The Gambia: Issues and Options in the Energy Sector Public Disclosure Authorized

Report No. 4743-GM The Gambia: Issues and Options in the Energy Sector Public Disclosure Authorized

November1983 Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Report of the JointUNDP/%brld Bank Energy Sector AssessmentProgram Thisdocument has a restricteddistribution. Its contentsmay not be disclosed without authorizationfrom the Govemment,the UNDPor the World Bank. JOPIIUTNDP/ T ORL BAN\K ENrYV C,ECICR ASSESSMIENT MTISSION

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Report No. 4743-GM

THE GAMBIA

ISSUES AND OPTIONS IN THE ENERGY SECTOR

November 1983

This is one of a series of reports of the Joint UNDP/World Bank Energy Sector Assessment Program. Finance for this work has been provided, in part, by the UNDP Energy Account, and the work has been carried out by the World Bank. This report has a restricted distribution. Its contents may not be disclosed without authorization from the Government, the UNDP or the World Bank.

ABSTRACT

The Gambia relies completely on imported petroleum to meet its commercial energy needs, including the generation of electricity which is entirely diesel based. At present, the Government is facing acute difficulties in servicing the petroleum import bill because of depressed export prices for the Gambia's major export, groundnuts. This report reviews the implications of recent changes in petroleum supply arrangements for the Gambia and recommends technical assistance to enable the Government to decide on a least-cost option to improve the energy situation. The capital city of Banjul has been short of power since late 1977, when an explosion damaged the existing power station at Half Die; efforts to restore adequate capacity for the Banjul also are examined. The performance of isolated diesel-based power systems in the provinces is reviewed, as is GUC's request for assistance to carry out an emergency overhaul and rehabilitation program to prevent permanent breakdown and loss of several units. Progress on developing indigenous energy resources is examined, including the application of groundnut residues and solar energy to substitute for diesel uses. The status of technical assistance to energy sector institutions is reviewed and recommendations are made for strengthening the Energy Unit of the Ministry of Economic Planning and Industrial Development. The report concludes with a detailed list of investments and technical assistance requirements for developing the Gambia's energy sector.

ABBREVIATIONS AND ACRONYMS boe barrel of oil equivalent DCD Department of Communty Development DOF Department of Forests EMPS Energy Master Plan Study (UNSO) GDP Gross Domestic Product GGFP Gambia-German Forestry Project GJ gigajoule = 1 million kilojoule GPMB Gambia Produce Marketing Board GTZ German Technical Assistance Agency GU Geological Unit GUC Gambia Utilities Corporation ha hectare HDS Half Die Station HFO Heavy Fuel Oil KPS Kotu Power Station kcal kilocalorie kg kilogram kj kilojoule kW kilowatts kWh kilowatt hour m3 cubic meter mm millimeter MEPID Ministry of Economic Planning and Industrial Development MW megawatt MWh megawatt hour NEC National Energy Commission p.a. per annum RE Rural Electrification toe tonne of oil equivalent tonne metric ton Currency Equivalents

D 2.70 = US$1.00 D 4.00 = UK Pound 1.00 1/ US$1.48 = UK Pound 1.00

11 The exchange rate of the Gambian currenLcy, the Dalasis (D), is pegged at 4 to 1 UK Pound Sterling. Conversions to US dollars are made at prevailing quotations of the US dollar exchange rate with that of the UK Pound Sterling. The above reflect exchange rates for August 1983.

This report was prepared by Mr. Amarquaye Armar on the basis of information available in a number of studies of Gambia's energy problems (listed in Annex III), and through additional information gathered during a mission in August 1983. That mission, which comprised Messrs. M. Ahmed (mission leader), A. Armar (energy planner) and R. Chronowski (energy technology consultant) also discussed a draft of this report with the Government of the Gambia and agreed upon the recommendations for policy action and technical assistance requirements described in the report. Energy Conversion Factors

Fuel toe per Physical Unit I"

Petroleum Products (tonnes) 2/

LPG 1.08 Gasoline 1.05 Kerosene/Jet Fuel 1.03 Diesel Oil (LDO) 1.02

Electricity (MWh) 0.25 3/

Biomass Fuels (tonnes)

Firewood 0.33-0.35 Groundnut Husk/Shell 0.37

1/ 1 toe = 10 million kcal = 6.61 boe = 39.68 million Btu

2/ LPG = 1730 liters/tonne Gasoline = 1357 liters/tonne Kerosene/Jet Fuel = 1229 liters/tonne Diesel (LDO) = 1187 liters/tonne

3/ Converted at thermal efficiency of 34% or 4 MWh per toe.

Table of Contents

Page No.

SUMMARY OF FINDINGS AND RECOMMENDATIONS ...... i

I. ENERGY AND THE ECONOMY ...... 1 Country Economic Situation...... 1 Petroleum Imports ...... 2 Energy Balance for 1982 ...... 3

II. ENERGY DEMAND, PRICES AND SUPPLY OPTIONS...... 5 Petroleum...... 5 Historical Demand ...... 5 Petroleum Projections ...... 7 Petroleum Prices ...... 7 Petroleum Supply Arrangements...... 9 Petroleum Handling Facilities ...... 11 Electricity ...... 13 Electricity Tariffs ...... 14 Power Supply Options...... 16 Woodfuel ...... 21 Fuelwood Consumption ...... 21 Cooking Fuel Options for Urban Households ...... 22 Stove Development ...... 23

III. ENERGY RESOURCE DEVELOPMENT PROGRAMS ...... 24 Overview ...... 24 Forest Energy Resources ...... 24 Reforestation ...... 25 Utilization of Mangrove Resources ...... 26 Hydropower in the Gambia River Basin ...... 27 Hydrocarbon Prospects...... 29 Oil and Gas ...... 29 Peat...... 30 Nonconventional Energy Resources ...... 30

IV. FUEL SUBSTITUTION OPTIONS...... 32 Utilization of Groundnut Residues ...... 32 The Role of Solar Water Heaters ...... 33

V. DEVELOPMENT OF ENERGY INSTITUTIONS...... 35 Management and Coordination of the Sector... 35 Energy Subsector Operations ...... 35 Gambia Utilities Corporation (GUC)...... 36 Department of Forestry (DOF)...... 37 The Geological Unit ...... 38 Other Responsibilities ...... 39 Page No.

VI. ENERGY TECHNICAL ASSISTANCE AND INVESTMENT REQUIREMENTS ...... 40 Summary of Energy Demand Projections...... 40 Energy Investments ...... 40 Summary of Technical Assistance Requirements ...... 42

ANNEXES

Annex I Notes on the Energy Balace .45 Annex II Energy Technical Assistance Proposals .46 Annex III Gambia Energy Assessment"...... 52 Annex IV Solar Water Heating Analysis.55 Annex V The National Energy CommiLssion Terms of Reference .59 Annex VI Petroleum Product Pricing Zones in The Gambia .60

FIGURES

2553 17

MAPS

IBRD 17424 IBRD 17169 IBRD 15416 SUMMARYOF FINDINGS AND RECOMMENDATIONS

Overview

1. The Gambia relies entirely on imports to meet all its petroleum needs. This includes electricity which is based on diesel systems. The Government's difficulties in servicing the country's growing oil import bill have become acute in recent years because declining groundnut production and low export prices have reduced foreign exchange earnings to critically low levels. The net effect is that oil imports, which absorbed only about 9% of commodity export earnings in 1974/75, now account for over 22% of such earnings in a good year. In a bad year such as 1980/81, when the country was particularly hard hit by the poor groundnut harvest, oil imports absorbed about 70% of such earnings. The outlook for improvement is not favorable, as export prices for groundnuts are not expected to improve much over current levels, and the Government may eventually be compelled to introduce some form of rationing petroleum products to ensure essential supplies to important sectors of the economy. In practical terms, the country's options for reducing petroleum imports are limited by a relatively modest indigenous energy resource endowment. There is some possibility of economically exploitable oil and gas deposits in the Gambia's sedimentary basin but this requires systematic exploration. Hydropower and peat are marginal energy resources, and applications of nonconventional sources (solar, wind) are yet to be fully assessed.

2. The Gambian economy is based on non-energy intensive agriculture and groundnut production. The modern sector, which comprises commerce, public works, tourism and small industries, is growing in importance due to the Gambia's role as an entrep8t serving neighboring Sahelian countries. The economy has suffered from a persisting drought which has seriously cut agricultural output. Groundnut production reached a record low of 45,000 tonnes in the 1980/81 growing season. The Government currently is proceeding with the Second Development Plan which assumes a five percent yearly growth in GDP over the period 1980 to 1986. This level of growth reflects the Government's projection that groundnut production will rebound from the weak 1980/81 performance to previous levels of about 135,000 tonnes a year. The Mission projects that commercial energy demand (excluding fuelwood and other biomass) will grow at about seven percent a year, due mainly to the restoration of adequate diesel power generating capacity in the Banjul area which has been short of power since an explosion at the Half Die Power Station in 1977. These projections need to be reviewed in 1985 as part of the proposed medium- term power development plan. - ii -

Energy Sector Issues

3. The Government's basic energy policy as outlined in the current Development Plan is: (i) to secure adequate energy supplies to meet future requirements ofi the economy; and (ii) to minimize the cost of energy to the economy by improving the efficiency of energy use in the economy. Immediate problem areas in the energy sector are rooted in institutional weaknesses which have developed from inadequate staffing of energy institutions that control day-to-day operations in subsectors such as power, petroleum and forestry, and the lack of a well articulated energy policy or strategy with which to guide planning and other efforts by these institutions and the Ministry of Economic Planning and Indus- trial Development (MEPID). The Government is fully aware of the seriousness cf these problems and has requested technical and financial assistance from external sources to tackle them. The response to this request from foreign agencies has been good, and progress is being made on some of the more pressing operational problems of the Gambia Utilities Corpor- ation (GUC), the Department of Forests (DOF), and the Geological Unit of the Ministry of Local Government and Lands (for petroleum exploration). This report is based on a critical evaluation of outstanding energy issues and options which have yet to be addressed as part of a comprehensive energy sector development program for the Gambia, and review of ongoing programs to identify areas for further assistance.

4. Banjul Power System The Banjul area has been short of power since late 1977, when an explosion destroyed part of the Half Die Power Station in Banjul. The GUC is in the process of restoring adequate capacity for the area by expanding installed capacity at the new Kotu Power Statioin which took over base load operations in July 1982. The Govern- ment and GUChave secured external financing from the Japanese Government and KfW (West Germany) for two diesel power units (one 5.0 MWand one 3.8 M!W). Both units are to be installed by the end of 1985, at which time G3UC expects to have enough capacity to meet the short-term load requirements in the area. However, because GUC is holding up action on some .2600 applications for new connections, further capacity will be needed shortly after 1985. GUC plans to commissiona a medium-term power development study to determine system capacity requirements (generation, trans- missionland distribution) beyond 1985. In the Mission's view, this study is needed to clarify the scope and timing of additional investments in the Banjul system. KfW and the German Technical Assistance Agency (GTZ) have indicated interest in sponsoring the study (2.16).

5. Provincial Power Systems GUC operates isolated small diesel power generating systems in the administrative headquarters for the provinces. Because of GUC's operational arLd financial weaknesses, these provin,cial systems, with a total installed capacity of 5.2 MW, have been neglected and their current total available capacity is only 2.6 MW. The Missionl endorses GUC's request for asssistance to carry out an emergency overhaul and rehabilitation program for the provincial systems. A few of the units have broken down recently and several more are likely to break down permanently unless such a program is begun immediately. The - iii -

Government is waiting for a response to its request for technical assistance from the bilateral programwith the U.K. Government (2.17).

6. Petroleum Supplies The Government relies on private oil companies (Shell, BP and Texaco) to furnish the country's petroleum supplies. Current difficulties in maintaining this arrangement reflect (i) a breakdown of the West African Replenishment Program (WARP) which was a pooling system for supplying petroleum to the region, and (ii) foreign exchange shortages which have undermined the ability of private oil companies to maintain their lines of credit to the Gambia. In March, 1983, the Government introduced a temporary arrangement which allows the oil companies to procure products from Senegal. This arrangement has led to significant price increases because of: (i) higher procurement and handling charges through Senegal; and (ii) payment of Senegalese taxes on petroleum products although duties have been waived. The Governmentwould like to establish a more permanentarrangement which could both reduce costs and assure relative security of supply. The Mission recommends that the Governmentcommission a study to evaluate the relative costs of the current arrangement and alternativesbefore deciding on a permanent arrangement (2.9). In the Mission's view, an arrangement similar to the recently establishedSpecial Oil Purchasing Facility could form one basis for supplying the entire country's petroleum needs. The Facility was established by the Government, with financing from the Islamic Development Bank, to procure GUC's diesel oil requirements directly from Algeria. The Mission also recommends the development of a contingency allocation program to replace the existing ad hoc system for distributing and retailing products during supply interruptions and shortages. A more uniform and rational set of criteria could be established through joint consultations between the Government and representatives of the private oil companies (2.10).

7. Petroleum Storage Facilities Despite the recent installationof a sophisticatedfire protection system at the Shell operated depot, there is still some concern in the Government about the safety of its location in Banjul city center. The Government has identified a site for a new storage depot on land reclaimed for the Banjul Port Expansion Program but it is not clear what portion of the investment required for this new depot will need to be financed by the Government. The Mission recommends that the Government carefully review the costs and benefits of such a relocationbefore deciding on its next move (2.11).

8. Energy Efficiency and Savings The Mission reviewed a number of options for improving the efficiency of energy use, and reducing energy costs through fuel substitution. The Mission identifieda sizeable unex- ploited potential for saving diesel oil and electricity by retrofitting existing water heating systems in the commercial/industrialsector. Spe- cifically, about 720,000 liters of diesel oil a year and some electricity could be saved by installing solar water heating systems at seven major hotels and the Banjul Brewery. Both the Government and potential users have expressed interest in pursuing this option. The Mission recommends a comprehensivetechnical assistanceprogram to prepare detailed designs, tender documents for procurement and installation of equipment, and to - iv -

supervise and monitor the initial operation of these systems. Equipment for the proposed Solar Retrofit Program could be financed througlh the foreign currency line-of-credit of the Gambia Commercial and Development Bank (GCDB). GCDB will, however, need external financing to replenish its foreign currency reserves (4.5).

9. Energy Pricing The Government's policy is not to subsidize petroleum; as a result, prices fully reflect the cost of imports. Retail prices are well above the c.i.f. import 'Levels due to high Government duties. Retail prices are adjusted on a semiannual basis after consultation with the private oil marketing compan:ies. The differential between retail prices for petroleum products in Senegal and the Gambia has been almost completely eliminated in the past two years. Despite regular increases that have more than doubled electricity tariffs in 1976, GUC is still facing financial difficulties. GUC has, however, been able to improve its liquidity position by adopting cost-cutting measures and by receiving strong Government support to pursue outstanding bills. Although GUC had requested another 20% increase to be effective in September 1983, the Government is reluctant for social reasons to approve further increases until GUC exhausts other avenues for reducing costs. As the operating losses for provincial stations are also a major contributor to GUC's high costs, the Mission has also recommended that the scope of the proposed study of provincial electricity systems to be funded by the Islamic Development Bank be expanded to include a detailed assessment of the costs to GUC of operating and maintaining such isolated systems. Fuelwood prices are not controlled by the Government. At current prices, fuelwood remains the cheapest energy source for cooking in the Gambia.

