NATIONAL7 (Spotlight Weekly)]

Energy Brigade

The US-initiated Regional Energy Forum plans to begin actions from next year

By A CORRESPONDENT

Even as the 11th summit of the South Asian Association for Regional Cooperation (SAARC) could not take place in the capital on the scheduled date (last week of November), government officials and Non Government Organizations' representatives from the SAARC member countries did assemble in Kathmandu during the first week of December.

Their two day meeting took place under the banner of South Asia Regional Energy Forum. Organized by the US Energy Association and funded by the US Agency for International Development (USAID), the forum aimed at providing an opportunity for the South Asian Countries to share energy sector development experiences and to explore options for mutually beneficial cooperation in the said sector.

Other organizations that supported the forum include the US Department of State, US Department of Energy, US Trade and Development Agency, and the US Department of Commerce.

So, how successful was the meet to attain its target? "There is general receptivity, agreement and enthusiasm over the idea of trying to have a program that could support regional dialogue on power sharing and help develop cross border infrastructure and eventually trade and resource," said Delbert MC Cluskey, Chief of Regional and Special Programs of USAID Bureau for Asia and the Near East.

Going by the South Asia Regional Initiative/Energy Program (SARI/Energy) draft prepared by the USAID, the regional forum is not just talks and meeting. SARI/Energy will be a two-phased program beginning in fiscal year 2000. Phase I will last upto four years, with a total estimated budget of 34 million US Dollars. Phase II will be contingent upon the experience of PhaseI.

The SARI/Energy program will fund technical assistance and training in these areas in regional forums where energy sector stakeholders from different countries can learn lessons from the experience of their neighbors and gain a common base of knowledge regarding successful energy cooperation and trade among countries in other regions.

That apart, the regional forum also talks about generating cheaper power at a time when electricity tariff, especially in Nepal, has been one of the most expensive in the world. "Ultimately, what we hope to happen out of this regional cooperation and with the reforms that happen in each country in the region is the most economic power sources will be developed and made available to consumers and industries," said McCluskey.

"Our observation in a number of other countries has been that when you get the sectors restructured, get independent regulatory body, get the right tariff structures in place and get enough competition system that works within a country and between countries, you end up getting competitive pressures that keep the price of energy as low as economically feasible," said Gordon W. Weynand, Acting Director of USAID's Office of Energy, Environment and Technology.

Given the increasing demand for energy in South Asia, the competitive pressure to bring the price down does not appear a remote possibility. According to the US Energy Information Administration, South Asia's primary energy consumption from commercial energy sources increased by around 50 percent between 1990 and 1997.

"Considering the development of, for instance, natural gas in Bangladesh, hydro potential in Nepal, and energy demand from sustained economic growth, the time is appropriate the regional dialogue," says McCluskey.

Understandably, the idea of the forum comes as a groundwork for the US commercial interest in the region. According to the US participants at the regional meet earlier this month, South Asia represents one of the largest potential economic markets in the world.

With big US power developers like Enron already interested to invest on large scale projects in the country, the regional meet's US participants also advocated for the medium size to smaller companies that are what they claimed most likely technology oriented.

"These are the companies that right now are not getting exposure and do not have access to the markets. If we can open up for those kind of companies, there is benefit from the country's perspective as well as from those companies'."