinitial critical phases of this operation be supervised by expatriateexperts. Gaining experience in operating fuel oil consuming equipment isof long-term importance for SONELEC and the electricity subsector as awhole. Technical assistance to SONELEC for fuel conversion is to beincluded in the rehabilitation of the Nouadhibou system financed by EIB.
Coordination with Self-Producers
4.8 To enhance supply security and operational efficiency, SONELECand the more important self-producers need to coordinate their electri-city operations and investment more closely. In Nouadhibou, SONELECalready supplies electricity to SNIM's mini steel plant and the townshipof Cansado. A formal agreement between SONELEC and SNIM concluded in1983 envisages cooperation in training, spare parts supply, and temporaryassistance by SNIM in financing SONELEC's fuel purchases. There is addi-tional scope for electricity exchange between SONELEC and self-producers.For example, in Nouadhibou, a strong case exists for SONELEC supplyingelectricity to SNIM's Point Central operations. SNIM's generating plantis old, less fuel efficient, and would have to be replaced soon in theabsence of alternative supply arrangements. Preserving SNIM's generatorsas reserve units would allow postponement of the expansion eventuallyrequired for the combined systems. SNIM acknowledges the mutual advan-tages of this option but has certain reservations because (a) reliablepower supplies essential for its operations have not been assured bySONELEC in the past, and (b) SONELEC's present industrial tariff is about20-25% higher than SNIM's generating cost. To enhance system reli-ability, the transmission line between the SONELEC and SNIM systems needsto be reinforced. This would require expenditures of about UM 40 million(US$0.7 mn) which is low considering the benefits from this investmentand the much higher cost of replacing SNIM's power plant. A loweredblock tariff for SKIM (based on lower short-run marginal cost and con-sistent with the higher utilization factor implied in supplying SNIM)would bring the purchase price of electricity into line with SNIM's owncost.
4.9 In Nouakchott, SONELEC will be short of capacity in 1985-86even with rehabilitation of its two existing plants. Among the variousself-producers, the SOMIS sugar refinery, the cement packaging plant andthe radio station could contribute to securing electricity supplies butthis would call for an investment of about US$0.3 mn to rehabilitatetheir generating capacity. SOMIS already has made 1.3 MW available toSONELEC. The other self-producers have agreed in principle to supplyelectricity to SONELEC, but have declined to participate in financing thenecessary investment. The issue of the price of electricity to be paidto the self-producers also would need to be resolved. The mission recomi-mends that SONELEC, assisted by the Energy Directorate, negotiate withpertinent self-producers in Nouakchott and Nouadhibou the terms andconditions of power exchanges and financing the necessary investment.
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Once agreement is reached, SONELEC should start project preparation with-out delay.
4.10 SONELEC also envisages taking charge of electricity distribu-tion to residential customers in the systems owned by SNIM in Zouerate.Given its scarce managerial resources, SONELEC should concentrate in theimmediate future on higher priority projects. However, it should appriseitself of the specific requirements involved to be ready to assume theabove mentioned tasks once its organization is sufficiently strengthened.
Electricity Planning and Project Analysis
4.11 There is no electricity master plan to indicate capacity andenergy requirements over the medium to long term. Likewise, there is noplanning or project evaluation capacity at SONELEC or elsewhere in thesubsector. SONELEC in 1983 prepared projections of electricity growthand related investment requirements for its own network but it is notclear how investments relate to future electricity demand and capacityneeds. 21/ The preparation of a least-cost expansion program for SONELECand the subsector as a whole requires a ranking of investment prioritiesand analysis of investment alternatives. However, SONELEC's limitedvolume of operations at the moment does not warrant the establishment ofa separate planning and project evaluation department. Therefore, thepreparation of expansion programs and project feasibility studies shouldbe left to outside consultants, although SONELEC would need some in-houseplanning and project evaluation capacity to monitor the consultants,work. At least one planning specialist and one project analyst thereforeshould be added to SONELEC's staff. Options to strengthen SONELEC'splanning and project analysis capacity should be evaluated in the contextof the ongoing parastatal rehabilitation project.
Training Requirements
4.12 SONELEC has considerable training needs. At present only about30 of nearly 560 staff have professional backgrounds. To alleviate themost pressing shortcomings, SNIM and a Government-owned commercial banktemporarily made professional staff of their own available to SONELEC.In addition, the IDA rehabilitation project will provide training forSONELEC staff in operational and financial matters. On a permanent basis,SONELEC needs to train specialists on-the-job using outside experts onshort-term assignments. Also, better use should be made of professional
21/ SONELEC projects increases in electricity demand in 1984-93 toaverage 10% p.a. and required investment to total about US$70 mn(1983 prices).
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training facilities in the Region such as the Higher Interafrican Schoolfor Electricity (ESIE) in Abidjan (Ivory Coast). 22/
4.13 For its technical staff, SONELEC runs a small training centerfinanced through French bilateral assistance. The center has facilitiesfor about 20 trainees and offers a quality program but it cannot copewith demand. To make this program more effective, SONELEC should(a) identify its training requirements more clearly, (b) establish atraining unit as part of its administrative services, and (c) coordinatethe activities of its center with those of SNIM's much larger facility tooffer trainees a certain specialization (e.g. SONELEC could concentrateon electricity-reLated training and SNIM on mechanics-related training).Once SONELEC's center is expanded, it also could train staff of otherelectricity self-producers.
Investment Strategy, 1984-95
4.14 Even with considerable expansion, Mauritania's electricityrequirements over the foreseeable future will remain relatively limitedand geographically dispersed. This will limit supply options to gen-eration based on diesel units which offer more flexibility and lowercosts than alternative solutions based on steam units using either fueloil or coal. Mini-hydro generation might be feasible in a few cases buthas no significance on a national level. Interconnection with Senegal isa remote option at least over the medium term due to the prevalence ofsmall and far-apart load centers on both sides of the border. However,an electricity sector master plan is being prepared in Senegal and inter-connection might become feasible depending on how Senegal's systemdevelops. Therefore, any plans which bear on future electricity demandin the Senegal River Valley should be carefully evaluated with respect totheir impact on the feasibility of interconnection. The Government isconsidering eventually receiving hydropower from the Manantali schemenear the Mali/Mauritania/Senegal border, should this scheme also provideelectricity. (The multi-national institution OMVS has commissioned anelectricity demand study for Mauritania, Mali and Senegal which will becompleted after 1985). However, supplies from Manantali only would beviable for transmission of large blocks of electricity in excess ofMauritania's needs before the end of this century.
4.15 Short Term. As a matter of urgency, SONELEC plans for theNouakchott system to (a) rehabilitate the two generating plants, reestab-lishing their effective capacity at about 8 MW, and (b) interconnect thepublic grid with industrial self-producers. Rehabilitation of these pro-ducers' generating capacity also would be necessary. In the Nouadhibousystem, SONELEC needs to refurbish its plant's fourth generator,
22/ Only one of ESIE's 140 students in 1983 was from Mauritania.
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repLenish spare parts, and convert to fuel oil. In addition, the distri-bution network needs to be rehabilitated and the SONELEC and SNIM systemsinterconnected. SNIM on its part needs to rehabilitate its Point Centralplant to ensure sufficient firm capacity prior to any interconnectionwith SONELEC, and to keep its generators on standby for the combinedsystem.
a/ Excluding portion sold to SNIM-Point Central.b/ Supplied by SONELEC from 1986 onwards.c/ Distributed by SONELEC and included in "Smaller Centers & Waterworks".d/ AOS. For TBS, 43.5 MW.e/ AOS. For TBS, 33.1 MW.
4.16 Medium-to-Longer Term. SONELEC plans to commission a new 28-MWfuel oil-based plant for Nouakchott by early 1987. 23/ Following rehabi-litation of the two existing Nouakchott plants, the new plant would stillbe required but its full capacity, chosen to substantially reduce therisk of power outages in the system, would not be needed until the early1990s even if older units are retired. The implied overcapacity wouldresult in excessive capital and operating costs. Initially installing21 MW (3 x 7 MW) and adding a fourth unit only when needed would allowpresent value savings of US$2.7-3.7 mn on capital costs alone. Themission therefore recommends that the new plant's initial capacity bereduced to 21 MW and a multi-year option from the supplier be obtainedfor the fourth unit. 24/ Following the addition of this fourth unit, nofurther capacity expansion in the Nouakchott system seems to be requireduntil after 1995. The Nouadhibou system, on the other hand, would needsignificant additional generating capacity, particularly if SNIM's ministeel plant remains in operation. Electrification of a number of medium-sized towns also is likely by the early to mid-1990s, adding perhaps 2-3MW to installed capacity. In this context, the importance of electricitysupplies for future agricultural development in the Senegal River Valleyneeds to be carefully evaluated.
4.17 SONELEC also plans to substantially expand the Nouakchott dis-tribution system. The mission recommends that this be postponed untilthe commissioning of the new generating plant, at which time hopefullythe necessary technical and institutional capacity e:ists to supply addi-tional customers and to secure payments by these customers. Minor dis-tribution investment would be associated with medium-town electrificationschemes.
4.18 Based on the expansion program outlined above, the costs of1984-95 investment together with studies and technical assistance areprojected to be about US$76 mn under the Action-Oriented Scenario andUS$85 mn under the Trend-Based Scenario (1983 prices) almost all onSONELEC's account. Thus far, financing of about US$42 inn has been ob-tained to rehabilitate one of SONELEC's Nouakchott plants and for the newNouakchott plant and related facilities. Even if SONELEC's financialperformance improves to the extent that 20% of its investment is coveredthrough financial surpluses, about US$19-26 mn would remain to befinanced depending on the scenario chosen. Of this amount, highestpriority should be given to mobilizing funds for interconnectingSONELEC's Nouadhibou system with SNIM (about US$0.7 mn).
23/ Associated investment includes extension of the Nouakchottdistribution system and construction of a 70 km transmission line tothe Idini water works.
24/ This recommendation has been accepted by the Government.
SNIM Nouadhibou System 2.0 2.0Rehabilitation of ExistingGeneration Plant 2.0 2.0
Total 52.1 23.5 71.6 13.3
Source: SONELEC; mission estimates.
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V. PETROLEUM
Introduction
5.1 Effective management of the petroleum subsector will be crucialfor securing energy supplies at least cost to the modern economy. Toachieve this, several wide-ranging issues need to be resolved. First,the petroleum product marketing system needs to be strengthened and mademore flexible. Second, a solution has to be found to the problem posedby the Nouadhibou refinery, whose operation is not economically viable.Third, the Covernment's hydrocarbon exploration promotion program needsto be vigorously continued, given the importance of even a small dis-covery by international standards for the country's future energy supply.
Petroleum Product Marketing
Institutional Constraints
5.2 The state-owned company SMCPP holds an import monopoly onpetroleum products and accounts for about 80% of domestic distributionoutside SNIM, which imports directly. The Mauritanian subsidiaries of BPand Mobil share the rest of the market and are important in marketingspecial products such as butane, aviation fuels, and Ijbricants. Storagefor crude and petroleum products totals some 0.33 mn m and is managed byMEPP, SNIM and SOMIR. While Nouadhibou area ports can accomodate vesselsof up to 30,000 DWT, available storage limits vessels to 15,000 DWT, re-sulting in relatively high ocean freight costs. Supplies to Nouakchottand occasionally, the MEPP terminal in Nouadhibou have been transshippedin 4,000-6,000 DWT coastal tankers from SNIM's Point Central terminal,the main receiving point. Meanwhile, SOMIRts depots are providing stor-age capacity. Petroleum product supplies generally are adequate in themajor consumption centers but are somewhat irregular in other locations.
5.3 There are a number of shortcomings in petroleum product market-ing, most of them related to SMCPP's and MEPP's operational ineffici-encies and financial weaknesses. SMCPP's administrative staff of about250 is excessive for the product volumes handled. SMCPP has incurredlosses since its inception which increased to nearly US$2 mn by 1984.Its cash flow position is weakened by substantial arrears of large-volumeconsumers. In some instances, the lack of available financing hasprevented imports from being effected on time. Logistical bottleneckslimit the volumes handled and raise the cost of products. While a moreeffective management has recently been appointed, SMCPP will need assis-tance to strengthen virtually all of its activities and to take up oppor-tunities for inter-fuel substitution.
Nouadhibou and Point Central 316.8!AEEP (3.9)SNIIi (17.9)SOMIR (295.0)
Zouerate 3.0SNIM (3.0)
Source: Energy Directorate; SMCPP; MEPP; SOMIR; SNIM.
Butane
5.4 While the BP-managed butane marketing operation in Nouadhibouand northern Mauritania is reasonably efficient, SMCPP's marketing
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arrangements for Nouakchott and southern Mauritania are inadequate. 25/By installing a storage and bottling terminal in Nouakchott and trans-porting butane in bulk by specialized trucks from Dakar, delivery costscould be substantially reduced. Road transport would be cheaper thanmarine supply because of the relatively small volumes and short distancesinvolved. With the cost of a storage terminal estimated at about US$0.4mn, amortization, capital recovery and operating costs based on a 1,500M.T./year throughput should total about US$90/M.T. Including freightDakar-Nouakchott estimated at US$60/M.T., supply costs of the proposedoption compare to those currently prevailing as follows:
a/ Of the "transport cost" for cylinders from Dakar-Nouakchott, about one-third consists of bottle handling and other related costs. Purefreight is estimated 'o be about 130 USs/M.T.
b/ A lower f.o.b. price is assumed for bulk purchase in truck vs. bottlesas Dakar saves the cost of bottling.
c/ Most of the handling costs already should be included in the bottlingplant costs.
Source: SMCPP; mission estimates.
5.5 A bottling installation supplied through road tankers thusshould save about US$130/M.T in supply costs. The pay back period ofthis investment would be abouc three years at present butane consumptionlevels and correspondingly shorter at higher capacity utilization. 26/To accomodate the envisaged increases in butane consumption, supplies toregional consumption centers need to be improved and terminal capacityeventually be expanded. SMCPP would require technical assistance toorganize and operate its terminal and expanded delivery system.
25/ Butane is transported in cylinders from the Dakar refinery, whichresults in high ex-delivery costs of US$543/M.T., compared toUS$240/M.T. ex-refinery.
26/ SMCPP plans to intall a butane bottling plant, for marine supply,with an initial capacity of 5,000 m , and which is to be put intoservice around 1987.
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Fuel Oil
5.6 Fuel oil consumption in Mauritania will soon resume. With therequirements in electricity generation, industry and, possibly, mining,consumption may total over 0.1 mn M.T./year by the early 1990s, which atpresent neither SMCPP nor MEEP is equipped to handle. SMCPP would needto prepare the necessary infrastructure and to establish proper procure-ment procedures. In Nouakchott, separate loading and additional storagecapacity of 3,000-5,000 m3 for fuel oil would have to be provided withintwo years or so, which are envisaged by SMCPP as part of its storageexpansion project for Nouakchott. In Nouadhibou, there would -iot be anyneed for additional storage if the SOMIR tankage could be used as a re-ceiving terminal. Alternatively, SNIMts Point Central terminal could beconverted to store fuel oil as SNIM's gas oil requirements diminish.