Development of Indigenous Energy Resources

l0o Fuelwood The first phase of the Gambia-German Forestry Project (GGFP) is almost complete, and a second phase which is estimated to cost DM 5.0 million (US$2.0 million) is to start in November, 1983. The USAID sponsored Forestry Project also has been completed. Because of the high costs of establishing fuelwood plantations, future support from USAID may be for only communal woodlot schemes. The Mission endorses the GGFP recommendation that greater emphasis be placed on managing the country's natural woodlands to sustain the production of fuelwood and other forest products. This approach will be developed during the second phase of the GGFP. In the Mission's view, the Department of Forests (DOF) needs strengthening at the professional level to effectively carry out the proposed approach. At least five more persons need to be trained to the Bachelor's and/or Master's level before DOF can adequately manage its field operations staff under a proposed five-zone system. In the Mission's view, the efforts of the GGFP need to be supplemented by technical assistance: (i) to do a comparative analysis of the financial aspects, including evaluation of economic costs and benefits of alternative schemes for producing fuelwood in relation to the different markets in the Gambia; and (ii) to evaluate the appropriateness of existing license fees and royalties (3.4). -v -

11. Oil and Gas The Gambia is collaborating with Senegal and Guinea-Bissau in a joint study of the region's sedimentary basin. Pro- gress is being made by the Government's consultants, Atlantic Resources Limited of Portugal, who have completed the first stage of retrieving, reevaluating and reprocessing available geological and geophysical data on the basin. The Government is also being assisted by the PetroCanada International Assistance Corporation (PIAC) who also has completed a 600 km marine seismic survey in part of the basin. The data will also be used for the regional basin study (3.9).

12. Hydropower There is no hydropower potential in the Gambia because of the very flat nature of the country's landscape. The maximum elevation of the country is only 30 meters. The Gambia will have access to future hydropower developments upstream on the river because of its membership on the Joint Commission for the Development of the Gambia River (OMVG). The prospects for obtaining hydropower supplies through this arrangement before the 1990s are remote (3.7).

13. Peat Recent discoveries of mangrove peat occurrences along sections of the Casamance River in Senegal have raised some interest in the possibility of similar occurrences along the Gambia River. However, there is the likelihood that the fuel quality of any mangrove peat deposits found along the Gambia River will be as poor as that of the deposits in western Senegal which were found to have a high ash and salt content. In the Mission's view, a limited reconnaissance survey would appear to be the next step for the Government (3.10).

Institutional Framework for Energy Planning

14. Further to the recommendations contained in the final report on the Energy Survey and Master Plan Study (EMPS) on the Gambia (financed by the United Nations Sudano-Sahelian Office), the Government established a National Energy Commission (NEC) comprising public and private officials to advise the Cabinet on energy matters. The Energy Unit, first established within the Ministry of Economic Planning and Industrial Devel- opment (MEPID) to monitor and review the EMPS, is to function as the permanent secretariat to the NEC. The Energy Unit currently is staffed on a part-time basis with a Principal Planner and an expatriate technical adviser to the MEPID. The Government has allocated resources for MEPID to recruit an economist to work full-time in the Energy Unit. The economist will be supervised by the Principal Planner of MEPID and continue to receive support from other MEPID staff as required. A resident expatriate energy economist/planner also will be needed for about 18-24 months to assist in establishing the unit, defining its work program vis-a-vis NEC's priorities. In the Mission's view, the need for the expatriate energy economist/planner is critical during the formative years of the Energy Unit and NEC because the counterpart economist is likely to have little energy sector experience (5.2). - vi -

Implications for External Assistance

15. The most pressing requirement for external financial assistance is for the emergency overhaul and rehabilitation of the eleven provincial, diesel-based power generating systems. About US$1.0 million in spare parts is urgently required to prevent. the possible permanent breakdown of some units. A substantial part of the investment required to reestablish adequate electric power generating capacity for the Banjul system has recently been secured from bilateral assistance programs with Japan and West Germany. However, because of the large suppressed demand for electricity services in the Banjul area, additional capacity will be required soon after 1985. The Solar Retrofit Program will require external. financing of about US$0.6 million for solar water heating equipment.

16. The main focus of external technical assistance for energy development in the Gambia should be institution building in the operational entities (GUC, DOF, Geological Unit), and planning/investment programming tasks to be carried out by the Energy Unit of MEPID and the NEC. These are discussed in Chapter VI and terms of reference are presented in Annex II.

Summary of Technical Assistance Requirements a/

Estimated Cost b/ Sector (IJS$ '000) Source

Power Rehabilitation of Provincial Systems 100 UK-ODA Rural Electrification Program Review not determined ISDB Medium Term Power Plan for Banjul System not determined KfW/GTZ

Institution Building Resident Energy Economist/Planner (18-24 months) 240 none identified GUC Diesel Mechanics Training Program not determined none identified Professional Forestry Training not detrmined none identified Petroleum Supplies Specialist 50 none identified Forestry Economist 12 none identified

Energy Development Solar Retrofit Program 150 none identified Pilot .Mangrove Harvesting Program 20 none identified a/ Details in Annex II. b/ Estimated at US$10,000 per man-month of specialist consulting.

Source: Mission estimates I. ENERGY AND THE ECONOMY

Country Economic Situation

1.1 The Gambia is geographically surrounded on three sides by Senegal. The country's total land area of 10,360 sq. km lies entirely within the lower basin of the Gambia River. 1/ The maximum elevation of the Gambia is 35 meters, and there are three main ecological regions: the mangrove belt which borders the river from its mouth at the Atlantic Ocean to over 240 kilometers inland; the swampy areas lying on slightly higher ground known as the "banto faros"; and the sandstone plateau where most of the crops are grown. The climate in the Gambia is Sahelian with a long dry season (November to May) and a season with sparse rainfall (800 mm to 1700 mm in June through October). The Gambia is currently suffering the effects of a prolonged drought. The latest census (1983) estimates the population at 696,000, giving a population density of about 70 persons per square kilometer. Urban incomes are reported to be over four times those of rural areas. Consequently, the rural to urban drift is high and the urban population growth rate has averaged 7.0% a year, compared to 2.9% a year for the country overall.

1.2 The Gambian economy is based on agriculture and commerce. In 1981, it had an estimated GDP of US$250 per capita. Activities in the modern sector are based on commerce and transport and reflect Gambia's role as an entrep8t serving parts of Senegal and other neighbouring Sahelian countries. The value of commodities reexported through the Gambia increased from D 1.5 million in 1974/75 to D 18.2 million in 1979/80. Another growth sector is tourism, 2/ which currently accounts for about eight percent of GDP and provides direct employment for some 2700 persons. Industrial activity is still limited to groundnut oil milling by the Gambia Produce Marketing Board (GPMB), a brewery, some brick making enterprises and a shoe factory.

1.3 GDP growth in the Gambian economy was 2.9% p.a. (in constant 1976/77 prices) during the First Plan period (1974-1980). Since the population grew at 2.9% p.a. during the same period, there was no real growth in per capita GDP. The decline in the agricultural sector output was offset by increased transit trade activity and by an increase in Government services and public works. The share of GDP from construction and public works grew from 18% to 27% during the First Plan. The Govern- ment expects a 5.1% p.a. real GDP growth during the current or Second Plan period (1980-1986) based on a recovery of groundnut production from the 1980/81 record low level of 45,000 tonnes, to 135,000 tonnes a year by 1986. However, during the Second Plan, the Government expects: (i) a

1/ The Gambia is a member country of the Organisation de Mise en Valeur du Fleuve Gambia (OMVG).

2/ The Gambia attracts mostly beach-oriented tourists from Europe. -2- stabilization of imports and the reexport trade; and (ii) a reduced public investment program. 1/ Preliminary estimates of actual GDP (constant 1980/81 prices) for the initial three years of the plan period are shown in Table 1.1.

1.4 The Mission's commercial energy demand projections are to some extent based on expected trends in the transport, commerce and construction sectors. Specifically, the demand for diesel oil and gasoline is likely to stagnate because of reduced construction and freight transportation activity but should increase from use by a larger bus transport fleet of GTP, 2/ the commissioning of some 8 MW of diesel generating capacity at the Kotu Power Station, and a six percent p.a. growth in the fleet of taxis and mini-buses.

Table 1.1: GDP Projections and Trends (1980-1983) (Constant 1980/81 Prices)

1980/81 1981/82 1982/83 1983/84 1984/85 1985/86

Total GDP at factor cost 369.0 411.1 439.8 459.5 481.4 502.6 (2nd Plan Projections)

Actual GDP at factor 353.6 389.7 422.1 - - - cost a/ (estimates) a/ Preliminary estimates by MEPID

Source: NEPID

Petroleum Imports

1.5 The Government is having serious difficulties servicing the country's growing oil import bill because of declining groundnut production and export prices which have reduced foreign exchange earnings to critically low levels. The net effect has been that oil imports which absorbed only about 9% of commodity export earnings in 1974/75, now account for over 22% of such earnings in a good year. In a bad year such as 1980/81, when the country was particularly hurt by the very poor

1/ Construction activities have slowed down, mainly because of reduced Government development (in 1982/83) and a reduction in private construction of commercial buildings such as for the tourist industry.

2/ GTP plans to increase its fleet of buses from 20 to 45 by December 11983, and to 70 by mid-1984. - 3 -

groundnut harvest, oil imports absorbed about 70% of commodity export earnings (Table 1.2). The outlook for.a general improvementis not hope- ful, as export prices for groundnuts are not expected to improve much over current levels, and the Government may eventually be compelled to introduce some form of rationing petroleum products to ensure essential supplies for important sectors of the economy.

Table 1.2: Cost of Petroleum Imports (million Dalasis)

1974/75 1976/77 1978/79 1980/81

Total Petroleum Imports 7.9 11.3 21.0 39.3

(i) Petroleum as % of mer- chandise imports (c.i.f.) a! 8.9 6.7 9.5 14.2 (ii) Petroleum as % of merchan- dise exports (f.o.b.) a/ 9.3 10.3 22.3 70.3

a/ includes reexported goods.

Source: MFT

Energy Balance for 1982

1.6 In 1982, annual per capita energy use in the Gambia (1982) was about 0.25 toe (1.7 boe). Wood and groundnut residues 1/ accounted for 70% of total energy supplies. However, since estimates of fuelwood consumption are much less reliable than for the other commercial fuels, the contributionof wood may have been overstated (2.24). Electricitygener- ation is diesel based. The total supply of commercial energy (petroleum) in the Gambia was 53,400 toe or 77 kilograms of oil equivalent on a per capita basis. This is one of the lowest in Africa.

1.7 The transport sector accounts for 54% of overall petroleum use; Government services, including the operation of its vehicles, consume 24% of petroleum, and the industrial and commercial sectors combined use up about 10%. The main source of energy used by householdsis wood. House- holds however, account for about three percent of the petroleum used in the form of kerosene and electricity in the Gambia. The 1982 energy balance (Table 1.2) must be further refined as data improve and when the Energy Unit of MEPID becomes fully operational.

1/ Only groundnut residues used by GPMB at Denton Bridge Mill are included in the energy balance. Table 1.4: The Gambia: Energy Balance 1982 a/ ('000 toe)

Total Groundnut Total Total Petroleum Electricity commercial Fuelwood b/ Residues Noncommercial Energy

Primary Supplies Production - - - 125.0 1.6 126.6 126.6 Imports 53.4 - 53.4 - - 53.4 Total 53.4 - 53.4 125.0 1.6 126.6 180.0

Conversion Public Power Generation (9.2) 9.2 - - - - Conversion Losses (5.5) (5.5) - - (5.5) Distribution Losses (0.8) (0.8) - - - (0.8)

Net Supplies 44.2 2.9 47.1 125.0 1.6 126.6 173.7

Final Consumption Residential 0.4 1.1 1.5 110.0 - 110.0 111.5 Industry/Commercial 3.3 1.2 4.5 15.0 1.6 16.6 21.1 Agriculture 4.5 - 4.5 - - - 4.5 Transport 25.4 - 25.4 - - - 25.4 Government/Others 10.6 0.6 11.2 - - - 11.2

Total 44.2 2.9 47.1 125.0 1.6 126.6 173.7 a/ Negative flows indicated by parentheses. See Annex I for notes. bi/ Although some charcoal is still produced and used in the Gambia, no data are available.

Source: Mission estimates. - 5 -

II. ENERGY DEMAND, PRICES AND SUPPLY OPTIONS

Petroleum

Historical Demand

2.1 Petroleum requirements in the Gambia consist of gasoline (premium and regular), diesel oil (gasoil),kerosene, LPG, and aviation (jet) fuel. LPG was introduced in 1975. The consumption of liquid products grew from about 30,000 toe in 1975 to 54,000 toe in 1982. There was a steady growth in the demand for diesel oil (14.9% p.a.) and aviation fuel (11.2% p.a.) but the demand for gasoline has dropped sharply from the 1980 level (Table 2.1). Data supplied from Shell Co. also indicate a substantial switch from regular to premium gasoline in 1982. 1/ The increase in demand for aviation fuel reflects the increased air traffic due to tourism and the commissioning of the new internationalairport. The use of LPG, which is imported and marketed in bottles, has dramatically reduced the demand for kerosene. Data on LPG show sales to be somewhere between 200 and 400 tonnes a year.

Table 2.1: Petroleum Consumption (1975-1982) (million liters)

average growth % p.a. Fuel Type 1975 1980 1982 (est) (1975-1982)

Aviation Fuel 3.81 6.05 8.02 11.2 Gasoline 17.50 26.52 21.59 3.0 c/ Kerosene 1.59 1.28 0.50 -15.2 Diesel Oil 12.71 26.15 33.07 b/ 14.9

Total 35.61 60.00 63.87 8.7

a/ Combines premium and regular gasoline sales. b/ Combines diesel oil sales by oil companies plus direct imports by GUC. c/ Gasoline demand grew at 8.7% p.a. until 1980 and declined 9.8% p.a. from 1980 to 1982.

Source: Shell Co., GUC, Energy Master Plan Study

1/ The breakdown in consumption between regular and premium gasoline was 12,430 m3 and 11,120 m3, respectively,in 1981; but 4,701 m3 and 16,890 m3 in 1982. Disruptions in supplies of regular gasoline appear to have caused this switch. - 6 -

2.2 A sectoral breakdown of consumption is not available for 1982 but is likely to resemble that of 1980 (Table 2.2). The main petroleum consuming sectors are transport, construction and electricity generation. Goverrment services consumed just over six million liters of gasoline and diesel oil combined in 1980 (Table 2.3). The Government's concern about waste has led to the introduction of mandatory fuel allocations for its fleet vehicles. The effects of this directive on conserving fuel needs to be ascertained during the preparation of the contingency allocation plan (2.10).

Table 2.2: Gasoline/Diesel Consumption by Sector (1980) (Percent)

Sector Gasoline Diesel

Agriculture a/ 12.1 8.1 Industry/Commerce b/ 0.7 10.9 Transport 67.3 23.4 Public Sector c/ 19.9 23.9 Power Generation - 33.7

Total 100.0 100.0

a/ includes consumption by fishing enterprises. b/ includes consumption by hotels. c/ includes consumption for administrative services, public works andL construction.

