Objetivos específicos

Even though every country in Africa has surplus energy resources, financing difficulties have prevented the vast majority of countries from being able to exploit their energy potential (Sanoh et al., 2014). Energy development in many countries in SSA also suffers from poor energy financing and incentive mechanisms, inadequate energy planning and the weakness of national energy policies (Mohammed et al., 2013b). Malawi’s inadequacies in providing the appropriate financial support and investments for renewable energy sector are therefore not particular to the country, but characteristic of SSA. Malawi does not only have to address the question of

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attracting local and international investors to develop renewable energy projects but the country also has to increase awareness of the value of RETs, improve the availability of RETs and improve the accessibility of RETs.

Scaling up the effort to solve energy-poverty problems require innovation in service delivery which includes possible changes in both ownership of energy service delivery organisations and the ways in which energy is financed (Zerriffi, 2011). A lack of finance was cited as an issue that has impaired the deployment of renewable energy in Malawi and other countries in the region. Funding constraints arguably limit the extent to which renewable energy related research and development and capacity building activities can be undertaken. Policies in Malawi should therefore be geared at increasing the sources to which the renewable energy sector stakeholders can access finance possibly through a Renewable Energy Fund. No electrification project has ever succeeded without significant government backing and strong political will (CORE, 2003), as such a Renewable Energy Fund is particularly helpful not only as it will demonstrate political will to improve renewable energy generation. It so happens that experience gained from first-generation market development projects show that, in almost all cases, significant public resources have been necessary to increase the affordability of clean energy technologies, provide access to financing for the poor, and remove non-economic barriers (Glemarec,2012).

Below are three options which present a means for creating and sustaining a Renewable Energy Fund. Since donor commitments can be erratic, the three options provided are independent of donor support or anticipated grants as such present a more sustainable approach to developing renewable energy sources through other resources.

Option 1- Energy Levies

Following on from the proposals contained in the Malawi National Energy Policy (2003), the Rural Electrification Act (2004) was enacted to make provision for the promotion, funding, management and regulation of rural electrification; and for matters connected therewith and incidental thereto (GoM, 2004c: par 21). The key provisions of the Act include the establishment of the Malawi Rural Electrification Fund comprising of such sums as shall be appropriated by Parliament for the purposes of the Fund and rural electrification levies on energy sales. The funds

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collected through the Rural Electrification Act have greatly contributed to the development and sustainability of the Malawi Rural Electrification Programme (MAREP) which was mainly funded by donors prior to the enactment of this Act.

The price of petrol and diesel in Malawi incorporates the Rural Electrification Levy in its price build up as such there is a consistent flow of funds available for rural electrification that are protected by national legislation. In addition to this, there are also annual allocations from the national budget towards the Rural Electrification Fund. In a similar manner, it is conceivable for Malawi to develop a similar piece of legislation that can stipulate national budget allocations and levies from fossil fuels to be directed towards a fund for financing renewable energy initiatives. Or alternatively a certain percentage of money collected for rural electrification through the Rural Electrification Act/Rural Electrification Levy can be allocated for electrification and other activities that only deal with renewable energy developments in order to assist with the diffusion of RETs. Moreover, it has been reported that the US$55,000,000 (€40,315,275) Kapichira II Hydropower Project (2011-2013) was financed through revenues from the Rural Electrification Levy hence since the project was finished and commissioned it theoretically means that Malawi can generate US$55,000,000 every three years to make available for rural electrification and renewable energy development.

Option 2- Environmental Taxes

Various countries have introduced or are proposing to introduce various taxes which can be considered environmental taxes since they tax anything or a proxy for anything that has a negative impact on the environment. Pertinent current or proposed environmental taxes include plastic packaging materials and products (Ghana), vehicle carbon tax (Zimbabwe) and carbon emissions tax (South Africa).

Such taxes are not imposed in Malawi even though the environmental issues that these taxes are trying to address are also prominent in Malawi. There is therefore potential to impose these taxes and establish a fund for which the funds collected can be transferred to and be utilised for renewable energy development.

This study further proposes that the environmental taxes should be introduced through annual national budgets rather than through the enactment of an Act of

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Parliament. National budgets are more versatile and adaptable as a means of increasing and reducing taxes, introducing and eliminating taxes (surtax, duty) and waiving taxes as every year the budgets include various incentives and provisions to enable the government to achieve specific agendas and revenue collection goals.

National budgets are also particularly ideal in that the environmental taxes, can be introduced on a trial basis and extended in successive years should they be seen to be effective towards the purpose. Such an arrangement can therefore enable a quicker way of building consensus amongst various stakeholders. In order for this to be undertaken various stakeholders as identified in the research will need to lobby the government on this issue.

Option 3- Carbon Credits

Carbon credits can be used to improve the financial viability of renewable energy projects and also generate revenues that can support the development of renewable energy projects. Whilst normal projects usually incorporate carbon credits into their economic feasibility for projects, the approach taken for the Lake Turkana Wind Power Project (LTWP) highlights an alternative approach where carbon credits aid projects to be financially viable even though they are not incorporated as part of the revenue stream.

The LTWP is a 300MW wind farm (i.e. equivalent to 20% of the country's current total installed generation capacity) in Kenya. The LTWP provides various points that can be emulated in order to promote renewable energy deployment. The €459,000,000 project was developed without drawing any public funding which is a challenging task since the mobilisation of private enterprises to support renewable energy projects is challenging as investors are reluctant to allocate resources to technologies that guarantee uncertain returns (Masini and Menichetti, 2013). The project is expected to mitigate the emission 16 million tons of carbon emissions during its 20-year lifespan as such it was registered under the Clean Development Mechanism so as to generate additional finances through the sale of carbon credits (LTWPL, 2011).

In order to improve the project’s financial viability, reduce financial risks, and attract investors, the project developers came to an agreement with the national utility whereby a higher tariff and guaranteed price was agreed between the two parties on

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the condition that some funds from the sale of carbon credits from the project would be paid to the utility. This arrangement is rather unique as usually many projects base their financial viability and projections on the revenue from the sale of carbon credits whose value changes with market forces. This innovative arrangement can be seen to have significantly improved the sustainability of the project as the carbon price (figure 7.5-CER prices January 2011 to December 2012) has been seen to be falling with no significant detriment to the revenues and credentials of the project.

In a similar fashion, renewable energy project developers can negotiate with ESCOM and large power consumers for preferential/premium tariffs on condition that the projects will be registered with compliance or voluntary carbon schemes and the funds generated from the sale of the carbon credits will be directed towards the Renewable Energy Fund so as to assist with the development of other renewable energy projects in Malawi thereby further promoting the diffusion of RETs and reducing energy related GHG emissions.