Fuel Supply to the Fisheries Sector
5.7 There seems to be considerable potential for increasing fuelsales to the fisheries sector in Nouadhibou. Gas oil deliveries to thefishing fleet by MEPP, 21,000 M.T. in 1983, represent only about 14% ofthe estimated fuel consumption by Mauritanian-owned/chartered vessels, asmost of the fuel supplies are obtained either at Las Palmas (CanaryIslands) or from mother ships. The Government has required fishingvessels operating in Mauritanian waters to obtain their supplies locally,but this policy has proven unenforceable because of the lack of infra-structure and facilities. The central area of the Nouadhibou port iscongested, and the location and state of MEPP's storage and pumpingfacilities limit fueling capacity to about 30-35,000 M.T./year. SMCPPtherefore is considering the following options to improve bunkeringfacilities at Nouadhibou:
(a) improving and expanding MEPP's existing installation includingconnecting it by product pipeline with the SOMIR depot;
(b) mooring a refuelling barge in the harbor; and
(c) extending SOMIR's dock facilities.
5.8 Given its location and state, MEPP's existing installationcould hardly be adopted t_ serve as an efficient, high volume bunkeringfacility. As regards refueling barges, their use might not be justified,as the Nouadhibou harbor area as a whole is not nearly as rongested asthe large ports where barges are typically employed. (A barge wouldprobably cost about US$1 mn and, if self-propelled, would censume a con-siderable amount of fuel in fueling operations). Therefore, a smallfinger pier adjacent to the existing SOMIR dock may be the best option.It should not cost more than US$0.5 mn provided SOMIR lines and tanks canbe utilized. One potential disiadvantage might be fishing vessel conges-tion and interference with unloading of petroleum products in the eventthat the SOMIR tankage and jetty were used as the main product receivingand loading terminal.
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5.9 With regard to price competitiveness, the price of gas oilcharged to fishing vessels in Nouadhibou (US$350/M.T. equivalent at thepresent exchange rate) is much higher than the current price of marinediesel quoted for Las Palmas, i.e. US$264/M.T., largely because ofMauritania's inflated c.i.f. price structure (para. 2.6). It should bepossible to sell gas oil for little more than US$300/M.T., even if aUS$5/M.T. offshore reseller margin is added to the calculated US$264/M.T.c.i.f. Nouadhibou cost. A larger bunkering operation also would elimi-nate double handling and thereby reduce terminal costs. Two additionalfactors could make the Nouadhibou bunkering operation competitive withLas Palmas:
(a) avoidance of Las Palmas diversion costs, estimated atUS$30/M.T. of fuel purchased; and
(b) the option of switching from gas oil to less expensive marinediesel (the highest quality fuel required for medium-speedengines).
5.10 Nouadhibou bunkering probably could be made more competitivethrough a larger, more efficient operation which would reduce therequired terminal/bunkering margin. A further option would be to provideeven heavier, lower-quality fuel. However, the growth of fuel sales tothe fisheries sector ultimately will depend on Nouadhibou's developmentas a regional fisheries center with adequate infrastructure and suppliesother than fuel required by the fleet.
.5.11 In view of the importance of improving petroleum product mar-keting, a study under the IDA Petroleum Exploration Promotion Projectwill examine the options related to the supply of butane, fuel oil andbunker fuel for the fishing fleet, as well as policy, institutional, andinvestment requirements for a more flexible marketing system (Annex 23).
Petroleum Refining
5.12 One of the most difficult short-term sector issues concerns theproblem posed by the Nouadhibou refinery. This 1 mn tpy hydroskimmingrefinery designed to process very light crude is wholly owned by theGovernment and managed by SOMIR. It was designed before 1973, con-structed during 1976-78 and has operated intermittently in 1982-83 whenit processed some 0.19 mn M.T. of 440 API Algerian Hassi Messaud crude.Construction and start-up costs of about US$120 mn were entirely loan-financed. The refinery has a staff of about 180 including a dozenexpatriate experts. Its energy consumption is high compared to mostrefineries of similar complexity and configuration, i.e., 7-8Z of crudeinput compared to 4-5% for most refinies designed after 1973. To resumeoperations, SOMIR would need about US$30-40 un in working capital. TheGovernment has tried unsuccessfully to obtain financing and is consid-ering inviting capital participation by foreign investors in the refin-ery. To make the plant operation reasonably reliable, an additional
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US$6 mn investment for electricity generation, tankage, and basic safetyinstallations would be needed and about US$0.4 mn would have to be spentto train local staff.
5.13 Because the refinery's minimum operable throughput far exceedsdomestic consumption, the bulk of its output would have to be exported.This poses formidable problems because:
(a) there is substantial refining overcapacity worldwide -- esti-mated at 16 mn B/D in early 1984 -- and particularly in WestAfrica, much of which is in modern refineries close to majormarkets. Depressed margins aLlow only the most efficientrefineries and those with particular locational advantages(i.e. access to cheap crude or isolated markets) to operateprofitably;
(b) refining in Mauritania is expensive and distant from major con-sumption centers, which is bound to weaken its competitiveposition; and
(c) SOMIR is inexperienced in the international petroleum trade.
5.14 The key determinant of refining viability is the prevailinginternational price relationship between crude oil and products. Ananalysis for 1981-83 indicates that hydroskimming refineries in majorworld refining centers would have suffered a US$2-3/B negative margin(i.e. the difference between crude price and composite realization price)based on spot prices for products and official prices for Hassi Messaudand similar crudes. The Nouadhibou refinery would have sustained anegative margin of a similar magnitude even if all products were sold onlocal and regional export markets at higher prices (i.e., Rotterdamprices plus freight) because the advantage of this higher price would bewiped out by the refinery's low energy efficiency. Adding operatingcosts other than energy (slightly over US$1/B at 90% capacity utiliza-tion) the refinery wouLd have incurred an operating loss of US$3-4/B inthe best of circumstances. Refinery economics would improve somewhatthrough fuel sales to the fisheries sector, especially sales of marinediesel with a relatively high fuel oil content. However, even assumingfuel deliveries of about 0.15 mn M.T./year to the fishing sector and 90%refining capacity utilization, there would still be a negative refiningmargin of about Uq$-.30IB and an operating loss of US$1.40/B beforeamortization and financial charges.
5.15 Another important consideration is the cost of meeting domesticpetroleum product requirements through imports compared to the costs aflocal refining. Under present conditions, it is about US$11/B cheaper tomeet domestic requirements in Mauritania through imports. The inherentloss of economic efficier_y associated with domestic refining would bereflected in financial deficits for the public sector unless consumerswere made to pay the full difference between refining and c.i.f. importcosts. Ex-refinery prices charged to domestic consumers would have to be20-25% above c.i.f. import prices to allow the refinery to break even
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financially. However, since SNIM is guaranteed the right to purchasepetroleum products at international c.i.f. prices, other domestic con-sumers would have to bear prices even higher than those indicated.
5.16 With worldwide overcapacity likely to persist, there is littleprospect for improvement in refining margins. For refining in Mauritaniato become economically viable would require a custom refining arrangementwith a regional crude producer/exporter who is short of refining capacityand therefore obtains product supplies either through processing abroador straight product imports. Such an agreement with Nigeria, a netimporter of refining services, offers perhaps the best hope for refiningviability. Nigerian Bonny Light crude is usable at the Nouadhibourefinery with little loss of product quality and would give good gas oilyields (for which a substantial market exists in Nigeria). However,there are bound to be other coastal refineries in West Africa competingfor the same arrangement. SOMIR management has approached the Nigerianson this issue but as yet no agreements have been reached. More recently,discussions with Algeria have taken place with the aim of securing crudeshipments from that country at prices below international levels, as partof a financial aid package. While such an arrangement could help SOMIRfinancially, it would not improve the economic determinants of refiningin Mauritania.
5.17 Barring the early conclusion of a custom refining agreement,the mission concludes that it is riot economic to put the refinery intooperation. On the other hand, little could be gained through scrappingthe refinery. 27/ The existing facilities other than the processingunits could be used productively even in the absence of refining: theterminal and tankage would provide needed storage and loading capacityfor fuelling the fishing fleet, and the electricity generators couldprovide back-up to the Nouadhibou public grid, which would save invest-ment expenditures. Revenues from storage operations would cover moth-balling costs (estimated at US$1.0 mn initially and some US$0.2 mn peryear thereafter) and, possibly, a minor share of financial charges asso-ciated with refinery construction. The mission therefore recommends that(a) the processing units be decommissioned and properly mothballed,(b) the storage tanks, jetty and ancillary facilities be retained as aproduct receiving and shipping terminal, (c) the electricity generatorsbe retained as reserve units for the public grid, and (d) SOMIR's staffbe reduced to the level needed to operate the facilities in service andmaintain the mothballed units. Refinery operations should not be under-taken unless market developments make it economic to do so.
l
27/ The scrap value of its processing units after costs of demolitionwould not be much more than US$3 mn.
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Petroleum Exploration
5.18 Mauritania's hydrocarbon potential is rated as fair. Explora-tory activity in the late 1960s and early 1970s was concentrated in thecountry's two major sedimentary basins: the 0.2 million sq. km. CoastalBasin, and the inland Taoudeni Basin shared with Mali which extends 0.6million sq. km. in Mauritania alone. In the offshore, 22,000 km ofseismic lines were shot and ten wells drilled which had minor oil and gasshows. Two wells drilled in the Taoudeni Basin showed had very weak gasshows and thus, the results were not encouraging to continueexploration.
5.19 In the absence of any other readily exploitable energy re-sources, the Government attaches high priority to hydrocarbon explorationand to attracting foreign companies for this purpose. Assisted by theIDA petroleum exploration promotion project, it has taken a systematicapproach to exploration by: (a) collating and integrating existinggeological and geophysical data; (b) reviewing and revising its hydro-carbon legislation and contractual framework; and (c) promoting on anorderly basis exploration blocks to the industry. A new Hydrocarbon Lswsoon will be enacted. Conditions regarding work commitments, Governmentproduction sharing, and taxation are attractive to the companies whilesafeguarding the country's interests. To encourage exploration, produc-tion sharing arrangements are being modified for deep water and naturalgas deposits. The Hydrocarbon Division within the Ministry of Mines andIndustry, which is in charge of the Government's exploration program, isbeing strengthened under the IDA project. The Division staff has active-ly participated in the interpretation of recent exploration results.
5.20 The Government's efforts to promote exploration have beenreasonably successful. Three exploration contracts were concluded (withMobil, Oxoco and Arco) covering four blocks in the southern portion ofthe coastal basin. After completing some 4,600 line-km of seismic, Mobildrilled one well in 1984 to test the Coppolani structure. Based on theevaluation of the drilling results, that company decided to withdraw fromits two blocks. Oxoco and Arco are carrying out exploration work includ-ing seismic that might lead to drilling if promising leads are iden-tified. While the Government has had preliminary contacts with inter-ested companies, seven blocks out of nine in the coastal basin remainavailable for bids. In particular, little interest has been taken in thenorthern portion of the Coastal Basin, which is deeper and thereforecostlier to explore, or in the Taoudeni Basin which companies would haveconsidered if drilling in the Malian portion had been successful.
5.21 Further efforts are needed to attract foreign companies througha continuation of the Government's exploration promotion campaign. Thepresent or possibly a follow-up IDA project could provide the mechanismfor this. Given the still difficult international exploration environ-ment, such a campaign might have to await the results of ongoing acti-vities, expected not before late 1985 or 1986. In the meantime, theGovernment's exploration consultants are undertaking a systematic geolo-
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gical review of the coastal basin, to be completed by end-1985, in thecontext of the ongoing IDA project. Subsequently, based on the resultsof the work completed by then, the Government should prepare its strategyand a comprehensive program for attracting companies to explore theremaining prospective areas, for this purpose it should retain flexi-bility in the conditions offered to new investors, in the light ofexploration results and the evolution of host Covernment-contractorrelationships worldwide.
Investment Strategy, 1984-95
5.22 Petroleum-related investment during 1975-83 was substantial andtotalled at least US$153 mn (current prices) for the public sector aLone.Most was spent on construction of the refinery (US$149 mn includinginterest during construction of nearly US$20 mn). Very little investmentwas made in petroleum product marketing, partly because this activity wasundergoing major institutional changes. Government expenditure in explo-ration totalled about US$1 mn during 1981-83 and was financed through theIDA Petroleum Exploration Promotion project. Foreign companies spent atleast another US$40 mn which included an offshore well drilled by Seagapin 1981 and seismic work by Mobil in 1983.
5.23 Future options for improving and expanding marketing facilitiesentail comparatively limited expenditures. Required investments in mar-keting facilities for butane and marine diesel are projected around US$4mn (1983 prices) depending on the alternative chosen. This includesexpansion in later years once volumes outstrip available capacities.Available alternatives and possible sources of financing still need to beanalyzed in more detail, which will be the subject of the IDA-financedstudy on petroleum product marketing.
5.24 SOMIR plans to invest an additional US$6 mn in refining forwater desalination and LPG recuperation for which it is seeking financ-ing. Given the uncertainties surrounding refining viability, the missionrecommends that this investment be undertaken only if and when refiningoperations become economically viable. In that case, the refinery wouldneed to be put into full operating condition first, which would involveadditional expenditures of about US$6 mn.
5.25 Only nominal Government expenditure on petroleum exploration isexpected to take place in the future. The Government may participatedirectly in first-phase geophysical surveys if this is considered neces-sary for attracting foreign companies, but these companies are expectedto continue to carry out seismic surveys and exploratory drilling. 28/
28/ Government participation in field development in case of commercialdiscoveries is conjecturaL at this stage and has been disregarded.
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Table 5.3: PROJECTED PUBLIC SECTOR PETROLEUM-RELATEDINVESTMENT, 1984-95 a/(1983 USS millions)
a/ Identical for Action-Oriented and Trend-Based Scenarios.
b/ Contingent on refining viability.
Source: Mining and Geology Directorate, Ministry of Industry andMines; SMCPP; SOMIR; mission estimates.
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VI. RENENABLE ENERGY
Introduction
6.1 Given Mauritania's scarce conventional energy resources, renew-able energy, especially wind and solar, could be significant for meetinglocal requirements in the future. However, their development has beenheld back by the absence of a Government strategy and an institutionalinfrastructure, lack of local capability to test, produce, disseminate,and service suitable equipment, and high equipment costs. Externalassistance provided through demonstration projects has been uncoordinatedand often has not responded to real priorities. Inappropriate equipmentwas installed (e.g., thermodynamic solar pumps which are technicallycomplicated and ineffective and whose use should therefore be discon-tinued). Maintenance provisions have been inadequate, and the involve-ment and training of potential local counterparts has been neglected.
6.2 Of the wind equipment installed in recent years, a number ofturbines for measurements have collapsed and no recorded data are avail-able. The Humblot water pumping windmill of the World Lutheran Federa-tion (FLM) in Barkeol apparently has operated well since its installationin 1981. More recently, two water-pumping windmills have been installednear Rosso by the Netherlands ConsuLtancy Services/Wind Energy for Devel-oping Countries, as part of a project carried out by SONADER. Withregard to solar application, the solar stills installed by CARITAS in thefishing villages south of Nouadhibou seem to function wall, but most ofthe solar pumps have broken down. A solar water heater at a hotel inNouakchott operated satisfactorily for nearly a decade but has recentlybroken down and awaits repair. Some solar drying of gypsum is performedin a U.N.-financed project.