Source: Oil Marketing Companies; EMPS, May 1983

Table 2.3: Petroleum Consumption by Government Service (1980) (percent)

Zone Gasoline Diesel Total

Banjul/Kombo St. Mary 61 71 63 Lower River 22 17 21 Upper River 12 9 11 North Bank/McCarthy 5 3 5

Total (million liters) 4.90 1.38 6.28

Source: EMPS -7-

Petroleum Projections

2.3 Petroleum demand projections in the Gambia are based on the rate at which power generation capacity can be restored in Banjul since there is substantial suppressed demand for electricity. Banjul power generation capacity is projected to increase from a current peak level of 7.3 MWto over 13 MWby 1990. The growth in petroleum demand from non-power sectors is relatively low because of: (i) the expected lower levels of import/export trade activity; and (ii) reduced public works activities. The increase in the fleet of taxis, mini-buses and the GTP bus fleet also will contribute to some growth in petroleum demand. Overall petroleum demand (excluding LPG) will increase at (a) eight percent a year up to 1985, representing an increase in per capita consumption of about three percent a year; and (b) about seven percent a year from 1985 to 1990. Diesel oil demand will continue to grow at a much higher rate than the other products. As prospects for kerosene are uncertain, they are assumed to remain roughly at current levels.

Table 2.4: Petroleum Demand Projections ('000 toe)

(1982-1990) Growth Product 1982 1985 1990 % p.a.

Aviation Fuel 6.7 8.9 13.1 8.7 Kerosene 0.4 0.5 0.5 2.5 Gasoline 16.8 16.8 20.4 2.5 Diesel Oil (non-power) _/ 20.3 23.3 30.8 5.3 Diesel Oil (power) 9.2 17.6 28.3 15.1

Total 53.4 67.1 93.1 7.2 a/ a/ weighted average growth rates will differ if units other than toe are used. b/ incorporates savings of about 600 toe per annum due to solar retrofit program (4.5).

Source: Mission Estimates

Petroleum Prices

2.4 Retail prices are adjusted on a semi-annual basis after consultation between the Ministry of Finance and Trade and representatives of the oil marketing companies. The pricing formula is based on the following elements and margins: (i) landed cost, c.i.f., in Banjul; (ii) Gov- erinent duties; (iii) terminal and storage depot charges; (iv) marketing margin; and (v) retailing margin (Table 2.5). Since March 1983, the - 8 -

Government has been importing products froma Senegal through a temporary arrangement with the SAR Refinery in Dakar. The arrangement allows for a waiver of Senegal Government duties on petroleum products destined for the Gambia. But other Senegalese taxes must be paid, hence a much higher landed cost in Banjul of supplies brought in through this arrangement (Table 2.6). Prevailing retail prices (as of April 1983) in different zones of the Gambia are presented in Table 2.7. Although the differen- t:ial between petroleum prices in Senegal arLd the Gambia almost has been eliminated in the past two years, there may be a need to revise the pricing formula to equalize retail prices across provinces or zones as Senegal has done.

Table 2.5: Price Buildup for Petroleum Products in Banjul (post-April 1983 in Bututs per liter)

Premium Gasoline Regular Gasoline Diesel Oil

c.i.f. (Banjul) 84.0 80.0 77.0

EDuties 83.00 83.00 76.00 Terminal Charges/Losses 2.45 2.42 2.31 Diepot Charges 2.00 2.00 2.00

Ex-depot Price 171.45 167.42 157.31

Distribution Expenses/ Marketers' & Retail Margins 17.55 16.58 16.69

Retail Prices (Banjul) 189.00 184.00 174.00

Source: Oil Companies; Customs Department

Table 2.6: Recent Changes in Landed Cost of Petroleum Products (Dalasis per liter c.i.f.)

Product December 1982 July 1983 a % change

Premium Gasoline 0.52 0.84 61.5 Regular Gasoline 0.51 0.80 56.9 Kerosene 0.56 0.78 28.2 Diesel Oil 0.51 0.77 51.0 a/ Supplies from Senegal.

Source: Customs Department -9-

2.5 The price of bottled LPG, which is imported by Shell, GUC and several private enterprises,1/ is unregulated. Current wholesale 2/ and retail prices of Shell are D 38.00 and D 40.00 per 12.5 kg bottle, respectively. A significant amount of LPG in small 2.7 kg bottles 3/ is imported through unofficial channels from Senegal, where the Government maintains a large subsidy as part of a 'butanization'program. The Mission finds no justificationfor introducing a similar LPG subsidy in the Gambia.

Table 2.7: Retail Prices for Petroleum Products by Zone (April 1983) (Dalasis per liter)

Zone a/ Regular Gasoline Premium Gasoline Kerosene Diesel Oil

1 1.89 1.84 1.69 1.74 2 1.91 1.86 1.71 1.76 3 1.92 1.87 1.72 1.77 4 1.94 1.89 1.74 1.79 5 1.95 1.90 1.75 1.80 6 1.97 1.92 1.77 1.82 a/ See Annex VI for description of zones.

Source: Petroleum Marketing Companies

Petroleum Supply Arrangements

2.6 Current difficulties with petroleum import arrangementsin the Gambia reflect the breakdown of the West African Replenishment Program (WARP) for supplying products, and the country's foreign exchange problems which have caused some delays in paying for delivered products. 4/ In March 1983, the Government introduced a temporary arrangementwhereby petroleum was to be imported by the oil companies from the SAR refinery in Dakar. The Mission reviewed several aspects of the petroleum supply

1/ Mobil previouslywas involved in marketingLPG.

2/ Wholesale prices of LPG are on average 20% higher than the import cost, c.i.f.

3/ The small bottles are known locally as the 'Blip Banekh'.

4/ Petroleum products are imported by the private oil marketing companies, Shell (West Africa) Ltd., BP (Gambia) Ltd., and Texaco (Gambia) Ltd. Mobil has suspended its operations in the Gambia. - 10 - issue as a basis for assessing what measures the Government could take to improve matters.

2.7 Until the mid-1960s, deliveries to the Gambia and several other countries in West Africa 1/ were handled jointly by several international majors under the WARP system. Under WARP, each of the companies delivered products into petroleum storage depots at ports along the West African coast on a three-month rotation. Subsidiary oil marketing companies in each country then lifted products from these depots to meet their individual market shares. The system functioned efficiently and substantially improved the logistics of supply to the region. 2/ The system also provided significant savings to countries in the region as their individual markets for petroleum during the 1960s were too small to warrant separate deliveries. Later in the 1960s, the larger countries in the region such as Ghana, Nigeria, Cameroon, and the Ivory Coast, opted out of the WARP pooling arrangements in favor of new arrangements which included establishing national refineries. 3/ By the mid-1970s, the coverage of WARP had been greatly reduced and the oil companies decided to freeze operations under WARP. The Gambia currently is serviced by Texaco, BP and Shell through separate deliveries. Shell's operations are now confined to operating the storage depot in Banjul (2.11).

2.8 The country's precarious foreign exchange situation has compli- cated matters in recent years because it has undermined the ability of the private oil companies to maintain their 90 day credit facility for supplies to the Gambia. 4/ The decision by Mobil to suspend its operations in the Gambia and that by Shell to withdraw from marketing products can be attributed in large part to this problem. On a number of occasi'ons petroleum stocks have fallen to critically low levels and the Government has had to resort to emergency purchases from Senegal. The Government's decision to procure products through Senegal was therefore a necessary albeit temporary measure to arrest a worsening situation. The Government's rationale for this new arrangement was that the Gambia had

1/ Senegal, Ivory Coast, Ghana, Nigeria and Cameroon were part of WARP.

2/ WARP simplified the logistics of supply for the companies by allow- ing easier purchases from sources in either Europe, the Mid-East or the Caribbean, depending on prices and the availability of tankers.

3/ Ghana, for examp:Le, constructed a ref'inery in a joint venture with ENI, the Italian Oil Company.

4/ Each of the companies has a credit arrangement with its parent company. Texaco (Gambia) Ltd., for example, is in large arrears on its payments to Texaco International and the amounts involved have been escalating in local currency terms because of appreciation of the US dollar. - 11 -

better access to CFA francs (through the West African Monetary Clearing- house) to settle its petroleum import bill than to the rapidly appreciat- ing US dollar. Nevertheless,this move has led to significantincreases in the landed cost (c.i.f.) of the products (Table 2.5) because of the requirement to pay Senegal's petroleum taxes, 1/ higher freight and handling charges from Dakar to Banjul, and the higher ex-refinery prices at the SAR Refinery in Dakar.

2.9 The Government would like assistance in establishing a more permanent supply arrangement which could both reduce costs and ensure security and continuity of supplies. In the Mission's view, technical assistance for a comprehensive evaluation of the costs of alternative arrangements for importing petroleum products should be a first step. The Government could also examine the option of extending the recently established Special Oil Purchasing Facility for supplying GUC's diesel oil requirements to cover the entire country's needs. 2/ The current arrangement with the Islamic DevelopmentBank (ISDB) would, however, need to be modified to allow for the financing of deliveries on a quarterly basis.

2.10 To improve the internal management of supplies and stocks, the Mission sees a need for the Government and the private oil companies to take measures to replace the current ad hoc system for allocating petroleum products during shortages with a more uniform system, using criteria which ensure an uninterrupted flow of essential supplies to important sectors of the economy. The Mission recommends technical assistance for developing a contingency allocation plan which would respond to varying severnties of shortages by introducing rationing on a voluntary and mandatory basis (Annex II).

Petroleum Handling Facilities

2.11 Existing facilities for handling petroleum supplies and distribution in the Gambia consist of: (i) an oil pipeline for discharging small tankers 3/ at the Banjul Main Wharf; (ii) a storage depot located

1! Supplies for the Gambia are exempted from Senegal duties but not taxes.

2/ This Special Oil Purchase Facility allows for the direct supply of diesel oil from Algeria to GUC and is financed by the Islamic Development Bank (ISDB). Two consignments of 9 million liters of LDO in November 1981, and 7 million liters of LDO in 1982, have been delivered to GUC.

3/ The average size of these tankers is 16,200 gross registered tonnage (grt). An ongoing project, the Banjul Second Port Project (IDA Credit 3073-GM), includes financing for emergency rehabilitationof the wharf and repairing fire fighting systems. - 12 - in Banjul; and (iii) about 42 retail stations. 1/ The petroleum storage depot, which covers an area of about 1050 square feet in the commercial/residentialsection of Banjul, was built by the UK Royal Navy which operated it until 1949. Shell now owns and operates the depot which is also used by BP and Texaco who pay a throughput charge for storing their products. Available storage capacities by product type are indicated in Table 2.8. The Government is concerned about the safety of the depot in its present location. Although the risk of fire at the depot has been substantiallyreduced since Shell installed an automatic fire protection system, the officials still would prefer to have the depot relocated. This would require the construction of a new depot, most likely located on land reclaimed as part of the Banjul Port Expansion program. The next step should be a detailed feasibility study to determine the costs of building new facilities. 2/ It is also not clear what portion of the investimentrequired for this new depot will need to be financed by the Government. In the Mission's view, the Government should not decide on this matter until the results of a study, which could be done as part of the technical assistance program (Annex II), are complete.

Table 2.8: Product Storage Capacities at Banjul Depot (million liters)

Product Capacity

Premium Gasoline 2.37 Regular Gasoline 2.93 Kerosene 2.37 Diesel 6.65 Reserve (Standby) 1.81

Total 16.00

Source: Shell Co. (West Africa) Ltd.

1/ The retail stations are owned and operated by private dealerships which are financially independent of the marketing companies. The combined total capacity of these stations is about one million liters.

2/ The IDA-financed First Banjul Port Project (Credit 187-GM) identified and made provision for a new storage depot site. The Govern- ment's consultants PORTCONSULT have started implementing studies relating to the port expansion, but no special studies on a new petroleum storage depot are included. The site is located adjacent to the Bund Road, about 0.5 km from the Banjul Port Terminal. - 13 -

Electricity

Historical Demand

2.12 The public power supply system in the Gambia consists of an interconnected grid serving the Banjul area, and isolated small diesel generating systems in several of the administrative centers in the provinces (IBRD Map 17424). There are a large number of small private generators, and Gambia Produce Marketing Board (GPMB) generates part of its own power requirements using groundnut shells at its oil milling facility at Denton Bridge. As there are no data on private generation, the review in this section covers only the operations of the Gambia Utilities Corporation. The reliability of GUC sales data is also poor because of frequent outages and load shedding in the Banjul area since the 1977 explosion which destroyed the Half Die Station (HDS), and ex- tremely high losses which are partly attributable to fraud and unmetered consumption (2.18). The average growth in sales to the Banjul area was 12.5% p.a. over the period 1975 to 1982 (Table 2.9). Sales in the provinces have increased fivefold since 1975, due to an extension of service areas and connections. Table 2.10 shows generation and sales statistics for the provincial stations in 1982. Problems with operations at provincial stations are discussed below (2.17).

Table 2.9: ElectricityStatistics for Banjul System (MWh)

1975-1982 Sales Category 1975 1982 average growth rate (% p.a.)

Government 1242 3930 17.9 Street Lighting 141 260 9.1 Domestic 6321 12600 10.4 Industrial/Commercial 3318 5920 8.6 Hotels 1840 6920 20.8 GUC Waterworks 1393 2900 11.0

Total Sales 14255 32530 12.5 Total Generation a/ 20245 41040 10.6 Losses (%) (30) (21) a! Total Generation, less station'sown power use.

Source: GUC - 14 -

Table 2.10: Electricity Statistics for Provincial Systems, 1982 ( MWb)w

Total a/ Sales System Location Generation GUC Workshop Other Customers Totals

Brikama 550.0 45.0 419.0 464.0 Mansakonko 250.0 28.0 182.5 210.5 Farafenni 550.0 30.0 434.5 464.5 Georgetown 270.0 20.0 207.5 227.5 ]3ansang 380.0 16.0 204.5 220.5 Bansang 650.0 50.0 498.5 548.5 a/ Including power house consumption.

Source. GUC

E]lectricity Tariffs

2.13 Despite regular increases 1/ which more than doubled electricity tariffs between September 1976 and August 1979, GUC's financial position hlad worsened in 1979. The main causes include losses of revenue due to generator breakdowns, inefficient power distribution, and rapid fuel oil price increases. Fuel prices rose from 28.8 bututs per liter in 1975 to 73.0 bututs per liter in 1981. Fuel costs increased from 40% of operating expenses of GUC's Electricity Division in 1975 to about 54% in 1982 (Table 2.11).

Table 2.11: Fuel Costs in GUC Powier Generation (1982) (% of total station opera.ting cost)

Fuel Cost Banjul System Kotu 85.6 Half Die 50.9 Total Banjul 72.1 Provincial Systems Brikama 74.5 Mansakonko 53.2 Farafenni 60.0 Georgetown 57.5 Bosang 55.6 Basse 65.7 Total Provincial 53.7 Source: GUC Annual Report (Electricity Division)

1 Tariffs were raised 33% in September 1976; 15% in October 1977, and 33% in August 1979. - 15 -

2.14 In August 1981, the Government approved a major financial recovery plan for GUC, which included a 15% increase in electricity tariffs effective October 1, 1981. The Government also agreed to cover GUC losses on the provincial electricity power systems. The Government approved another tariff increase (20% for electricity, 15% for water) in April 1983 (Table 2.12). This increase helped GUC reduce its financial losses by about 50% (from about D 6 million in FY82/83). The Government is reluctant for social reasons to approve any further increases in tariffs 1/ until GUC exhausts other avenues for reducing costs (2.19). GUC has adopted some cost cutting measures which include laying off temporary staff and vigorously pursuing outstanding bills. Several customers with large outstandingbills have been disconnected. GUC's liquidity position appears to be improving and its bank overdraft has been reduced by D 0.5 million (40%).

