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World Bank Document Rep(ortNo. 7104-COM f Comoros:Issues and Options in the EnergySector Public Disclosure Authorized IJnuary 1988 Public Disclosure Authorized Public Disclosure Authorized Repit te Join UN,,FMtxI Bwk seckw''t A'e.m gr Thisdocument has a restrictedditribution. Its cortents may not be dscbsed Public Disclosure Authorized without authonzat n from the Government,the UNDPor the WorldBank. JOINT UMDPIWORLD BANK ENERCY SECTOR ASSESSNENT PROCRA Reports Already Issued Country Date Number Indonesia November 1981 3543-IND Mauritius December 1981 3510-HAS Kenya May 1982 3800-KE Sri Lanka May 1982 3792-CE Zimbabwe June 1982 3765-ZIM Haiti June 1982 3672-HA Papua Nev Guinea June 1982 3882-PNG Burundi June 1982 3778-BU Rwanda June 1982 3779-PW Malawi August 1982 3903-MAL Bangladesh October 1982 3873-BD Zambia January 1983 4110-ZA Turkey March 1983 3877-TU Bolivia April 1983 4213-BO Fiji June 1983 4462-FIJ Solomon Islands June 1983 4404-SOL Senegal July 1983 4182-SE Sudan July 1983 4511-SU Uganda July 1983 4453-UG Nigeria August 1983 4440-UNI Nepal August 1983 4474-NEP The Gambia November 1983 4743-GM Peru January 1984 4677-PE Costa Rica January 1984 4655-CR Lesotho January 1984 4676-LSO Seychelles January 1984 4693-SEY Morocco March 1984 4157-MOR Portugal April 1984 4824-PO Niger May 1984 4642-NIR Ethiopia July 1984 4741-ET Cape Verde August 1984 5073-CV Guinea Bissau August 1984 5083-GUB Botswana September 1984 4998-BT St. Vincent and the Grenadines September 1984 5103-STV St. Lucia September 1984 5111-SLU Paraguay October 1984 5145-PA Tanzania November 1984 4969-TA Yemen Arab Republic December 1984 4892-YAR Liberia December 1984 5279-LBR Islamic Republic of Mauritania April 1985 5224-MAU Jamaica April 1985 5466-JM Ivory Coast April 1985 5250-IVC Benin June 1985 5222-BEN Continued on inside back cover THE COMOROS ISSUES AND OPTIONS IN THE ENERGYSECTOR January 1988 This is one of the series of reports of the Joint UNDP/WorldBank Energy Sector Assessment Program. Finance for this work has been provided, in part, by the UNDP and the World Bank, and the work has been carried out by the World Bank. This report has a restricted distribution. Its contents may not be disclosedwithout authorisationfrom the Government, the UNDP or the World Bank. This Report analyzes the main issues facing Comorian poV:y makers in the energy sector. An overwhelmingshare of energy (nearly801) is supplied from biomass (essentiallywoodfuels and agriculturalresidues) and householdsare the main consumersof energy. The largest user of energy for productionpurposes are the ylang-ylangdistilleries, which exclusivelyuse biomass suppliedenergy. The main conclusionsand recomendations of the Report are that: (i) greater efficiency in productionand use of all sources of energy should be the main goal of the Comoros' energy sector developmentstrategy (to minimize the costs of energy needed for economic and social development); (ii) strong measures need to be taken to protect the vegetative (tree) cover of the islands,especially in Anjouan; (iii) households,within their possibilities,need to cubstitute kerosene for woodfuelsand switch to improvedwood and charcoal stoves; (iv) energy supply enterprisesneed to improve their operations,especially through trainingand by minimizing investmentcosts; (v) pricing and tax policies should give users of energy appropriatesignals as to the true (economic)costs of the energy they consume to enable them to make optimal allocations;thus, electricitytariffs need to be revised to reflect the costs of service and petroleumproducts prices need to be modified to more equitablydistribute the benefits of the decline in world oil prices; and (vi) aurplusesby sector enterprises(especially SCH) need to be budgetizedand tax policy needs to be modified so that an orderly, transparenttransfer of revenues (taxes, duties, profits) can take place between the enterpriseand the State budget. AUUVIATIONS AND AC£1RObYS SEP Brevet d'Etudes Professionnelles BTS Brevet TechnicienSupirieur CADER Centre d'Appui au D6veloppementRural CAP Certificatd'Aptitude Professionnelle CARE U.S. based, internationalprivate volunteer organization CCCE Caisse Centrale de CooperationEconomique (France) CEFADER Centre Federal d'Appui au DMveloppmentRural DC Director Gereral EEDC Electrit6 et Eau des Comoros FAO Food and AgricultureOrganization of the United Nations FED European DevelopmentFund GDP Gross Domestic Product IDA InternationalDevelopment Association (World Bank Affiliate) IRR Internal Rate of Return IUT Institut Universitairede Technologie KPC Kuwait Petroleum Corporation kgoe Kilograms of oil equivalent LRIC Long run marginal cost LV Low voltage MV Medium voltage NGO Non-governmentorganization O&M Operation and Maintenance PV Photovoltaic RD Regional