Development Requirements
6.3 The Government has attached increasing importance to renewableenergy development. It has established the National Unit for AlternateEnergy (CNEA) with technical and financial assistance from the RegionalSolar Energy Center CRES in Bamako (Mali) and it seeks additional ex-ternal assistance. However, inadequate coordination among governmental,semi-public and private institutions, together with the absence of costand market analysis, have hampered renewable energy development and makeappropriate planning difficult. There are several requirements for over-coming these shortcomings, as analyzed below:
Realistic Objectives
6.4 The Government should es:ablish realistic objectives forrenewable energy development, including a priority ranking of availableoptions based on their comparative costs and benefits. Accurate
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measurements are essential for an appropriate assessment of renewableenergy options. Wind and solar data are recorded by ASECNA's 13 meteoro-logical stations throughout the country. 29/ AGRh i.AT also operates anumber of stations where wind speeds are measured for agricultural pur-poses. More accurate predictions of the energy output of wind and solarinstallations require improved measurements and detailed data analysis.In particular, more reliable data on solar radiation are needed whichtake into account the fractional distribution between direct and diffuseradiation. ASECNA therefore should develop the capability to producesolar data suitable for solar energy applications.
6.5 Among wind energy options, wind-based electricity generationbeems feasible for Nouadhibou, where high wind speeds are combined with asystem load which can fully absorb any wind generated electricity. Theelectrical demand ensures a minimum load of about 3 MW. A 60 kW windturbine in Nouadhibou could generate about 0.2 GWh/year. An investmentof 8 million UM per turbine (US$0.1 mn) would imply generation costs ofabout 9 UM (USilO.9) per kWh, which is less than for diesel units in thatsystem. The investment for 20 units estimated to total US$2 mn would berecovered in about three years. A wind farm with a total capacity of1.2 MW would not pose large problems of electricity absorption forSONELEC's Nouadhibou grid 30/ and would save around 1,100 M.T. of fuel ayear, or 5.5% of SONELEC's total consumption. More detailed studies areneeded for site selection, grid connection, diesel control strategies andmaintenance organization, and to assess corrosion problems and protectionmeasures.
6.6 The preconditions for wind-driven irrigation pumps seem toexist in the Senegal River Valley where the wind regime is reasonable andthe soil of good quality. The water table in the region around Rossovaries between 4 and 7 meters below ground-level. The lack of wells andpumping equipment is a limiting factor for agriculture. At present about5,000 ha are brought under cultivation, in perimeters of about 20 ha. At7 meter head, a 5 meter diameter windmill in the Rosso region would irri-gate 2-3 ha each at a cost for water of USC4-5/m3 in the case of only onecrop, and correspondingly less with double cropping. The resulting fuelsavings could be about 0.6 M.T./year per diesel pump replaced. Wind-based irrigation of small perimeters thus seems to be a promising optionto supplement the present irrigation schemes based on diesel pumps.
6.7 The most attractive solar application at present is in waterheating for urban areas and, possibly, industrial establishments.Because of high investment costs, solar water pumping presently is only
29/ Nouakchott, Nouadhibou, Nema, Aioun el Atrouss, Kiffa, Kaedi, Rosso,Boutilimit, Tidjikja, Akjoujt, Atar, F'Derick, Bir Moghrein.
30/ The wind generating capacity of 1.2 MW would need at least 5 MW ofcapacity on line at all times to be absorbed. This condition is metin the Nauadhibou system.
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attractive for low head, low flow applications where diesel-driven pumpsare too expensive to operate. However, cost reductions expected over themedium term and the favorable results of the economic comparison withother pumping options as indicated in the UNDP/World Bank study on solarpumps merit a study of the irrigation potential of solar pumps in theSenegal River Valley. One minor application might be solar stilis forsupplying potable water, which are well suited for isolated sedentarycommunities where seawater or brackish water is plentiful. However,their introduction on a larger scale needs to await the results of anongoing project (para. 6.2). The scope for solar telecommunicationapplications is small as the present equipment with engine-powered gen-erators is quite reliable. No solar lighting system is reported to befunctioning in Mauritania. Given the interest in these systems in otherAfrican countries, it seems worthwhile to investigate their possibleapplications. One specific yet potentialLy important application issolar cooling of medicine. An inventory of the needs of Mauritania'srural hospitals could reveaL possibilities for its introduction.
Strengthening Institutions
6.8 CNEA has a potentially important role to play in renewableenergy development as well as in woodfuel conservation and substitu-tion. CNEA at present has no staff of its own although plans are to hiretwo engineers and several technicians. Its 1984 budget of UM33 mn(US$0.6 mn) is largely financed through a special fuel tax earmarked foralternate energy development and grants from CRES. CNEA's present respon-sibilities, which include research into renewable energy sources, opera-tion and maintenance of renewable energy equipment, and participation inproduction and saLe of renewable energy equipment, are too extensive andneed to be better focused. For this purpose as well as for designing arenewable energy strategy, a balance has to be struck between the desir-ability of renewable energy development and the more urgent requirementsrelated to conventional energy. It should be emphasized that (a) renew-able energy's contribution to meeting future energy demand is likely tobe small even in the Mauritanian context and therefore other energy formswill have first claim on scarce resources; and (b) the organization ofproduction, marketing, and use of renewable energy equipment should beleft to the private and communal sectors. Within these constraints andcontingent on an in-depth assessment of renewable energy priorities,CNEA's role would be rmost useful in (a) attracting external assistanceand channelling it toward producers and users of renewable energy equip-ment; (b) elementary testing of prototypes, including improved stoves andsolar water heaters, and monitoring the performance of solar and windpumps, and (c) carrying out needs assessments. Cooperation should beestablished with DPN and ADEREM on stoves, with SONELEC and SNIM on solarwater heaters and wind turbines, and with SONADER on wind and solarpumps. For any local production of renewable energy equipment, CNEA'sparticipation ought to be limited to the start-up phase.
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Developing Delivery Systems
6.9 The successful promotion of renewable energy applications willrequire a wide spectrum of capabilities such as for: operation, main-tenance and repair; site selection; needs assessment; and equipment test-ing, importation, manufacture, distribution, and design. SONADER andCNEA should be responsible for servicing windpumps. At a later stagewhen more windpumps are to be installed, a local workshop could beengaged in assembly, maintenance and repair. SONELEC should develop thecapability to operate and service electricity generating wind turbines.CNEA, SONELEC and SNIM should jointly organize the local assembly, in-stallation and dissemination of solar water heaters.
6.10 To create the managerial and technical expertise for renew-able energy development, local counterparts should be involved in allforeign-assisted pilot projects. Donors should be encouraged to developindividual training programs which emphasize maintenance and repair.Mauritanian staff could be trained at regional facilities such as thewind energy installations in Cape Verde. Existing technical educationestablishments like the Technical College (LCT), the Center for HigherStudies (CEST) and the Center for Profesjional Formation and Perfection(CFPP) should include subjects related to renewable energy in theircurricula. The support of CRES and external donors to organize thistraining will be needed.
Recommendations
6.11 To prepare a realistic, well-focused renewable energy program,the mission recommends the following activities:
(a) improving measurements. To provide solar radiation data thataccurately predicts the energy output Af installations, theexisting pyranometers should be repaired, the measuring networkexpanded, and the energy measurements related to existing sun-shine data. To improve the interpretation of wind data, auto-matic wind recording equipment should be installed at suitablelocations and data compilation should be modified to facilitatetheir use for wind energy purposes. ASECNA should be in chargeof this activity in coordination with AGRHYMET;
(b) evaluating the feasibility of electricity-generating wind tur-bines for the Nouadhibou system, including the installation ofa small wind farm and protection of equipment against corro-sion;
(c) evaluating the feasibility of introducing irrigation wind pumpsin the Senegal River Valley;
(d) developing solar water heating in hotels, hospitals and otherofficial buildings, in residential areas with a concentrationof hot water consumption and, possibly, in industrial enter-prises; and
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(e) incorporating the passive use of solar energy in buildingdesigns to reduce air conditioning load. The Government shouldtake the lead by having new buildings designed on these prin-ciples and, possibly, by having existing buildings retrofitted.
6.12 These activities should be analyzed in more retail through astudy on the utilization of renewable energy resources, which shouldinclude evaluation of technical and economic aspects, managerial andorganizational issues, and CNEA's institutional and technical assistancerequirements (Annex 24).
Investment Strategy, 1984-95
6.13 Future expenditure on wind and solar energy largely depends onthe resolution of the issues indicated above. However, the mission proj-ects that there will be significant expenditure on wind-based electricitygeneration, solar and/or wind water pumping, and solar water heating, aswell as on studies and other technical assistance, especially under theAction-Oriented Scenario.
Table 6.1: PROJECTED DEVELOPMENT EXPENDITURE ON WINDAND SOLAR ENERGY, 1984-95
(1983 USS millions)
Actlion-Oriented Trend-BasedScenario Scenario
Wind-Based Power Generation 2.0 1.0Solar and/or Wind Pumps 0.5 0.2Solar Water Heating 5.0 2.0Stud;es, Pilot Projects, Other 0.5 0.2
Total 8.0 3.4
Source: CNEA; mission estimates.
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VII. INSTITUTIONAL ISSUES
Energy Planning and Policy Coordination
7.1 Because of the need to overcome the inadequacies of the variousenergy enterprises, efforts to improve ope3rations and planning shouldconcentrate at the subsector level. The mission's recommendations forimproving performance of the principal agencies in forestry, electricity,petroleum product marketing, and wind and solar energy have already beenindicated (Chapters III-VI). However, there also is a need to strengthenplanning and policy coordination at the sectoraL level to appropriatelyevaluate future energy demand, establish rational priorities among sub-sectors, and reconcile energy development objectives with macroeconomicconstraints. Thus far, poor coordination between sector institutions anda lack of expertise have prevented a comprehensive approach to energydevelopment from emerging. Sector-wide planning is just beginning. TheGovernment is in the process of preparing a sector strategy, but a per-manent effort over the medium- to long-term will be needed to have anyimpact.
7.2 The creation of the Energy Directorate was meant to bring thiseffort about. However, the institution is unable to meet its nominalresponsibilities because it lacks the authority to coordinate energy-related activities, its organizationaL structure is weak, and budgetaryand manpower resources are grossly inadequate. Its small staff is inex-perienced in energy system and policy analysis, and it has not receivedany technical assistance. The Directorate's rapport and exchange. of in-formation with the operating agencies in the forestry and electricitysubsectors and the Planning Ministry is unsatisfactory. The recentlycreated interministerial Energy Commission -- an advisory body consistingof representatives of the Energy Directorate and of other sector entities-- could contribute to improving sector coordination but it has not beenvery active so far.
7.3 The Energy Directorate has a potentially important role to playand efforts to strengthen sector-wide planning and policy coordinationshould focus on this institution. However, its future role largelydepends on the political will to use it as the Government's principalenergy planning and coordinating institution. The Energy Directorateneeds to be strengthened considerably to become an effective institu-tion. The specific requirements, which will be the subject of an insti-tutional study carried out under the IDA petroleum exploration promotionproject, include the following:
(a) a closer definition of its objectives, which should emphasizeplanning and policy analysis. While the Directorate shouldensure a sectoral perspective in analyzing individual agencyproposals on pricing, investment and other issues, the sub-sector entities should retain responsibility for detailedinvestment planning and policy implementation, in addition totheir administrative functions;
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(b) a build-up of competent staff with adequate analytical capa-bilities. Initially, expatriate experts could act as advisers,i.e. (i) an energy economist, responsible for energy supply anddemand analysis and for investment and pricing policy analysis;(ii) an energy efficiency expert for setting up an energy effi-ciency unit within the Directorate, and for preparing programs,policies, and projects to enhance energy conservation and sub-stitution; and (iii) an electricity specialist for ensuringappropriate subsector monitoring;
(c) adequate documentation and general office support; and
(d) more systematic coordination with the other sector institu-tions, which could be assisted by activating the EnergyCommission.
7.4 The Energy Directorate should develop the capability to sys-tematically collect and process information on the energy sector, prepareand update an overall energy plan, and analyze energy projects as well asprojects with a significant bearing on energy consumption. To improvepolicy coordination in the energy sector, the Energy Commission should bereinforced and should include high-ranking officials of the Governmentministries with an important involvement in the energy sector. The Com-mission should act as an advisory body to the Council of Ministers andassist in preparing policy decisions. The Energy Directorate shouldbecome the Secretariat to the Commission.
Manpower and Training Needs
Manpower
,.5 The major manpower issues in the energy sector concern inade-quate professional competence at all but the highest levels, and theimbalance between various professional specialities. Most of the pro-fessionals have technical backgrounds, which is appropriate for tacklingshort-term problem3 at the level of individual agencies. However, forstrategy and investment decisions of increasing complexity which requirea ranking of priorities, other professional experiences also are neededsuch as those of economists and financial analysts. Manpower planningshould become an integral part of energy sector and subsector planning.The individual agencies therefore should analyze their manpower needs, incoordination with the Energy Directorate. The experience with the teamof expatriate experts placed in SONELEC under the rehabilitation projectshould be evaluated with a view towards applying this concept to othersector agencies as well. Salary structures should be set according toactual responsibilities rather than formal qualifications to makeemployment in the public energy agencies more attractive.
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Training
7.6 Except for a well-focused training program for the HydrocarbonDivision of the Ministry of Industry and Mines, under the IDA petroleumexploration premotion project, there is no professional training in theenergy sector. Training needs should be systematically identified con-currently with the evaluation of manpower requirements, and candidatesfor trairn:-: _..ould be carefully selected. Specific on-the-job trainingshould be emphasized, which could resolve any problems associated withreleasing suitable staff for any length of time. Training should becomea standard component of foreign-assisted projects. As far as feasible,expatriate experts working on specific projects should organize short-term training courses in the country. Exchanges of staff between thesector agencies and internships in relevant institutions in neighboringcountries might be a low cost way Fo transfer expertise. Overseas train-ing should be limited to longer-term studies leading to professionaldegrees and the relevance of overseas training programs to sector andindividual agencies' needs should be ensured. For the Energy Direc-torate, training in energy planning and conservation should have thehighest priority.
Financial Issues
1.7 Insufficient financial resources for current operations are oneof the principal causes of institutional deficiences in the sector. Forexample, the Energy Directorate's 1983 budget of UM 1.5 mn (less thanUS$30,000 equivalent) just about covered the salaries of its staff. Asin most other sector agencies, there are very few funds left for generaloffice support, technical literature and reference materials, to thedetriment of staff productivity.
7.8 The weaknesses in public finances make a solution to this prob-le-iz elusive. The mission recommends that the Government consider allo-cating a share of funds raised through energy taxes to cover develop-mental current expenditures for the administrative and planning entitiesin the energy sector. A systematic pooling of facilities among sectorentities might alleviate the most acute shortcomings. External donorsshould consider these needs for future technical assistance projects, asrelieving them would involve relatively small expenditure.
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VIII. INVESTMENT AND TECHNICAL ASSISTANCE REQUIREKENTS
Investment Requirements
8.1 The scant information available on individual projects in theenergy sector nevertheless indicates that past investment was substan-tial, totalling about US$200 mn between 1975-83, or 11.5% of GrossDomestic Captial Formation over those years. However, this investmentwas little effective in meeting energy needs, as a number of importantprojects were either over-dimensioned (e.g. in electricity) or by-passedrequirements altogether (e.g. petroleum refining). At the same time,priority needs such as forestry did not receive enough attention. Giventhe seriousness of the deforestation problem, forestry investment hasbeen grossly inadequate for alleviating environmental damage or meetingthe energy needs. There was hardly any expenditure on institutionbuilding.
Table 8.1: ESTIMATED DEVELOPMENT EXPENDITURE IN THEENERGY SECTOR, 1975-83(Current USS millions)
Forestry 4.5Reafforestation (Nouakchott Green Belt) 1.0Tree Nurseries 1.3Rural Tree Plantations 1.0Resource Management 1.0Inventories; Studies; Scholarships & Training 0.2
8.2 No Government investment program exists for the energy sec-tor. The mission therefore has projected the requirements for fixedinvestment and other developmental expenditures which are consistent withits projections of energy demand growth. While these investment projec-tions are only indicative, they do reflect a needed shift in prioritiestoward increased emphasis on energy efficiency measures, woodfuels devel-opment and institutional development. As a matter of principle, fixedinvestment should focus on rehabilitating and making more effective useof the existing capital stock, limiting expansion to the highest priorityprojects consistent with least-cost solutions.