Table 2.12: GUC ElectricityTariffs (Dalasis)

October 1981 April, 193 Increases (1981-83) Tariff Category Rates a Rates' (%)

General/Domestic First 30 Units 0.33 0.33 Next 100 Units 0.37 0.40 8.1 Next 1000 Units 0.40 0.48 20.0 Balance 0.42 0.51 21.4 Minimum Charge 10.00 10.00 - ReconnectionFee 15.00 15.00

Street Lighting 0.35 0.35 -

Commercial/Industrial Per kVA Recorded .! 35.00 42.0 20.0 Per Unit 0.26 0.31 12.2 Minimum Charge d/ 1600.00 1900.00 18.7 a/ became effective October 1981. b/ approved by GUC Board in November 1982, but not yet effective. c/ maximum demand meter reset annually. d/ also charged if customer is disconnectedfor nonpayment of arrears.

1/ GUC had requested another 20% increase for both electricity and water services for September, 1983. - 16 -

Power Supply Options

2.15 Restoring Generating Capacity in Banjul System Ever since the November 1977 explosion which destroyed one 2.2 MW diesel unit and seriously damaged another 2.2 MW diesel unit at the Half Die Power Station (HDS), the Banjul area has been short of power. GUC was able to restore power supply to the area temporarily through emergency purchases of replacement generators. The African Development Bank later financed the construction of a new power station at Kotu which was commissionedin mid-1981. The nominal ratings of diesel generators currently installed at the two stations in the Banjul grid are::

(i) Half Die Station (HDS) 3 x 775 kVA Caterpillar 4 x 1000 kVA Mirrlees Blackstone (rated 3.3 kV; 1000 rpm) 1 x 2750 kVA Mirrlees K8 Major

(ii) Kotu Power Station (KPS) 2 x 4300 kVA Mirrlees (rated 11 kV; 600 rpm).

Various factors including aging, high speciLfic fuel consumption rates and lack of spares and maintenance have reduced the available firm capacity of the HDS to 1.0 MW. The KPS, which has a firm capacity of 3.4 MW, took over base load generation in July 1982, and the HDS now is only used for providing daily peaking capacity (Figure 1). GUC incurs high losses by keeping the HDS in daily operation (about D 1.2 million a year) and therefore proposes to have the station retired from service as soon as new capacity is commissioned at KPS. GUC, however, plans to retain two of the Mirrlees Blackstone Units as an emergency reserve at HDS in case of a major breakdown at the KPS (e.g. due to severe weather). Other arguments for shutting down HDS are its remoteness from the main load center which is the Kombo St. Mary area, 1/ and the poor state of physical facilities at HDS which would require major civil works to restore it for slow speed diesel units using heavy fuel oil (2.20).

2.16 The KPS will be maintained as the central power station for the Banjul grid and, because existing civil structures at the KPS can accommodate five units, three new generators will be installed in addition to the existing two Mirrlees Blackstone units. GUC has secured financing of US$4.5 million (DM 7.0 million) from the German Agency, KfW, to expand the KPS during 1984-85. 2/ The Japanese government also has provided the Government with a grant to purchase one addLitionaldiesel generator (5.0- 6.0 MW) for KPS. The Mission was informedLthat the unit supplied under

1/ The scope for further urban expansion in central Banjul is very limited.

2/ The concessional loan from KfW would provide approximately D 7.0 million for one 3.8 MW diesel unit, and D 2.0 million to expand the Banjul transmission/distributionsystem. - 17 -

BANJULPOWER SYSTEM LOAD FORECAST (SHORT-TERM)

13-

12~~~~~~~~~~~~~~~~~~.'8~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 10 ow|ePrGrwh

Peak Load 7.25MWWth Reduced | Voltage and LoAd Shedding Nta

7 _ Capaclty Inst./Avallable Kotu /w

Firrn Capacity at Kotu

1973 1975 1977 1979 1981 1983 1985

StInsuMfclentGenerating Cpo&)ciy SourctP:GUC

Worici Bank -25537 - 18 - the Japanese grant will be installed in late 1984, and the other two financed by the KfW in late 1985. Until then, the Banjul system will continue operating with frequent load shedding, especially during periods when one of the two units at KPS has to be shut down for routine maintenance. Until the proposed study to determine the medium term (10 year) load forecast for the Banjul system is completed, 1/ GUC plans to expand capacity as quickly as possible through available financing. GUC's short-term load forecast (Figure 25537) clearly illustrates the nature of the current deficit in generation capacity. In the Mission's view, an additional diesel generator -- possibly another 3.8 MW diesel unit -- may be required at KPS before 1990 to allow GUC to cope with the backlog of outstanding connections. 2/

2.17 Provincial (Rural) Electrification The Government's objectives for provincial or rural electrification (RE) are socioeconomic: (i) to stimulate rural development, including attracting industrial activity to the provinces; and (ii) to counteract the rural to urban drift. RE services consist of some 5.2 MW of installed small isolated diesel generating stations for vital administrative and social services at most provincial centers. The RE targets during the past Plan period were not achieved because resources had to be diverted to tackle the emergency situation in Banjul. Nevertheless, new RE services were introduced at Farafenni, Basang, and Mansakenko. 3/ The existing provincial stations operate without adequate supervision and maintenance by GUC. Most of t:hem are in very poor working order and a number have broken down recently. 4/ The total available capacity in the provinces has been reduced to 2.6 MW. The Mission agrees with GUC on the urgent need for an emergency program to overhaul and rehabilitate about eleven provincial diesel-based power generating plants. In 1982, GUC had requested M,irrlees Blackstone, the UK manufacturers of most of the units in use in the provinces, to do a survey to ascertain requirements for such a major underta-king. The results of the survey indicated a need for about US$1.0 million in spare parts and equipment to overhaul the units. The proposed overhaul should prevent further damage and, possibly, the permanent cbreakdownor loss of some units which are vital for maintaining administrative services in the provinces. GUC would require the services of an expatriate diesel engineer for about one man-year to supervise the rehabilitation program. The mission was informed that the Goverrment had requested UK bilateral aid for the program and was awaiting a response.

1/ The study has been proposed by GTZ and will be financed by the KfW.

2/ GUC has suspended action on applications for new connections until adequate generating capacity is in plac:e. There are currently some 2600 outstanding applications for new connections in addition to new industrial loads due to the Plan.

3/ About D 2.0 million (US$1.0 million) has been allocated in the current Plan for new RE installations.

4! Ca-terpillar Diesel Generators from HDS have been redeployed at some of the provincial centers. - 19 -

2.18 The Mission also supports the Government's plan to make a comprehensive evaluation of the RE program. The Mission recommendsthat the scope of the study, which may be financed by the Islamic DevelopmentBank (ISOB), include: (i) a review of technical and operating standards for RE services; (ii) a review of the capital requirementsfor such services; and (iii) a review of operating costs and the implications for annual subsidies for RE (Annex II). 1/ Following this study, the Government will be able to determine what level of RE services it can effectively provide within its overall financial constraints and also whether sums allocated to subsidizing rural electrificationcan be better utilized to meet other energy needs of the rural population.

2.19 Power System Loss Reduction An evaluation done in 1975 during the appraisal of the IDA-financedGambia Infrastructureand Tourism Proj- ect (Credit 602-AM) identifiedhigh electricitylosses in the Banjul system -- on the order of 32%. The losses were attributed to generation losses of HDS (2.5%), transmission/distributionlosses (12%), and losses due to unmetered consumptionand fraud (18%). A component of the project was designed to upgrade the rudimentary transmission system, 2/ thereby reducing the transmission/distributioncomponent of losses from 12% to 10% over a five-year period. The measures were to include installation of new transformersand circuit breakers in three 33 kV/11 kV substations, construction of four new 11 kV/0.4 kV substations,and installation of a total of about 5 km of overhead lines and underground cables in the Banjul area. Unfortunately,the crisis which followed the explosion and damage of the HDS generatorsin 1977 disrupted implementationof the project. A new attempt is being made under the IDA-financed Energy Project (Credit 1187-GM) to continue rehabilitationof the Banjul transmission/distribution system. GUC expects that total losses will be reduced to about 12-15% at the end of 1983, after the new facilitiesare installed and after the "Special Task Force", set up by GUC to systematically check meters and to investigate and eliminate unmetered consumption and fraud, has achieved its objectives.

2.20 Conversion to Heavy Fuel Oil The Government requested GUC to investigate the option of converting diesel generating units at KPS and HDP stations to slow speed operation using heavy fuel oil (HFO). The Government expected that the conversionwould lead to (i) a reduction in

1/ Under existing arrangements, the GUC is reimbursed for operating losses at the provincial stations. GUC losses from provincial operations have increased from D 0.27 million in 1975/76 to D 0.86 million in 1981/82.

2/ The transmission/distributionsystem was overloaded. The load exceeded design thermal limits during peak hours and the number of switching points was inadequate. At the time, the 11 kV transmission system in Banjul consisted of about five miles of 30-year- old underground cable with ten indoor-type substations;and about 18 miles of copper conductor overhead line in the Kombo St. Mary area terminating at Yundum Airport. - 20 - the fuel cost of power generation and in the oil import bill; and (ii) a possible extension in the life of generating units at the two stations. To implement this program, GUC commissioned a feasibility study which was financed by KfW. The study concluded that, while both units at KPS could be converted to run on HFO, substantial investment in new equipment was required to complete the retrofit, including: (i) a new HFO storage tank of 750 tonnes capacity; (ii) pumps for discharging and transporting the HFO from the jetty at Banjul port to the Kotu station; (iii) fuel preparation facilities such as a pre-centrifugation tank and fitters; (iv) a storage tank at the Kotu power station; (v) smaller holding tanks for the daily generation requirement (one tank for the two Kotu units); and (vi) electric preheaters for the HFO circuit. The study also indicated that the operational units at HDS (2.15) could be converted. 1/ The estimated total cost of conversions was D 2.0 million, D 1e7 million for KPS, and D 0.3 for HDS.

2.21 The Mission discussed the HFO option with GUC in the context of their current plans to rehabilitate generating capacity in the Banjul/ Kombo St. Mary system, and agreed with GUC's position that conversion to HF0 would not be an appropriate strategy for now. First, GUC cannot raise the necessary financing under the current constraints imposed by the Financial Recovery Program, and second, the option of conversion to HFO could best fit inito GUC's plans after the base load in the Banjul system had exceeded 10.0-12.0 MW. Nevertheless, GUC will ensure that specifications for all additional diesel generators for KPS are compat- ible uith the future use of HFO.

2.22 Power Interconnection The possibility of interconnecting the power transmission grids of Senegal and the Gambia wuas recently discussed by representatives of the two Governments. Interconnection would involve a link-up of the GUC system with that of the Societe S6n&galaise de Distribution D'Energie Electrique (SSDEE) at either Kaolack or Ziguinchor. An agreement at the governmental level would allow GUC and SSDEE to proceed with an interconnection study along the lines proposed by the Union of Electrical Power Producers in Africa. In addition to determining more reliable estimates of the cost per kilowatt/hour (including power purchases and transmission) to Gambia load centers, the Mission recommends that such a study include a least-cost analysis of the following options: (i) a link between Banjul, Sokone, and Kaolack; and (ii) a link between Banjul, Diouloulou, Bignona, and Ziguinchor. In the Mission's view, interconnection is a long-ternm option which should not be given priority until problems with the Banjul system have been resolved.

1/ The manufacturers of the HDS units later ruled out the possibility of converting all but one of the units and also revised upwards the estimated cost of conversion to D 0.8 niillion. - 21 -

Woodfuel

Fuelwood Consumption

2.23 A household energy consumption survey 1/ carried out in May-June 1981 as part of the EMPS provides the most recent estimates of fuelwood demand in the Gambia. Average daily consumption was found to be relatively high--between 580 and 650 kg per capita on an annual basis. All of this is in the form of wood, as charcoal productionwas banned in July 1980 and sales are reported to have ceased by September 1980. This is equivalent to a total annual consumption for households of about 390,000 tonnes in 1981, of which 291,000 tonnes were consumed by rural inhabi- tants, and 99,000 tonnes by urban dwellers. Other non-householdconsump- tion (for commercial enterprises, etc.) accounts for an additional 40,000, bringing the national total to 430,000 tonnes for 1981. The results of the survey also indicate that per capita consumption patterns are roughly uniform in different regions of the Gambia. There are no reliable data on fuelwood consumption during the 1970s, so no assessment of historical trends can be made.

2.24 In the Mission's view, the above estimates of per capita fuelwood consumption in the Gambia need to be reevaluatedbecause of several factors which are discussed in detail in a more recent report prepared by the GGFP. 2/ These factors relate specificallyto the observationin the Gambia and other Sahelian countries that fuelwood consumption levels are tied more to the number of fireplaces or households than to the number of individuals. This being the case, projectionsof future demand for fuelwood are likely to have been overestimated,as the rate of growth in separate fireplaces would usually be much lower than the population growth rate. 3/ Demand could actually be half of the estimates derived from the EMPS survey, with significant implications for the rate of replanting woodlands. The Mission expects that the USAID-sponsored fuelwood

1/ About 500 households were included in the UNSO-financed energy survey of 1982.

2/ "Comments on the Estimation of the Present and Future Fuelwood De- mand in Sahelian Countries with Special Considerationon the Situa- tion in the Gambia" by Gambia-GermanForestry Project, Banjul.

3/ The rate of increase in the number of households or fireplaces will almost always be less than the rate of increase in population because household sizes would tend to increase. Also, an increase in the number of persons per household would lead to a reduction in per capita consumption of fuelwood. - 22 - consumption survey would be designed and implemented in a way to obtain the necessary information to resolve these issues. 1/

2.25 Fuelwood Prices The supply to urban centers is commercialized and prices are not controlled. The standard measure is a bundle of chopped wood. The pricing of fuelwood appears to incorporate several components, including:

(i) stumpage fees or royalties paid to the Forestry Department or local autlhorities; 2/

(ii) cost of handling felled logs or branches to roadside; and

(iii) transportation to urban centers.

Data collected during the survey indicate that one of the main determi- nants in pricing is the distance from point of collection to Banjul. Fuelwood is sold either directly to consumers from the roadside, or in- directly through dealers who independently arrange transportation to Banjul. Representative retail prices at the time of the mission were a 'uniform1 D 1.00 per bundle but varying in weight from 20 kg per bundle on thie roadside (about 200 km from Banjul) to only about 3 kg per bundle in Banjul. 3/

Cooking Fuel Options for Urban Households

2.26 Urban households in the Gambia have access to three sources of energy for cooking: fuelwood, kerosene, and LPG. Charcoal was the main fuel before 1980, when GOTG banned its production and use throughout the country. The extent of electric cooking irn these households is not likely to be very significant. An analysis of the relative prices of these sources per unit of useful heating energy (Table 2.13) indicates that fuelwood is much cheaper than electricity, LPG, or kerosene. There is therefore no clear price incentive for consumers to switch from fuelwood.

