Burundi - Issues and options in the energy sector

[]LJiFJ flLiLLiLL!1 IIJ[l]lJ]L]I 71 |LI LI t!] LIE L H 1i I LI Ii LiL I I 1-1 H II I I 1 (C- I' \ | "\ 11L - l 1-ofl 1lllsU.jU 11 J0L LI LI. fU IS 1 Jr 11 . 11 '- >/t ?)11 9< MICROFICHE COPY Report No. 9215-BU Type: (SEC) MR. MICHAE/ X34009 / J10205/ AF3 Burundi Rommas md optogo$ A th Energ Sector Report No. 9215-BU  JOINT UNDP / WORLD BANK ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMME (ESMAP) PURPOSE The Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) was launched in 1983 to complement the Energy Assessment Programme, tstablished three years earlier. ESMAP's original purpose was to implement key recommendations of the Energy Assessment reports and ensure that proposed investments in the energy sector represented the most efficient use of scarce domestic and external resources. In 1990, an international Commission addressed ESMAP's role for the 1990s and, noting the vital role of adequate and affordable energy in economic growth, concluded that the Programme should intensify its efforts to assist developing countries to manage their energy sectors more effectively. The Commission also recommended that ESMAP concentrate on making long-term efforts in a smaller number of countries. the Commission's report was endorsed at ESMAP's November 1990 Annual Meeting and prompted an extensive reorganization and reorientation of the Programme. Today, ESMAP is conducting Energy Assessments, performing preinvestment and prefeasibility work, and providing institutional and policy advice in selected developing countries. Through these efforts, ESMAP aims to assist governments, donors, and potential investors in identifying, funding, and implcmenting economically and environmentally sound energy strategies. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group (ESMAP CG), composed of representatives of the UNDP and World Bank, the govemments and institutions providing financial support, and representatives of the recipients of ESMAP's assistance. The ESMAP CG is chaired by the World Bank's Vice President, Operations and Sector Policy, and advised by a Technical Advisory Group (TAG) of independent energy experts that reviews the Programme's strategic agenda, its work program, and other issues. The Manager of ESMAP, who reports to the World Bank's Vice President, Operations and Sector Policy, administers the Programme. The Manager is assisted by a Secretariat, headed by an Executive Secretary, which supports the ESMAP CG and the TAG and is responsible for relations with the donors and for securing funding for the Programme's activities. The Manager directs ESMAP's two Divisions: The Strategy and Programs Division advises on selection of countries for assistance, carries out Energy Assessments, prepares relevant programs of technical assistance, and supports the Secretariat on funding issues. The Operations Division is responsible for formulation of subsectoral strategies, preinvestment work, institutional studies, technical assistance, and training within the framework of ESMAP's country assistance programs. FUNDING ESMAP is a cooperative effort supported by the World Bank, UNDP and other United Nations agencies, the European Community, Organization of American States (OAS), Latin American Energy Organization (OLADE), and countries including Australia, Belgium, Canada, Denmark, Germany, Finland, France, Iceland, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Sweden, Switzerland, the United Kingdom, and the United States. FURTHER INFORMATION For further information or copies of completed ESMAP reports, contact: The Manager or The Executive Secretary ESMAP ESMAP Consultative Group The World Bank The World Bank 1818 H Street N.W. 1818 H Street, N.W. Washington, D.C. 20433 Washington, D.C. 20433 U.S.A. U.S.A.  FOR OFFICIAL USE Report No. 9215-BU BURUNDI ISSUES AND OPTIONS IN THE ENERGY SECTOR January 1992 This is one of a series of reports of the Joint UNDP/World Bank Energy Sector Management Assistance Programme. Finance for this work has been provided, in part, by the UNDP, and the Government of the Netherlands, and the work has been carried out by the World Bank. This report has a restricted distribution. Its contents may not be discussed without authorization from the Government, the UNDP, or the World Bank.  ABSTRACT Burundi has a certain endowment of energy resources in the form of wood, hydropower and peat but with the present demand characteristics, population density and increase, as well as settlement pattern, the resources are either under pressure of potential depletion (wood) or are relatively costly to produce and supply (hydro resources and peat). In addition, the country's landlocked position makes petroleum products, for which it is entirely dependent on import, very costly. A dominant share of energy consumption (90%) is coi,ered by biomass (woodfuels and crop residues) and households are #e main consumer category of energy (more than 90%). Some 85% of commercial energy is imported, preempting 25-30% of the country's foreign exchange earnings. Given the above profile, the principal direction of the country's efforts in the energy sector should be towards improving the efficiency of utilization and production of energy, increasing the supply of woodfuels and lowering the supply costs of petroleum products, and strengthening institutions in the energy sector to enable them to improve planning, implementation and operations. The main recommendations of the present report are to: (i) improve demand management with respect to the different types of fuels, by introducing more efficient nricing policies for woodfuels and petroleum products and by fully implementing already initiated tariff reforms regarding electricity; (ii) more systematically follow up the potential for increasing efficiency of production and consumption of energy by non-price measures, in particular with respect to charcoal and electricity, and to pursue the possibility of substituting peat for fuel oil in industry; (iii) increase the supply of wood by further focussing on agro-forestry and improving management of existing wood resources, to improve reliability of electricity supply, and to pursue the means of lowering petroleum import costs and increasing the reliability of supply; and (iv) further develop the capacity for overall energy planning as well as for preparing and implementing subsector plans, by extending technical assistance and other support, by clarifying areas of responsibility, and by establishing and following clear procedures and planning methodologies. An Energy Sector Rehabilitation Project is being prepared and will complement the Energy Assessment.  ACRONYMS AND ABBREVIATIONS AMOCO American Oil Company BPE Bureau des Projets d'Education BRB Banque de la Republique Burundaise CEBEA Centre d'Etudes Burundais des Energies Alternatives CEPGL Communaute Economique des Pays des Grands Lacs CIDA Canadian International Development Agency CRAES Centre Regional Africain pour l'Energie Solaire DF Departement des Forets DGC Direction Generale du Commerce DGE Direction Gdnerale de l'Energie DGHER Direction Gdndrale de I'Hydraulique et des Energies Rurales DP DNpartement des Projets DRS Departement des Recherches et Statistiques DUB Developpement Urbain de Bujumbura EGL Energie des Grands Lacs FAC Fonds d'Aide et de Cooperation FED Fonds Europeen de Developpement ICO International Coffee Organization INCN Institut National pour la Conservation de la Nature MATE Ministere de l'Amenagement, du Tourisme et de l'Environnement MCI Ministere du Commerce et de l'Industrie MCIA Minist4re du Commerce, de l'Industrie et de l'Artisanat MDRA Ministere du Developpement Rural et de I'Artisanat MEM Ministbre de l'Energie et des Mines NES National Environmental Strategy ONATOUR Office National de la Tourbe PIP Public Investment Program PSE Programme Spdcial d'Energie SCEP Service Charge des Entreprises Publiques SEP Societe d'Entreposage du Petrole SINELAC Societe Internationale de I'electricite des Pays des Grands Lacs SPPF Special Project Preparation Facility TRC Tanzania Railway Corporation  CURRENCY EQUIVALENTS 1 Burundian !7anc (FBU) = US$0.0063 (Oct. 1989) 160 FBU = US$1.00 MEASUREME-NTS GWh Gigawatt-hour 1,000 MWh = 1,000,000 kWh GJ gigajoule 1000MJ = 1,000,0OOkJ kcal 3.968 British Termal Unit (BTU) 4.19 x 103 MJ kV kilovolt 1,000 volts MVA megavolt ampere 1,000 kilowatt amperes MW megawatt 1,000 kilowatt; 1000 kW MWh megawatt hour 1,000 kilowatt hours = 860,000 kcal= 0.248 TOE at 34% efficiency in thermal (oil) generation TOE Tons of Oi Equivalent 10.2 million kcal 42.5 GJ MT metric tons 1,000 kilograms lb pound stbre eucalyptus wood 450 kg n pine wood 300 kg Im3 solid eucalyptus 900 kg solid pine 7.0 kg HV High voltage MV Medium voltage LV Low voltage  ENERGY CONVERSION FACTORS Fuel GJ -i3MJ/unit Physical Units/TOE Liquid fuels (tons): Crude oi! 42.7 1.00 LPG 45.2 0.94 Kerosene 43.1 0.99 Jet fuel 43.5 0.98 Gasoline 44.0 0.97 Gasoil 42.7 1.00 Iustrial diesel oil 42.3 1.01 Fuel oil 41.0 1.04 Electricity (MWh) 3.6 (per def.) 4.0 Fuelwood (ton) 16W4/ 2.91 Charcoal (ton) 301a/ 1.46 4/ Air-dried wood, 15% moisture content wet basis (m.c.w.b.). FISCAL YEAR January 1 - December 31 This report is based on the findings of an energy assessment mission which visited Burundi in October 1989. rhe mission comprised T. Holtedahl (Mission Leader), P. Millan (Power Planner/Economist), R. van der Plas (Energy Planner), J.H. Neuteboom (Consultant, Forestry Specialist), C. Oudin (Consultant, Power Engineer), P.V. Pinheiro (Consultant, Petroleum Specialist), V. Hveding (Consultant, Energy Planner/Economist)  TABLE OF CONTENTS SUMMARY AND PRINCIPAL CONCLUSIONS ............................ i I, ENERGY AND THE ECONOMY ................................. 1 Background . ............................................ 1 Energy Constraints on Economic Development ........................ 2 Sector Objectives ar.d Strategies ................................. 2 Energy Consumption ............. ........................... 4 Energy Resources .......................................... 4 Energy Projections ......................................... 6 Energy and the Commercial Balance .............................. 8 Investments in the Energy Sector ................................ 9 II. ENERGY INSTITUTIONS AND PLANNING ......................... 10 Energy Institutions ......................................... 10 Overall Policy, Coordination and Planning .......................... 13 Recommendations .......................................... 15 Ml. BIOMASS AND HOUSEHOLD ENERGY ........................... i7 Background .............................................. 17 Goverunent Objectives and Policies .............................. 17 Current Pattern and Level of Household Energy Consumption .............. 18 Projected Household Energy Consumption .......................... 20 Biomass Resources and Production ............................... 20 Woodfuels Balance . ........................................ 21 Measures to Strengthen Wood Supply ............................. 23 Existing Plantations ............ ............................ 25 Woodfuel Conservation ...................................... 26 Woodfuel Substitution ........... ............................ 29 Costs and Pricing . .......................................... 31 Institutional Aspects ............. ........................... 35 Recommendations .......................................... 37 IV. PETROLEUM PRODUCTS .................................... 39 Background .......................................... 39 Structure and Evolution of Demand .......... ..................... 39  Organization of the Petroleum Sector ........................ . 40 Petroleum SJ rage .42 Sources of Supply ......................................... 43 Supply Routes ......... .. . . . 45 Least Cost Supply ......................................... 47 Price Structure and Taxation ................................... 49 Conservation and Substitution .................................. 51 Security Stocks ........................................... 52 Oil Exploration ........ . 54 Institutional Changes .54 Recommendations .54 V. ELECTRIC POWER .56 Organization of the Electricity Sector .................. .......... 56 Demand for Electricity ........................... 56 Demand Forecast ............................ 58 Generating Capacity ............................ 60 Transmission and Distribution . ............................ 61 Future Developments in Power Generation .......................... 63 Operations and Maintenance ............................. 66 Electricity Tariffs ............................ 68 Rural Electrification ............................ 69 Conversion of Industrial Boilers . ............................ 71 Institutional Review of REGIDESO ............................ 72 Investment Proposals ............................ 74 Recommendations ............................ 75 VI. PEAT ..................................... 78 Background ............................ 78 Resources and Production ..................... 79 Organizational Aspects ................................. 81 Costs and Prices ............................... 81 Uses and Market Potential ................................ 83 Recommendations ............................... 85 VII. NEW AND RENEWABLE ENERGY OPTIONS ....... ................ 86 Organization ................................ 86 Solar Energy ................................ 86 Background ................................ 86 Uses and Availability ................................. 87 Recommendations ................................. 