8.3 Based on these assumptions and the investment strategies forthe individual subsectors (Chapters III-VI) the mission projects devel-opment expenditures in the energy sector during 1984-85 to total US$166mn under the Action-Oriented Scenario and US$149 mn under the Trend-BasedScenario (1983 prices). While investment under the Trend-Based Scenariois lower, this would be at the expense of developing the long-term pro-ductive capacity and efficiency of energy use. Electricity would accountfor the largest individual share under both scenarios. Expenditure onforestry and woodfuel development would rise over the negligible levelsof the past, as would expenditure on wind and solar applications. Expen-ditures on studies, pilot projects and technical assistance would belargely directed at forestry and woodfuels conservation but also at over-all energy planning, particularly for strengthening of the Energy Direc-torate. Investments in the initial period (1985-87) would be reviewed inthe context of Mauritania's overall investment plan, in collaborationwith IDA and the IMF.
Table 8.2: PROJECTED PUBLIC DEVELOPMENT EXPENDITURE IN THEENERGY SECTOR, SUMMARY, 1984-95
(1983 USS mill ions)
Action-Oriented Trend-BasedScenario Scenario
Forestry and Woodfuels 47.3 29.3Electricity 75.6 84.9Petroleum 28.0 28.0Wind and Solar 8.0 3.4Energy Conservation and Substitution 6.0 2.5Energy Planning and Other Sector-Wide 0.4 0.2
Total 165.3 148.3
o/w Fixed Investment 155.3 142.3Studies, Pilot Projects,Technical Assistance 10.0 6.0
Note: Some of these categories overlap; for instance, wind and solarapplications would be largely for energy conservation andsubstitution.
8.4 Energy-related technical assistance in the past fell far shortof requirements, especially in forestry where it was limited to the ser-vices of an FAO advisor within DPN. In the electricity subsector, advis-ory services for SONELEC were provided but their impact was limited andSONELEC did not follow up on the advisory team's recommendations. Theforthcoming IDA parastatal rehabilitation project includes the placementwithin SONELEC of a financial management team which also will trainSONELEC staff. In the petroleum subsector, the IDA exploration promotionproject has provided useful technical assistance in the systematic colla-tion and analysis of exploration data, evaluation of exploration bids,review of the legal framework and training the staff of the Mining andGeology Directorate. An energy sector study carried out under the sameproject collated sector data and sector development options. SOMIRreceived technical assistance from Algeria for petroleum refining.
8.5 Because of the growing complexity of policy decisions in theenergy sector. and the need to strengthen sector institutions, well-coordinated technical assistance is becoming increasingly important foraddressing the principal sector issues. Projects which external donorsshould give high priority are listed below.
8.6 In the woodfuels subsector, the priorities are:
(a) a medium term institutional assistance program in support ofDPN which emphasizes forestry plannirLg, project preparation,administration, and monitoring of field activities, especiallythe establishment and management of tree plantations. Trainingprograms are required to prepare local staff to effectivelyhandle tree planting programs;
Cb) a research program focusing on appropriate technical packagesfor reafforestation in arid and semi-arid zones, includingplantation methods, introduction of new species, and accele-rated regeneration techniques;
(c) a pilot project for improved woodstoves to (i) evaluate presentcooking and dietary habits; (ii) test suitable stove models fortheir technical feasibility and social acceptability, and(iii) identify requirements for successful disseminationincluding production facilities, distribution systems, andfollow-up;
(d) a study on the importation and distribution of charcoal tourban and rural consumers, including institutional and logis-tical requirements. This study would be carried out under theIDA petroleum exploration project.
8.7 In the electricity subsector, SONELEC's requirements to becovered under the parastatal rehabilitation prQject are as follows:
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(a) in coordination with the rehabilitation financed by EIB; anefficiency audit for the Nouadhibou system (SONELEC and self-producers) to evaluate options for reducing losses in genera-tion, transmission and distribution and for improving elec-tricity dispatch practices;
(b) an electricity tariff study to determine a pricing structurebased on economic costs of supply and SONELEC's future finan-cial requirements. This is contingent on improvements inSONELEC's cost accounting and demand forecasting system (aswell as the installation of appropriate measuring equipment);and
(c) establishing an electricity planning and project evaluationcapability within SONELEC.
8.8 In the petroleum subsector, assistance is needed for:
(a) improving the petroleum product marketing system, whichincludes establishing the necessary infrastructure for butane,kerosene and fuel oil marketing and for bunker sales to thefishing fleet;
(b) institutional strengthening of SMCPP;
(c) evaluation of the petroleum product pricing structure, with aview to rectifying its anomalies; and
(d) continuation of the exploration promotion campaign.
The first three topics are the subject of a study financed under the IDApetroleum exploration promotion project.
8.9 In the renewable energy subsector, requirements are as follows:
(a) a study of specific applications such as wind-based electricitygeneration in Nouadhibou, wind and/or solar water pumping inthe Senegal River Basin, and solar water heating, to be fol-lowed by pilot projects and larger-scale dissemination; and
(b) an institutional study of the objectives and functions of CNEA,with emphasis on using this institution to stimulate and coor-dinate renewable energy development.
8.10 The following requirements have been identified for the prepa-ration of a coherent energy conservation and substitution program:
(a) for road transport, (i) training in fuel-efficient drivingtechniques and in vehicle maintenance, including dieselvehicles; (ii) technical assistance in improving public urbanand intra-urban transport, and in strengthening the publictransport corporation STPN; (iii) technical assistance in
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establishing a centralized system of vehicle maintenance andcontrol for governmental services;
(b) for the fishing sector, a study on the estabLishment of aservice center for fishing vessels in Nouadhibou; and
(c) a study on the fuel conversion potential in major industrialenterprises and preparation of a related program. This may befollowed by energy audits to identify specific fuel conser-vation options, over and above fuel substitution.
8.11 For assistance in energy planning and policy coordination, thefollowing is required:
(a) an institutional study of the Energy Directorate to (i) betterdefine this institution's objectives and role within the energysector, (ii) identify budgetary and manpower requirements, and(iii) prepare a training program based on energy systemanalysis and the principal technical, financial/economic, andinstitutional issues in the energy subsectors. This study willbe carried out under the IDA exploration promotion project;
(b) placement of an energy adviser to assist the Directorate inimplementing the institutional study's recommendations and instrategy and policy analysis especially of pricing andinvestment issues;
Cc) placement of an electricity specialist; and
(d) placement of an energy conservation expert to prepare energyefficiency programs in transport and industry, and to establishan energy efficiency unit within the Directorate.
ESTIMATED IN;OST SUPPLI/0ENAND SALANCe. 1*75
Petrel.. PedetASrPI. Sase- Aviation Jet Nero- see Fuel glestrl-ueld. Fuolveed Chereael llea aaselgme Feol sere LPG Oil Ol Subtatel alty Total
1ra.o,urt 29.7 0.3 4.1 30.3 49.4ulso& and laacst, ,0.9 40.9 9.pluierIau 21.4 23.4Commerecil sad IlwtrIMAIP 3.9 1.1 9.3 0.7 4.9 0.4 1.0fstideatlmi 1.6 124.3 13.0- l. 1.7 3.0 2,lAgr I eel 2tor l 0.S O.
ASSUMPTIONS ON ENERGY DEMAND FOR ACTION-ORIENTEDSCENARIO AND TREND-BASED SCENARIO, 1984-95
Action-Oriented Scenario Trend-Based Scenario
Woodfuels
1. Increase in area under 1. No increase in yields.natural forest management Destruction of accessibleto 0.36 mn ha by 1995; forest cover by turn ofestablishment of 17,000 century.equivalent ha of treep.'Intations by 1995,resulting in incr nmentalyield of 52,000 m by 1995.
2. Active program of dissemi- 2. Much slower progress innating improved stoves, disseminating improvedresulting in increasing stoves, resulting inefficiency of fuelwood use increasing efficiency to 9Zfrom 7.5% in 1983 to 12% by by 1990 and 12% by 1995.1990 and 18X by 1995; andof charcoal use, from 15%in 1983 to 22% by 1990 and25% by 1995.
3. Increase in the number of 3. Increase amounting to lessfamilies using kerosene by than half of that in AOS.5% p.a. during 1984-90 and6.5% p.a. during 1991-95;and those using butane by15% p.a. in 1984-90 and 18%p.a. in 1991-95.
Electricity
4. Determined efforts on part 4. Only rominal efforts toof consumers to conserve conse:ve eleccricity.electricity.
5. Closure of SNIM's mini 5. Mini steel plant continuessteel plant. to operate.
6. Interconnection of the 6. ibidSONELEC and SNIM systems inNouadhibou around 1986.
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7. Reduction of losses in the 7. Loss reduction much lessSONELEC system from about25Z of generation atpresent to 10-12Z by 1990.
8. Increased use of fuel oil 8. ibidfor gas oil as primaryenergy source.
9. Substitution of wind and 9. Wind and solar energysolar energy for a minor applications much less.amount of electricity.
10. Copper mining and proces- 10. Copper mining andsing will not be resumed -- processing will be resumedno additional electricity to a limited degree,demand. resulting in additional
consumption estimated at 40GWh p.a. from late 1980sonward.
Petroleum Products
11. Transport: improved main- 11. Transport: considerablytenance of passeng'r cars less progress in increasingand other vehicles; reduced efficiency. No service anduse of taxis, increased use repair facilities inof buses; moderate dieseli- Nouadhibou.zation (light utility.-hicles). Establishmentof a service center inNouadhibou for systematicmaintenance of fishingvessels.
12. Electricity: see 4. - 10. 12. Ibid.
13. Residential use: see 3. 13. Ibid.
14. Bunker sales: 59,000 M.T. 14. Bunker sales: 9,000 H.T.by 1990; 134,000 M.T. by by 1990-95.1995.
Annex 4PROJECTED ENERGY SUPPLY/DEMND BALANCE, 1990
ACTION-ORIENTED SCENR IO
Petroleum ProductsAgric. Gaso- Jet Marlne Fuol Electri-Resid. Fuelwood Charcoal line Fuel Kerosene LPG Gas 01I Diesel Ol Subtotal city Total
j/ Handled by BPl/ Included In Item 'OffIcicl Cost end Margin"
2/ Consumed In Nouakchott only
So,ureca Energy Directorate
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COMPARATIVE RESIDENTIAL ENERGY COST
1. The comparative costs to consumers of the major residentialenergy sources in Mauritania based on their official retail prices havealready been analyzed (paras. 2.21-2.24 of the main report).
2. In order to be more meaningful, the comparison of residentialenergy costs should be based on economic cost of different energy formsas represented by (a) c.i.f. import cost plus domestic distribution cost,or (b) long-run marginal cost of domestic production and distribution.It should also include equipment cost. With these modifications, thiscomparison will be as follows (in US$):
Energy Cost per household/year 50.68 35.48 39.45 39.56Plus equipment cost/year 13.-- 13. 2.64 5.
IV. Fuel plus Equipment Costper household/year 63.68 48.48 42.09 44.56
a/ Six persons per household.
Source: SMCPP, DPN, mission estimates.
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3. Costs of imports of charcoal from Senegal are assumed to beidentical to those for domestic supplies from the charcoal producingregions bordering Senegal. The analysis is based on prevailing stoveefficiencies but takes into account the option of improving theefficiency of charcoal deliveries and concomitant reductions of ex-delivery cost. Electricity has been excluded from this comparison due tothe lack of reliable economic cost data but the conclusion reachedearlier regarding its high comparative cost is likely to be reinforcedonce the high costs of electric stoves are taken into account.
4. Results. Based on this comparison, the economic cost ofkerosene is lowest, followed by charcoal. Butane priced at its economiccost is the most-expensive fuel because of high transport cost, evenassuming a reduction in its ex-delivery cost as a result of the overlandtransport/Nouakchdtt bottling plant option. However, it is not clear ifcharcoal imports originating further afield are obtainable at the sameprice as presently paid to Senegalese suppliers. For charcoal to becompetitive with butane, its c.i.f. import cost should not exceedU.S.$124.-/M.T. and would have to stay at or below U.S.$106.-/M.T. forcharcoal to be competitive with kerosene.
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PILOT PROJECT FOR DISSEMINATION OF IMPROVED STOVES
DRAFT TERMS OF REFERENCE
Background
1. Fuelwood and charcoal in Mauritania meet close to one-half ofnet energy consumption, over 901 of residential energy needs and virtu-ally all of t3ese needs in rural areas. Consumption is estimated tototal 0.8 mn m p.a., nearly eight times the production from accessibleforests. The resulting over-cutting, togethcr with excessive clearingfor agricultural purposes and drought-inflicted damage, has reducedforest reserves by nearly 30Z over the past decade. Unless a strategy toreduice woodfuel consumption and to raise the sustainable forest yields isput into place soon, the accessible forest cover could be completelydestroyed within 20 years.
2. Woodstoves presently used in Mauritania, mainly the three-cornered stove, have a very low energy efficiency of typically less than10%. Developing and promoting more energy-efficient stoves would greatlybenefit rural households by increasing the amount of cooking that can bedone with a given amount of wood. However, serious technical, institu-tional, and societal obstacles have impeded the dissemination of improvedstoves.
Project Objectives
3. The principal objectives of the proposed pilot project are:
(a) to identify economically viable, self-sustaining ways toproduce and disseminate reliable and energy-efficient stoves;
(b) to review the nature, extent and results of past and presentimproved stove activities in Mauritania;
(c) to indicate the scope for and specify the requirements of alarge-scale project to produce, promote and market improvedstoves; and
(d) to recoimend institutional arrangements to strengthen the localcapacity for coordinating and implementing such a program.
4. To achieve the objectives of the project, it will also benecessary:
(a) to review the existing cooking practices of rural households(in an area to be chosen) in an effort to compare thetraditional technologies with improved stoves and utensils; and
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(b) to establish the thermal efficiency of present cooking modes inorder to assess the potential energy savings from improvedstoves and utensils.
Project Purpose and Scope
5. The main purpose of the project is (a) to develop and field-test an appropriate stove design and (b) prepare a longer term stovedissemination project. Thus far, no stove-related local research anddevelopment work has been done. The design of a program to develop andencourage the use of energy efficient stoves shouLd be based on thepremise that the dissemination process is likely to be more difficultthan the technical R&D involved.
6. The project would be carried out in three phases:
Ca) Phase I: Review of current energy consumption patterns andcooking technology
i) an assessment of the size, diameter, and uniformity of fuelsused and their mode and frequency of collection;
(ii) a classification of stoves in use;
(iii) a classification of cooking technology, for example, thesizes and shapes of pots and other utensils, prices andproducers, and mechanisms for their marketing;
(iv) main diets and their manner of preparation (cooking, baking,brewing);
(v) cooking practices (number of meals cooked per day, cookinginside/outside of dwellings, use of proper pot lids,shielding from wind, etc.);
(vi) an analysis of whether and to what extent improvedwoodstoves are perceived to be needed;
(vii) a technology assessment including establishing the thermalefficiency of the open fire and existing woodstove designs,their actual fuel consumption, production and retail costs;and
(viii) an assessment of existing metal- and/or ceramic-workingcapabilities, including their costs (labor, materials) andefficiency.