1/ The fuelwood consumption survey has been planned as part of the ongoing project (3.3). The Mission, however, was informed that the survey had been postponed and probab]Ly would be incorporated in a follow-up forestry project.

2/ This is about 1 butut (0.1 dalasis) per kilogram of wood.

3/ Bundles in Banjul contain 6 or 7 smaller sticks, each weighing about 0.4-0.5 kg. The size of the sticks increases in the surrounding areas up to 0.6-0.8 kg. Hence, a D 1.00 bundle outside Banjul could weigh 4-5 kg. - 23 -

Table 2.13: Energy EquivalentCosts of Cooking Fuel in the Urban Household

Energy Fuel Retail Cooking Energy Fuel Type Content Unit Price Efficiency Cost (Units/GJ) (bututs/Unit) (%) (bututs/UsefulGJ)

Fuelwood 19.3 kg 37 b/ 0.1 7,150 Kerosene 28.7 liters 147 0.3 14,063 LPG 21.6 kg 283 0.6 10,188 Electricity a/ 280.0 kWh 52 0.7 20,800 a/ Represents current domestic tariff for consumption above 1100 kWh per month. b/ Based on Banjul retail price of D 1.00 per bundle of 7 small sticks, each weighing approximately0.5 kg.

Source: Mission estimates

Stove Development

2.27 The Government has recently started a stove development program to address the issue of fuelwood conservation. 1/ The Government'sim- plementing agency is the Department of Community Development (DCD) which works in collaboration with extension staff of DCD, DOF, and the Appropriate Technology Center at Mansakonko. The current stove program began in October, 1982 and is funded in part by UNSO and DANIDA. Tech- nical support for the program is being provided by personnel of the Intermediate Technology Development Group of the UK. Over the period 1982-1985, the program's aims are to develop, test and begin dissemination of: (i) about 1000 metal stoves (Kumba Gaye Stoves) for use with groundnut shell briquettes and fuelwood in urban areas; and (ii) about 6000 clay and sand stoves for use with fuelwood in rural communities. The project provides funds for 75% of the cost of materials used for stove making. In the Mission's view, it is too early to assess the impact of this program on fuelwood demand. The approach being used is comprehensive and takes into account experiences with similar stove development projects in Africa. The targets appear to be too optimistic for a three-year project.

1/ Other projects by DCD resulted in the developmentof the ALTONA oven for smoking fish. - 24 -

III. ENERGY RESOURCE DEVELOPMENT PROGRAMS

Overview

3.1 The Gambia's energy endowment is modest. The natural woodlands are bieing depleted through conversion to accommodate the needs of a rapid:Ly growing population. There is some possibility of economically exploitable oil and gas deposits offshore, based on limited past exploration and geophysical inference. The country is very flat, with a maximum elevation of 35 meters, which precludes any major hydroelectric potential. No coal, oil shale, or uranium deposits have been discovered. Groundnut shells presently are being used for cogeneration at GPMB's processing plant at Denton Bridge. The potential for wind power appears to be limited to the coast, but the solar regime appears to be very favorable for applications such as water heaters. This chapter briefly examines the indigenous energy resources cf the Gambia and the progress being made to develop them.

Forest Energy Resources

3.2 There are no recent, reliable data on the extent and distribution of natural woodlands in t e Gambia. The standing volume in woodland areas is estimated to be 25 m wood per hectare. Table 3.1 shows estimates presented in the Energy Master Plan Study (EMPS). These estimates would need to be revised to reflect the results of the more comprehensive land use survey and forest inventory which has just been completed under the Gambia-German Forestry Project (GGFP). The standing stock of mangroves is estimated to be 5.0 million m3 The results of the USAID- financed Mangrove Feasibility Study 1/ indicate that some 1.2 million m3 of margrove growing upstream of the crossing point for the Trans-Gambia highway would have to be removed after construction of the proposed Yellentinda Dam. A large portion of the hardwoods could be utilizes as fuel. The remaining mangroves stands could yield about 100,000 m of fuelwood on a sustainable basis if systematic harvesting methods are introduced. The USAID-sponsored study also indicated that the mangroves were endangered by disease and pointed to the worsening environmental conditions along the Gambia River.

1/ Mangrove FeasibiliLty Study by Checchi and Company, Washington, D.C., SeBptember 1981. - 25 -

Table 3.1: Distributionof Woodlands in The Gambia (1980)

Category Area (ha)

Closed forest 7,200 Woodland 155,280 Woodland savannah and bush fallow 201,495 Mangrove 66,770

Source: EMPS

Reforestation

3.3 The Government proposes to expand the replanting program from the First Plan target of 250 ha/year to 570 ha/year by the end of the current Plan period. 1/ The justification for this increase appears to have been recent evaluations of the fuelwood supply/demand situation which project widening fuelwood supply deficits for the future (2.24). The Mission reviewed ongoing forestry operations of USAID and GTZ in the Gambia:

(i) USAID/Gambia Forestry Project: 2/ The project is due for completion in 1983 and the achievements include the establishment of about 604 ha of Gmelina plantationsand ten communal woodlots, each 5 ha in size. Communal woodlots will continue to be established during the second phase of the project, but additional fuelwood plantationswill not because of high establishment costs (about US$350 per ha), and the difficulties of maintaining the plantations due to the prolonged drought and uncontrolledbushfires;

(ii) Gambia-GermanForestry Project (GGFP): Phase I of the project (DM 4.0 million) has been completed and (i) a comprehensive land use plan has been submitted for Government review; (ii) the field work and data processing for the forest inventory have been completed; 3/ (iii) trials on the propagation

1/ Since 1978, the Government has sponsored an annual 'National Tree Planting Festival'. About 500,000 tree seedlings are distributed each year to volunteers in communitiesfor planting.

2/ USAID Project No. 635-0205 Gambia, provided services worth US$1.5 million.

3/ A final report on the forest inventory is being prepared. The inventory will, in future, be updated by surveying quantitative and qualitative changes in the forest canopy. - 26 -

of selected tree species are continuing; (iv) a plan for managing three or four of the forest parks is complete; and (v) surveys 1/ are continuing on the remaining 29-30 forest parks. Phase II of the project (DM 5.0 million), scheduled to start in November 1983, will continue for three years and emphasize methods for managing production and harvesting of products from the natural woodlands and include building access roads, setting up an infrastructure to systematically recover dead wood, and exploit selected species for fuelwood. Other aspects involve starting a logging and saw milling operation which would eventually handle some 1000 to 2000 m3 of timber for the domestic market.

3.4 The Mission supports the findings of GGFP personnel that the main causes of deforestation in the Gambia are the widespread use of un- controlled bushfires to create grazing areas for livestock, and shifting cultivation practices. The Department of Forestry (DOF) needs to be strengthened at the professional level to implement the above approach (5.8). There is also a need to review relative costs and economics of ongoing reforestation efforts and the field operations of DOF to better ascertain the appropriateness of existing license fees and royalties charged for obtaining forest products (6.3).

Utilization of Mangrove Resources

3.5 The main recommendation of the USAID-sponsored study on mangroves was for an accelerated harvesting program in two phases: (i) to recover as much fuelwood as possible from mangrove stands that would have to be removed when the proposed Yelletinda danm (IBRD Map 17169) was constructed; and (ii) to extract about 100,000 m of fuelwood on an annual tsustainable basis from diseased mangroves in the remaining stands down- stream of the Yelletinda dam. Estimates of the production and distribution costs for such a scheme are shown in Table 3.2. The report proposes an institutional framework for the scheme involving the Forest Products Marketing Board, the DO)F, and the Gambia River Transport Co. The Mission recommends that the Goverrment proceed first with a pilot mangrove harvesting project to test the viability of the scheme. Technical assis- t:ance would be required to design and cost the pilot project (Annex II).

1/ Surveys include erecting posts and demarcating areas in the parks. - 27 -

Table 3.2: Mangrove Woodfuel Distribution Costs

Transported b,y Barge (80%) Transported by Truck (20%)

Operation Large wood 22! Small wood - Large wood Small wood 70% 30% 70% 30% - dalasis per cubic meter --

Felling, bucking, stacking 12.0 19.5 10.0 17.0 Transport to roadside - - 5.0 5.0 Barge or truck loading 2.3 2.3 1.5 1.5 Transportation 20.0 17.5 15.0 15.0 Unloading barges and stacking wood 1.5 1.5 - Other storage yard costs 2.4 2.4 Truck loading and transport to retail yard 5.0 5.0 - - Additional cost related to drying - - 8.0 8.0

Total direct cost to retail yards 43.2 43.2 39.5 46.5

a/ Stems of trees larger than 20 centimeters in diameter. b/ Tops of all trees and stems of trees 20 centimeters in diameter and smaller.

Source: Mangrove Feasibility Study, Final Report, September 1981.

Hydropower in the Gambia River Basin

3.6 The only identified dam site within Gambian territory is at Yelletinda, near Farrafeni, off the Trans-Gambia Highway (IBRD Map 17169). When built, this dam will carry the Trans-Gambia Highway, serve as a salt barrier on the Gambia River, and store water for irrigation purposes. The dam has no hydropower generation potential. However, the Gambia could have access to power from other sites in the Gambia River Basin which together have an estimated firm hydro capacity of 203 MW(939 GWh annual firm hydro energy capability). The three most promising sites for development on the Gambia River are: 1/

(i) Niokolo Koba (3-50 MW)

The proposed site is on the Nikolo Koba, which is a tributary of the Gambia River, and lies in Senegal close to the conflu- ence of the two rivers. The proposed dam, either of concrete or earth, would be small, about 23 m high and 930 m long, and

1/ Shawinigan (Canada): Plan Directeur, Secteur de l'Energie Elec- trique (July 1981). - 28 -

the reservoir volume would be 416 million m3 . The estimated head for electricity generation would be about 10 to 15 meters.

(ii) Kekreti (75 MW)

The proposed site is on the Gambia River in Senegal, about 160 km upstream from the eastern border of the Gambia. An earth fill dam with a height of 80 meters and a 1,500 meter crest length would have to be constructed.

(iii) Sambangalou (125-135 MW)

The proposed site is on the Gambia River in Senegal, but the reservoir would extend upstreamninto Guinea. 1/ In a 1977 preliminary study, consultants proposed a 110 meter high and 570 meter long rockfill dam. OMVG has commissionedanother study to reevaluate those proposals.

3.7 All the identified projects are multipurpose, and due to other factors in the Sahelian region, the irrigation component will determine the feasibility and priority given to each of them. The next stage in investigationsappears to be more detailed engineering and cost estimation (site boring investigations,etc.) Thesthree sites are distant from the main power loads in the Banjul area and in western Senegal. 2/ The Gambia has little control over the timing of these projects which will be determined by load growth and power supply options in Senegal. An energy assessment mission to Senegal has determined that these three projects are among the least viable options for Senegal.

1/ Senegal and the Gambia signed a series of agreements on cooperative exploitation of the Gambia River in 1967, 1968 and 1976. These agreements defined the river as a common resource for energy generation, irrigation, and navigation. The two countries established OMVG (L'Oganisationpour la Mise en Valeur du Fleuve Gambie) in 1979 with headquarters in Dakar, Senegal, to carry out a systematic development program. Guinea joined OMVG in 1981.

2/ The sites are also some 500-750 km from main loads in Western Senegal. - 29 -

Table 3.3: Hydropower Potential of The Gambia River

Capacity,MW Production,GWh No of Otherd/ Project Installed Firm Units Average Firm Type Purposes

Kekreti a/ 75 40 3 450 320 Storage I,F Sambangaloub/ 135 - 3 710 610 Storage I,N,F Niokolo-Koba - 50 - - - Storage I a/ Preliminary Study complete; feasibilitystudy underway and estimated constructionperiod is four years. b/ Preliminary Study complete and indicates that dam would cause exten- sive flooding in Guinea. c/ Preliminary Study complete. d/ Other purposes are I for irrigation; N for navigation; and F for flood control.

Source: "Les Grande Bassins Fluviaux et Lacustres du Sahel", December 1980 by CIDA.

Hydrocarbon Prospects

Oil and Gas

3.8 The Gan ian sedimentary basin covers an area of 7,6002km 2 onshore: 5,000 km on the continental shelf and about 4,000 km on the continental slope (IBRD Map 15416). This area has been explored for hydrocarbons since 1956, mostly by companies which also were holding exploration permits on adjacent areas in Senegal. Five companieshave in the past held exploration permits: British Petroleum, Shell Interna- tional, Aracca Petroleum, Chevron and Societe Nationale Elf Aquitaine (SNEA). Chevron relinquished its rights on the continental slope in early 1980, and only SNEA currently holds an explorationlicense covering both the continental shelf and onshore.

3.9 As a result of past exploration by these companies, a significant amount of informationhas been collected. About 5,000 km of seismic have been shot (mostly offshore). Three wells have been drilled. BP drilled two wells onshore in 1960-61 (SK-1 and BK-1); and Chevron drilled a well (Jammah-1)in the deep offshore in early 1979. 1/ The three wells were dry. The onshore wells were drilled on poorly-definedstructures, while Chevron drilled a large, north-south tending structure. The recent

1/ SK-1 bottomed at 3,710 m in Upper Aptian, BK-1 at 2,104 m in Lower Cenomanian,and Jammah-1 at 3,020 m in Albian (IBRD Map 15416). - 30 -

dry well, Jammah-l, undoubtedly has downgraded the continental slope areas. The shelf and coastal margin area were not drilled enough to allow a thorough evaluation of the potential. Senegal, Guinea-Bissau and the Gambia currently are collaborating in a basin-wide study financed by the IDA Energy Project. 1/ The Government's consultants, At:Lantic Resources Ltd. of Barcarena, Portugal, have started work on the re- trieval, reevaluation, and reprocessing of geological and geophysical data on the Gambia. The Government also concluded an agreement (US$1.2 million) with the Government of Canada to allow the PetroCanada Inter- national Assistance Corporation (PIAC) to do a marine seismic survey to enhance the data and information base for the regional basin study. PIAC has completed an 800-km seismic survey in the area that was formerly the concession of Chevron and expects to interpret the new data by November 1983.

Peat

3.10 Some occurrences of mangrove peat recently have been detected along the valleys of the Casamance and Sine Saloum rivers in Senegal. The Government would like to investigate the possibility of similar deposits in the mangroves along the Gambia River. If peat is found in significant quantities, the Government expects that it could be used in solid briquetted form as a supplementary fuel for rural industries such as brick making. The Mission supports the need for a reconnaissance survey to locate mangrove peat deposits (Annex II). Such a survey could be undertaken as an extension of the proposed survey to be implemented with French aid in the Casamance region of Senegal. However, the Mission expects that any mangrove peat deposits along the Gambia River are likely to have fuel characteristics similar to t:hose in the river deltas of western Senegal, that is, with high ash and salt contents.