88  Biogas Digesters 9...................................... 9 Background ........................................ 89 Family Size Digesters .................................. 90 Institutional and Commercial Enterprise Digesters .. .................. 91 Recommendations .................................. 91 Briquettes ........................... 92 Recommendations ..... ...... ........................... 93 Wind Energy ............................ 93 VIII. ENVIRONMENTAL ASPECTS ....... ........................... 94 Background .................. 94 Relationship Energy-Environment by Energy Source ...... .............. 96 Wood ....................................... 96 Charcoal ........................................ 97 Agricultural Residues ..................................... 97 Peat . ...................................... 97 Petroleum Products ...................................... 98 Hydropower ....................................... 99 Briquettes ....................................... 9 Methane-Biogas ...................................... 100 Relationship Energy-Environment by Region ........ ................. 100 Conclusions and Recommendations ............ ................... 101 TABLES 1.1 Burundi Energy Supply - Demand Balance - 1988 ........................ 5 1.2 Primary Energy Supply, 1988a.d200 ..........d. ..................... 7 1.3 Energy and the Commercial Balance ................................ 8 3.1 Household Energy Consumption ........... ........................ 19 3.2 Burundi: Estimated Wood Production Capacity (1988) ........... ......... 21 3.3 Prices and Costs of Household Fuels in Bujumbura (1989) ................... 31 4.1 Petroleum Products Mix, 1988 ........... ......................... 39 4.2 Import of Petroleum Products by Supply Route .......................... 46 4.3 Indicative Model for the Price Strucure of Petroleum Products Example: Gasoline from Dar es Salaam Via Kigoma .................... 51 5.1 Consumption of Electricity ...................................... 57 5.2 REGIDESO - Future Demand of electricity .......... .................. 59 5.3 Characteristics of Hydroelectric Power Plants ......... .................. 60 5.4 Burundi - Imports of Energy ..................................... 61 5.5 High and Medium Voltage Lines ................................... 62 5.6 Future Hydroelectric Projects ..................................... 64 5.7 Actual Power Rates vs. Long-Run Marginal Costs ....... ................. 69 6.1 Proven Reserves ........................................ 79  6.2 Annual Peat Production and Consumption ............................. 80 6.3 Cost Structure of Peat, 1989 .................................... 82 6.4 Financial and Economic Cost Comparison of Fuels, 1983 ................... 83 7.1 Biogas Projects ............................................. 89 8.1 Sumn1ary of Environmental Activitics ................................ 95 8.2 Summary of Environmental Impacts of Energy Sources Development in Burundi ..... 101 ANNEXES 1.1 N, es to Energy Balance ........................................ 103 1.2 International Comparisons of Commercial Energy Consumption ............... 104 2.1 Energy Sector - Simplified Functional Organization Chart ................... 105 2.2 Ministry of Energy and Mines - Organization Chart ....................... 106 3.1 -onsumption of Woodfuels and Other Biomass .......................... 107 3.2 Woods Resources and Production .................................. 111 3.3 Future Wood Reserves - An Illustration .............................. 112 3.4 Biomass Resource Inventory and Development of a Woodfuel Management Information System ................................ 113 3.5 Household Energy consumption Survey .............................. 117 3.6 Burundi: Household Energy Projects ................................ 119 3.7 Improved Stoves - Final Phase .................................... 120 3,8 Improved Charcoal Efficiency Program .............................. 122 3.9 Cost of Wood ............ 124 3.10 Wood Product Prices - Mageyo Plantation ............................. 126 3.11 Price Structure of a Bag of Charcoal ................................ 127 4.1 Consumption of Petroleum Products ................................ 128 4.2 Projected Consumption of Petroleum Products .... ........ ......... 129 4.3 Burundi: 1988 Sales Volumes by Product and Company .................... 130 4.4 Bu-undi: Official Price Structure of Gasoline ........................... 131 4.5 Potential Price Reduction for Petroleum Products ........................ 132 4.6 Petroleum Price Structure - Some Recommendations and Comments ............. 133 4.7 Petroleum Unit Within the Direction Generale de I'Energie .................. 135 5.1 Burundi: Urban and Rural Centers with Electric Service ................... 136 5.2 Comparison of Demand Projections ............ ..................... 138 5.3 Burundi: Energy and Capacity Balance for REGIDESO .................... 139 5.4 Characteristics of Micro-Hydro Plants Installed ......... ................. 140 5.5 Long-Run Marginal Costs of Electricity ............. ................. 141 5.6 List of Rural Electrification Projects . ............................... 143 5.7 Rural Electrification .................................... .. 144 5.8 REGIDESO: Organigram ...................................... 149  5.9 REGIDESO: Summary of Financial Accounts 0.......................... l0 5.10 List of Transmission and Distribution Projects .. 151 5.11 Burundi: Feasibility Studies of Hydroelectric Powe; Plants .152 5.12 Burundi: Rural Electrification Master Plan .... 153 6.1 Conversion of Boiler to Peat for Industrial Purposes .154 6.2 Peat Characteristics in Burundi .156 6.3 Feasibility Study of Peat Substitution in Selected Industries .157 7.1 Solar Water Heaters: Household Usage .............................. 159 7.2 Photovoltaic Lighting System ......................... 160 MAPS IBRD 22084R Natural Forestry Resources & Wood Plantations - January 1992 IBRD 22660 International Surface Transport Connections - October 1990 IBRD 22083.2 Power Network - January 1992 IBRD 22082R Peat Reserves - January 1992  SUMMARY AND PRINCIPAL CONCLUSIONS Introduction 1. The objectives of this assessment are to evaluate Burundi's energy position, especially its energy resources and development options, and to suggest priorities among the actions that might be taken in the sector by the Government and external donors. The present report follows an energy assessment completed in 1982 (Report No. 3778-BU), and an activity completion report in 1984 (No. 012/84). Although the structure of the energy sector is basically the same as when the first assessment was carried out, the present evaluation is a self-contained review of the basic issues and options as seen nearly a decade later. Few of the recommendations in the first energy assessment have been carried out. As explained later in the report, however, the World Bank is in the process of preparing an energy sector rehabilitation project under which most of the recommendations of the present assessment will be implemented. 2. Burundi is a small, low income, densely-populated landlocked country, and its principal energy issues are related to these characteristics. Most Burundians use wood and agricultural by-products for cooking and other basic energy needs. The high population density is beginning to make fuelwood increasingly scarce and puts reforestation efforts in competition for land with agricultural production. The country is dependent on overland transport routes crossing other countries for almost all of its imports, including oil. As a result, the country faces two main difficulties with respect to petroleum products: high costs and insecurity of supply. The hydropower resource base of the country is good, transmission distances are reasonable, but unit costs for transmission as well as for distribution come out high, due to the settlement pattern, low income and low level of consumption. Peat is quite abundant but, for this resource also, high unit production costs are, inter alia, related to modest production scale. 3. The scarcity of technical and management skills affects the prospects for developing the country's energy resources, and it also reduces the scope for effective policy-making and the planning and operations of energy producing, marketing, and consuming institutions. Energy Consumption 4. The energy situation of Burundi is characterised by a high reliance on biomass which completely dwarfs the use of modem, commercial fuels. Firewood and charcoal combined meet more than 80% of the country's energy needs, and agricultural by-products an estimated 11%. Petroleum products account for 6% and hydropower, which dominates the public energy sector investment program, covers only 1% of the total energy requirements. Final energy consumption, totalling close to 1 million tons of oil equivalent (TOE) or approximately 190 kgoe per capita is low, as is the consumption of modern fuels, at 1 kgoe per capita. The latter is explained by the low level of income, by relatively  - ii - expensive petroleum products and high connection costs for electricity, by the dominance of subsistence agriculture in the economy, and the small size of the industrial sector. 5. The consumption of commercial energy grew at an average annual rate of about 6% over the period 1980-88, i.e. at around 5% for petroleum products and close to 12% for electricity. Approximately 85% of commercial energy (predominantly petroleum products) is imported and have accounted for 20-30% of merchandise exports in recent years. Per capita consumption of electricity was around 20 kWh in 1988, one of the lowest levels in Sub-Saharan Africa. Table 1: FINAL ENERGY CONSUMPTION, 1988 1,000 TOE X FueLwood 742 79 Charcoal 30 3 Agricultural residues 106 11 Peat 3 a/ Petroleum products 50 6 ELectricity 9 1 Total 940 100 Source: Energy balance (Chapter 1). A/ Less than 0.5% Energy Resources 6. Burundi has a certain endowment of energy resources in the form of wood, hydropower, and peat but with the present demand characteristics, population density a.dd increase, as well as settlement pattern, the resources are either under pressure of potential depletion (wood) or are relatively costly to produce and supply (hydro resources and peat). 7. Woodfuels and crop residues. The tree cover totals some 200,000 ha or 7% of the country's total land area. This includes natural forests, woodland savannah and tree plantations. In addition comes scattered farm trees. An estimated 90-95% of wood production is for domestic energy consumption in the form of fuelwood and charcoal. Data related to forestry and woodfuels are very poor but the country is, on the basis of best estimates, in a potentially serious situation of depletion on a national level. So far, demand appears to have been met both in rural and urban areas without price increases in real terms in later years. For certain areas, however, there are already quite significant imbalances between wood consumption and sustainable supply, and potential problems affecting the welfare of the rura' population as well as the environment will be emerging unless determined action is taken. High population density, clearing of land for agricultural purposes, and depenmence on woodfuels are contributing factors. Industrial plantations coming to a stage of maturity are seen to yield substantially in excess of commercial offtake, which would indicate a mismatch in the allocation of production as between industrial plantations and other forest resources and, possibly also, in the allocation of public resources aimed at increasing wood supply.  - iii - 8. Hydroower. The country is rich in hydropower -nources. The theoretical potential has been estimated at 6,000 GWh/year. In practice around . ,500 C *,:n/year from about 40 projects are seen to be economically exploitable. These are located in two distinct regions of the country, the north- western part of the country and the southern region. In addition, there are other hydroelectric potentials that must be developed in cooperation with other countries, as they are found along rivers forming boundaries. Compared with current generation of 115 GWh/year (domestic and import, 1988), the economically exploitable potential would allow a 13-fold increase in supply, indicating that the limitations are related not to the resource base but rather to the economic basis (availability of capital for generation facilities and for transmission and distribution network) and planning capacity for expanding the system. Present domestic hydropower facilities consists of 27 power plants with a total installed capacity of 32 MW, two of which alone represent 81% of the total installed capacity in the country. Thermal plants provide only 2% of the power generated in the gtid systemri. Burundi has imported power for a number of years from Zaire's Ruzizi I plant but in a decreasing proportion to total energy supplied to the network (1988: 10%). In addition, Burundi takes power from Ruzizi II, commissioned in 1989 and jointly owned by Burundi, Zaire and Rwanda. The contractual arrangement with Zaire which allows Burundi to import considerably more electricity than it does at present (and at no cost, up to a time limit) plus the possible addition of a third unit at Ruzizi 11 imply that Burundi will not need to expand its own capacity until around 1998. In the meantime the existing power master plan needs to be revised as a basis for further subsector development. 