(b) Phase II: Stove design and dissemination
(i) identifying an appropriate stove design, taking into accountthe capabilities of local producers, fuel consumption,
- 86 - Annex 12Page 3 of 4
consumer requirements and preferences, and disseminationmechanism;
(ii) field testing and monitoring a small control group, usingthe selected improved stove, with regard to fueL savings,time savings, and household consumer reaction;
(iii) modification of the stove design, if necessary;
(iv) evaluation of the dissemination structure, including:
- existing commercial, governmental, informal, and otherdistribution channels (frequency of contact, target groups,etc);
- relevant capabilities (staff, funding, range ofeffectiveness and experience in disseminating their hardwareand software);
- existing Government policies and institutions with regard toimproved stoves;
= foreign assistance pertaining to improved stoves (theirdissemination experience and their applicability to thedissemination program); and
- the possible participation of governmental and foreignassistance organizations in disseminating stoves, improvingcooking techniques and activities that might play asupportive role.
(c) Phase III: Follow-up
(i) recomendation on the feasibility of a rural stove program,and on an action program for the design, production,promotion, marketing, and quality control of improvedstoves. This will involve:
- determining further work required for designing improvedstoves, specifying the means to carry out the recommendeddesign work;
- recommending specific measures to promote production,procure construction materials, provide training andincentives to artisans, and maintain quality control;
- recommending a detailed strategy for promoting and marketingimproved woodstoves (policy instruments, mechanisms); and
- analyzing the organizational requirements to manage andimplement the recommended program, and the training and
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Page 4 of 4
other technical assistance needed to establish such anorganization;
(iii) preliminary schedule and costing of the proposed program.
Staffing Requirements and Schedule
7. The pilot project should be carried out by one or severalexperienced stove experts from a firm with the appropriate experience infuelwood and charcoal stove technology and dissemination, and which hasstove-testing facilities. Suitable local support staff for fieldevaluations and follow-up should be made available by the Government.
8. The expert(s) should be fluent in French and should have aworking knowledge of English.
9. The pilot project will be undertaken in close coordination withthe National Unit of Alternative Energy (CNEA) as the principalGovernment institution responsible for dissemination of improved stoves,the Energy Directorate, and the Environmental Protection Directorate(DPN). The aforementioned Government institutions will form a workinggroup for assisting in implementing the pilot project. The expert(s)will keep these institutions informed about the progress of the pilotproject and will, to the feasible extent, involve staff of theseinstitutions in project implementation and evaluation.
10. The pilot project will be completed within nine monthsfollowing signing of the contract. The expert(s) will submit within fourmonths following start-up of the project a draft report containing (a)analysis of test results, (b) specific recommendations, and (c) theoutline of a pre-feasibility study on a longer-term stove disseminationproject. The final report will take account of the Government's andIDA's comments and will be completed within four weeks following thetransmittal of these comments.
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MAURITANIA: STUDY OF CHARCOAL IMPORTS
Draft Terms of Reference
B4ckground
1. Charcoal consumption in Mauritania, estimated at around 24,000M.T. in 1983, is equivalent to 6Z of final energy consumption. It is ofimportance especially for urban households where it might satisfy up toone-half of final energy needs. Because of the depletion of forestreserves in Mauritania, the bulk of charcoal now is illegally brought infrom Senegal, several hundred km away from the main consumptioncenters. However, this supply source also is likely to be exhaustedwithin a few years. Acute scarcities of charcoal have developed whidhare reflected in rapidly rising prices in parallel markets.
2. The Government has responded to the fuelwood crisis throughsubsidizing butane as a woodfuel substitute. However, there might belimits to promoting butane because of (a) relatively high economic cost(i.e., fuel and equipment cost) and (b) engrained habits on the part ofenergy users who prefer charcoal to petroleum-based fuels. Increased useof kerosene as a woodfuel substitute seems to be economically viable butthis option still needs to be analyzed in more detail. Therefore,significant charcoal requirements are likely to persist. Since forreasons of forestry resource conservation, indigenous charcoal productionshould be drastically reduced and Senegal cannot be relied upon toprovide supplies for any length of time, supplies would have to besecured from actual/potential charcoal exporting countries in West Africaor further afield. The proposed study is to provide an in-depth analysisof available options, as a component for formulating a strategy andpolicies for securing fuel supplies.
Objectives
3. The study would:
(a) evaluate the technical feasibility and economic viability ofimporting charcoal into Mauritania;
(b) identify policy, institutional, and investment requirements forestabLishing an efficient charcoal importing system; and
(c) (if charcoal imports prove feasible:) make recommendations onpreparation of feasibility studies and specific measures for anaction program.
-89 - Annex 13Page 2 of 4
Scope
4. The study would analyze:
(a) present position and mediumr to long-term prospects of theMauritanian charcoal market, i.e.
(i) forest resources;
(ii) charcoal production and marketing (capacities, capabilities,costs);
(iii) Government policies affecting charcoal production and use(forest resource use; fuelwood and charcoal taxation andpricing; promotion of substitutes; other);
(iv) institutions and operating entities in the charcoal market(public, private).
(b) Actual and potential charcoal exporting countries in WestAfrica
i) resource base;
(ii) production and exporting potential (capacities andcapabilities; domestic demand and its impact on charcoalexporting capacity);
(iii) production and marketing costs;
(iv) f.o.b. price acceptable to Mauritania (long-run marginalcost vs. petroleum equivalent cost);
(v) maritime transport capacity and costs.
(c) Comparative economic analysis of imports of charcoal vs.petroleum products into Mauritania
(i) import and marketing costs;
(ii) equipment costs;
(d) Requirements for charcoal exporting countries
(i) resource use (natural forest management; establishment oftree pLantations; utilization of forest industry residues);
(ii) charcoaling technologies;
(iii) organizational (production; transport and storage;exporting);
-90 - Annex 13Page 3 of 4
(iv) investment and financing.
(e) Requirements for importation of charcoal into Mauritania
(i) technical and organizational (maritime transport, portunloading; storage; distribution);
(ii) investment and financing;
(iii) institutional (respective roles of Government and privatesector institutions);
(iv) policies (pricing and taxation, other).
(f) Feasibility of pooling imports with other charcoal-deficitSahelian countries
i) coastal countries;
Gii) land-locked countries.
Recommendations
5. Should the importation of charcoal into Mauritania provefeasible, the study would recommend a strategy, specific policies andfollow-up actions (including follow-up studies) required for:
(a) developing an export capacity in woodfuel surplus countries inthe region;
(b) providing adequate maritime transport; and
(c) developing a charcoal-importing capacity in Mauritania.
Staffing Requirements and Costs
6. The study should be carried out by a qualified firm which hasundertaken comparable work in developing countries. The firm should makeavailable the following experts:
(a) a senior forestry economist, as team leader, with long-rangeexperience in (i) forestry development, (ii) fuelwood andcharcoal production and marketing, and (iii) analysis of policyand institutional issues with regard to fuelwood and charcoal(for four months);
(b) a charcoal specialist with experience in charcoaL production,transportation, marketing, and international trade (for threemonths);
(c) a transport specialist with experience in maritime transport inWest Africa (for two months); and
- 91 - Annex 13Page 4 of 4
(d) an energy economist for assessing (i) the charcoal exportpotential of particular countries within the framework of theirforestry balance and overall energy balance, (ii) Mauritania'sapproximate charcoal import requirements, and (iii)approximate import requirements of other Sahelian countries(for three months).
7. The specialists assigned to this study should be fluent inFrench and should have a working knowledge of English.
8. The experts should carry out this study in close coordinationwith the Direction de Protection de la Nature (DPN) as the main Govern-ment institution for energy forestry as well as with the EnergyDirectorate and CNEA. These institutions will form a working group toassist in implementing this study. The consultants will inform theinstitutions regularly about the progress of their work and will arrange,to the extent feasible, for participation of suitable local staff intheir work.
9. The study will be compLeted within nine months followingsigning of the contract, including incorporation into the final report ofthe Government's and IDA's comments on the draft report.
- 92 - Annex 14Page 1 of 4
STUDY ON FUEL CONSERVATION FOR THE GOVERNMENT VEHICLE FLEET
Draft Terms of Reference
Background
1. Road transport in Mauritania accounts for nearly 22% ofpetroleum product consumption. The bulk of it is gasoline (some 27,000MT in 1983) with gas oil consumption for road transport estimated at8,000 MT. Despite low prices of gas oil relative to gasoline, gas oiluse is limited to heavy trucks whereas most light trucks and virtuallyall passenger cars run on gasoline. Fuel use is inefficient and exceedsnorm consumption possibly by as much as 25% because of bad drivinghabits, lack of maintenance, grossly inadequate service facilities and anover-aged fleet. Required technical controls generally are not applied.
2. The Central Government and other public institutions own about10 of passenger cars (i.e., about 2,000, with annual increases of 80-100). The public sector vehicle fleet is beset by the same deficienciesas the country's vehicle fleet overall. In addition, there is nocentralized control over vehicle use. The Government's expenditures onfuel meanwhile amount to UM 80 mn, 1% of current expenditures. Technicaldeficiencies are compounded by weak Government institutions anduncoordinated policies in the transport sector. The TransportDirectorate of the Ministry of Supplies and Transport, which isresponsible for sector administratioa (including technical controls andcompliance with regulations) has insufficient budgetary resources and noqualified staff. The Energy Directorate of the Ministry of Hydrology andEnergy, the principal institution in energy matters, does not monitorenergy-related aspects of transport. There is no coordination betweenthe Energy and Transport Directorates.
3. In an effort to increase the energy efficiency of the publicsector vehicle fleet and to reduce fuel costs, the Government has decidedto carry out a fuel conservation study.
Objectives
4. The study would:
(a) analyze the size, composition, and utilization efficiency ofthe vehicle fleet (i.e. passenger cars, pick-ups, trucks) ownedby the Central Government and other public sector entities;
(b) identify shortcomings in (i) organziation, management andadministration of vehicle use, and (ii) vehicle maintenance;
(c) identify institutional, managerial/administrative, andtechnical options and requirements for improving fuelefficiency in the public sector; and
- 93 - Annex 14Page 2 of 4
(d) evaluate the scope for extending the recommended measures tothe private sector.
Scope of Analysis
5. The study would analyze the following aspects:
I. Present Situation
A. Organization, management and administration of the publicsector vehicle fleet
1. Size and composition
(a) Nouakchott area(b) Rest of country
2. Estimated utilization factors and efficiency ofutilization
3. Estimated expenditures on
(a) Fuel(b) Maintenance'c) Other
4. Service and repair facilities
B. Replacement and expansion requirements of the public sectorvehicle fleet
II. Options and Requirements for Improving Fuel Efficiency
A. Institutional improvements
1. Energy Directorate2. Transport Directorate
B. Administrative/managerial improvements
1. Vehicle pool administration2. SMCPP service facilities
C. Improving driving habits
D. Improving maintenance
1. Mechanical condition and fuel consamption checks on randomsample of vehicles
2. Maintenance schedules
- 94 - Annex 14Page 3 of 4
3. Materials and equipment
4. Manpower and training
E. Improving and enforcing of existing regulations
1. Data bank on vehicle fleet2. Vehicle logs (carnets)
F. Investment requirements and operational requirements
1. Maintenance and repair facilities2. Measuring and control equipment3. Training4. Other
G. Costs and fuel savings likely to be achieved
III. Scope for Expansion of this System
A. Beyond NouakchottB. To private sector vehicle fleet
Staffing and Budget
6. The study is to be carried out by a consulting firm with wide-ranging experience in transport economics and fuel conservation. Thefirm should have working experience in developing countries.
7. The firm should make available two specialists, i.e.
(a) a senior transport/energy economist, as team leader, forassessing the institutional, organizational, managerial, andadministrative aspects of deploying the public sector vehiclefleet (for 3.5 months); and
(b) a transport engineer, for assessing the technical options andrequirements of fuel conservation (for 2.5 months).
8. The team should spend about two months in Mauritania. Itshould liaise closely with the Energy Directorate as the Governmentinstitution responsible for this study, as well as with the TransportDirectorate and the Planning Directorate of the Ministry of Planning andRegional Development. The team should to the maximum extent possibleinvolve Government energy and transport specialists in their work.
95 - Annex 14Page 4 of 4
9. The study should be completed within four months after thesigning of the contract, including incprporation of the Government's andIDA's comments.
96 Ant*e 15
ELECTRICITY GENERATION AND CONSLUPTION 1974-83{COMb
ai Estlated.h/ Purchteod trom SvilM (e-ther fully or In pert).cJ Purchased tree SAMIIE.d/ Nom-snsincl result (i.e.; ahove 1005).*f Average.
Source! SONELEC: SHIIN: mession estilm-e.
P40JEVIEO ELECTRICITY GENERATION, OWN uSE AM) LOSSES, AN M) IlJ9Ti0N. 1904-95
IGIELEC SNlI4 OTHER GRAMI) TOTAL
Mmekdlett IMuSdhibdu Smaller Fomters WetoreAs Si18-TMAL. Pt.Cfri. zejerate I OGus,bi 119-TOTALSa,era- 0wn Use Consump- Geniia- Own Use ostto Gosere- Own Use Cons.um- Gnonr. Genkera- 0nm Use Consump- Goner. Goner.- Own Use Consue'- Oenere- Owni Use ConewW. Goner. Genera- Own Use CeASeie-tions A Lesses ties ties & Lseasl wie 96IW withSIN 10 Ilas & Lassos tie. ConsI. tIns & Losses tlon -Coall. tion A LOSSes tins tles & Losses tios .Cs.5. tics A Losses tIcs,
M B 10.31 tL . . I: 11 S 33.0 0.3 10.1PL 31.3 31.3 10.30. 3.113.010.0 0.1 6.3O., 3.
13 106 Il 61M., C 8 16 01 SIV4 10U4 o 66"g 5
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- 0 -Annex 19
Page 1 of 4
SONELEC ELECTRICITY EFFICIENCY AUDIT -- NOUADHIBOU SYSTEM
Draft Terms of Reference
Background
1. The Government-owned power and water utility SONELEC isaffected by serious technical, financial, and managerial deficiencies.Despite high tariffs, SONELEC has sustained persistent losses, largelybecause of inadequate financial management. As a result of run-downequipment and inadequate maintenance, generation and distribution effi-ciency is low and power supplies are frequently interrupted. SONELEC atpresent has virtually no capability for project analysis and electricityplanning.
2. The Government has taken steps aimed at putting SONELEC on asounder footing. A new management team has been appointed and has ini-tiated rationalization and control measures which before long shouldenhance operational efficiency. A tighter organizational structure isbeing introduced. A rehabilization program is being prepared with IDAand French bilateral assistance for financing urgently needed spareparts,services of expatriate experts, and training of professional staff.Rehabilization of SONELEC's generation and distribution facilities isalso part of this project. The proposed SONELEC efficiency audit wilLprovide the basis for the rehabilitation of generation and distribution.
Objective
3. The objective of the audit is to define the scope for, andspecific measures leading to, cost-effective modifications to systemfacilities, operations, and construction standards in order to improvethe technical efficiency of the power system and to reduce non-technicallosses.
Scope
4. The audit will include a plant-by-plant survey of major faci-lities including: (a) generating plants; (b) sample diagnostic studiesof transmission and distribution circuits; (c) a critical analysis ofdistribution system standards and practices; and (d) a review of customerservice activities, including metering and billing. Outside the scope ofthe audit are studies of such areas as management and organization,staffing, financial, and accounting procedures and tariffs, except to theextent that the audit findings lead to recommendations for furtherstudies or improvements in such areas.