Nonconventional Energy Resources

3.11 Solar Energy The Gambia is located in a region with abundant sunshine. Existing records indicate that most parts of the country receive an annual mearn daily radiation of over 480 cal/cm . Radiation levels are generally higher during the long dry season when cloud cover is minimal. From an energy viewpoint, the most promising application of solar energy appears to be water heaters to substitute for electric and diesel oil-fired water heating systems in Banjul (Chapter IV). Other existing applications of solar energy in the Gambia include:

(i) Solar Evaporation: The salt works at the Darsilameh village in the Kerewan District, are based on solar evaporation techniques. In 1977, UNIDO provid,ed technical assistance for a feasibility study to expand the salt works from 50 to 500

1/ Gambia Energy Project (Credit 1187-GM). Guinea-Bissau's share of the basin study is financed under Credit 1095-GUB. - 31 -

tonnes/year. 1/ The expansion project is to be implemented during the current Five Year Plan with support from the Gambian Artisans Marketing Cooperative (GAMCO) and the Indi- genous Business Advisory Service (IBAS).

(ii) Solar Powered Water Pumps: One pilot unit has been installed at a borehole near Jambanjole. The system was donated by the Government of Saudi Arabia and installed by German technicians. A second pilot unit will be installed at Mandina Ba as part of a UNDP-financed project. 2/ The implementing agencies for this project, the Water Resources Department and the UN Department for Technical Cooperation for Development, plan to evaluate the performanceof the unit at a later date.

3.12 Wind Surface windspeeds are low over most of the Gambia. There is, however, some potential for using windpumps at several coastal sites where investigationshave confirmed the availability of windspeeds over three meters per second. As part of the UNDP project on experimentation with pumping systems, one wind pump will be installed at a borehole 15 meters deep near Tanji. The prospects for more widespread use of wind pumps in non-coastal areas appear to be poor.

3.13 Biogas The Department of Community Development has initiated a small biogas developmentprogram. In the Mission's view, it is too early to draw any firm conclusions on biogas potential in the Gambia, but socio-cultural factors make it unlikely that biogas will play a large role in the Gambia's energy situation.

1/ About 20% of the total consumption in the Gambia.

2/ UNDP Project "Preliminary Groundwater Investigations and Experi- mentation of Pumping Systems". - 32 -

IV. FUEL SUBSTITUTION OPTIONS

4.1 The Mission's assessment of energy efficiency and fuel substitution options in the Gambia are presentedin this chapter. The most promising options involve the use of groundnut residues for cogeneration,and solar systems to reduce the consumption of diesel oil for heating water.

Utilization of GroundnutResidues

4.2 Cogeneration Groundnut processing facilities are owned and operated by the Gambia Produce Marketing Board (GPMB). The GPMC has two processing facilities: one at Denton Brid[ge which combines two decortication plants, two groundnut oil mills, a refinery, and a soapmaking factory; and another at Kaur which consists of a decorticationmill and a small groundnut shell briquetting plant. The oil mill, refinery, soapmaking factory and one of the decortication plants at Denton Bridge are supplied with steam and electricity from an on-site power plant which is fired with groundnut shells. The decorticationplant, located across the road, however, is connected to GUC supplies. 1/ The existing power plant is equipped with two vintage 1930 Babcock boilers, each rated nominally at 20,000 lb/hr steam. The steam drives two separate condensing turbo alternators of 650 kW and 450 kW capacity. During the processing season, GPMB is able to meet peak loads of between 700 and 800 kW because the generators can be operated simultaneously. GPMB has decided to install a new plant to replace the existing power plant. The new plant is rated at 1.5 MW and consists of two boilers, each of 11 tonnes/hour steam capacity which would feed two 750-kW turbo generaLtors. The plant is scheduled for commissioning in mid-1984 and will make the entire Denton Bridge facility self-sufficientin power and steam requirements. As the groundnut processing season coincides with the peak season for tourists, GUC will have an additional 200 to 400 kW to cover the increased hotel electricity load. The Mission fully supports GPMB's program for Denton Bridge. The feasibility of power generation also has been investigated at GPMB's processingfacility at Kaur, but electricitydemand for the decortication plant is too small to justify a captive power plant of the same size. Kaur is also remote from provincial electricityload centers.

4.3 Fuelwood Substitution The technical options for reclaiming the surplus shells at Kaur to use as a fuelwood substitute are based on either: (i) a briquetting plant to produce groundnut shell briquettes by an extrusion process; or (ii) a continuous carbonizationplant to produce charcoal briquettes from groundnut sheLls. A 1.5 ton/day pilot

1/ There is one decortication plant attached to the oil mill. The other decortication plant is located on the other side of the Banjul/Yundumhighway. The peak load for the latter is estimated at between 200-400 kW. - 33 - briquetting plant, 1/ installed at Kaur is out of operation because of technical problems. The unit produced groundnut shell briquetteswhich were found to be a poor substitute for fuelwood because they were too pliable and produced too much smoke. Nevertheless,UNSO is funding an ongoing project to improve the operation of the plant at Kaur, 2/ to promote the use of groundnut shell briquettes as a cooking fuel for urban households, and to develop an appropriate stove for this type of fuel. The Mission also reviewed another proposal by the Gambia Commercial and Development Bank (GCDB) to convert available groundnut shells at Kaur into 4000 tonnes of charcoal briquettes a year through a horizontal continuous carbonizing process. 3/ Despite the high initial investment required to establish the plant at Kaur (D 4.0 million), the Mission found that its product, charcoal briquettes, could be competitive as a fuel, for example, for ironing, in Banjul. In the Mission's view, the impact of both options will be marginal in terms of substituting for woodfuel requirementsin the Gambia.

The Role of Solar Water Heaters

4.4 All the larger hotels in the Gambia use either diesel oil-fired boilers or electric boilers for heating water (Table 4.1). The Banjul Brewery also uses a diesel oil-fired boiler to produce hot water for washing and sterilizingbottles, and although there have been no surveys, most residential hot water systems are reported to be electric. The potential for saving diesel oil by retrofittingexisting hot water systems with solar is good, as illustrated by the results of the Mission's studies of the Senegambia Hotel and the Banjul Brewery (Annex IV). The diesel heating system of the SenegambiaHotel could be retrofittedwith a system comprising a solar collector array, two storage tanks, and ancil- liary pumps, piping and controls at an estimated cost of US$70,000. As current diesel heating requirements amount to about US$4,800 per month, the payback period in simple terms on the solar retrofit would be about 15 months. The estimated payback time would be similar for the other hotels and possibly shorter for hotels with electric heaters. The Mission's assessment also indicates that the existing diesel oil heating system at the Banjul Brewery could be retrofitted with a similarly designed solar heating system for about US$111,000. The payback period,

1/ Annual output would be 7500 tonnes of 55 mm. diameter briquettes. The plant was financed by a grant from the Danish agency, DANIDA.

2/ UNSO/DANIDA Project: "Improving the Production of Fuel Briquettes in KAUR Plant, and the Use of AgriculturalWaste Products for Fuel" Project UNSO/DES/GAM/81/006.

3/ The process is a proven one and equipment is available through rep- utable suppliers such as Aldred Process Plant Ltd., UK. The feasibility of the project is presented in a 1980 report "Agro-based Energy" by the GCDB. - 34 - in simple terms, given projected savings in diesel consumption costs of US$5,350/month,would be about 21 months.

4.5 In the Mission's view, converting these diesel-firedand electric water heating systems would be both financially profitable to the companies involved and economically viable and attractive for the Gambia. Converting the five large hotels and the Banjul would require an investment of about US$600,000 but would result in savings of about 720,000 liters of diesel oil a year, or about US$500,000 a year iLn the cost of diesel imports. The main bottleneck appears to have been the lack of awareness of the potential benefits and/or the difficulty in obtaining reliable information on suppliers and costs, given that there is no local firm representing such a supplier. As the Government, potential users, and the Gambian Commercial and Development Bank are interested in pursuing the solar water heating option, the Mission recommends a program of technical assistance: (i) to prepare the necessary detailed designs and cost estimates for each site; (ii) to prepare tender documents for the supply and installationof the equipment; and (iii) to evaluate bids and supervise installationand monitor the initial operation of the solar water heating systems. (Detailed terms of reference for this work are included in Annex II). The potential size of the market for domestic solar water heating systems could also be surveyed during this exercise.

Table 4.1: Water Heating Systems in Tourist Hotels

Hotel Number of Rooms Type of Water Heater

Atlantic 235 diesel oil fired Kombo Beach 256 diesel oil fired Fajara 272 diesel oil fired Senegambia 305 diesel oil fired Sunwing 200 electric Bungalow Beach 114 electric Wadner Beach 160 electric

Source: Mission survey - 35 -

V. DEVELOPMENT OF ENERGY INSTITUTIONS

Management and Coordination of the Sector

5.1 Overview The responsibility for formulating policy, making decisions and implementing programs in the energy sector is fragmented. Although the Ministry of Economic Planning and Industrial Development (MEPID) is responsibile for the energy sector, other ministries maintain key responsibilities pertaining to the sector. The Ministry of Finance and Trade (MFT) is responsible for regulating and monitoring energy prices; electricity operations of GUC are supervised by the Ministry of Works and Communications; hydrocarbon exploration is coordinated by the Ministry of Lands and Local Government; and forest energy programs are administered by the DOF in the Ministry of Water Resources and Environ- ment. The Government established an Energy Unit in MEPID to monitor and review the UNSO-financed Energy Survey and Master Plan Study.

5.2 National Energy Commission In January 1983, the Government decided to create a National Energy Commission, comprising public and private officials, to take over responsibilities for formulating energy sector policies. NEC also would be the principal advisory body to the Cabinet for decision making purposes. NEC is to be headed by either the Vice-President or the Minister of Economic Planning and Industrial Development and will be supported at the working level by the Energy Unit of MEPID. The Government has allocated resources to allow MEPID to recruit a full-time economist for the Energy Unit. Other staff of MEPID, including the Principal Planner, would provide assistance on a part-time basis as required. As the full-time economist of the Energy Unit is likely to have limited energy sector experience, the Mission recommends technical assistance in the form of a resident expatriate energy economist/planner for 18-24 months. During this period, the resident energy economist/planner will help in: (i) establishing a work program for the Unit; (ii) assisting the Government through NEC in formulating energy policies and energy investment plans. The Gambian economist would be his counterpart and would benefit from on-the-job training from the expatriate (Annex II).

Energy Subsector Operations

5.3 Energy sector problems in the Gambia are rooted in institutional weaknesses which have developed from: (i) the inadequate staffing of energy institutions which control day-to-day operations in subsectors such as power, petroleum and forestry; and (ii) the lack of a well articulated energy policy or strategy with which to guide planning and other efforts by these institutions. The Government is fully aware of the seriousness of these problems and has requested technical and financial assistance from external sources to tackle them. The response to this request from foreign agencies has been good and progress is being made on the immediate, critical needs of the Gambia Utilities Corporation (GUC), - 36 -

the Department of Forests (DOF), and the Geological Unit (GU) of the Ministry of Local Government and Lands.

Gambia Utilities Corporation (GUC)

5.4 The GUC has faced severe management and financial problems since it took over responsibilities for public utilities from the Ministry of Works and Communications (MWIC)in 1972. The German Agency for Technical Cooperation (GTZ) currently is providing technical assistance to resolve these problems. GTZ recently completed a detailed study of GUC's operations and organizational structure. Its recommendations on financial and institutional matters have been accepted by the Government. They include:

(i) a Financial Recovery Plan which was approved by the Cabinet in 1981, and which provides funds from the Government to cover cost overruns for the Kotu power station project, and to cover cummulative losses from the provincial stations (1973-1980); and

(ii) placing GUC, for the duration of the assistance program, under direct responsibility of the Presidency.

5.5 The GTZ team in Banjul now includes personnel for the key GUC positions of: (i) Managing Director; (i) Manager, Water Division; (iii) Manager, Electricity Division; (iv) Generation Engineer; (v) Trans- mission-distribution Engineer; (vi) Manager, Kotu Power Station. The team will remain in charge of GIJC until 1985. Other experts will be used on a short-term basis to analyze specific problems in GUC finances, personnel management procedures, and the operation of the Statistical De- partment. On-the-job training will be provided to Gambian counterparts who are expected gradually to take over managerial functions. GUC's provincial operations also have been poorly managed, and many of the stations are in disrepair due to lack of adequate maintenance and skilled operators. GUC's financial crisis has contributed to this problem and immediate action is required to rehabilitate the provincial diesel generation units (2.17).

5.6 The GTZ technical assistance program is therefore well underway and should help resolve most of GUC's problems. There is a need for additional assistance to allow GUC to train enough diesel mechanics and operators for their expanding system in Banjul and the provinces. GUC's management had proposed establishing an Ele!ctrical Training Center which would teach job-oriented diesel mechanic skills to 10 to 12 persons on a three-year rotation. The Mission discussed this proposal with the Gov- ernment, who agreed to it. However, the Government decided that in the interest of better utilizing existing facilities, such a training program could be organized using the facilities at the Gambia Technical Training Institute. The Mission supports this approach, which has been reflected in the scope of technical assistance for establishing the training program. (Annex II). - 37 -

Department of Forestry (DOF)

5.7 Until 1981, the Forestry Department was one of the nine depart- ments of the Ministry of Agriculture and Natural Resources. DOF was transferred after the creation of the new Ministry of Water Resources and the Environment in February, 1981. The DOF has three divisions:

(i) Forestry Plantation Division: responsible for the planning, protection and management of the Gmelina plantations. The Division is responsible for replanting 200-300 ha/year and developing working/managementplans in collaborationwith the GGFP;

(ii) Forest Protection Division: responsible for patrolling forestry reserves, organizing villages to fight fires, controlling licenses for the exploitation of wood and other forest products, controlling unauthorizedfelling, etc; and

(iii) Forest Research/UtilizationDivision: responsible for the Government-ownedsawmill and lumber yard at Nyambai. 1/

5.8 A new Director of Forestry was appointed in late 1982. He is one of only three graduate foresters in DOF. One of the Director's main tasks has been to prepare a program of action to implement the forestry component of the IDA-financed Gambia Energy Project, and to coordinate other bilaterally funded schemes. The DOF has a total staff of about 134 persons comprising: Forest Scouts (66), Forest Guards (33), Forest Rangers (14), Senior Forest Rangers (15), Assistant Foresters (3), Super- visor Foresters (3). Each of the three Assistant Foresters heads a Division Forestry Unit in the Upper River, the Lower River, and the Western River Division. DOF plans to divide field operations into five zones, each to be headed by a graduate forester. This would require more resources to train more personnel at the professional level (Annex II). Ongoing projects by GTZ and USAID include training for only middle level technical personnel in DOF: GTZ has sponsored four persons at Diploma courses in Liberia and Cyprus and proposes to sponsor an additional five at the same level; and USAID also has sponsored six persons. 2/

5.9 The DOF cooperates with the Senegalese Forestry Department for joint management and developmentof forests, especially along the border areas. 3/ The Directors of the two services meet every six months to discuss areas of mutual concern, and once a year for a joint tour of a

1/ The sawmill was recently rehabilitated under the USAID Forestry Assistance Project.

2/ Four persons recently have completed two-year forestry degree courses in Nigeria, and one person is working toward a Bachelor's degree in Tanzania.

3/ A Bilateral Agreement on Forestry Matters was signed in May, 1975. - 38 - selected border area. Joint treks also are arranged at the field staff level. Other areas of cooperation include training, the exchange of planting stock, extension materials, etc. Consultation on matters of forest policy is another important facet of this cooperation. For example, when the Gambia banned the production of charcoal, Senegal agreed not to issue any charcoal licenses within 10 km of the bordler in an effort to discourage smuggling. Plans are underway to coordinate forestry research in the two countries.