9. Peat Proven reserves are large, some 55 million MT, predominantly made up of lowland bogs, at present barely in production, and of highland bogs from which some 12-14,000 MT are extracted annually. Highland bogs are easier to exploit and do not seem to pose significant environmental problems. Present use of peat is basically limited to institutions, whereas the potential for significant increases lies with households and industry. Technical problems related to inconvenience in use have to be overcome for households to be interested in peat for cooking, in addition to the question of cost. A more likely and immediate application is as a fuel in industry, although the feasibility (primarily economic/financial) needs to be confirmed. Apart from the question of cost, environmental issues will have to be addressed before any large scale extraction is undertaken, especially from the lowland bogs. 10. Hydrocarbgns. Seismic investigations and an aeromagnetic survey preceded the drilling of exploratory wells in 1987 on the Ruzizi Plain, but the results were inconclusive. Further exploratory work is planned offshore in Lake Tanganyika but the combination of until recently low oil prices and high risks have slowed down activities. As indicated above, Burundi is entirely dependent on imports to cover its requirements for petroleum products. 11. New and renewable sources of enerv. Despite a relatively promising environment and high conventional energy costs, new and renewable energy technologies have had limited application and alternative energy sources are not likely to provide substitutes for traditional or modern energy sources on any significant scale in the mid-term future. Most options are non-economical at present day technologies and energy prices. Biogas digesters and solar systems appear to offer, however, a limited potential mainly in isolated areas. The environmental benefits of the former may be just as important as their energy contribution.  - iv - 12. The Government's declared objectives for the energy sector emphasize (a) the rational development and exploitation of national energy resources, (b) the supply of suitable forms of energy for rural development, (c) the supply of inexpensive energy for industrial and artisanal activities, (d) the efficient utilization and maintenance of existing energy infrastructure, and (e) a reduction in the dependance on foreign energy supply. Pursued within reasonable limits and through rational policies, these objectives should contribute to the promotion of the overall objectives of sufficient supply at least cost of forms of energy adapted to the needs of the country. The following paragraphs will examine the policies and activities carried out within the energy sector in Burundi, the options for improvements, and recommend measures and actions to be taken by the Government with the assistance of the donor community. Energy Demand Management 13. Since raising the productive potential of the energy sector is feasible only over the longer term, measures aimed at increasing the efficiency of energy use are of particular importance at least over the short- to medium term. Appropriate energy pricing reflecting the economic cost of supply is the most important instrument for effective demand management. The Government has made progress in the last year in moving towards more realistic electricity prices. However, a more general awareness and use of pricing as a tool in the energy sector is required, together with direct, non-price measures focussing on specific energy conservation. For reasons related to quite '-iide differences in cost between various forms of energy, low level of income, and technical constraints, the energy subsectors in Burundi are more clearly defined, less interwoven, and more closely associated with specific classes of users than is usually the case. The scope for substitution between fuels therefore appears at present to be relatively limited. Energy Pricing 14. Present prices of fuelwood and charcoal do not properly reflect economic costs. Prices of both fuels are basically market-determined. The Government intervenes by setting a stumpage fee of BUF 415/stere for wood originating in public forests and plantations, but the official price is rarely enforced. The market price for wood around Bujumbura, BUF 1,000/stere, is also below the long-run marginal cost of wood (BUF 845/stere (US$5.30) 1/ at site) which, including transportation and distribution margins, is calculated at BUF ,,650 (US$ 10.30). A bag of charcoal (45 kg) in Bujumbura costs around BUF 750 (US$ 4.70), whereas the economic cost based on the LRMC of wood is close to 1,200 (US$ 7.50). These price differences reflect, inter -lia, the perception of non-commercial wood as "free", the low purchasing power of consumers relying on fuelwood for cooking, limited markets for commercial fuelwood as well as for higher value uses of wood, and supply from sources where the total cost of wood is not fully perceived by the supplier. Lower market price leads to higher consumption of wood than is desirable from society's point of view, it does not give proper incentives to develop and adopt efficient methods of charcoal production nor to use improved stoves and, finally, it means that the rural wood producing population is subsidizing urban households. It is therefore recommended that the If US$ 1 = BUF 160 (Oa. 1989).  -v.- pricing and taxation of commercialized wood and charcoal be reviewed and measures to more effectively enforce collection of fees and taxes be implemented. The timing is relevant with a number of industrial plantations coming to maturity and with the completion of the Second Forestry Project financed in part by the World Bank. Prior to the price and tax revision, an awareness campaign as to the value of wood should be initiated. 15. Electricity tariffs have been periodically adjusted over the last years but the changes were, until recently, not based on any complete and sound analysis of the long-run marginal cost of generation and supply. A study was carried out in December 1989 and, based on it, the Government decided to implement in April 1990 a comprehensive electricity tariff reform. Medium-voltage rates were immediately adjusted to the estimated LRMC values (USc 12/kWh declining to USc 4/kWh with the hours of utilization, plus a fixed charge for subscribed capacity), while for low-voltage users the adjustment is phased with an initial increase of 27% for all consumption above 375 kWh per month (present tariff USc 10-12/kWh vs a LRMC of USc 14/kWh). A social tariff for consumers using less than 75 kWh per month has also been established. The tariff reform also eliminated the system of free electricity to high government officials and to the personnel of the power and water utility. Prior to this reform, the high connection fee was reduced to cover only the individual cost of connection and a term payment plan was introduced. However, the use of expensive high-standard material and equipment from countries involved in the extension of lines instead of from low-cost developing countries still makes connection expensive for large segments of the population. It is recommended that the initial restructuring of the tariffs be followed up by further adjustrnents towards the LRMC for low-voltage and other users, that annual adjustments be made to compensate for inflation, and that a differentiation between peak and off-peak tariff be introduced for large industrial users. 16. The prices of petroleum products are controlled by the Government and have been unchanged since 1983, with the exception of fuel oil which has been moderately increased. 2/ The Government has strongly resisted any attempts to liberalize the prices of petroleum products and has adjusted its duties and taxes to compensate for variations in product prices and the exchange rate. To quite some extent, the fall in international oil prices has been offset by the fall in the Burundian franc vis a vis the US dollar. Purchases of modest quantities of petroleum products and high overland transportation costs (more than 50% of initial cost FOB ocean port) explain the high price CIF Bujumbura. Retail prices, however, are lower than in most of Europe and in neighboring landlocked countries. Thus, relatively moderate government revenues compensate for high product and transport costs. In addition, an overvalued Burundian franc reduces the real value of prices and of government duties and taxes. The official price structure is complex and main user-related elements in the structure are low -impared to the cost they are supposed to cover. A review of the level and structure of petroleu aduct prices is therefore required and recommended. The increase in oil prices in September 1990 unatrscores the urgency of a Government initiative to introduce a regime of adjustable petroleum prices, following movements in the international market. Furthermore, regulations by the Burundian Government related to the overland transportation of petroleum products have led to transport costs which 2/ In September 1990, --troleum product prices in Burundi were increased by about 30%, partly reflecting the new situation in .,e international market.  - vi - are higher than otherwise dictated by market conditions. The Government has agreed to deregulate international truck transportation and it is recommended that this liberalization be implemented to stimulate competition and that the price structure of petroleum products be reviewed regularly to encourage importers to make use of the least cost supply route. Non-price Measures for Improving Efficiency 17. Woodfuela. Consumption of woodfuels in traditional stoves is quite inefficient and considerable scope for improvements exists, primarily with respect to charcoal stoves. This is less the case with respect to firewood which is mainly used by the rural population and burned in 3-stone open fires which in themselves are "free" and use a resource which is also perceived as free. Such users of fuelwood have less incentive to change their habits, and projects targeting these users have not been successful. Charcoal stoves, on the other hand, have a monetary cost, as does the charcoal. Improved stoves have been promoted by various public institutions but although the charcoal savings (more than 30%) imply a very short payback period, the number of stoves sold has gone down in the last couple of years. Cost and quality of the stoves are partly reasons for the lack of success, but the problem is mainly institutional. Backing from the Government and an effective institution to organize production and marketing of the stoves is i1eeded. It is recommended that the improved charcoal stove program be revitalized, that the management be entrusted to an organization suited for the purpose (in the process of being identified), with the intent of making the sale of stoves a commercially viable activity run by the private sector. A project to this effect is proposed. 18. Inefficient charcoal production based on traditional techniques is responsible for large quantities of wood wasted. Improved carbonization methods have been introduced together with training, and savings of 50% have been demonstrated. If fully implemented, a program to increase efficiency in this area could have a quite significant impact on the woodfuel balance. There are few incentives to change, however, with low wood prices and little follow-up. It is recommended that the present activity is reoriented (by, inter alia, establishing closer links between wood owners and charcoal producers and by organizing and training of the latter) and managed as a project with the Departement des Forets and the Direction Generale de l'Hydraulique et de l'Energie Rurale as counterpart organizations, and that the pricing and taxation review take into consideration the need for proper incentives to adopt improved techniques. 19. Electricity. Total losses in the electricity system were of an order of 18-20% in 1989, up from previous years. They are high both at the transmission level, given the small network, and at the distribution level. The latter is partly explained by the old age of the lines in the capital and in another major town, and they are in Iugent need of rehabilitation. There are also indications that non- technical losses are a quite significant part of total losses. A program of revision of electrical meters is in progress and the findings so far confirm the need to continue this work. It is recommended that the rehabilitation of the Bujumbura and Gitega distribution systems be undertaken, and that other measures to reduce technical losses be identified and implemented.  - vii - 20. Petroleum products. Although the industrial base and the consumption of petroleum products by industry in Burundi is limited, savings on the import bill of some significance could be made by following up a study in 1986 of the 15 largest industrial enterprises. Measures identified are of a conventional kind and require little or no investments, but lack of know-how and incentives have prevented implementation. It is recommendgd that advisory assistance be given to help industry acquire and install metering and regulating devices. Higher investment costs but also larger savings in terms of fuel oil are associated with the use of indigenous peat or surplus electricity by boiler conversion or by installing electric boilers in some of the major industrial establishments. Initiatives have been taken towards a conversion of boilers to electricity. The envisaged concept is, however, not economically justified. Nor is an arrangement based on interruptible power advisable in the present context due to perceived problems of effectively managing such a system. It is on the other hand recommended that the possibility of substituting indigenous peat be pursued by establishing the technical, financial and economic viability of such an option and, if confirmed, by choosing a step-wise approach of implementation. A project is proposed, focussing on smaller industries to begin with. Options to Increase Energy Supplies 21. Overall, availability of energy appears until now not to have been a major constraint on economic development, except for the low penetration of electricity which may be a handicap of some significance to productive development outside urban centers and an obstacle to the extension of social services. But, although the situation so far has been reasonably satisfactory, the rapid growth in population and continued economic development give rise to important challenges with respect to supply within all the major energy subsectors. 