Procedures
5. A series of interviews would be held with SONELEC's seniormanagement in order to assess: (a) the overall efficiency and capability
- 101 - Annex 19
Page 2 of 4
of the entity; and (b) management's policy towards, and goals for, lossreduction. The information obtained on the principal problemsencountered would indicate where losses are occurring and what steps weretaken or contempLated to reduce losses.
6. An assessment of the operating efficiency of the generatingplants would be made from site visits and inspection of the equipment,through discussions and examination of plant and other records.
7. The distribution system would be examined through discussionswith appropriate staff and site visits to substations, distribution work-shops, and other facilities. Available statistics on system performancewould be analyzed and verified through sample measurements.
8. The information obtained would be analyzed to identify areaswhere (i) losses should be reduced; (ii) changes or additions should bemade to design criteria and operating and maintenance procedures; and(iii) more detailed studies are required. The course of action to imple-ment these recommendations would be outlined.
Reporting
9. A concise report on the audit will be prepared. The recommen-dations will be cover two phases comprised of (i) a Preliminary Loss Re-duction Project and (ii) a longer-term Power Plant and DistributionSystem Improvement and Expansion Program.
(a) Phase One. The Preliminary Loss Reduction Project would out-line immediate steps to be taken to improve the most urgentloss problems in generation, transmission and distribution. Itwould cover a two- to three-year period. The report would in-clude each project's description, its technical and economicjustification, and an approximate cost estimate. Terms ofReference would be prepared to the extent required tofacilitate the contracting of consulting, engineering, or otherservices for implementing the activities recommended undet theproject. This phase would include the following items whereappropriate:
Generation, Transmission, Distribution
Ci) Data collection and analysis;(ii) Design criteria and construction standards;
(iii) System planning methods and procedures;(iv) System operations and maintenance;(v) Service outages and their causes;(vi) Voltage control and monitoring procedures;
(vii) Economic system load control and management methods;(viii) Transmission and distribution circuit analysis using
computer-based programs and the data base for this analysis;
- 102 - Annex 19
Page 3 of 4
(ix) Metering systems, operation, maintenance, testing,installations, and service standards;
(x) Meter reading, billing, and monitoring procedures;(xi) Transformer specifications and load management;(xii) System And circuit power factor measurement and corrective
measures;(xiii) System technical loss assessment, value of losses, and
estimate of loss reduction potential;(xiv) Review of non-technical losses and measures to control them;
and(xv) Construction methods, standards, equipment, and procedures.
Generation. The generators and auxiliaries would be examinedin detail to identify areas of losses or needed rehabilitationor where improvements in efficiency could be achieved, i.e.
(i) The scope for retrofitting more efficient parts;Cii) The adequacy and condition of manual and automatic controls;(iii) Maintenance programs, procedures and effectiveness, and
spare parts stocks;(iv) Plant operations efficiency; and(v) Fuel quality control.
Training needs will be assessed for generation, transmission, and dis-tribution systems in as far as this is related to improving efficiency.
(b) Phase Two. The longer-term Power Plant and Distribution SystemImprovement and Expansion Program would cover a period of aboutfive years following completion of the Preliminary Project.This would include a project definition specifying desiredresults, criteria, and approach, and a preliminary costestimate.
10. The project document(s) should be suitable for presentation bya development bank or similar agency for financing.
Evaluation Criteria
11. Costs and benefits shall be disaggregated according to time-of-day and season when appropriate and feasible. Present value costingshall be used for all analyses using appropriate opportunity costs (12%for capital unless otherwise specified). Transmission and distributionfacilities shall be studied by appropriate sampling techniques using,where possible, micro-processor computer programs or equivalent method-ologies (e.g. programmable calculators).
Staffing and Work Program
12. The audit shall be performed by an experienced team consistingof (a) a senior electricity economist, as team leader, (b) a generationengineer, and (c) a transmission/distribution engineer. The field study
- 103 - Annex 19
Page 4 of 4
should be completed within one month. The total assignment includingcountry visit and report preparation should not exceed two months.SONELEC will provide data, office space, local transportation, and coun-terpart staff for the duration of the survey.
13. The specialists assigned to this audit should be fluent inFrench and should have a working knowledge of English.
14. The specialists should carry out the audit in close coordina-tion with SONELEC, inform SONELEC and the Energy Directorate regularlyabout the progress of their work and arrange, to the extent feasible, forparticipation of suitable local staff in their work.
- 104 - Annex 20Page 1 of 2
STUDY ON STRENGTHENING SONELEC'S PROJECT ANDELECTRICITY PLANNING CAPACITY
Draft Terms of Reference
Background
1. The Government-owned power and water utility SONELEC isaffected by serious technical, financial, and managerial deficiencies.Despite high tariffs, the entity has sustained persistent losses largelybecause of inadequate financial management. As a result of run-downequipment and inadequate maintenance, power supplies are frequently in-terrupted. SONELEC at present has virtually no project analysis andelectricity planning capability. There is no electricity master plan andno load forecast based on realistic assumptions. Investment decisionsare made without consideration of least-cost solutions to meeting futureelectricity requirements.
2. The Government has taken steps aimed at putting SONELEC on asounder footing. A new management team has been appointed and has ini-tiated rationalization and control measures which before long shouldenhance operational efficiency. A tighter organizational structure isbeing introduced. A rehabilitation program is being prepared with IDAand French bilateral assistance for financing urgently needed spareparts, services of expatriate experts, and training of professionalstaff. SONELEC wants to build up in-house capacity for project analysisand electricity planning through the creation of a "Direction desitudes, projects et traveaux" and has requested technical assistance tothis unit.
Objectives
3. The study would:
(a) identify requirements for and recommend measures conducive tobuilding up SONELEC's capacity for: (i) analyzing electricitydemand, (ii) determining concomitant investment needs, and(iii) identifying projects and programs which meet least-costcriteria of system expansion; and
(b) design a program for implementing the recommendationsunder (a).
Scope
4. The study would assess:
(a) requirements for SONELEC project analysis and electricityplanning unit
- 105 - Annex 20Page 2 of 2
(i) functions and responsibilities(ii) placement within SONELEC organization(iii) staffing: professional backgrounds and experiences compared
to other SONELEC departments and other public enterprises(iv) information resources(v) equipment and support facilities
(vi) liaison with other SONELEC departments and other Governmentinstitutions
(b) recommendations on implementation and follow-up, includingspecific measures and phasing.
Staffing Requirements and Costs
5. The study should be carried out by a consulting firm withextensive experience in small-sized power utilities in developingcountries. It should make available a team consisting of:
(a) a senior electricity specialist, as team leader, for assessingSONELEC's project analysis and electricity planning needs andrelevant technical assistance requirements (for three months);
(b) a system analyst for designing a computerized informationsystem required for project analysis and electricity planning(for two months); and
(c) an organization specialist for periodic short-term visits (forup to two weeks each; over 18 months) for assisting in imple-menting the study's recommendations (for a total of threemonths).
The specialists should be fluent in French and have a working knowledgeof English.
6. The study should be carried out in close collaboration withSONELEC as the local counterpart institution, and the EnergyDirectorate. These two institutions should form a working group tofacilitate the study. The consultants will regularly report to SONELECand the Energy Directorate about the progress of their work and will, tothe extent feasible, involve SONELEC and D.E. staff in this work.
7. The study is to be completed within four months after contractsignature, including one country visit (of about one month) by theconsultants and incorporation of the Government's comments on the draftreport into the final report.
Jet Fuel Sold to ForeignAlrlines a' 4.3 4,2 3.8 5,3 7,6 6,7 5.5 6.2 5.8 7.9
a/ EstimatedSource: Energy Directorate; SMCPP; SONELEC; SNIM; mission estimates
- 107 - Annex 22Page 1 of 6
OPTIONS TO IMPROVE PETROLEUM PRODUCT MARKETING
Butane
Background
1 In an effort to substitute for woodfuels, the Government hasstimulated butane consumption. It has substantially reduced the retailprice in 1982 (from UM850.- to UM250.- per 12.5 kg bottle) extending asubsidy equivalent to about 30Z of the retail price. This subsidytotalled about US$ 0.5 mn in 1983 and is financed through a special taxon gasoline. Largely as a result of this subsidy, a quantum increase inconsumption took place, as indicated below:
Butane Consumption, 1973 - 83(M.T.)
Estimated1977 1980 1981 1982 1983
Northern I4auritania 170 890
Southern Kauritania 523 1,300
Total 880 693 798 1,180 2,190
Source: Energy Directorate.
Presen SupySse
2. Butane marketing in Nouadhibou and northern Mauritania ismanaged by BP, which imports in 1,000 DWT tankers from Southern Europe,Nigeria, and Dakar. With regular drop-offs of about 200 M.T., oceanfreight is very high -- about U.S.$200/M.T. - due to relatively smallshipmpntst the need for specialized ships, and limited availability ofvessels normally voyaging in this region. Given these conditions, BP'sbutane marketing system is reasonably optimized although terminal andloading facilities would need expansion once sales reach about 2,000M.T./year. SMCPP is in charge of marketing for Nouakchott and southernMauritaniB- Butane is transported in filled cylinders from the Dakarrefinery, which results in high ex-delivery costs (i.e. US$543/M.T. com-
pared to US$240/M.T. ex-refinery).
Options for ReducingSupply Costs
3. By installing a receiving terminal and bottling plant inNouakchott and bulk transport by specialized trucks from Dakar, delivery
- 108 - Annex 22
Page 2 of 6
costs could be substantially reduced. 1/ There would be an inherentreduction in costs per butane payload since freight is based on weightand in carrying filled cylinders, about 60Z of weight is made up ofcylinder steel. There are also cost savings in avoiding empty cylinderreturns to Dakar and attendant handling. Road transport of butane fromDakar would be cheaper than ocean shipping due to the relatively smallvolumes and short distances involved. While a bottling plant might bebuilt with an eventual ma-ine supply in mind, it is unlikely that such anoption would be competitive with road transport at the price levels andrelatively reduced volumes indicated. By way of demonstration, the costof a storage terminal (about 80 M.T. capacity including truck receivingand bottling facilities, which is considered adequate for SMCPP's mediumterm projected needs) is estimated at about 1983 US$0.4 mn. Based on a1,500 M.T./year throughput, amortization, capital recovery and operatingcosts should total about $90/M.T. Using prevailing freight costs andaLlowing for the specialized nature of butane truck transport, thefreight cost Dakar-Nouakchott is estimated at $60/M.T. A comparison ofcurrent costs to those prevailing with a bottling plant is as follows:
a/ About one-third of the "transport cost" for cylinders from Dakar-Nouakchott consists of bottle handling and other related costs.Pure freight is estimated to be about 130 US$/M.T.
b/ A lower f.o.b. price for a bulk purchase in truck vs. bottles isassumed since Dakar saves the cost of bottling.
CI Most of the handling costs should already be included in thebottling plant costs.
Source: SMCPP; mission estimates.
4. A bottling installation supplied through road tankers thusshould result in supply cost savings of about US$130/M.T. The payback
1/ A project of this type is envisaged by SMCPP which plans to installa bottling plant of an initial capacity of 5,000 m /year.
- 109 - Annex 22Page 3 of 6
period of this investment would be about three years at present butaneconsumption levels and correspondingly shorter at higher capacityutilization. A butane distribution system for supplying regionalconsumption centers from Nouakchott also needs to be established. SMCPPwould require technical assistance to organize and operate its terminaland expanded delivery system.
Fuel Oil
5. Fuel oil consumption was discontinued in 1978 with the closureof SAMINE's copper mine and resumed in early 1984 with the start-up ofthe Guelbs electricity plant. It will grow further once SONELEC'sNouadhibou plant is converted to fuel oil and its new fuel oil firedNouakchott plant will come on stream. With additional fuel oil consump-tion in industry and, possibly, mining, total requirements may exceed 0.1mn M.T./year by the early 1990s, a volume which neither SMCPP nor MEEPare at present equipped to handle. SCHPP needs to establish proper pro-curement procedures and separate loading and some additional storagecapacity is apso required. In Nouakchott, additional storage capacity of3,000-5,000 m for fuel oil would be needed within two years or so. InNouadhibou, there would be no need for additional storage if the SOMIRtankage can be used as a receiving terminal. AlternativeLy, SNIM's PointCentral terminal could be converted to storing fuel oil as SNIM's gas oilrequirements diminish.
Fisheries Sector Fuel Supply
6. There is substantial potential for increasing fuel sales to thefisheries sector. Nouadhibou is the home port for the Mauritanian fish-ing fleet numbering 70-80 vessels which are fuelled either at the MEPPfacilities or at Las Palmas (Canary Islands). About 250 foreign-ownedfishing vessels operating in deeper waters are fueLled by mother shipsand rarely put into port. MEPP's gas oil sales, 21,000 M.T. in 1983,represent only about 14% of estimated fuel consumption by Mauritanian-owned/chartered vessels. The local "Federation des Industries etArmement de Peche" (FIAP) estimates totaL fuel consumption of the fleetto be as follows:
- 110 - Annex 22Page 4 of 6
ESTIMATED GAS OIL CONSUMPTION IN THE FISHERIES SECTOR, 1983(M.T. '000)
7. While the Government has required fishing vessels operating inMauritanian waters to obtain their supplies locally, this policy hasproven unenforceable due to the lack of adequate infrastructure andfacilities. The central area of the Nouadhibou fishing/general port isvery congested and NEPP's storage and pumping facilities limit fuellingcapacity to about 30-35,000 M.T.Iyear. SMCPP therefore has consideredvarious options to improve bunkering facilities at Nouadhibou, i.e.:
(a) improvement and expansion of MEPP's existing installationincluding its connection by product pipeline with SOMIR'sdepot;
(b) mooring of a refuelling barge in the harbor; and(c) extension of SOMIR's dock facilities.
8. Given the location and state of MEPP's.existing installations,it is difficult to see how they could be adopted to serve as anefficient, high volume bunkering facility. As regards refuelling barges,these are used in many large, congested ports. However, while the cen-tral area of the Nouadhibou fishery/general port is very congested, theharbor area as a whole is not nearly as congested as the large portswhere barges are typicaLly employed. A barge would probably cost aboutUS$1 mn and, if self-propelled, its own fuel consumption in fuellingoperations would be considerable. Therefore, a small finger pier adja-cent to the existing SOMIR dock may well be the best option. It shouldnot cost more than US$0.5 mn provided SOMIR lines and tanks can be uti-lized. As a potential disadvantage which needs to be investigated, thereis the possibility of fishing vessel congestion and interference withunloading of petroleum products in the event that the SOMIR tankage andjetty are used as the main product receiving/loading terminal.
9. With regard to price competitiveness the fishery gas oil priceof 1,640 UM/Hl., equivalent to $3507M.T. at the present exchange rate ismuch higher than the current marine diesel price quoted for Las Palmas of$264/MT. Mauritania's inflated c.i.f. price structure (para. 2.6 of themain report) is the main contributor to the overpricing of bunkers. Evenif a US$5/M.T. offshore reseller margin is added to the calculated c.i.f.Nouadhibou cost of US$264/M.T., it should be possible to sell gas oil at
- 111 - Annex 22Page 5 of 6
about US$300/M.T. instead of US$350tM.T. as at present, as indicatedbelow:
COMPOSITION OF THE GAS OIL PRICE TO THE FISHERIES SECTOR
(US$/M.T.)
Charged EnvisagedDec. 1983
c.i.f. Price 318 269Margin for Terminal Costs,Markup etc. 32 32
Gas Oil Bunker Price 350 301
Source: SMCPP, mission estimates.
