CAPACITY DEVELOPMENT FOR THE CLEAN DEVELOPMENT MECHANISM
NORTH AFRICA AND MIDDLE-EAST REGION
Report on the first visit to Egypt
September 2002
Gordon A. Mackenzie Samir Amous
UCCEE, Denmark APEX, Tunisia
1 Introduction
The United Nations Environment Programme has launched, with the financial support by the Dutch Government, the project Capacity Development for the Clean Development Mechanism. The UNEP Collaborating Centre on Energy and Environment (UCCEE) is the supporting organisation contracted by UNEP to implement the project.
The project aims at :
· Generating in participating developing countries a broad understanding of the opportunities offered by the Clean Development Mechanism;
· Developing the necessary institutional and human capabilities that allow them to formulate and implement projects under the CDM.
Twelve countries have been selected to participate in the project. Egypt, Jordan and Morocco are the countries in the North Africa/Middle East region participating in the project.
APEX, from Tunisia, is the Regional Centre selected to assist the UCCEE on the implementation of the project in Egypt, Jordan and Morocco.
The project includes two main phases: (i) The project preparation phase to be carried out from September 2002 to December 2002; and (ii) The project operational phase to be implemented from January 2003 to December 2005.
The main activities of the preparatory phase, in the countries, are:
· Initiate discussions with the relevant stakeholders in order to establish a country specific strategy approach aimed at obtaining the highest degree of political support. This will include the organisation of a national workshop involving the main stakeholders to take part of the project;
· Designate an appropriate Focal Point Agency (FPA) that will be the official government institution responsible for the implementation of the project at national levels. This will include the preparation of a Memorandum of Understanding that will describe the terms of collaboration between the FPA and UCCEE;
· Designate an appropriate National Technical Support Entity (NTSE) that will be in charge of undertaking the major technical activities included in the project, on behalf of the FPA. This will include the preparation of a Memorandum of Understanding that will describe the terms of collaboration between the FPA and the NTSE, and of a contract between UCCEE and the NTSE, under which the NTSE will undertake the designated activities on behalf of the FPA;
· Develop a multi-year work plan for promoting national CDM activities and investments;
· Organise a regional workshop involving representatives from the participating countries, as to share experience on project activities with the other national teams in the region, and discuss any CDM related issues.
This report presents the main findings and recommendations of the first mission that took place in Cairo from 9 to 13 September 2002. The Team that conducted the visit included Dr Gordon Mackenzie (UCCEE) and Dr Samir Amous (APEX).
2 Status of the climate change related activities in Egypt
2.1. Technical issues
Egypt signed the United Nations Framework Convention on Climate Change (UNFCCC) in Rio de Janeiro in 1992, and ratified the Convention in 1994. Egypt has also signed the Kyoto Protocol in March 1999, but has not yet ratified it.
In accordance with its commitments to the Convention, Egypt has submitted its Initial Communication to the UNFCCC in June 1999. As a part of the preparation of the National Communication, Egypt launched two major projects: “Building Capacity for Egypt to respond to the UNFCCC”, with the support of the UNDP-GEF, and “Support for National Action Plan for Climate Change” (called SNAP) funded by USAID.
Under the first project, in addition to the capacity building activities, a number of studies have been executed covering the fields of GHG emissions inventory, vulnerability & adaptation assessment and mitigation assessment.
Within the framework of the second project, many studies have been undertaken, including assessment of Strategy and Policy Measures for Adaptation to Climate Change in Egyptian Agriculture, Adaptation Studies for Sea Level Rise, and GHG mitigation actions. These studies have been fully contributing for the development of Egypt’s Climate Change Action Plan.
More recently, a National Strategy Study (NSS) on the Clean Development Mechanism has been undertaken in 2001 and 2002, and is being completed soon. A workshop is being held from 30 September to 1 October 2002 for the presentation of the draft Final Report of the NSS.
2.2. Institutional aspects
As a result of an increasing attention to the environmental protection, the Government of Egypt established the Egyptian Environmental Affairs Agency (EEAA) in 1982. The EEAA is a part of the Ministry of State for Environmental Affairs.