The Geological Unit

5.10 The Geological Unit is part of the Ministry of Local Goverrment and Lands (MLGL) and is responsible for monitoring petroleum exploration. It has a total staff of ten, headed by a senior geologist. Due to staffing and budgetary limitations, the unit has not been in a position to acquire geological information or even to monitor the work of foreign private petroleum exploration companies. The Unit currently is receiving technical assistance to improve its capabilities and facilities as part of the IDA-financed energy project which includes:

(i) about 16 man-months in services of exploration consultants (including an explorationist, a geophysicist and other experts on short-term assignments) to assist in:

(a) retrieving, compiling and integrating existing geological and geophysical data;

(b) test reprocessing of seismic data;

(d) negotiating exploration contracts;

(e) monitoring the activities of operating companies.

(ii) about six man-months of advice by a legal firm to review the legal and contractual framework for petroleum exploration and to assist in negotiations with companies;

(iii) equipment to support the work of the Geological Unit and consultants, including storage and reproduction equipment, vehicles andi a modest expansion of office space.

On-the-job training would be provided to Urnit personnel by consultants. A few local staff will also be sent abroad for further training.

Other Responsibilities

5.11 Three international oil majors --- Shell, BP, and Texaco -- handle various responsibilties for the supply, storage, and domestic marketing of petroleum products in the Gambia. Until recently, Shell was - 39 - engaged in all aspects but now has withdrawn from the importation and domestic marketing functions. Importation, storage and petroleum pricing issues are discussed in Chapter II. - 40 -

VI. ENERGY TECHNICAL ASSISTANCE AND INVESTMENT REQUIREMENTS

Summary of Energy Demand Projections

6.1 The Mission's projections of overall primary energy demand between 1982 and 1990 are shown in Table 6.1. The projections have been kept simple but take into account: (i) progress being made in restoring adequate diesel power generating capacity in the Banjul system; (ii) the interest shown by the Government and potential users (hotels and .industry) in reducing diesel consumption through solar water heating systems; and (ii) the poor chances of converting from diesel-based generation at KPS to heavy fuel oil (HF0). The result is that primary energy demand will increase at about four percent a year, and seven percent a year for petroleum and electricity combined. The major investment decisions relate to the Banjul power system. Minor investments are also req,uired for the Solar Retrofit Programs and for the emergency overhaul of provincial diesel generators.

Table 6.1: Projected Primary Energy Demand ('000 toe)

1982 1985 1990

Petroleum fuels 44.2 49.5 64.8 Diesel Electricity a/ 9.2 17.6 28.3 Fuelwood b/ 125.0 133.0 146.0

Total c/ 178.4 200.1 239.1

Growth % p.a - 4.0 3.7 a/ represents diesel oil consumption for electricity generation. b/ excludes consumption of other biomass fuels such as groundnut residues. c/ the solar retrofit program (4.5) would result in a reduction in demand of at least 600 toe per annum when implemented.

Source: Mission estimates

Energy Investments

6.2 The Second Development Plan includes D 26 million (US$9.6 million) for energy related investments (Table 6.2). Of this amount, D 20 million (US$7.4 million) is being sought from external sources in the form of grants or loans to supplement D 6 million (US$2.2 million) in - 41 - local financing. The Mission's findings are that external sources of financing for the Banjul power system have for the most part been identified. There is, however, an urgent need for an additional investment to overhaul provincial electricitygeneration facilities.

Table 6.2: Energy Related Investments in Second Plan (million Dalasis)

Total Investment Source of Financing Investment in Local External Project Cost 2nd Plan Grant Loan

1. Kotu Power Station 19.0 3.0 2.0 - 1.0 2. KPS Third Generator 6.0 6.0 - 6.0 - 3. Banjul Transmission/ Distribution System 5.0 5.0 1.0 - 4.0 4. Rural Electrification 2.0 2.0 2.0 - - 5. Carbonization Plant 4.0 4.0 - - 4.0 6. Solar Salt Expansion 0.2 0.2 0.2 - - 7. Forestry Development 9.0 6.0 1.0 5.0 -

Source: MEPID

6.3 The main energy sector investmentsduring the Second Plan are:

(i) Power: A third generating unit (5.0 MW) for KPS has been secured through a grant from the Government of Japan, a forth unit (3.8 MW) for KPS will be financed by a DM 7.0 million (US$2.9 million) loan from KfW (West Germany), and loans from the IDA and KfW 1/ have been secured for further rehabilitation and expansion of the Banjul transmissionand distribution system. The Emergency Overhaul and RehabilitationPro- gram for provincial diesel-based power generating plants would require immediate external financing of about US$1.0 million for spare parts and equipment. The Government has made a request for assistance from the UK bilateral aid program and is awaiting a response.

(ii) Forest Energy Development: Phase II of the Gambia-German Forestry Project (GGFP) will be providing grants of about DM 5.0 million (US$2.0million). USAID will not be establishing

1/ KfW may be providing an additionalDM2.0 million (US$0.8million) in 1984. IDA has provided a credit of about US$500,000 for upgrading distribution facilities as part of the ongoing Energy Project (Annex - 42 -

new fuelwood plantations but will continue supporting communal woodlot projects. A more precise appraisal of investment requirements in forestry/fuelwood supply schemes can only be available after a decision has been made on the proposed mangrove harvesting project (Annex II).

(iii) Petroleum: Although no investments in petroleum facilities are planned by the Government during the Second Plan, a decision to move the existing depot (2.11) will require investments to construct a new storage depot in the Banjul Port area. The exact investment required can only be determined after a detailed feasibility study.

(iv) Petroleum Exploration: A grant of US$1.2 million was obtained from the Canadian Government and used in part to finance a recently completed 800 km marine seismic survey by the PIAC (Annex III).

(v) Solar Retrofit Program: Some 720,000 liters of diesel oil can be saved by converting existing diesel oil-fired water heaters in the Banjul Brewery and about five large hotels to solar water heating systems. An additional three large hotels could effect substantial savings by retrofitting their existing electric water heaters with solar systems (4.5). The required investment for equipment in this program is about US$0.6 million which could be financed in part through the Gambia Commercial and Development Bank (GCDB). 1/

(vi) Utilization of Groundnut Residues: The Government may require external financing for an investment of D 4.0 million (US$1.5 million) to install the 4000 tonne per year continuous carbonizing plant at Kaur. The proposal, which was prepared by the GCDB, has been presented to the European De- velopment Fund (EDF) and a decision is awaited. The total investment required could be reduced by using briquettes from the existing plant at Kaur (4.3).

S3ummary of Technical Assistance Requirements

6.4 In addition to ongoing technical assistance programs (Annex [II), the mission recommends external assistance for the following tasks:

Top Priorities

(i) evaluation of petroleum product import arrangements to establish the relative costs of present and other alternatives to

1/ GCDB will require external financing to replenish its foreign currency line of credit. - 43 -

allow the NEC and the Government to decide on a more permanent arrangement (2.9);

(ii) preparation of a contingency plan to replace the current ad hoc system for allocating petroleum products during emergen- cies (2.10);

(iii) emergency overhaul and rehabilitation of provincial diesel- based power generating plants (2.17);

(iv) a comprehensive review of provincial electricity services (RE) to determine operating and maintenance costs to GUC, and the required level of Government expenditures to ensure an efficient program (2.17);

(v) preparation of detailed solar system designs for each site (hotel and the brewery), of tender documents for supplying and installing the equipment, evaluation of bids, and supervision of the installation and initial operation of the systems (4.5); and

(vi) strengthening the capabilities of the Energy Unit of MEPID (5.2).

Other requirements include:

(i) preparation of a medium-term power load forecast to use in planning investment in future generating capacity and the transmission/distribution network of the Banjul grid (2.16);

(ii) establishment of a training program for GUC diesel operators and mechanics (5.6);

(iii) evaluation of the costs and benefits of establishing a new storage depot for petroleum products (2.11);

(iv) preparation and implementation of a pilot mangrove harvesting program (3.5);

(v) fuelwood consumption survey (2.24);

(vi) comparative analysis of the costs and benefits of alternative fuelwood production schemes in relation to existing royalties and license fees for obtaining fuelwood from natural woodlands (3.4); and

(vii) reconnaissance survey on mangrove peat occurrences in the Gambia River Delta (3.9);

(viii) sponsorship for professional training of five or six Gambian nationals (at Bachelor's and/or Master's degree level) to take up vacant positions in the DOF (5.8). - 44 -

6.5 The Government proposes to approach multilateral and bilateral agencies for financial and technical assistance for the above energy development tasks. This will be arranged in the context of the Gambia's next donor conference which is scheduled for early 1984. Detailed pro- files on these proposals for technical assistance are presented in Annex II of this report and summarized below.

Table 6.3: Summary of Additional Technical Assistance Requirements b/

Cost Estimates a/ Sector (US$ '000) Source

Power Rehabilitation of Provincial Systems 100 UK-ODA Rural Electrification Program Review n.s. ISDB Medium Term Power Plan for Banjul System n.s. KfW/GTZ

Institution Building Resident Energy Economist/Planner (18-24 months) 180-240 None identified GUC D)ieselMechanics Training Program n.s. None identified Professional Forestry Training n.s. None identified Petroleum Supplies Specialist 50 None identified Forestry Economist 12 None identified

Energy Development Solar Retrofit Program 150 None identified Pilot Mangrove Harvesting Program 20 None identified cl Estimated at US$10,000 per man-month of specialist consulting. Cost estimates do not include related investments in hardware. b/ Details in Annex II.

Source: Mission estimates - 45 -

ANNEX I

NOTES ON THE ENERGY BALANCE

1. Agriculture includes fishing operations.

2. Public works are included under the Government sector.

3. Energy consumption from groundnut residues represents shells used only by the GPMB oil well at Denton Bridge.

4. Electricity figures do not include private generation, and generation by GPMB.

5. Fuelwood estimates are based on EMPS of 1982.

6. Electricity consumption by hotels is included in commercial/industrial sector estimates.

7. Electricity consumption by the Government sector includes street lighting and water works.

8. LPG data is not inc]-idedbecause of unreliable data, and the small size of the market. - 46 -

ANNEX II Page 1 of 6

ENERGY TECHNICAL ASSISTANCE PROPOSALS

I. Technical Assistance to Energy Unit of MEPID

A. Petroleum Supplies Specialist

Source of Funding: none identified.

Starting Date: to be determined.

Scope of Work: about 10-12 week assignment to assist the Energy Unit (MEPID) review and develop a strategy for managing and coordinating petroleum supply/distribution operations in the Gambia. Terms of reference cover:

(i) preparing (in collaboration with representatives from Shell, BP, and Texaco) a Contingency Allocation Plan for petroleum products to be used during shortages; (ii) evaluating the feasibility (and financing implications to the Government) of establishing a new storage depot for petroleum products; (iii) evaluating the relative costs of alternative petroleum product import arrangements, and assisting the Government in establishing a permanent arrangement. (iv) reviewing existing information on oil industry in the Gambia and estab:Lishing a system within the Energy Unit for basic operations such as: (a) monitoring petroleum imports against foreign exchange allocations; (b) forecasting petroleum demand levels and foreign exchange requirements; establishing an analytical f'ramework for reviewing product prices in relation to import costs, exchange rates, duties, etc. (v) training key staff of MEPID and the Government in these areas.

Estimated Cost: US$50,000

Comments: This assignment requires immediate follow-up. The review also could include an assessment of the financial requirements to establish a National Petroleum Reserve (Buffer Stocks).

B. Resident Energy Economist/Planner

Source of Funding: none identified

Starting Date: to be determined - 47 -

ANNEX II Page 2 of 6

Scope of Work: 18-24 man-months for a Resident Energy Econo- mist/Planner to help MEPID establish the Energy Unit, define its work program, and assist NEC and the Government in addressing energy policy and investment issues as they arise. Terms of reference cover:

(i) training of the couterpart Gambian economist of the Unit. (ii) development of an Energy Statistics Data Base for planning purposes. (iii) development of a strategy and guidelines for monitoring and reviewing domestic energy prices (petroleum, power, fuelwood). (iv) series of decision papers/reports on selected energy issues and options in the Gambia for consideration and policy for- mulation by the NEC.

Estimated Cost: US$180-240,000

Comments: none

II. Technical Assistance to GUC

A. Emergency Overhaul and Rehabilitation of Provincial Diesel Generators

Source of Funding: request made to UK-ODA

Starting Date: to be determined

Scope of Work:

(i) Diesel Engineer full-time for 6-10 months to supervise the overhaul of the units in each of the 11 provincial stations; and (ii) spares and equipment to be used in overhauling and servicing the diesel units.

Estimated Cost: About US$100,000 for services of Diesel Engineer; and US$1.0 million for spare parts and equipment.

Comments: top priority and requires urgent follow-up. Basic information available in a report prepared after a 1982 survey of provincial stations by an engineer from the UK firm, Mirrlees Blacks tone. - 48 -

ANNEX II Page 3 of 6

B. Establishmentof a Training Program for GUC Diesel Mechanics

Source of Funding: n.s.

Starting Date: to be determined.

Scope of Project: to provide training for 10 to 12 students per cycle of three years duration in basic skills in diesel engine operation and maintenance. Training program could be implemented under joint supervision of the Gambia Technical Institute and the GUC, and requirementsinclude:

(i) Two Instructor/Trainers(specialized in diesel engines and basic machine tooling skills) and one Instructor/Trainer (Specialized in electro-mechanical skills) for special courses at the Technical Institute. (ii) adaquately equipped diesel engine training workshop under GUC.

Estimated Cost: to be determined.

Comments: none

C. Rural ElectrificationStudy

Source of Funding: Islamic Development Bank (ISDB)

Starting Date: to be determined.

Scope of Work: To formulate a coherent policy with regard to selection criteria, technical standards and financing of electricity supplies to provincial centers and rural areas. The terms-of-referencecover two phases:

Phase I

(i) to appraise the existing rural electricity systems with particular reference to plant value, expected lifetime, fuel and maintenance costs, condition of distribution network, number and quality of personnel,arrangements for management and control of systems, and required capacity in view of projected demand for electric.ityup to 1990; (ii) to ascertain, with due regard to the geography of the Gambia and the spatial distribution of population centers, the technical standards for provincial electricity systems including (a) the voltage levels for transmissionand distribution; (b) the availability and suitability of local materials for constructing pyLons and poles; - 49 -

ANNEX II Page 4 of 6

(iii) to evaluate the costs and benefits of extending electricity supplies from the Banjul grid to nearby areas and provincial centers such as Brikama; (iv) to prepare a report presenting the results of the analysis of Phase I and outlining recommendations for Government follow-up in the short to medium term.

Phase II

(v) to evaluate the costs of establishing entirely new provincial electricity systems at three representativelocations as a basis for projecting developmental expenditure per provincial system for planning purposes; (vi) to evaluate the technical and economic feasibility of GUC's proposal to establishone or two central power stations with transmissionto provincial load centers; (vii) to evaluate the technical and economic feasibilityof electricity generation by a small biomass-fired steam power plant using groundnut residues or mangrove wood; (viii) to prepare a report presenting results of the analysis of Phase II, and giving recommendationsto the Government which identify the least-costmethods for supplying electricityto the provinces over the long term.

Estimated Cost: to be determined.

Comments: Consultantswould need to consult with the Utility Manager of GPMB on the experience with the groundnut residue-fired steam power plant at Denton Bridge.