10. A larger bunkering operation also would result in a reductionof terminal costs: in addition to economies of scale generally, thedouble handling of products as at present would be eliminated since theproduct receiving tanks and bunkering tanks would be one and the same.Two additional factors could render the Nouadhibou bunkering operatingcompetitive with Las Palmas, i.e.:
(a) for bunkering in Las Palmas, vessels must divert up to fivedays from fishing grounds. Fixed vessel costs and fuel costsof this diversion are about US$10,500 per fuelling trip.Assuming 350 M.T. fuel taken per trip, this involves additionalcosts of $30/M.T.;
(b) the fuel supplied at Las Palmas is marine diesel, i.e. a mix-ture of heavy gas oil with up to 20Z of residual fuel oildepending on blending quaLities, which is normally the highestquality fuel required for mediumrspeed engines. In contrast,only automotive gas oil is supplied at Nouadhibou at presentirrespective of use. The price of marine diesel is usuaLlyabout 97Z of that of automotive gas oil. Through installationof a blender at the storage facilities, customized blends couldbe supplied at Nouadhibou to meet consumer needs. Switching tomarine diesel thus would make it possible to supply a lower-priced product. Accounting for these two factors, bunkering inNouadhibou would be price competitive with Las Palmas, assummarized below:
- 112 - Annex 22Page 6 of 6
US$/H.T.
Marine diesel c.i.f. Nouadhibou 261 (97% of gas oil price)Terminal and bunkering margin 32Nouadhibou marine diesel bunker price 293Las Palmas marine diesel bunker price 264
Difference 29Compares with diversion cost 30
11. A further option would be to provide even heavier, lower-quality grades of fuel. Many intermediate speed marine diesels run onmixes with up to 30% fuel oil; the larger, low-speed diesels run on purefuel oil.
12. Notwithstanding these options, the growth of fuel sales to thefisheries sector would ultimately depend on Nouadhibou's development as aregional fisheries center with proper infrastructure and supplies otherthan fuel.
- 113 - Annex 23Page 1 of 7
STUDY ON PETROLEUM PRODUCT MARKETING SYSTEM
Draft Terms of Reference
Background
1. Mauritania at present consumes about 0.17 mn MT of petroleumproducts, which account for some 40% of primary energy supplies andsatisfy commercial energy requirements in their entirety. In the absenceof domestic crude production and refining, all petroleum products have tobe imported save for some small quantities produced during test runs bythe Government-owned refinery in Nouadhibou managed by SOMIR (Socift6Mauritanienne d' Industrie de Raffinage). This refinery, with a capacityof 1.0 million M.T. per year, has not been put into regular operationpending a review of its economic, financial, and technical viability. Asregards the consumption pattern, diesel by far is the most importantproduct, accounting for 74% of petroleum consumption, followed bygasoline (17%), kerosene (3.4%), and aviation fuels (5.4Z). LPGconsumption increased substantially between 1982-83 following a 7O0 pricereduction, but still amounts to less than 1X of petroleum consumption.Fuel oil consumption recently has resumed and the conversion of theNouadhibou plant of the electric utility SONELEC to fuel oil and thestart-up by 1987 of S0N2LEC's new Nouakchott plant should result insignificant consumption growth. By sector, transport is estimated toaccount for 27% of petroleum product consumption followed by powergeneration and government/commercial use (252 each), mining andmetallurgy (13%), fisheries (9Z), and residential use (1%).Geographically, about 53% of the petroleum market is suppLied fromNouakchott and 47% from Nouadhibou.
2. Petroleum products are imported largely from the Canary Islandsunder contracts negotiated quarterly. The state-owned SocieteMauritanienne de Commercialisation des Produits Petroliers (SMCPP) holdsan import monopoly and accounts for about 80% of domestic distribution.The rest of the market is shared by two private distribution companies.Storage is managed by the Societe Marritanienne d' Entreposage desProduits Petroliers (MEPP), a mixed company largely controlled by SMCPP,with capacity totalling 14,300 mi in Nouakchott and 3,900 m inNouadhibou. Additional storage capacity is owned by SNIM in PointCentral, near Nouadhiboyz (17,900 m ) and Zouerate, and by SOMIR (120,000m for crude; 175,700 m for products). While the Port of Nouadhibou canaccomodate vessels of up to 30,000 DWT, storage limitations make itnecessary to use much smaller vessels (around 15,000 DWT). Supplies toNouakchott normally are transshipped in 4,000-6,000 DIT coastal tankersfrom Nouadhibou. Petroleum product supplies to the major citiesgenerally are adequate but other locations seem to be supplied somewhatirregularly. Handling costs are high due to long distances and smallvolumes delivered. The Government is trying to stimulate butaneconsumption as a substitute for fuelwood and charcoal but marketingfacilities are inadequate.
- 114 - Annex 23Page 2 of 7
3. Pricing. Petroleum product prices are controlled by theGovernment. Except for butane, they fully cover economic cost andincorporate a substantial margin for SMCPP (the price build-up is basedon the c.i.f. import prices prevailing in 1981-82, whereas actual importprices paid by SMCPP are much lower). Butane is sold at about 75% oflanded cost c.i.f. Nouakchott. The cost of the subsidy, estimated atUS$0.5 mn in 1983, is financed through a speciaL tax on gasoline. Thereare marked differences in relative prices: for social and industrialpolicy reasons, gas-oil and kerosene are priced much Lower than gasoline(57% and 62%, respectively, of the price of regular gasoline). No fueltaxes are levied on gas-oil sales to SNIM. Sales to SONELEC, fishingvessels and industrial firms operating under incentive schemes are partlytax-exempt.
4. There is an urgent need to strengthen the infrastructure,institutions, and policies related to petroleum product marketing. Theinstitutional structure is fragmented and too complicated for the smallmarket. SMCPP and MEPP are beset by operational inefficiencies andfinancial weaknesses. SMCPP appears to be overstaffed and to needexcessively high margins to cover costs. Infrastructure improvements arenecessary especially for storage capacity for alleviating bottlenecks inthe delivery of gas oil to the fishing fleet in iouadhibou and of butanefor the residential/commerciaL sector in Nouakchott. There will beadditional handling and storage facility requirements for fuel oil inline with growing requirements for electricity generation. SMCPP andMEPP have developed project proposals aimed at dealing with theseproblems, but they need technical assistance in strengthening theirorganization, management, and project financing. The Uovernmenttherefore plans to carry out an integrated petroleum product marketingstudy which would be financed through the IDA-assisted petroleumexploration promotion project.
Objectives
5. The *tudy would:
(a) analyze the existing petroleum product marketing systemincluding (i) infrastructure and products flow, (ii) sectorinstitutions, (iii) Government strategies and policies and (iv)the managerial, administrative and operational capacity ofoperating entities;
(b) identify the institutional, policy, investment, and operatingrequirements for more efficient management of the system, withemphasis on supplying (i) fuel to the fisheries sector, (ii)fuel oil for electricity generation, and (iii) butane andkerosene to the residential and commercial sectors; and
(c) recommend specific measures and projects to strengthen thepetroleum product marketing system. This should includepreliminary cost estimates, an implementation schedule, andidentification of possible sources of external financing.
B. Infrastructure: facilities and equipment - wharves, pipelines,storage, trucks, service stations, etc.
C. Flow of products through the system: present and future marketof petroleum products1. by product2. by economic activity3. by geographic area
D. Petroleum product pricing
E. Financial issues: SMCPP and MEPP1. Operating costs2. Financial charges, overheads, taxes, etc.
F. Data base and information flows
II. Improving Liquid Fuels Marketing System
A. Nouakchott and Southern Mauritania1. Present arrangements: physical infrastructure, institu-
tions, costs of marketing, efficiency2. Alternative arrangements: costs and benefits
B. Nouadhibou and Northern Mauritania1. Present arrangements: physical infrastructure, institu-
tions, costs of marketing, efficiency2. Alternative arrangements, under three scenarios:
(a) status quo market situation(b) alternative assumptions on fuel market for fishing
fleet(c) refinery in operation
C. Freight costs, by supply source, vessel size, and off-loadingfacilities1. for Nouakchott and Nouadhibou individually2. for Nouakchott and Nouadhibou combined
- J.16 - Annex 23Page 4 of 7
D. Recommendations
III. Fuel Supply to Fishing Fleet
A. Actual and potential market1. by size and type of vessel2. by ownership (country of origin) of vessel
B. Comparison of Nouadhibou to alternative supply bases1. Fuel related considerations: comparative prices, payment
terms, time factor -- by size, type, and ownership ofvessel
2. Non-fuel related considerations: availability of spareparts, other supplies and services (including repairs);facilities, terms and conditions for sale of catch; timefactor -- by size, type, and ownership of vessel
3. Government fisheries policy4. Feasible market share for Nouadhibou, as a function of (a)
fuel price differential relative to other sources ofsupplies and (b) the availability of other services
C. Options for fuel deliveries: comparative costs and benefits1. Installing an offshore barge2. Modifying of facilities at Point Central3. Upgrading existing facilities at Nouadhibou fishing port
D. Requirements for increasing fuel deliveries1. Infrastructure and logistics2. Institutions3. Quality of fuel to be supplied
E. Recommendations1. Project selection: least-cost solution, implementation
period, and financing arrangements2. Institutional management, and operational arrangements
IV. Butane and Kerosene Promotion
A. Actual and potential markets1. by economic activity2. by type of use (e.g. cooking; water-heating; lighting)3. by geographic area
B. Type and cost of energy to be substituted in terms of1. fuel cost2. equipment cost
C. Existing butane and kerosene supply systems1. Fuels: supply sources; transport, bottling and
distribution; costs and prices (including subsidies)2. Equipment (i.e. stoves, water-heaters, lamps; bottles and
efficiencies and life-span; distribution channels; costsand prices
3. Supplies and prices of fuels and equipment in Senegalborder areas
D. Existing promotion poLicies
E. Alternatives to existing butane and kerosene supply systems andpromotion policies1. Supply system alternatives, by market and container type
(i.e. bottles vs. cartridges): supply sources;transportation (tank trucks vs. coastal vessels); bottling;distribution
2. Butane subsidization alternatives: effects on (i) consump-tion of butane and its substitutes and (ii) governmentfinances, of:(a) reducing or eliminating the subsidy, on all sales or
on those made in large bottles only(b) as in (a) but combined with subsidies on equipment for
low income groups
F. Recommendations1. on improving marketing infrastructure2. on improving promotion policies
V. Fuel Oil Supply to the Electricity and Industrial Sectors
A. Electricity Sector1. Existing consumption of petroleum products
(a) SONELEC(b) SNIM(c) Others
2. Fuel conversion and expansion plans(a) SONELEC(b) SNIM(c) Others
3. Investment requirements and logistical/operationalrequirements for fuel oil use in power generation(a) SMCPP; MEPP(b) SONELEC, SNIM, other possible users
B. Industrial Sector1. Existing consumption of petroleum products2. Fuel conversion and expansion plans3. Investment and logistical/operational requirements for fuel
oil use in the industrial sectorC. Recommendations
- 118 - Annex 23
Page 6 of 7
VI. Institutional and Policy Requirements and Recommendations
A. Functions of Government, public enterprises, and privateenterprises
B. Regulatory policies
C. Management and Administration
D. Finances (including arrears situation) with regard to1. Foreign exchange2. Local currency
E. Planning: investment, operations, finances
F. Staffing (including training requirements)
C. Recommendations1. on "in-house" measures2. on technical assistance
Staffing Requirements and Costs
7. The study should be carried out by a consulting firm withextensive experience in petroleum product marketing and pricing indeveloping countries. The firm should provide a team of specialists,i.e.
(a) a senior marketing specialist, as team leader, for overallevaluation of (i) feasible options and requirements forstrengthening the petroleum product marketing system, (ii) re-levant Government strategies, policies and institutions, and(iii) operational efficiency of marketing entities (for sixmonths)
(b) a marketing facilities and logistics specialist, for assessmentof operational requirements, and for assessment and preliminarycosting of investment requirements (for three months)
(c) a petroleum product pricing specialist, for assessing the costand price structure of petroleum products and for identifyingpricing modifications needed for more appropriate operation ofthe petroleum product marketing system (for three months)
The specialists should be fluent in French and should have a workingknowledge of English.
8. The team of specialists would visit Mauritania for about twomonths. It would liaise with the Energy Directorate of the Ministry ofHydrology and Energy, the Government institution in charge of this study,and SMCPP, who would form a working group to facilitate implementation ofthe study. The team would keep the Directorate and SMCPP fully informed
- 119 - Annex 23
Page 7 of 7
about the progress of its work and would involve Directorate and SMCPPstaff to the extent feasible in its work.
9. The study is to be completed within eight months includingincorporation of the Government's and IDA's comments.
120 Annex 24Page 1 of 3
RENEWABLE ENERGY OPTIONS
Wind-based Electricity Generation
1. Wind turbines for electricity generation appear to be viablefor those locations where high wind speeds are combined with a systemwhose load can absorb all wind-generated electricity, such as inNouadhibou. The local wind regime is excellent with an average windspeed of 7.5 mls. Electricity demand at present ensures a minimum loadof about 3 NW and well above 5 MW once SONELEC and SNIM areinterconnected.
2. To indicate the electricity cost based on wind generation, themission assumes that a 16 m diameter wind turbine can be installed for UN6 an (US$ 107,000), i.e. about twice the present cost in Europe or theU.S. This includes transport, installation and protection against corro-sion. The 16 m diameter turbine is chosen because this size presentlyhas the lowest cost-to-output ratio: smaller and larger machinesgenerate electricity at higher cost. Also, these turbines can be erectedwithout too complicated and expensive cranes.
3. Assuming a capital recovery factor of 102, an economic life ofthe equipment of 10 years, and annual costs for operation, maintenanceand repair equivalent to 5Z of capital cost, the total annual costs willbe UN 1.83 mn. The relatively high percentage for OMR costs is chosen tocover the extra maintenance required due to the dusty and corrosiveatmosphere. At an annual output per turbine of 210,000 kWh in Nouadhibou(85,000 kWh in Nouakchott) generation costs for Nouadhibou would be 8.7UM/kWh (14 UM/kWh for Nouakchott) compared to SONELEC's estimate of aboutUN 18/kWh for diesel-based generation in Nouadhibou. Wind turbines thusare an attractive option in Nouadhibou, and their payback period is aboutthree years with the above assumptions.
4. The grid situation in Nouadhibou is such that a small wind farmconsisting of 20 60-kW wind turbines, generating a maximum of 1.2 MW,will not pose large problems for the diesel-powered electricity plant. Adetailed study is needed for site selection, grid connection, diesel con-trol strategies, maintenance organization, etc., but also to assess thecorrosion problems.
5. The intensive use of electricity for cooling purposes by thefish processing industries, and their operation of storage rooms and iceproduction facilities, opens a possibility for load management in corre-lation with the supply of wind energy. Discussions with one of thelargest electricity consumers, SOFRIMA, revealed that load managementwould be possible if restricted to ma-imum periods of about half anhour. Storage for hours without electricity seems rather difficult. Thepossibilities for load management should also be part of the study of awind farm.
- 121- Annex 24Page 2 of 3
Wind-based Water Pumping
6. Water pumping windmills should preferably be located in placeswith a good wind regime and a high water table, because the cost percubic meter of water pumped is inversely proportional to the pumpinghead. Also, productive applications such as irrigation are to bepreferred where the owner sees a clear responsibility for the maintenanceof his windmill. These requirements seem to be met in the Senegal RiverBasin, which is nearly the only region in Mauritania where agriculture ispracticed on a reasonable scale. The soil is of good quality, but thelack of wells and pumping equipment is a limiting factor, apart fromorganizational and maintenance problems. The silt problem due toseawater intrusion at river flow rates below 50 m3 /sec has been solved bybuilding a temporary dam in the mouth of the river, awaiting thecompletion of the Djamma dam in 1986.