22. Wood. Uncertainty with respect to the resource base and its development combined with indications of depletion of the natural tree cover, due to the need for fuelwood and to the clearing of land for agricultural purposes, create a situation where measures should be taken, in parallel, to improve the level of information and to restore and increase the tree cover. Effective measures are all the more important considering both the welfare implications that a fuelwood shortage will have on the rural population in particular, with their limited substitution possibilities, and the negative environmental impacts of deforestation. In view of a potential surplus for a number of years ahead of commercialized wood from maturing industrial plantations, it is important that the primary focus is on agro-forestry, with the farming population as target group. It is recommended that a national inventory of wood resources and yields be carried out, that the organization of the woodfuel sector (both for charcoal and commercial firewood) be studied, and that a national household energy survey be done, to form a basis for planning and monitoring with respect to supply and demand of household fuels. Furthermore, it is recommended that increased emphasis should be placed on agro-forestry projects, nursery programs and extension services. The design of the programs should take into account the need to elicit the participation of the rural population. Finally, it is recommended that a strategy should be designed for the management of wood resources in general, and for the exploitation, maintenance and marketing of wood from maturing industrial plantations in particular. The role of the private sector with respect to managing public plantations should be considered. These recommendations should be carried out pardy under ongoing projects and partly as new activities.  - viii - 23. Electricity. Operating problems in the grid are fairly common and the number of incidents interrupting the supply of electricity is quite high. Mostly this can be ascribed to the quality of maintenance work which is in general low, due to lack of training, inadequate stocks of spare parts and material and to deficiencies in logistical support. The planning of maintenance is too general and, with the exception of Rwegura, no detailed program exists for preventive maintenance. Isolated centers relying exclusively on supply from thermal power plants also experience quite frequent failures. It is recommended that detailed preventive maintenance programs be prepared for all power plants, substations and transmission lines, that maintenance personnel be given additional training, that a detailed survey be undertaken of the state of diesel units in isolated centers, and that diesel power plants kept in reserve to supply the grid be maintained and kept in operating condition at all times. 24. Based on its own existing hydropower capacity, its share of an expanded Ruzizi II and imports from Ruzizi I, Burundi's needs for power are covered up to around 1998. For new capacity at that time, there are both regional and domestic options. For various reasons, the regional Rusumo Falls project has, until recently, not been actively pursued, whereas a study is being prepared for a Ruzizi III project. Meanwhile, Burundi needs to determine the priority of its domestic options. A power master plan was completed in 1988, but a too limited number of alternative strategies were considered. For the potential sites in the two most water resource-rich regions in the country there is only one for which a feasibility study has been made, despite the fact that preliminary findings show other alternatives to be more promising. Given the time requirements for implementing expansion plans, it is recommended that a limited number of additional feasibility studies for specific sites be prepared as soon possible, as a basis for carrying out a more comprehensive master plan resulting in a least cost development plan. In the meantime, expansion of the grid-connected generating capacity should be deferred to avoid sub-optimal solutions. Expansion of connections in areas where electricity is available should, on the other hand, be given high priority. 25. Of the country's 115 municipalities, 32 have their main village electrified while 83 completely lack electricity service. A dialogue between the local authorities and the Government regarding extensions and possible sources of electricity was recently completed, but no real plan for rural electrification exists nor have proper economic evaluations of identified projects been carried out. Development in this area is, furthermore, hampered by institutional ambiguities and inefficient management of existing rural services. It is recommended that a comprehensive rural electrification master plan be prepared, preceded by institutional reform as part of the study. Meanwhile, only projects that pass the economic threshold for. rural electrification projects (as discussed in the main text) should be implemented. 26. Peat. The development of peat as a fuel on any scale is linked to its acceptance by households and in industry. As indicated earlier, inconvenience in use and cost are the main obstacles to penetration of the household market. Present work to overcome these obstacles should be continued on a limited scale. The successful use of peat in industry in other countries and preliminary calculations based on data for Burundi, indicate that this avenue is worth pursuing. The conversion of industrial boilers to peat should be studied, as recommended above, and peat should continue to be promoted in  lx - the institutional sector which is the main user at present. Environmental impacts (possible drainage problems and competition with agricultural uses for land) of extraction need to be considered and monitored. 27. Petroleum products. The import of these products give rise to three supply-related issues: (a) source of supply and product costs, (b) supply routes and transport, and (c) storage and security stocks. The small size of the Burundian market for petroleum products and the fact that it is serviced by five operators effectively bars it from approaching the international market for its requirements. At present, the local operators cover their needs by purchasing modest quantities individually from multinational companies that own and operate depots in Mombasa/Nairobi and Dar es Salaam. With a weak bargaining position, the importers end up by paying a price above the parity price. Based on the options open at present, it is recommended that the Government, in cooperation with the local operators, prepare a strategy for reducing product prices by assessing the costs and benefits of pooling purchases and entering into negotiations with possible suppliers in Kenya and Tanzania. The question of least cost source should be considered in relation also to supply security and to transport routes (see below). Other possible supply arrangements should be considered as they become an option, including regional solutions which are at present under study by the World Bank. 28. The dominant supply route for imports is from Nairobi via Uganda and Rwanda (the northern corridor) but transportation by truck or, in particular, railway/barge from Dar es Salaam (the central corridor) is considerably less expensive. Capacity problems and poor infrastructure severely limit the use of the central corridor, however. Under a regional projects involving, inter alia, the World Bank, the Tanzanian railway will be stre:igthened and dedicated blosk trains providing the landlocked countries with reliable goods transport services will be supplied and are expected to improve the situation significantly within 2-3 years. Road improvements along the central corridor are also gradually making this route more accessible. Competition among transport operators should increase as the Government, as part of negotiations with the World Bank on the country's transport sector policy, has agreed to eliminate regulations protecting national transporters. It is recommended Lhat the Government monitor the situation with regards to the different transport options and see to it that the regulatory framework (e.g. the official price structure) is adjusted so as to stimulate the use of the least cost alternative. 29. For a landlocked country, minimum security stocks of petroleum products of a size consistent with what the country can afford to hold should be enforced. At present, this is not the case but the Government plans an irncrease of minimum stocks corresponding to 90 days' consumption. This is considered too high, risks and costs taken into consideration. It is recommendad instead that a policy of 30 days' security stocks (which are additional to approximately 30 days' operational stocks) be implemented and a plan for their financing, cost coverage, use and replenishment, be prepared in cooperation with the petroleum operators. Existing reserve depots should be put in service from the point in time needed, probably as an integral part of the main depot in Bujumbura.  x - Energ.i and Environment 30. Environmental impacts of and risks associated with energy supply and use are primarily related to traditional sources of energy, i.e. fuelwood, charcoal and (potentially) peat. Rapid population growth will, if unchecked, create major ecological imbalances which, in part at least, can be attributed to energy. Although potential environmental consequences of recent, large hydropower projects have been taken into consideration during planning and implementation, a systematic and overall approach to assess and alleviate environmental impacts related to energy supply in general does not exist. The matter is not energy-specific but a general one, however and it is romm-ended, therefore, that a national environment strategy be designed in order to provide guidelines for environmental protection and management. These guidelines (which should, inter alia, include institutional setup and environmental tools) should be adopted in all matters related to energy development to ensure that environmental impacts are systematically taken into consideration as part of project preparations. The Direction Gendrale de l'Energie should have responsibility for the application of the guidelines and liaise with institutions that have specific environmental responsibilities. Institution Building 31. Energy planning and policy formulation. The quite different structures of the respective energy subsectors (electricity, biomass, petroleum, peat, alternative energy sources) and their consequential different needs in planning and management are broadly reflected in the institutional framework for energy planning and management in Burundi. Planning, implementation and follow-up is generally carried out within each of the mair subsectors, while the Direction Gdn6rale de l'Energie (DGE) of the MinistOre de l'Energie et des Mines (MEM) has in principle overall responsibility for the energy sector. 32. The foremost task of the DGE is that of keeping an overview of the energy sector as a whole, assessing requirements and priorities as between subsectors, giving general guidelines for subsector development, and ensuring coordination. It is essential that the DGE supports and strengthens the respective subsector institutions rather than duplicating or taking over their work. Weaknesses should be corrected by strengthening the institution involved and, if warranted, giving it more resources. It is therefore recommended that the DGE focus on overall energy planning, overseeing and giving guidelines for the subsector agencies, and that for this purpose a Departnent of Planning, now under consideration, be established. Physical planning and implementation for individual subsectors, on the other hand, should be the responsibility of the subsector agency, supervised by the DGE. A case in point is the REGIDESO, the national power and water utility, which should be given full responsibility for planning the expansion of the electricity supply system, which today is done by the DGE as one of their main activities. 