III. TechnicalAssistance for Fuel Substitution

A. Commercial/IndustrialSolar Energy Retrofit Project

Source of Funding: to be determined

Starting Date:

Scope of Project: to provide sufficient technical support services to allow six commercial/industrialsolar hot water heating systems to be installed in the Gambia within a 12 month period. Terms of Reference cover:

(i) Selection of suitable hotels for solar application to a maximum of five hotels, and confirmationof compatabilityof existing brewery system for solar integration. - 50 -

ANNEX II Page 5 of 6

(ii) Assistance to Gambian government in developing Program Docu- mentation, with complete preliminary engineering. (iii) Preparation of Specifications and Bid Documentation for Procurement. (iv) Review of Proposals and Supplier Selection. (v) Monitoring of Site Installations. (vi) Assistance in Preparation anel Implementation of Staff Train- ing Programs. (vii) Survey of Size of Domestic Solar Hot Water Heating Market.

d. Cost Estimates: US$150,000 total consisting of:

(i) Consultant Services: $120,000 (8 mm over 12 month period) (ii) Training Program $ 30,000

Comments: Financing of hardware will require some US$600,000.

IV. Technical Assistance to DOF

A. Pilot Mangrove Harvesting Project (Phase 1)

Source of Funding: n.s.

Starting Date: to be determined

Scope of Work: one to two man-month assignment for a Logging Engineer, with experience in handling mangroves, to design a pilot projecit to test a proposed scheme for harvesting mangroves along the banks of the Gambia River, for distribution as fuelwood to Banjul.

Cost Estimate: about US$20,000 excluding investments and equipment purchases required to implement the pilot project.

Comments: Basis for the pilot project is presented in detail in USAID Project report "Mangrove Feasibility Study" by Checci and Co., September 1981.

B. Forestry Economist

Source of Funding: n.s.

Starting Date: to be determined

Scope of Work: one man-month assignment comprising a comparative analysis of the costs and benefits of alternative methods - 51 -

ANNEX II Page 6 of 6

of supplying fuelwood in the Gambia (plantations, thinning woodlands, harvesting mangroves, etc.), with a view to determining appropriate levels of license fees and royalties charged for the acquisition of fuelwood and other forest products. The Forestry Economist will also be required to provide on-the-job training to counterparts from the Energy Unit and DOF on the methods used in the analysis.

Estimated Cost: US$12,000

Comments: Considerable data on the cost of fuelwood production through different techniques have been generated from a variety of sources. These data have to be arranged consistently and evaluated from the viewpoint of the different markets they are likely to cater to.

C. Professional Training for Forestry Personnel

Training at the BSc and MSc degree level for five or six Gambians to take up vacant professional forester positions in the Department of Forestry.

V. Technical Assistance to Geological Unit

Peat Reconnaissance Survey

Source of Funding: n.s.

Starting Date: to be determined

Scope of Work: Survey of the mangrove stands in the Gambia River Delta to identify peat occurrences. The survey would include:

(i) photogeological survey (ii) geological survey (iii) collection and analysis of samples (iv) estimation of fuel potential of deposits.

Cost Estimate: US$59,000, of which about 50% would be for geological survey and analysis.

Comments: Survey could be done as an extension of ongoing survey by a French team in Casamance, Senegal. - 52 -

ANNEX III Page 1 of 3

GAMBIA ENERGY ASSESSMENT

Summary of Ongoing Energy Technical Assistance Activities in the Gambia (August 1983)

Subsector Project Scope oi Technical Assistance

Electric IDA Energy (i) optim4ze distribution from Half Power Technical Die and Kotu Power Stations Assistance Credit serving the Banjul area; (Cr. 1187-GM) (ii) reinforce 11 kV and lower voltage network in Banjul area to reduce the risks in overloaded circuits; (iii) enhance substation and trans- f'ormer capacity and safety in the Banjul area.

GTZ Technical (i) technical experts to take up Assistance to GUC Fiositions of GUC Managing (3 to 4 year Director, Managers for Water program) Division and for Electricity Division (2 positions), and Engineers for Generation, and for Transmission/Distribution; (ii) short-term consultants to analyze GUC finances, personnel management and training issues, and operation of the GUC statistical division.

Petroleum IDA Energy (i) exploration promotion senrices Technical for: retrieving, compiling, and Assistance Credit integrating geological and geo- (Cr. 1187-GM) physical data; reprocessing of seismic data; and assistance to GOTG for negotiating and monitoring exploration contracts; (ii) legal services to review legis- lative and contractual framework for exploration; (iii) training of designated Gambian staff and upgrading facilities of Geological Unit; - 53 -

ANNEX III Page 2 of 3

(iv) completion of basin study (in cooperation with Senegal and Guinea-Bissau). Petro Canada (i) 800 km marine seismic survey; International (ii) legal services for petroleum Assistance (Corp.) exploration; PAC) (iii) technical training for per- (Can $1.5 million) sonnel of Geological Unit.

Forestry IDA Energy (i) consultancy services to DOF to Technical prepare program for effi- Assistance Credit cient management of forest (Cr. 1187-GM) resources for wood energy requirements; (ii) equipment to upgrade operational capabilities of DOF.

GTZ Forestry (i) preparation of land use plan; Technical (ii) forest inventory; Assistance (iii) trials on selected species; (Phase I) (iv) preparation of plan for managing and utilizing 33 of Gambia's forest parks; (v) scholarships to Gambians for forestry related training.

USAID Forestry (i) establishment of 10 village Project (635-0205) woodlots; (ii) feasibilitystudy on mangrove utilizationas fuel; (iii) establishmentof 1300 ha of Gmelina plantations; (iv) training of extensionspecial- ists and forestry technicians for DOF; (v) modernizationof sawmill; (vi) fuelwood consumptionsurvey (postponed).

UNDP/UNSO (i) stove developmentassis- Forestry Project tance to DOF for reforestation.

FAO/BADEA (i) establishmentof forestry Forestry Program nurseries for DOF's reforesta- Grant tion program. - 54 -

ANNEX III Page 3 of 3

Energy UNDP/UNS0 (i) fuelwood consumption survey; Planning Energy Survey (ii) review of energy pricing; and Master Plan (iii) energy supply/demand analysis Study and projections to 1990; (iv) eniergyinvestment programming 1990.

Renewable UNDP Experimental (i) demonstration of solar PV water Energy Water Pumping pumping system at borehole near Systems Sub-Project Mandina Ba; (ii) demonstration of wind pump at borehole near Tanji.

UNIDO (i) feasibility of expanding pilot Solar Salt Works solar salt evaporation system at Darsilameh from 50 tonnes/year to 500 tonnes/year.

Saudi Arabia/GTZ (i) demonstration of a pilot solar Solar PV Water PV powered water pumping system Pump. at a borehole near Jambanjali.

UNSO/DANIDA (i) development and dissemination Stove Development of 1000metal stoves (Kumba Project. Gaye); (ii) development and dissemination of 6000 clay and sand stoves.,

Available Reports on the Gambia's Energy Sector

1. Republic of The Gambia/United Nations Sudano-Sahelien Office (UNSO): Energy Survey and Master Plan Report, May 1983. 2. Mangrove Feasibility Study: Report of Gambia Forestry Project No. 635-0205 by Checchi and Company, September 1981. 3. Agro-Based Energy: Study by Gambia Commercial and Development Bank, 1980. 4. Hydrological and Topographical Studies of the Gambia River Basin (6 Volumes), by Howard Humphreys and Sons:,July 1974. - 55 -

ANNEX IV Page 1 of 4

SOLAR WATER HEATING ANALYSIS

A. Senegambia Hotel (305 - two bed rooms)

Hot water used in rooms, in kitchen, and in laundry; the hot water is produced by a German-made "OMNICAL"boiler rated at 235 kW at 110°C and 5.5 Bar. The boiler fuel consumption is as follows: 1/

Diesel consumption

Total average diesel cost/month =D 15,500 80% allocated to hot water = D 12,400 or $4,769/month at D 1.74 per liter = 7,126 1/month Btu requirementsper day = 7,136 1/month = 237.5 1/day = 237.5 1/day

Heat Rate at 44,375 Btu/l x 237.5 1/day = 10.5 x 106 Btu/day at 80% boiler efficiency = 8.4 x 106 Btu/day heat transferredinto the water As a check: (305 rooms x 2 beds per room = 610 beds)

At maximum occupancy: 610 people x 20 gal/day 2/ = 12,200 gal/day 12,200 gal/day = 101,626 lbs/day

Assume water temperatureinto boiler =75 0F

Assume water temperatureinto storage tank = 140°F

Heat pickup by water = 101,626 lbs/day x 65 Btu/lb =6.6 x 106 Btu/day

8.4 x 106 =6.6 x 106 + 1.8 x 106 Btu/day

1/ Information provided by Hotel Managing Director, Chief Accountant, and Engineer.

2/ 20 gpd assumed, as hotel is tourist hotel on beach with multiple showers per day per person. This is a high use rate but is necessary for proper design and estimating purposes. Tourist season is close to full occupancy. - 56 -

ANNEX IV Page 2 of 4

Kitchen plus laundry in hotel can account for some or all of the 1.8 x 106 Btu/day, or the 140°F can be 160°F, suggesting estimates are close enough for this stage.

For this application, the most cost effective solar system would be of the low cost plastic unglazed type producing hot water at 120°F inter-tied with the existing storage tank, and lowering the system. temperature to 120°F if possible, but still maintaining the existing oil- fired boiler for trim if necessary, and for emergency usage. The unglazed system under those conditions experienced in the Gambia can be rated at 800 Btu/ft2/day. Collectors have an installed cost of approximately $5.00 per ft2. To pick up the full 8.4 x 106 Btu will require 10,500 ft2 of collectors.

The total installed cost can therefore be estimated as follows:

Collector $52,500 Pumps 2,000 2 Storage Tanks 2,500 Piping and Controls 2,000 $59,000 Contingency (20%) 11,000 $70,000

The simple payback based on the current average of $4,769 per month :Eor diesel oil water heating is about 15 months. Adding in shipping charges and time cost escalation still will result in less than a t:wo year payback. It is unlikely that specific site problems could drive the cost over to the three year payback point. While each hotel has its own specific demand requirements, it is assumed that those using diesel oil for hot water heating will present sim:Llar payback situations while those with electric water heaters should look even better.

Glazed flat plate collectors have not been considered for this application as the higher cost per ft2 of collector surface -- at least 425.00 per ft2 -- is not compensated for by the somewhat higher thermal performance. With glazed flat plate collectors the total installed cost is estimated at $195,000 for the Senegambia Hotel. This would provide at best, EL 41-month payback. Shipping, time cost escalations, unique site problems all will result in driving the payback out further from this point.

B. Banjul Brewery Ltd.

The Brewery uses 22,000 liters of diesel oil a month to heat water in a hot water boiler rated at 110°C at 10 Bar. At 22 working days per month this works out to 1,000 liter/day. Assuming 100% make-up, the - 57 -

ANNEX D Page 3 of 4 water is heated from 750C to 230°F or 155 Btu is added to each pound of water. If a substantial condensate return is used, the system can be modified to be a higher temperature,lower flow configuration.

1,000 liter/dayx 44,375 Btu/liter = 44,375,000Btu/day

44.375 x 106 Btu/day = 286,290 lb/day = 34,368 gal/day 155 Btu/lb

Installing a low-cost, plastic unglazed water heating system which is limited to a 120°F outlet temperaturewill result in the following:

(i) System spec: Raise the temperature of 286,290 lb/day water from 75°F to 120°F

(ii) Therefore: 286,290 lb/day x 45 Btu/lb + 12,883,050Btu/day

At 800 Btu/ft2/day 1/ collection area = 16,100 ft2

The installed solar system cost is estimated at:

Collectors $80,500 Pumps 3,500 2 Storage Tanks 5,000 Piping and Controls 4,000 $93,000 Contingency (20%) 18,000 $111,000

22,000 liter/monthx D 1.74 + D 38,280/mo = $14,723/moTotal diesel bill

36.3% diesel oil is displaced by solar heating, assuming an 80% boiler efficiency,therefore: .363 x 14,723 5,344/mo savings

1/ The use of 800 Btu/ft2/day unglazed and 1,000 Btu/ft2/day for glazed flat plate collectors is probably conservative. With the solar regime in the Gambia these values could be 20% higher, resulting in smaller, hence less costly, solar arrays. - 58 -

ANNEX IV Page 4 of 4

At an installed cost of $111,000, the simple payback that will result is about 21 months which would be acceptable.1/

C. Existing Installation

There is one solar hot water heating installation in operation in the Gambia at the Hotel Training School outside of Banjul. The system has been successfully operating since the school's opening in late 1980. It consists of 14-30 ft2 flat plate collectors made by Sunsense Ltd. of Peterborough,England. The collectors utilizing plastic glazing appeared to be inexpensivelyconstructed, yet perfectly adequate for the job.

1/ This estimate must be refined by detailed verification. Both the diesel oil used for self-powered generation and a possible 26-day work month can change the size of the system. The relative economics as shown are valid and the payback should not vary. - 59 -

ANNEX V

THE NATIONAL ENERGY COMMISSION TERMS OF REFERENCE

1. To advise Cabinet on energy resources availability, with due regard to pricing, in order to assist Government evolve a national energy policy which integrates energy into the economy with the aims of achieving conservation and efficiency in utilizing the greatest possible range of energy resources.

2. With the back-up service of the Energy Planning Unit, assist in the coordination of energy planning, and to promote the orderly development of the country's energy resources.

3. To prepare a phased programme for conservation of energy, con- centrating on petroleum products and fuel wood.

4. To encourage the rational utilization and development of energy technologies with particular attention given to socio-economic and environmental factors.

5. Within the framework of regional and sub-regional cooperation, promote regionally combined development of energy resources.

6. To monitor progress of programmes of energy conservation and development and suggest modifications in these in light of experience and changing conditions of the domestic and international economies.

7. To maintain a close liaison with the National Science and Tech- nology Development Committee by suggesting areas for initiating coordinated efforts towards indigeneous technological development in energy. - 60 -

ANNEX VI

Petroleum Product Pricing Zones in the Gambia

Zone 1 Bijilo, Banjul, Serrekunda, Brufut, Bakau, Lamin, Sukuta, Yundunm.

Zone 2 Brikama, Faraba, Gunju, Kartong, Tanji, Tujereng, Pirang, Sanyang.

Zone 3 Barra, Berending, Buniadu, Chamen, M'Bolet, Bondali, Bulock, Bwiam, Fass, Kafuta, Kalagy, N'Demban, N'Dugu-Kebbeh, Sibanor, Sintet, Aljamdu, Albreda, Dasilama (NBD), Kuntair, Sika.

Zone 4 Bureng, Barokunda, Farafenni, Japeni, Jasong, Kiang Jataba, Kerewan, N'Jawara, N'Jaba-Kinda, Noh-Kunda, Paka linding, Soma, Salekene, Minteh-Kunda.

Zone 5 NfGain Sanjal, Pakaliba, Kaur, Kuntair, Georgetown, Brikama-Ba, Sapu/Panchang.

Zone 6 Bansang, Basse, Bakadaji, Diabugu, Falloto, Fatatenda, Kossemar, Karantaba, Sami, Sutukoba, Foday-Kunda.

IBRD 17424

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