7. The cultivated areas in the various regions near the river aredistributed as follows (1982):
Rosso 3,294 haBoghe 467 haKaedi 1,267 haSelibaby 374 ha
Total 5,392 ha
SONADER is invoLved in the cultivation of 2780 ha. It was stated thattens of thousands of hectares could be brought under cultivation if suf-ficient amounts of water could be provided. The water table in theregion around Rosso varies between 4 and 7 m below ground level. Taking5 m as the average groundwater level and adding 2 m for various lossesresults in 7 m total head for the windmills. A water pumping windmillwith a diameter of 5 m will produce about 1,800 kWh(hydr) per year in awind regime with an average wind speed of 4.5 m/s. At 4 m/s, the oytputdecreaseI to about 1,300 kWh(hydr). This is equivalent to 94,COO m and68,000 m of water pumped per year. The water can be used only duringpart of the year. Conservative y, one crop of 120 days is assumed. Thisreduces the output to 31,000 m or 22,000 md/crop, corresponding to 260or 190 m /day. With this amount of water about 2-3 ha could be irri-gated.
8. With the investment cust of a 5 m diameter windmill estimatedat US$ 6,000 and snnuity and maintenance costs estimated at 20% ofinvestrent cost, the pumping costs in the above example will be USC4 andUSC5/m' of water. These costs are quite acceptable for irrigationwater. If more efficient use of the water output can be made by plantinga second crop, the water costs would be correspondingly reduced.
9. The Netherlands Steering Committee Wind Energy for DevelopingCountries (SWD) will assist SONADER through installation of two 5-mdiameter water-pumping windmills (to be installed in Ngawley, about 100km East of Rosso).
- 122 - Annex 24
Page 3 of 3
Solar Water Heating
10. Most higher income earners in urban areas in Mauritania possesselectric water heaters. Their number is not known because no separaterecords of private three-phase connections are kept by SONELEC. Thisinformation is essential since the owners of electric water heaters arethe potentiaL target group for replacement by solar water heaters. It isknown that SNIN employees in Nouadhibou possess at least one electricwater heater each, and that their electricity bills are paid by SNIN.SONELEC estimates that at least 2,000-3,000 electric water heaters areinstalled by SNIM. Adding another 2,000 heaters for the rest ofNouadhibou and an estimated 5,000 heaters for Nouakchott leads to a firstestimate of 10,000 heaters in Mauritania.
11. The following simple cost comparison may demonstrate the possi-biLities for introducing of solar water heaters in Mauritania. The costof a solar water heater in Europe or the U.S. varies according to thedifferent makes and sizes, but usually amounts to US$150-250 per m2 ofcoLlector area including piping and tank. For Mauritania, US$500 is areasonable estimate for a square meter of collector area. For theaverage private consumer, two square meters will be sufficient, costingUS$1,000 or about 80,000 UM. With a capital recovery factor of 10% andadding 2Z of capital cost for maintenance, the annual cost will be 18.3%of 80,000 UK, or 14,640 UN.
12. The solar collector will produce about 500 kWh/m2 a year, whichis based on a conservative annual efficiency of about 27% and annualinsolation assumed at 5 kWh/day times 365 days, equalling 1,825kWIh/m /year. In other words, a 2 m2 solar water heater produces about1,000 kWh(th) per year, which corresponds to 17,200 liters of hot waterheated from 20 to 70 deg C (47 literslday). To produce the same amountof hot water with an electric water heater with an efficiency of 90%,about 2,200 kWh(el) are required. The electricity cost to the consumerwould amount to 19,800 UM (i.e., 1,100 kWh times 18 UM). An average 75liter electric water heater imported from Spain costs about 29,000 UM.Assuming that the annual equipment costs are also 18% of the investment,annual electricity and equipment costs would total 24,950 UM.
13. On this basis, solar water heaters would be significantlycheaper than electric water heaters. This justifies promoting theintroduction of solar water heaters to those consumers that can affordthem, i.e. (a) hotels, using considerable amounts of hot water, whoseinvestment costs per square meter probably would be lower due to thelarger installations required; (b) SNIM employees in Nouadhibou; and(c) hospitals and other public buildings.
14. The fuel conservation compared to the use of eLectric waterheaters is estimated as follows. With 4 kWh(el) generated per kg offuel, each solar water heater of the above example saves 1,10014.0 = 275kg of oil per year. With a reasonable market potential of 5,000 solarwater heaters, 1,375 tons of fuel are conserved per year. This corres-ponds to about 7Z of the consumption of SONELEC in 1983 (20,000 tons).
- 123 - Annex 25Page 1 of 7
STUDY ON UTILIZATION OF RENEWABLE ENERGY SOURCES
Draft Terms of Reference
Background
1. In view of the scarcity of conventional energy resources,renewable energy, especiaLly wind and solar, is potentially significantfor meeting local energy requirements. However, its development has beenheld back by the lack of an appropriate Government strategy,institutional weaknesses, high cost of equipment, and absence of localcapabilities to produce, disseminate, and service suitable equipment.The Governmental National Unit for Alternative Energy (CNEA) potentiallyhas an important role to play, but its objectives need to be more clearlydefined. In addition, a priority ranking of available options should beestablished as a framework for a development strategy.
Objectives of the Study
2. The study would:
(a) identify and rank wind and solar energy options;
(b) prepare a follow-up program for implemention, including termsof reference for feasibility studies; and
(c) evaluate CNEA's current objectives and responsibilities, with aview to recomnending a work program for CNEA in line withrational energy development priorities and available resources.
Scope of the Study
3. The study would evaluate the technical, economic, andinstitutional aspects related to the following options:
I. Wind-based Electricity Generation - Nouadhibou
A. Wind regime measurements
1. Evaluation of available data (long-term averages,Weibull factors, persistence of calms)
E. Experience with windmills in the area (Mauritania andSenegal)
l. Test data
2. Anecdotal accounts
F. Available equipment (windmills, towers, pumps)
1. Types, sizes, capacities
2. Capital and operating costs
3. Equipment, supplies, and skills needed for operationand maintenance
4. Possibilities of local manufacture
C. Development prospects
l. Effects of wind-based irrigation on
(a) Volume of water pumped and costs of irrigation(b) Areas irrigated, agricultural output(c) Fuel and electricity consumption in irrigation(d) Water and salinity balance
2. Alternative types and number of windmills
(a) Investment requirements and scheduling(b) Operational requirements (including training)
H. Recommendations
1. Wind measurements
(a) Institutions(b) Procedures(c) Equipment
2. Equipment testing, adaptation
- 127- Annex 25Page 5 of 7
3. Training
4. Further studies
5. Draft specifications for bidding documents on equipment
III. Solar Water Heaters - Urban Centers
A. Solar resource data, estimates
B. Past experiences
C. Potential markets: estimates of volumes and of comparativecosts of water heating
1. Higher-income households (with electric and/or gaswater heaters)
2. Lover-income households (heating water in pans, etc.)
3. SNIM employees
4. Public institutions
5. Commercial and industrial firms
D. Available equipment - characteristics, performance, costs
1. Flat plate
2. Bag type
3. Focusing
E. Needs and local availability of skills, materials, andequipment to manufacture, install, and maintain systems
F. Taxes and import duties on water heaters
G. Recommendations
1. Solar energy measurements
(a) Institutions(b) Procedures(c) Equipment
2. Equipment testing, adaptation
3. Training and setting-up of "delivery system"
- 128- Annex 25
Page 6 of 7
4. Fiscal and credit incentives for dissemination andapplication of solar water heaters
5. Institutions to participate in disseminating solarwater heaters
(a) SONELEC(b) SNIM(c) CNEA(d) ADEREM
IV. Proposed CNEA Work Program
A. Strategy objectivea
1. Coordination of renewable energy activities carried outby the Government and public sector entities
2. Testing, adaptation, and dissemination of
(a) New and renewable energy technologies and equipment(b) Energy saving technologies and equipment
(i) Improved stoves(ii) Other
3. Support to private sector
4. Identification of foreign assistance requirements
5. Mobilization of foreign capital and technicalassistance
B. Operational objectives
1. Renewable energy data compilation and publication
2. Rehabilitation and installation of measuring devices
3. Equipment inspection, repair, and maintenance
4. Coordination with and logistical and operationaLsupport to programs carried out by technical assistanceinstitutions
5. Participation in priority wind and solar energyprojects
6. Participation in studies on potential and utilizationof new and renewable energy in Mauritania
- 129 - Annex 25
Page 7 of 7
Staffing Requirements and Schedule
4. The study would be carried out by a consulting firm with long-range experience in wind and solar energy applications in developingcountries. The firm would make available a team consisting of: (a) asenior energy economist, as team leader, with experience in wind andsolar energy and institutions in the renewable energy sector; (b) anelectricity specialist with experience in wind-based electricitygeneration and its integration into the electricity grid; (c) aspecialist on wind and solar water pumps; and (d) a specialist on solarwater heating. The consultants should be fluent in French and shouldhave a working knowledge of English.
5. The consultants' team should carry out this study in closecoordination with CNEA as the main Government institution for renewabLeenergy development, as well as with SONELEC, SKIM, and SONADER. Theaforementioned institutions will form a working group to assist in theimplementation of this study. The consultants will inform the insti-tutions regularly about the progress of their work and will arrange, tothe extent feasible, for participation of suitable local staff in theirwork.
6. The study will be completed within nine months followingsigning of the contract, including initial field work in Mauritania(about two months) and incorporation into the final report of theGovernment's comments on the draft report.
- 130 -
Annex 26Page 1 of 3
STUDY ON STRENGTHENING THE ENERGY DIRECTORATEOF THE MINISTRY OF HYDROLOGY AND ENERGY
Draft Terms of Reference
Background
1. The Energy Directorate (E.D.) of the Ministry of Hydrology andEnergy was established in 1982 with responsibility for (a) energy plan-ning, (b) policy analysis and coordination and (c) sector administrationincluding monitoring and supervision of energy enterprises. E.D.'s staffat present consists of its director and four junior professionals. The1983 budget was about the equivalent of US$50,000. Budgetary and staffresources thus are grossly inadequate for meeting E.D's wide-rangingfunctions.
2. Technical assistance in the energy sector has been givenprimarily to the operating entities. There is also need for assistanceat the sectoral level, e.g. for preparation of energy demand forecastsand integrated analysis of long-term supply options. In order for D.E.to meet its functions as the principal governmental institutionresponsible for energy planning, technical assistance to this institutionwill be imperative.
3. The Government therefore has decided to carry out a study tostrengthen D.E. for enabling this institution to meet its functionseffectively. Financing for this study has been obtained from IDA, aspart of the studies component of the Petroleum Exploration PromotionProject.
Objectives
4. The study should:
(a) analyze D.E.'s existing role, institutional capabilities, andrequirements for carrying out its functions; and
(b) assist D.E. in designing a short and medium-term work program,identify further technical assistance requirements, and iden-tify possible sources of technical assistance.
Scope of Analysis
5. The study should cover the following aspects:
I. Present Situation
A. Objectives
B. Responsibilities
- 131 -
Annex 26Page 2 of 3
1. Administration2. Policy analysis3. Planning
C. Institutional relationships
1. within the Ministry of Hydrology and Energy
2. with related Ministries (e.g. for Rural Development,Planning, Mining and Industry, Transport)
3. with energy enterprises(a) public sector(b) private sector
D. Representation in other institutions
E. Available resources
1. Staff
(a) Training and experience(b) Salary and benefit Levels (vis-a-vis comparable public
and private sector institutions)
2. Equipment, materials, supporting services
3. Information resources(a) Documentation(b) Data collection and processing
4. Functions
(a) Routine functions and their cost
(i) Licensing(ii) Monitoring and supervision
(b) Non-routine functions and their cost
(i) Policy analysis(ii) Energy Planning
II. Medium-term Objectives and Requirements
A. Responsibilities and functions
B. Staffing and other material resources
C. Budgetary implications and possible sources of financing
- 132 -
Annex 26Page 3 of 3
1. Central Government budget
2. Earmarked Covernment revenues
3. Foreign grants (in money or in kind)
D. Requirements for, and sources of, technical assistance(including training)
E. Feasible alternatives in case resources remain insufficient
III. Recommendations
A. Priority ranking of functions
B. Liason with other institutions in the energy sector
C. Staffing
1. Levels
2. Number of positions
3. Recruitment and training
D. Information resources
E. Budgetary resources
Staffing and Cost
5. The study should be carried out by an energy planningspecialist with solid experience in Government energy administration,policy analysis and planning in developing countries. The specialistshould be fluent in French and should have a working knowledge ofEnglish. The specialist should visit Mauritania for about two months andshould work in close liasion with D.E. staff. The study is to becompleted within four months of the start-up of field work includingincorporation of the Government's and IDA's comments.
IBRD 1840?
S ~ ~~~~~~~~~~~~~~~~~~~~~~~~~ r
A (SAMINER )
MAURITANIA R 'A ACOMMERCIAL ENERGY ACTIVITIES .7//1A
I Quosewnory
EaDene - r ) 5-,
X Pbleooc Coerw an Platform I : rMelsworphcius or Row-bat Arch . 'EOfhhoe Ban Bum - . . .,
Onshor Bo,m "
Strucwus Visiage on eseit Seismi aurvey %
* VMIs /7 "~~~~~~~~~~~~N'"~I-. N' (SONADERiP' ~t7-
(;3 Int rusionolEanoz' -o ~ ~ ~ ~~~_ Rlno Boh S E. N:.GAL :-
iHydrocarbon Esiplomation Blocks' I ________~
Hydrocarbon Explomotion Bl6cks.Countrocted*I
DiesA D 'si
Iv :hr ruaFs IC
Depth Contours vn Meters
- - lntnoonl Boundaries Uj- ½A~~~~~~~ EQ
_^-." uar_~~~_a"_-*~~~~ ' -'
.Note The coastlire serves as bounidary for blocks 2-3, 5-6 and 0-9. DAKAR/
A F RI C A
r _~ b -__ _ _ _ _ THE GAMBIA'9 ~~~'02 0
_w~~lu .w_s f -,_~_te__ ,___~ 8 e. - w o--i r 1- - -~vG U -, I N E A UD eec r a. .e w ae. WI~~~~~~~~~S SA U
IBRD 18404AUGUST 1964
ANNUAL RJELwOOD PRODUCTOPER HECTARE OF NATURAl. FOREST COVER
1982 MAURITANIAMIEAN ANNUAL NET"JUALAN.EINCR"EMENT ( ,NCREMENT1 RENEWABLE ENERGY RESOURCES
DESERTIC AND SESEDTIC ZONE 0.05 0.02
JOERP0PULATED SAHEULAN AND 0.15 0.035UDANO-SAMELIAN, ZONE
UNERSTOCKED AND OVERPOPUATED WIND DATA SOLAR RADIATION DATASAVANNA ZONE ~ 0.45 0.07 1962 1982
. SAVANNA ZONE _ lM/SECI (AVERAGE NRSOAY I
NATIONAL AVERAGE 0.16 0.03 NOUADHI80U 7.5 8.6NOUAKCHOTT 5.0 8.0
C EXPERIMENTAL RURAL EVELOPMENT CENTER - ATAR 4 e.3* SMALL PERIMETERS NEMA 4.2 8.9