33. Coordination in a decentralized system would normally be achieved by establishing uniform investment criteria, but with the great dissimilarity between the energy subsectors (electricity dominated by clearly identifiable projects, the biomass subsector more by ongoing programs and externally financed technical assistance), the use of formal, objective criteria may not always be possible. Setting of priorities may call for judgement by the DGE. Important cases should be referred to the newly  - xi - created National Commission for Water and Energy. It is recommended that clear procedures and criteria be established and applied for evaluating projects and programs in the individual energy sibsectors, and that a process involving the DGE (ensuring the application of procedures and criteria by subsector agencies) and the National Commission be instituted. Furthermore, it is recommended that the acceptance of externally financed projects in the energy sector be subject to assessment and recommendations by the DGE. This is important, in order to avoid a donor driven energy agenda prevailing over investments and activities that would be more consistent with national objectives and criteria if developed on the basis of clear procedures and criteria. The role and functions as indicated of the DGE will require a strengthening of staff, in particular the agency will need to recruit economists and key personnel with a background in energy planning issues and management. 34 Important issues that have direct bearing on the energy situation of the country are not properly addressed at present. In the petroleum subsector, the central govermrnent agency is the Ministere du Commerce et de l'Industrie. This would seem a logical arrangement if regulating commercial activity were the overriding concern. With the host and type of issues related to petroleum products, as indicated above (supply, cost, price structure, efficiency, security stock and storage), it is recommended that the DGE have the responsibility for energy-related aspects of petroleum products in close cooperation with the present ministry looking after commercial aspects, and liaising with the petroleum operators on supply, price and storage questions. There are at present also serious gaps in the management of woodfuels, i.e. no one institution has an in-depth understanding of both fuelwood supply and demand question. This applies also to household energy issues more generally. Donor activities are also in need of better coordination. The Ddpartement des Forets (DF) should natura' y retain its role with respect to the woodfuels supply issues, but it is recommended that the DGE with its focal energy orientation take responsibility for monitoring household energy matters, in cooperation with the DF. It would not be necessary to create a new unit in the DGE for this purpose as one of its departments already has responsibility for alternative household energies. Additional staff with relevant background would be needed, however, and this applies also - and in particular - to the additional responsibilities for the DGE for petroleum matters. Technical assistance would be required for this specialized field. 35. Operating entities. In the power subsector, REGIDESO is in the process of reforming its organization and procedures in order to recover from serious operational and financial difficulties. The reform plan is carried out under an agreement with the Bank within the framework of a structural adjustment loan. While REGIDESO has committed itself to operating as a commercial enterprise and carry out the required measures for a successful reform, the Government has indicated that it will establish a tariff policy for electricity and water based on the long-run marginal costs, increase the capital of the enterprise and pay operating subsidies for all investments that are economically viable but not financially attractive from the point of view of REGIDESO. The reform plan has, however, had a slow start and most measures remain to be implemented. Assisted by the World Bank, steps are being taken to speed up the process. In line with recommendations above, an adequate capability for planning of generation, transmission and distribution should be urgently established within REGIDESO. Also, the delimitation of responsibilities for rural electrification between REGIDESO and the agency involved within the Ministere du Developpement Rural et de l'Artisanat should be clarified.  - xii - 36. With respect to foresty and household energy, adjustments and strengthening are required to enable the institutions to meet the challenges ahead. It is recommended that the Departement des For8ts, as far as energy-related matters are concerned, adapt its organization and strengthen its capacity to address issues such as determining and monitoring the forest resource base, preparing policies on exploitation and maintenance of wood resources, preparing and implementing agro-forestry projects, monitoring the improved carbonization program, and reviewing and enforcing woodfuel pricing and taxation. It would seem logical that this process of adaptation and strengthening of the DF be carried out as part of the finalization of the Second Forestry Project. Increased attention to and improved coordination of household energy matters will require an expanded scope for the DGE, as indicated above, although actual implementation of projects and programs should remain the responsibility of different organizations, as is the case today. This includes activities related to coordination and monitoring of new and renewable energy technologies. The ongoing Programme Special Energie through the GTZ should provide the required support. Finally, it should be mentioned that responsibility for development, production and marketing of peat lies with the parastatal company, ONATOUR, within ths MEM. Its organization was restructured a few years ago and has the capacity for dealing with increases in production and sales. Investment Requirements and Technical Assistance 37. Investment planning is at this juncture subject to considerable uncertainty. The electricity subsector completely dominates investements in the energy sector, in fact in the Government's investment program for the Fifth Five Year Development Plan, 1988-92, projects in that subsector account for 97% of the US$45 million (1986 price level) program of energy investments. As indicated above, no addition to the generating capacity of the interconnected system should be needed before around 1998 and in the absence of a satisfactory master plan, expansion of generating capacity should be deferred. Expansion of connections in areas where electricity is available should, however, be pursued. A rural electrification master plan is also needed before any significant commitments should be made in this area. Given the excessive investments of the past and the critical financial situation of REGIDESO, the Government has agreed not to undertake new investments in the power sector without a new and thorough review of the economic and financial viability. Therefore, the bulk of the investment requirements in the energy sector cannot be estimated at present, and an investment program is not available. Direct investment requirements in subsectors other than electricity are modest and would mainly include rehabilitation of the Gitega petroleum depot around 1995 (US$ 100,000) and possible industrial boilers using peat if this alternative is proven to be attractive. 38. Technical assistance. The growing complexity of strategy and policy decisions calls for increased technical assistance corresponding closely to the mairn sector objectives. In addition, strengthening of the energy subsector agencies and institutions are required to enabac them to address the major challenges within their respective areas. Particular consideration should be given to training and manpower development, policy and institutional evaluations and preinvestment studies. It is recommended that the Government and potential donors pay special attention to the following requirements:  - xiii - (a) for the Direction Generale de l'Energie, (i) the externally financed Programme Spdcial d'Energie (PSE) should be continued to assist in establishing a structured approach to energy issues; (ii) assistance is needed to establish a planning unit within DGE, to prepare and implement procedures and criteria for energy planning and follow-up, to be applied by the DGE as well as by energy subsector agencies, and to develop the analytical skills of local staff through training in energy planning, project analysis, and pricing issues; (b) for the woodfuels and household energy subsector, (i) assistance will be required to carry out a national inventory of wood resources and yields, a study on the organization of the woodfuel sector including ecoiomic cost and pricing of wood and charcoal, and a household energy survey; (ii) the Departement des Fordts needs to be reinforced in order to design a strategy for the management of wood resources on a national level, to implement a policy that focuses on agro-forestry, and to revitalize the much-needed improved carbonization program; and (iii) assistance should be provided to the DGE to assume the role and functions of planning and monitoring of household energy matters; (c) for the electricity subsector, (i) a limited number of feasibility studies have to be undertaken as soon as possible to be used as a basis for the preparation of a power master plan; in addition a rural electrification master plan is needed quite urgently; (ii) the implementation of the reform plan for REGIDESO should be accelerated and its capability for physical planning should be established; (iii) a detailed preventive maintenance program should be elaborated, and loss reduction measures be identified and implemented; (d) for the petroleum subsector, (i) assistance would be needed by the DGE to enable it to assume the role and functions associated with overall management and monitoring of energy-related petroleum issues, inter alia, through training of local staff abroad and at home; (ii) expertise with an appropriate international background is required to assist in planning and implementing a strategy for reducing petroleum product cost and for reviewing petroleum product prices and price structures; and (e) for energy efficiency and substitution options in industry, assistance is needed to evaluate peat as a substitute for fuel oil, and to advise on the implementation of existing proposals to reduce specific energy consumption. Energy Sector Rehabilitation Project 39. Most of the recommendations presenteo above will be implemented during the execution of an Energy Sector Rehabilitation Project financed by the World Bank. The appraisal mission for this project was done in June/July 1990 and approval is expected in the first quarter of 1991. The broad objectives of the project are to promote rational energy policies and to strengthen the efficient management of energy resources. The project aims to develop efficient institutions in the sector, and  - xiv - improve the quality of public investment, incrs ase the efficiency in the use of energy resources through reforms in the pricing stnteture of electricity, petroleum products and woodfiuels, expand the access of the population to electricity and reduce negative envirw-unental effect of the use of energy. 40. The main components of the project are the following: (a) Energy soctorjnstitution building (i) implementation of the Rehabilitation Program for REGIDESO that includes a managenlent assistance partnership program with a foreign operator, a restructuring of the financial base of the entreprise, the construction of limited new facilities to improve operations and training for its personnel; (ii) pre-feasibility and feasibility studies for selected hydroelectric power projects and up-dae of the power sector Master Plan; (iii) institutional strengthening of the Direction G6ndrale de l'Energie so that it can assume its leadership role in the areas of planning, coordination and control of the energy sector; (iv) institutional strengthening of the Direction de l'Hydraulique et des Energies Rurales in the Ministere du Developpement Rural et de l'Artisanat so that increased access to electricity in rural areas can be achieved efficiently; (v) implementation of pricing policies reflecting the economic cost of supply of electricity, petroleum and woodfuels; and (vi) coordination and monitoring of the public investment program in the energy sector. (b) Biomass and household energy (i) execution of a Charcoal Efficiency Program to disseminate improved techniques for the production of charcoal and sensitize charcoalers to the issue of deforestation; (ii) continuation of the Improved Charcoal Stoves Program which aims at reducing charcoal and wood consumption; (iii) a household energy consumption survey to improve knowledge with respect to energy demand and to strengthen the planning process; and  - xv - (iv) a feasibility study of peat substitution in secondary industries to determine the viability of increasing the use of these resources. (c) Rural electrification (i) execution of a Rural dlecwification Master Plan to evaluate potential projects in rural areas and propose solutions to institutional issues in the subsector; and (ii) execution of some economically justified extensions of the distribution network in rural areas. (d) Power subsct (i) doubling of the 110 kV transmission line from Bubanza to Bujumbura and extensions in associated substation; and (ii) implementation of an intensive program of new connections and extension of the distribution network in urban areas.  - xvi - Table 2: SUMMARY OF RECOMMENDATIONS AND PRIORITY ACTIONS Issue Recormmendation ResponsibiLity Proposed Action/ Status Assistance | I Energy Demand lManagement Prices of woodfueLs not Review pricing and Ddpartemant Technical assistance Inclusion in a reflecting taxation of des Forkts required for study possible next phase economic cost commercial wood- and implementation of ongoing Second fuels and collection Forestry Project l ____________________ _ DO licy proposed Electricity tariffs Follow up initial re- REGIDESO Study already carried Goverrnment agreed to betow LRMC for low- structuring of tariff out further adjustments vottage and other users under proposed ESRP (Energy Sector Rehabititation I ________________________ ________________________ ________________________ Pro ject) Rigid petroteum price Review level and IMinfst&re du Commerce Study already carried Goverrnent agreed to structure, fixed price structure of prices et de l'Industrie out carry out policy and initiate flexible recommendation prior pricing policy to ESRP effectiveness Low extent of Revitalize stove ONATOUR and DGE Technical assistance To be carried out dissemination of program, strengthen required for training under proposed ESRP improved charcoal institutional and promotion; stoves setting, and involve equipment. Cost: USS private sector 315,000 Charcoal production Reorganize and Departement des Technical assistance To be carried out generally based on revitalize charcoal Forets and DGHER needed for training under proposed ESRP inefficient techniques efficiency program and promotion; and reconsider equipment. Cost: taxes/prices USS 615000 High electric power Prepare a loss REGIDESO Technical assistance REGIDESO to present losses reduction plan and and equipment plan for loss rehabilitate required reduction by mid- Oujumbura and Gitega 1991; KfW-Germany to distribution systems finance -._______________________ .____.____.____.____.-__ rehabilitation Consumiption of fuel oil Pursue potentail for Direction Generale de Feasibility study for Feasibility study to in industry contributes substituting peat and t'Energie and ONATOUWR peat project and be carried out under to high petroleum implementing fuel advisory services for proposed ESRP; import bill saving measures industry. Cost: USS funding needed for ..._____________________ 263,500 advisory services  - xvii - Issue Recommendation Responsibility Proposed Action/ Status ____ ___ ___ ___ ___ ___ Assistance_ _ _ _ _ _ _ _ _ _ _ _ EnerAv Supoly Options Lack of data on wood Carry out nrtionaL Departement des Technical assistance Inclusion in next resource base and its wood resource Forets required for study phase of Second development inventory and develop and training; Forestry Project woodfuel management equipment. Cost: USS proposed; additional information system 700,000 sources may be considered Insufficient basis for Carry out a national The Direction TechnicaL assistance To be carried out planning and monitoring household energy Gen6rale de l'Energfe required for survey under proposed ESRP of household energy survey and strengthen and the Departement and training. Cast: sector the D6partement des des Recherches et USS 170,000 Recherches et Statistiques Statistiques Potential general Continue shift of D6partement des Technical assistance Inclusion in next depLetion of wood focus towards agro- For6ts (OF) to support reorienta- phase of Second resources combined with forestry, and prepare tion and strengthe- Forestry Project potential surplus of a strategy for the ning of the DF proposed; additional wood from public management of wood required, as well as sources of funding plantations resources for planning and may be considered or implementation of required resource utilization irregular supply of Prepare detailed REGIDESO Program to be- REGIDESO to present electricity preventive prepared and training maintenance ptan by maintenance plan and impiemented as part mid-1991 maintenance training of the reha- program bilitation program l________________________ __________________ for REGIDESO Need for additional Prepare a least cost REGIOESO Technical assistance To be carried out (hydro) power capacity development plan for required for under proposed ESRP to cover electricity the power sector feasibility studies requirements after 1998 based on a more and least cost complete set of development plan. feasibility studies Cost: USS 3.48 mill. Electrification of Prepare a rural alec- OGHER and REGIDESO Technical assistance To be carried out rural areas taking trification master required for under proposed ESRP place without proper plan and deal with preparation of master planning and evaluation institutional issues plan. Cost: US, 300,000 Small quantities of Prepare a strategy Ministere du Cofmmerce Technical assistance Support to DGE in petroleun purchases by for reducing prices et de l'industrie in required for petroLeun matters to 5 distributors puts paid internationally cooperation with the preparation of be provided under Burundi at a price by assessing the Direction Gen6rale de strategy and for proposed ESRP; disadvantags costs and benefits of l'Energie (DGE) negotiations. Cost: additional funding pooling purchases part of costs for for negotiation support to DGE (see exFertise will be below) required Costly international Eliminate protection Mfnistere des Deregulate Government agreed to transportation of of national transport Transports, Postes et international tran- carry out petroleun products into operators and adjust Telecommunications sportation and recommendations Burundi regulatory framework and the DGE implement revised under Transport to encourage least petroleum price Sector Project and cost transport structure ESRP alternatives Lack of policy Plan and implement a Ministere du Commerce Prepare and implement Government in the regarding minimtn policy of 30+30 days' et de l'industrie the plan in process of (affordable) security stocks, including together with the DOGE cooperation with the reconsidering their stocks for petroleui financing and cost petroleum importers policy in the light products recovery of recent international events  - xviii - I ssue Recommendation Responsibility Proposed Action/ Status Assistance instftution Need for clarification DOE to focus on The DGE, REGIDESO, Technical assistance To be carried out of responsibilities for overall energy plan- DOGNER, the required for partty under ESRP, planning and ning, and subsector 06partement des preparing and partly proposed implementation within institutions on Forets implementing changes; funded under the the energy sector, for physical planning and key professionals to possible next phase institutionalizing implementation; be hired and trained. of on-going Second overall planning certain new units in Cost: USS 500,000 Forestry Project, functions and for DGE to be created for DGE strength- partly as component monitoring household with associated ening (wilt also of Programa Special and petroleun energy manpower support cover next activity) d'Energie areas - . Planning and selection Establish clear The DGE and the Technical assistance To be carried out of projects not subject procedures and National Commission required for the under proposed ESRP to systematic and criteria for for Water and Energy preparation of rigorous evaluation; assessing energy procedures and energy agenda partly projects, involving criteria and for donor driven the DGE and the training of local National Commission staff. Cost: see above REGIDESO in longtime Speed up the REGIDESO Rehabilitation Program initiated need of being put on a implementation of the program incorporated under a PPF advance sound operational and existing reform plan, in a performance and to be further financial footing improvements In contract to be financed under adninistrative implemented with the proposed ESRP and by procedures and assistance of a other donors financial structure foreign operator l Now challenges and Adapt organization D6partement des Technical assistance Inclusion in next tasks for the and strengthen Forets needed for planning phase of Second Departement des Forfts capacity to plan and and implementing the Forestry Project as focus shifts further implement tasks change, including proposed towards agro-forestry related to changed training focus _ Lack of systematic and Design a national Ministere de Technical assistance The Goverrvnment has overall approach to environmental l'Am6nagement, de needed to prepare a indicated its assess and alleviate strategy to provide l'Envfronnement et du nationaL interest in environmental Impacts general guidelines Tourisme, and the DGE environmental developing a of energy generation for environmental for ensuring that strategy and assist strategy under a and supply protection and guidelines are with its Special Project management applied to energy implementation Preparation Facility ______________________ _____________________ development  I. ENERGY AND THE ECONOMY ! ~~Backcgond 1.1 Burundi is a small, landlocked country with a population of about 5 million. It has the second highest population density in Africa, a high population growth rate (3% p.a.), and its GNP per capita, estimated at about US$240 (1987), ranks among the lowest in the continent. The country has limited natural resources other than relatively fertile agricultural land. Agriculture is the dominant activity, contributing more than half of GDP, 93% of employment, and 85-90% of export earnings. The most important crop in this largely subsistence-dominated sector is coffee, which on average accounts for about 80% of export earnings. The secondary sector .s small, accounting for about 13% of GDP and '0% of exports in recent years. As a landlocked country, Burundi is vulnerable to conditions in neighboring col'ntries and faces very high transportation costs to and from the Indian Ocean ports. 1.2 In August 1988, Burundi experienced an outburst of ethnic violence which shook the country. Constructive action has been taken, however, by accelerating the policy of reconciliation and national unity. The overwhelming majority of the refugees have now returned to Burundi, and reconstruction efforts have been undertaken in the affected areas. 1.3 Burundi's major structural constraints are (a) high population growth, (b) excessive dependence on coffee exports, (c) excessive role of the public sector, and (d) inadequate incentives for sustained growth in agriculture and industry. In recognition of the serious economic consequences of failures to correct economic and financial imbalances, in 1985 the Government embarked on a comprehensive economic reform program which, however, was not carried out at the pace envisaged. 1.4 Despite political upheaval and wide and erratic coffee price changes, developments in the 1986-88 period were somewhat positive, following the recovery of agricultural production. GDP, on average, grew by about 3.5% per year over the 1986-88 period. In 1989, the agricultural sector performed poorly which was reflected in 0.4% growth of GDP; whereas coffee prices fell by 50% during the second part of the year after the International Coffee Organization ([CO) queta agreement collapsed. The balance of payments and public budget deficits were reduced during the 1987-89 period but rationalization of economic choice for public expenditure needs to be reinforced. The external financial situation, though still fragile, will remain secure in the medium-term due to a high reserve level and an expected disbursement from SAL II (second tranche). b 1.5 Economic performance over the next five years will remain fragile and depend on several factors: (a) timlely implementation of the adjustment programn; (b) the responsiveness of the private sector to new incentives and the economic enviroimment; (c) evolution of world prices for Burundi's exports, in particularly coffee; and (d) the availability of external financing on concessional terms. Assuming that aid inflows are sustained at the recent high levels, annual average real GDP growth for the 1990-94 period could be around 34% at market prices. Growth would originate essentially from the agricultural and the agro-industry sectors.  - 2 - Energy Constraints on Economic Development 1.6 Burundi has so far been able to maintain a reasonably secure and uninterrupted supply of energy at prices which are not too much out of line with countries at a similar stage of economic development. In the case of petroleum, the underlying costs are high as a consequence of the country's landlocked position, but with a relatively mild taxation prices to consumers are not particularly high. Being entirely dependent on imports and long overland transportation of petroleum products through other countrie- the country is exposed to the threat of supply interrruptions for political and climatic reasons. These factors cause from time to time cuts in the supply but in recent years no major disruptions have occurred. Electricity is a special case, being available in the capital and major urban centers only due to the sparse pattern of settlement and low levels of income in rural areas. National hydropower resources are quite abundant but fairly costly to develop. The bulk of the country's use of energy is in wood and other biomass, most of which is not traded in commercial channels. Although data are scant, supply of fuelwood and charcoal appears to have been able to meet present demand both in rural and urban areas, and prices of marketed wood products have not risen in real terms in later years. At the rate of consumption of wood for (mainly) fuel purposes and with the clearing of land for agricultural purposes by a rapidly growing population this situation may, however, not last for very long. Wood consumption at present exceeds sustainable supply on a national level, and potential problems affecting the welfare of the rural population as well as the environment will be emerging unless determined action is taken. 