Directors (DirecteursRegionaux) R&D Research and Development SCH Societe Comoriennedes Hydrocarbures SF SimultaneityFactor toe Tons of oil equivalent UNIDO United Nations IndustrialDevelopment Organization WFP World Food Program WMO World MeteorologicalOrganization aIRCT RQUIVALMS1/ 1984 437 CF (ComorianFrancs) - US$1.00 1985 448 CP (ComorianFrancs) - US$1.00 1986 346 CP (ComorianFrancs) - US$1.00 1987 (4 months) 301 CP (ComorianFrance) - US$1.00 FISCAL YETA January 1 - December 31 ENE= TUrs SDANuDm A Ampere c.i.f. Cost, insurance,and freight DWT Deadweighttons f.o.b. Free on board CWh Gigawatt-hour= 1,000,000kilowatt-hours (kWh) ha hectare 1 Liter kg kilogram kgoe kilogram of oil equivalent km kilometer kV kilovolt = 1,000 volts kVAR Reactive kilo Volt Ampere kW Kilowatt kWh Kilowatt-hour m meter m.c.w.b moisture content,wet basis Ins meters per second m3 square meters m cubic meters MW Megawatt = 1,000 kilowatts NPV Net Present Value t tonne - Metric ton - 2,204.68 pounds toe ton of oil equivalent w.b. wet basis 11 The exchange rate used in this Report is that of November 1986, that is, CF330/US$1.00. TABLE OF CONTENTS Page SUMKARY, CONCLUSION,AND RECOMMENDATIONS ................. i I, ENERGY AND THE ECONOMY............. 1 Introduction....... .-.............. 1..-. Overview of Economic Development....................... 2 Energy Demand and Supply.u p pl.y............... 3 Prospectsfor the Economy and Energy Demand.m n..d....t. 5 Energy Institutionstu...t............. ........ i os**. 6 Energy SectorDevelopment Strategy ....................... 8 Specific Subsectorsb. se..or..... 9 II. BIOMASS AND NEW AND RENEWABLEENERGIES...........E........ 10 Biomass Supply and Demand... s ... ..... 10 Forestry/Vegetative Cover Situation..u. a ... 10 Forestry and Land Ownership....... s................. 12 HouseholdEnergy Issues*e.....*..t....to................. 16 Interfuel Substitution.... ... o.9...o...o... 17 Ylang-ylang Distillation....oo9.o.. .. 18 Lime Producton........... 0......so..................t20 Biomass Gasification..**.... ..... .... 22 OtherRenewable Energies.e.r.gi.. .... 22 FutureBiomass Consumption 23 Recommendationscomm e n ... ta*t i o n s 24 III. ISSUES IN THE PETROLEUM SUPPLY AND DISTRIBUTION SUBSECTOR .......... oe.... ..... o..... .. ... 27 Introductionand Background*..**...*....o.......... 27 Pricing of PetroleumProducts*u... 27 Taxation Policy................................ 27 Pricing of Specific Productso...u..ts................s. 30 SCH Managementand InvestmentProgram**.*a.... 32 SuggestedInvestment Programs for SCH...................... 34 Adequacy of Procurementand Supply Arrangements.... 35 This Report is based on the findirgs of a mission which visited the Comoros in October-November1986. The mission compositionwas as follows: Michel Del Buono (MissionLeader, economist),F. de Paula Coelho (economist),J. Baptista (consultant,power engineer/economist),H. de Montety (consultant, petroleum supply and distributionspecialist), Y. Dube (consultant, forestry specialist),and C.-P. Zeitinger(consultant, energy economistand biomass/newand renewablesspecialist whose participationwas sponsoredby the German Agency for Technical Cooperation,GTZ). A preliminaryversion of this Report was discussedwith the Comorian authorities in November 1987. IV. ISSUES IN THE POWER SUBSECTOR ............................o 38 Introduction**.*.... .... ,38 Electricity Demand Projections and Investment Progtam ..... 38 Demand ................................... 38 Existing Investment Program............................ 40 Issues and Recommendations.. ............. .............. 40 System Expansion Plan and Investment Program............ 41 Expansion Plan for Moheli.............................. 41 Expansion Plan for GrandeComore ........ ....... 42 Expansion Plan for Anjouan.......................... e . 43 Alternative Investment Plans ... .......... .... 45 Issues in Electricity Pricing and EEDC Finances ........... 47 Present Electricity Tariffs.................. 47 Connection Costs .........00 ........ 47 Characteristics of Present Tariff Structure..e..eeseso 47 Tariffs and Long-Run Marginal Cost (LRMC)...RMC)o*...... 48 Proposed New Tariff Structure.... 49 EEDC Financial Situation ... 51 Billing and Collectionl....... ........... 52 Issues ... ..... O.*...54 OperationalEfficiency ............... 54 Facilities Operation and Maintenance,... 54 Mainennc.**.***.. .... 55 Supply Reliblty..****...... 55 Manpower and Training.*n....g........ 56 Training Nees.....e....ts ... 57 Summary of Main Power Subsector Recommendations*.......... 58 TABLES 1.1 Population, 1 ..9 ...... 8 7 0 .... 1 1.2 Foreign Trade................... 0 ......".......... .... 2 1.3 Energy Balance, 1985...................................... 4 1.4 Primary Energy Demand:
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