Furthermore, in the context of its willingness to comply with the UNFCCC, Egypt established an inter-ministerial committee on Climate Change in October 1997. The Chief Executive Officer of EEAA heads this committee, and the members represent a wide range of governmental and non-governmental stakeholders. The committee aims at coordinating at national level the participation of Egypt in the Framework Convention on Climate Change, developing an overall policy dealing with climate change issues, reviewing the National Action Plan for Climate Change and following up on the implementation of the UNFCCC at national level.
Over the past few years, several organizations have been extensively involved in climate change related activities. These include: environmental organizations, energy related organizations, research centres, universities, as well as non-governmental organizations.
The Egyptian Environmental Affairs Agency (EEAA) and the Organization of Energy Conservation and Planning (OECP), were among the major stakeholders involved in the Climate Change activities initiated so far by Egypt.
The main expected outcomes of these initiatives were the development of a sustained institutional structure to address climate change issues and comply with the UNFCCC, and the development of a strengthened national mechanism that can provide full support for climate change related activities.
Subsequently to the submission of the Initial Communication to the UNFCCC, Egypt had been experiencing some difficulties in maintaining the same mobilization on Climate Change issues, but it continued, at high political level to pay great attention to maintaining a high interest to the major Climate Change issues, with a particular emphasis on implementing concrete actions.
Egypt has, in particular, launched the Study addressing the National Strategy towards CDM,[1] which, as mentioned above, aimed at improving the Egyptian capabilities to access CDM investments. The study included six major tasks:
· Review of the existing activities on Climate Change and on CDM;
· National GHG Offset Potential;
· International GHG Offset Market;
· Domestic Pre- requisites (Institutional, Regulatory).
· Options for implementing the CDM process in Egypt;
· CDM Project Pipeline.
A seventh task, related to the specific issues of Land-use and Land-Use Change and Forestry was also added to the study later on.
Under the umbrella of the EEAA, and its contribution to facilitating information exchange, and the supervision of a Steering Committee, six Commissions were established for carrying out this study, with a wide range of stakeholders participating in the different components of the study. This study was mainly carried out by a group of a highly experience senior experts, from the Tabbin Institute for Metallurgical Studies (TIMS) and its affiliated Energy and Environment Research Centre (E2RC). The TIMS has also been able to mobilize expertise from other research Centres and Institutes, and has associated various skills including experts coming from the banking sectors.
The TIMS was created in 1968, and is a part of the Ministry of Industry and Technology. It plays a major role as:
· A post-graduate institute for graduate students in the different areas of industry and energy;
· A training centre in industry and energy;
· An independent consultancy company, providing services both to the public and private sector.
The TIMS was also involved in the previous UCCEE CC mitigation costing studies, in the US Country Study, and actively participated in the preparation of the Initial Communication of Egypt to the UNFCCC and the Egyptian Climate Change Action Plan. The TIMS is headed by Prof. Dr. Eng. Ahmed Amin Abdulmaguid, who is also a member of the Consultative Group of Experts to the UNFCCC.
At institutional level, Egypt has also implemented in June 2002, one of the major recommendations of the Action Plan, i.e. the establishment a Climate Change Unit (CCU), under the EEAA. The aim of the CCU is to take care of all Climate Change activities and issues in Egypt, and should serve as a coordinating unit, acting on behalf of the inter-ministerial committee on Climate Change.
Egypt has also established an Energy Efficiency Council, whose role is to promote energy efficiency initiatives and projects.
More recently, and under a Presidential Decree, released in year 2000, Egypt has also established the Egyptian Electric Utility and Consumer Protection Regulatory Agency (EEUCPRA). This body, which is affiliated to the Ministry of Electricity and Energy, was created in the perspective of major changes in the electrical sector, to be launched soon, in particular those related to the opening of the power sector to private investments.