1.7 So far, however, availability and cost of energy have not been a major constraint on economic development, except for the low penetration of electricity which may be a handicap of some significance to the development of industry and crafts outside urban centers and also an obstacle to the extension of social services (schools, hospitals, etc.). But, even though the situation so far is reasonably satisfactory, the rapid population growth and continued economic deve!opment give rise to important strategic challenges in all the major energy subsectors, i.e. wood and other biomass, petroleum, and electricity. Sector Obiectives and Strategies 1.8 In the Burundi energy sector, the main subsectors (wood and other biomass, petroleum, and electricity) are more clearly defined and less interwoven than is usually the case. Each supply subsector is closely associated with a well defined class of users. Broadly speaking, there is wood and biomass for households (including larger communal households in education, health service, and defense), petroleum for transport, electricity for industry and for electricity-specific purposes in other sectors where available. The full picture is certainly a bit more complex (households using kerosene or electricity for lighting and to a minimal extent kerosene for cooking; biomass and /or fuel oil for heat in industry, and so forth) but by and large, there are weak linkages and little overlap between subsectors. The limited scope for substitution between fuels for the provision of heat, which is the only major use technically open to substitution is brought out by the comparison of cost in terms of heat in Table 3.5 in Chapter III. The differences in cost per unit of useful energy are substantial.  - 3 - 1.9 The relative insignificance of intra-sectoral linkages simplifies the formulation and implementation of energy policies, in that the complicating requirement of dealing simultaneously with the whole energy sector can be somewhat relaxed, while the various energy issues can be forcefully dealt with within each one of the parallell subsectors. This allows more attention to be paid to energy's relation to other aspects, structural and economic, of the respective subsectors. 1.10 In the overwhelmingly dominant subsector, woodfuels and other biomass (over 90% of all energy use in Burundi), the strategy will aim at two equally important objectives: to assure the continued supply, and to increase the efficiency in the use of these energy sources. The rapid population growth (3% p.a.) lends urgency to both of these strategy components. Planting and growing of trees compete for land with food production and with settlement (housing, communal centers, etc.) for the growing population. The technical scope for improvements on the demand side (efficiency in use) and supply side is considerable, as will be seen in Chapter III, but the attainment of such improvement is as much a social as a technical process. Policies for the supply side will take due account of the fact that most of the production and procurement of wood and other biomass take place within a framework of subsistence farming, even though an increasing portion of this sector is gradually becoming monetised (supply to urban households, institutions, and industry). 1.ll The monetised (and still small) subdivision of the wood and biomass subsector comprises mainly charcoal and peat. Being monetised, this sector subdivision should be guided towards efficiency by market forces, but lack of information and a strategy for a rational use of the country wood resources seem to have delayed the development of sound market policies. Continued attention to these issued should be part of a biomass strategy. 1.12 In the petroleum subsector, reducing or at least holding down costs and assuring security of supply will be the main strategic issues, both rooted in the country's landlocked position. Long overland import routes, across several neighboring countries, give cause for technical as well as political security concerns while also adding a cost element of the same magnitude as the original world market cost of petroleum. The cost issue is exacerbated by the small quantities required, smaller than the normal quantities in world market trading. 1.13 The domestie issues in the petroleum subsector are relatively minor in importance, such as ensuring a cost-effective, reliable distribution of petroleum products to all localities in the country. The means to ensure this would be to promote the unhampered, efficient working of a retail market. 1.14 In the electricity subsector the main strategic objective, besides minimizing costs, would be to increase the availability of electricity from the present, very low penetration of only some 1.5% (in terms of share of the population served). Working against this objective is the settlement pattern of the country, with few and reCatively small urban concentrations. The hydropower resource base of the country is good (see Chapter V), transmission distances are reasonable, but unit costs for transmission as well as for distribution come out high due to the low level of consumption. An important strategic challenge is to operate a tariff system that, while making minimum quantities of electricity available at affordable rates to target population categories, will encourage an efficient use of electricity at the margin and raise sufficient finance for the expansion of the system.  -4- Energy Consumption 1.15 An energy balance for Burundi for 1988 is given in Table 1.1. The quality of the figures varies enormously and the uncertainty is particularly great with respect to the dominant sources of energy, biomass (see Annex 1.1); hence the pro forma character of the balance, the purpose of which is to illustrate in broad lines the movement of energy through the economy, the orders of magnitude and relative role of the various energies. This the balance does, even when allowing for margins of uncertainty as mentioned. 1.16 The estimated final consumption of energy, all sources combined, is 940,000 tons of oil equivalent (IOE), corresponding to 188 kgoe per inhabitant. Households consume more than 90% of all forms of energy combined, dwarfing the transport and industry sectors. The only energy import of significance is petroleum, accounting for 6% of final consumption. I/ Reflecting the dominant role of agriculture in the economy and the low degree of urbanization, wood and other biomass cater for over 90% of the total energy consumption. Conversely, the low percentage accounted for by electticity (1 %) and petroleum products (6%) reflects the early development stage of the monetized, industry-based economy. The weak intra-sectoral linkages are illustrated i.a. by the many empty boxes in the table. The only conversion of any significance is that from wood to charcoal. The present scope for interfuel substitution as already commented is very limited. 1.17 Commercial energy consumption (here: petroleum products and electricity) grew at an average annual rate of somewhat over 6% over the period 1980-88, considerably faster than GDP in constant prices during the same period (slightly less than 4% p.a.). Nonetheless, conunercial energy consumption per capita and per unit of GDP remains lower than in other countries of similar size and income level in Africa (see Annex 1.2). The consumption of petroleum products alone increased by around 5% p.a. over the same period and the sale of electricity by close to 12% p.a. The latter rate was to a significant extent influenced by the addition of domestic hydropower capacity and the extension of the transmission and distribution network. As for woodfuels and other biomass forms of energy there are no data reliable enough to indicate the development of consumption in the past, except that one may assume that it has increased largely in the same proportion as the growth in population, which has been slightly less than 3% p.a. in the 1980s. Energy R-sources 1.18 In relation to the present level and pattern of energy demand, Burundi is reasonably well endowed in energy resources. The exception like for most other countries is petroleum, for which Burundi has to rely entirely on import. Although petroleum's share of overall energy use is small, that only reflects the correspondingly smnall share of transport and manufacturing in the economy. L/ Elecricity imports, from the Ruzizi I power station in Zaire, accountedfor some 10% of total electricity supply in 1988, or only 0.1 g% of total net energy supply in the energy balance.  Table 1.1: BURUNDI ENERGY SUPPLY - DEMAND BALANCE - 1988 (1000 TOE) Agri. Fuel- Cher- Peat Gaso- Diesel Fuel Kero- LPG Jetfuel Elec- Total X resid wood coal line oil sene Avgas tricity Gross SuomLy Primary production 106.0 897.1 3.4 8.8 1,015.3 95 Imports 20.1 19.4 7.3 1.6 0.1 4.9 1.0 54.4 5 Total 106.0 897.1 3.4 20.1 19.4 7.3 1.6 0.1 4.9 9.8 1,069.7 100 Conversion Charcoal (154.7) 154.7 Electricity (3.0) 3.0 Conversion losses (124.7) (2.5) (127.2) Transm. & distrib. tosses (0.2) (0.2) (0.1) Pi Pi Pi (1.5) (2.0) Net SuCDtY 106.0 742.4 30.0 3.4 19.9 16.2 7.2 1.6 0.1 4.9 8.8 940.5 100 tn Consumption Households 106.0 724.8 30.0 1.5 0.1 2.8 865.2 92 Industry 7.5 0.7 3.7 7.2 0.1 3.6 22.8 2 Public services 10.1 2.7 2.4 15.2 2 Transport 19.9 12.5 4.9 37.3 4 X of net supply 11 79 3 0.3 2 2 1 0.2 b 0.5 1 100 a/ Quantity less than 50 TOE. kf Less than 0.1X. Source: Electricity balance from REGIDESO. Petroleum figures from Ministere du Commerce et de l'Industrie. Peat figures from ONATOUR. Other figures are mission estimates.  - 6- 1.19 On the other hand, the country is rich in hydropower resources. The total hydropower potential is estimated to be about 6,000 GWh/year, of which 1,500 GWh/year is seen to be practically exploitable, from some 40 projects. Compared with current generation of 115 GWh/year (domestic and import, 1988), this would allow a 13-fold increase in supply, or enough to meet a 6 - 8% annual growth over 35-45 years. The limitation for the next few decades thus seems not to be in the resource tbase but in the economic and financial capacity for expanding the system. The country seems unlikely to have to import petroleum or coal for electricity generation. 1.20 Peat is a non-renewable source of energy found in large quantities in Burundi, in highland and lowland bogs. Highland bogs can cover demand at the present (modest) rate of 13,000 MT for more than 60 years. Peat resources in lowland bogs are much larger (estimated at 60 times those of highland bogs) but are unexploited today and can be developed economically only if demand increases significantly. The latter depends not only on costs but also on developing markets (uses) and improving the fuel product itself. Environmental aspects may also be a limiting factor to exploitation of peat on a larger scale. 1.21 The most complex and critical resource question is that related to wood and other biomass. While current production of fuelwood is estimated at 2.4 million MT/year the sustainable yield (annual increment) has been estimated at 1.7 million MT/year and the standing stock of trees at 40 million m3 (Chapter HII). The current production may thus exceed the sustainable yield by some 0.7 million MT/year or by 21/2 % of the total standing stock. This might not be much cause for concern if a reduced consumption could be achieved in the future, if the ongoing production could be optimally distributed on all the standing stock, and if the estimates are correct. One serious mismatch is already apparent in the allocation of production as between industrial plantations and other forest resources. Industrial plantations are seen to yield more than 1.2 million MT/year on a sustainable basis against a total commercial offtake of 0.6 million MT/ye&n. That leaves a yield of 0.5 million MT/year to meet the non-commercial offtake of 1.8 million MT/year. The standing stock from which this excess production (of 1.3 million MT or 2.0 million m3 annually) would be taken, amounts to some 15 million m3 (total stock minus industrial plantations). This stock is therefore at present being run down at a rate which already now gives cause for serious concern and again, since production is not ideally allocated on the whole stock, the resource depletion is even more severe locally. 1.22 This suggests a) that there could be a serious depletion problem with respect to important parts of the country's forest resources and b) that there is an urgent need for better and more comprehensive, quantitative information on these resources as well as their use. Energy Projections 1.23 The development of energy demand in Burundi will depend on a number of socio- economic factors (demographic, urbanisation, economic growth, structural changes in the economy, etc.), on energy policy (in particular pricing policies, substitution and energy conservation measures), but also on funds available for investments and for imports that will increase the supply, particularly within the electricity sector. Information on past aggregate growth in energy consumption is not available and is  probably not a very meaningful basis for making projections since the energy sector from a consumption point of view is totally dominated by woodfuels for which reliable information is lacking. A breakdown by energy subsector should give a better basis for making a forecast that may be indicative of the proportions in the supply and demand for energy in year 2000. Except for the case of electricity (planning of new capacity), precision in projections is not decisive for policy issues. 