According to the Decree, the EEUCPRA will regulate, supervise and control all matters related to the generation, transmission and distribution and consumption of the electricity in Egypt, including the ratification of procedures set for granting licenses related to the construction, management, operation and maintenance of electrical infrastructure, the establishment of the rules for the exchange of electricity between the different operators involved in the electricity sector, etc. The EEUCPRA will also be responsible for ensuring that electricity operators are in compliance with the environmental protection rules.
It is worth noting that the EEUCPRA is likely to become a major actor in the future, in the area of CDM investments, as many potential projects that might access the CDM market relate to the establishment of cogeneration equipment both in the industrial and tertiary sectors, and to the development of wind power. All of these projects could imply fundamental changes in the technical structure of the electrical sector in Egypt, and would necessitate that a specific regulatory framework be set up.
3 Perspectives for the development of CDM activities in Egypt
The draft recommendations of the National Strategy Study on CDM carried out by Egypt, suggested five major measures that should be undertaken in the future, in order to facilitate to Egypt to attract CDM investors:
· The establishment of a strong and a professionally credible CDM Unit in charge of all activities involved in the identification and preparation of eligible and marketable projects, as well as the implementation and monitoring of projects, taking into account the legal aspects associated with this implementation (e.g. verification, accounting, certification, issuance of CERs, etc.), as agreed upon by the Conference of Parties and by the CDM Council;
· The establishment of clear procedures regarding with the development and implementation of the CDM projects;
· The development of a capacity building programme, aimed at providing the necessary capabilities to manage the CDM process in the country and attract funding;
· The implementation of an efficient awareness programme targeting the major stakeholders and operators that might be interested in CDM investments;
· The development and execution of marketable project portfolios.
As mentioned above, the draft report of the strategy is being discussed in a workshop to be held in Cairo from 30 September to 1 October 2002.
4 Implementation of the project “Capacity Development for the Clean Development Mechanism” in Egypt
Considering the outcomes of the NSS, the current project is perfectly in line with the Strategy recommendations. Therefore, this project comes exactly on time to implement the modules of CDM Action Plan as suggested by the Strategy Study, and within the defined timeframe.
4.1. Preparatory phase (September-December 2002)
First visit to Egypt
This visit to Cairo took place from 9 to 13 September and allowed the team to meet with the main stakeholders involved in the CDM process, to get relevant information on past and ongoing activities on Climate Change and the CDM in Egypt, and to discuss the main questions on the agenda of the preparatory phase of the project.
Institutional settings
As a result of the consultations with the EEAA, and with other stakeholders, it is suggested to establish the following institutional setting for the project in Egypt:
· The Egyptian Environmental Affairs Agency (EEAA) as a Focal Point Agency for the Project in Egypt;
· The Tabbin Institute for Metallurgical Studies (TIMS) as a National Technical Support Entity (NTSE) to the project in Egypt.
It is suggested to establish this institutional framework as soon as possible so as to allow a timely implementation of the first phase of the project. When undertaking the activities of the project in this first phase, TIMS should give a full consideration to the mobilization of the necessary expertise in all the areas that are relevant to the CDM, while also considering the involvement of various stakeholders and experts, in all priority areas (i.e. Energy, Industry, Forestry, Agriculture and Waste), when undertaking the activities foreseen for the second phase of the project.
Provisional Agenda for the next activities of the first phase
o Participation in the Workshop to be held in Cairo 30 September - 1 October
In order to take stock of the experience acquired so far by the CDM National Strategy Study in Egypt, and to ensure that the current project is fully consistent with the recommendations of the NSS, it is suggested that the Regional Centre representative (Samir Amous) attend this workshop. This workshop could also be a good opportunity to present the current project to the stakeholders, and to discuss any recommendations that might enhance the effectiveness of the project. It is suggested to give this presentation on the final session of the first day of the workshop (30 September 2002).
o Organisation of a Stakeholder Workshop to be held in Cairo
A two-day national workshop should take place in Cairo, and should bring together the main national stakeholders involved in CDM issues in order to:
· Introduce national stakeholders to the Capacity Development for CDM project;
· Present, discuss and validate the Capacity Development requirements for the CDM process in Egypt;