2/ 1.24 A reasonable assumption would be that demand for wood and other biomass would increase by 3-4% per annum over the medium term. This is somewhat higher than the projected population growth rate of 3% p.a., reflecting mainly the increasing use of charcoal and low degree of switching to modern fuels during this period of time. Efficiency measures with respect to consumption and production of woodfuels, as well as the impacts of possibly less easy access to wood, could modify tn_s trend somewhat, but for the projected balance an aggregate growth rate for biomass of 3.6% p.a. is applied. The growth in electricity is determined to a large extent by the rate at which the supply system can be expanded. A growth rate of 6% is considered attainable, down from the rate during the major part of the last decade when expansion in already electrified urban areas was predominant and the first major domestic hydropower scheme came on stream. Demand for petroleum products, primarily for transport, is estimated to grow by some 5% per annum, mainly on the basis of expected increases in GDP and in population of the same order of magnitude as during the larger part of the '80s. No substantial additions to industrial capacity are anticipated. Projected demand is dealt with in more detail in the respective subsector chapters. Table 1.2: PRIMARY ENERGY SUPPLY, 1988 AND 2000 (1,000 TOE) 1988 Share 2000 Share Growth X X rate X Bivmass 1,007 94 1,545 93 3.6 Petroleun products 53 5 93 6 4.8 Electricity 10 1 20 1 6.0 TOTAL 1,070 100 1,658 100 3.7 Source: Mission estimates. 1.25 Globally, total energy demand should increase by 3-4% p.a. until year 2000. The structure of demand as shown in Table 1.2 will still be heavily dominated by woodfuels and other biomass (93%) despite a doubling of the consumption of commercial fuels. In per capita terms, energy consumption increases to only a modest extent, to some 230 kgoe, in primary energy terms. The main reason for this relative stability in the consumption pattern is the expected lack of any major structural or dimensional changes in the Burundian economy or society in general before the turn of the century. 2/ A recapitulation of some of the infornation given in previous paragraphs with some supplements may be usefp. For the period 1980-88 the following average annual rates of increase were registered or are estinwae woodfuels and other biomass: 3%; electricity: 11%; petroleum products: 5%; GDP in real terns: 4%;population: 2.8%.  -8 - 1.26 Until now, relatively modest resources have been devoted to improving energy efficiency in Burundi. The main efforts have been the development and previous attempts at commercialization of improved woodfuel stoves for households and the development of more efficient carbonization methods. Although data are not available for Burundi, experience from other countries would indicate a theoretical potential for energy savings in the order of 10-15% of preserit actual consumption. Despite the fact that the return on activities and measures to conserve energy is generally found to be substantial, the transition from this theoretical potential to actual savings has proved difficult to attain on a broad scale. A conservation scenario based on more systemnatic and sustained energy conservation efforts, desirable as these may be, would not to any significant extent alter the basic proportions in an energy balance for year 2000 from that shown in Table 1.2. Energy and the Commercial Balance 1.27 All petroleum products are imported from, or through, neighboring countries. Electricity originates mainly from domestic plants which, in 1988, accounted for 90% of the energy supplied, the balance being imported from Zaire. Under a protocole agreement between Burundi and Zaire from 1976, the former does not pay for electricity imports from the Ruzizi I power station (within certain quantity and time limits). Therefore, energy imports in Burundi's trade balance relate to the imports of petroleum ptoducts only. For the years 1986 to 1988, petroleum imports accounted for an average of 14% of merchandise imports and absorbed almost a quarter of the receipts from merchandise exports (see Table 1.3). Despite fairly significant increases in the quantity of petroleum products consumed, both the absolute value of petroleum imports and their relative importance vis-a-vis other imports have largely decreased or stagnated in the 1980s, due to the decrease in the world market price of petroleum during those years. This picture will be reversed if the price increases since August 1990 hold up. 1.28 Concerns for the balance of payments and a desir' - reduce the country's dependence on imports in the interest of national security have contributed to efforts on the part of the Government to limit the fuel import bill. These concerns are reflected in the import duties and taxes on petroleum products and in the development of domestic hydroelectric resources despite the availability of low-cost power import alternatives. Table 1.3: ENERGY AND THE COMMERCIAL BALANCE 1986-88 (BUF current millions) 1986 1987 1988 Imports of petroleum products 3,259 3,740 3,804 Merchardise imports (CIF) 23,195 25,465 28,885 Merchandise exports (FOB) 14,744 12,151 17,459 Imports of petroleum as X of total imports 14.1 14.7 13.2 Imports of petroleum as X of total exports 22.1 30.8 21.8 Source: Banque de la RepubLique du Burundi: Rapport Annuel 1988.  l9- Investments in the Energ Sector 1.29 Historically, energy hag had a relatively small share of total public investments. This is not surprising given the dominance of agriculture in the economy. During the Fourth Five Year Development Plan, 1983-87, energy represented 11 % of total public investments which was higher than during the preceding and the following plan periods. The investments in this sector grew at an average rate of 21 % per annum during the years mentioned but growth rates for individual years fluctuated greatly, due to lumpiness of investments dominated by electricity projects. Energy represented 10% of total foreign-financed development expenditures for the 1983-87 period. For 1988 this figure was 8%. With regard to domestically financed development expenditures, the energy sector captured about 1 % of total expenditure for the Fourth Plan period and remained at about the same level in 1988. 1.30 The Government's proposed investment program for the Fifth Five Year Development Plan, 1988-92, reduces energy's share of total investments to 3%, again with projects in the power subsector making up almost the entire energy sector program with 97% of BUF5.1 billion (US$32 million) of which approximately 80% will be represented by expenditures in foreign exchange. The reduction in percentage as well as in amount compared to the preceding plan period is due to the heavy investments in the Rwegura hydropower plant in the early part of the 1980s which alone absorbed about 70% of the sector investmnents. The Govermnent investment plans are discussed in later subsector chapters.  - 10- II. ENERGY INSTITUTIONS AND PLANNING Energy Institutions 2.1 The fundamentally different structures of the respective energy subsectors and their consequential distinct needs in planning and management are broadly reflected in the institutional framework for energy planning and management in Burundi. Planning, implementation and follow-up are generally carried out within each of the main subsectors, while the Direction Generale de l'Energie (DGE) of the Ministere de l'Energie et des Mines (MEM) is in principle responsible for overall planning, provides general guidelines and ensures coordination. Recently, a National Commission for Water and Energy has been created to oversee the national development and use of water and energy resources (see Annex 2.1 for a sector overview). 2.2 The structural characteristics that require different approaches in planning and management may perhaps best be illustrated by starting with the structurally fairly simple electricity sector. This sector provides a service in constantly supplying electricity from a system of fixed installations. The nature of the sector is that of a natural monopoly. Planning is highly technical, investments are large and have a long timc horizon. The petroleum sector on the other hand is basically a comrnmercial sector, in a regulated but competitive market. Operational logistics are important, investments are low (as long as production and refining are not involved). The wood and other biomass sector, which corresponds quite closely to the household energy sector, is maybe the most complex of the energy subsectors in that it ties in so closely with the household, farming and rural economy in general. These structural differences are naturally reflected in the institutional setup of the respective subsectors. 2.3 In the electricity sector, the REGIDESO (the water and electricity authority) is responsible for generation, transmission and distribution to urban areas, while the responsibility for rural areas is placed with the Direction Gdnerale de l'Hydraulique et des Energies Rurales (DGHER) of the MinistOre du Ddveloppement Rural et de l'Artisanat (MDR). REGIDESO is a parastatal organization, reporting to the Ministere de l'Energie et des Mines (MEM). 2.4 This division of responsibilities seems well justified. The two tasks, urban and rural electricity supply are rather distinct in character and call for different organizational approaches. The activtite of an urban supply organization will evolve around the planning, construction and operation of a large integrated generation system and a transmssion and distribution grid. Rural electrification, insofar as it concerns areas that cannot be reached by the grid, means work on a large number of small, isolated schemes. The organization type of REGIDESO, although qualified in technical terms, might not be able to pay enough attention to these smaller schemes, at least unless a special department were created with sufficient motivation for that purpose. The DGHER on the other hand, being part of the Ministry for Rural Development, will have their attention focussed on the rural environment, and can integrate with other departments within the Ministry. The demarcation between the two agencies may however be a  - I1 - problem, as pointed out in Chapter V, depending very much on how each of the agencies perceive the definition of urban versus rural. Some better guidelines should be established, along the lines suggested in Chapter V. The DGHER should also be able to contract technical services from the REGIDESO. 2.5 The REGIDESO is in the process of reforming its organization and procedures, to recover from serious operational and financial diffizulties). Annual subsidies from the Government to the comnpany now represent about 1% of the country's GDP. The improvement plan (Plan de Redressement) is carried out under an agreement with the World Bank within the framework of a Structural Adjustment Loan (for details, see Chapter V). Although at this stage priority must be given to urgent measures for increasing revenues and reducing operating costs, it is desirable, as the organization shapes up in those respects, that the management will also turn its attention to the agency's technical organization, to ensure adequate staffing and sufficient resources for planning, construction and technical operations. At present, staffing seems to be excessive in numbers, more than twice the normal number for this size of operation, the excess being mainly related to the distribution system. Training could raise the efficiency and reduce the number. The engineering staff needs to be strengthened, in particular with respect to maintenance which seems to get little or no attention. 2.6 In the petroleum sector, the central government agency is the Direction Generale du Commerce (DGC), in the Ministere du Commerce et de l'Industrie (MCI), but the ministries of Transport, Finance, and Planning are also to some degree involved. This would seem a logical arrangement, if regulating commercial activity in the sector were the overriding concern. What receives too little attention, though, is the adequacy of supply and the efficiency of the underlying supply arrangements. 2.7 As pointed out in Chapter IV, one of the critical issues is the coordination of petroleum product procurement so as to strengthen the bargaining position of Burundian importers in thte international market. Another is to seek less costly and more reliably functioning alternative overland routes into Burundi. This would require the involvement of a more energy-focussed entity such as the Direction G6ndrale de l'Energie, in parallel with other energy subsectors. A special unit for petroleum is therefore recommended to be established in the DGE, with sufficient professional capability and sufficient authority to address the supply issues as well as storage and distribution (see para. 4.50). Some staff and technical assistance with experience from international petroleum trade and from petroleum marketing would be needed. In purely commercial matters this unit would cooperate closely with the DGC. It should be pointed out, however, that many of the activities in the petroleum subsector are of a commercial nature, the import, wholesale and retail trade in petroleum. prE-ducts involving a number of participants in a competitive market context. The central interest of the Government should, in addition to securing supply, be to promote efficiency, and this is where DGE and others have a role. As an alternative to creating a new unit within DGE, consideration should be given to expanding the role of the Department des Projects (DP) and strengthening it as indicated above. 2.8 The dominant energy subsector in Burundi, wood and other biomass, is up against important challenges both on the supply side, to maintain the supply without seriously depleting the resource base, and on the demand side, to raise the generally very low efficiency in conversion (charcoal)  - 12 - and in end use. On the supply side the central institution is the Departement des Forets (DF) of the Ministbre de l'Amdnagement, du Tourisme et de l'Environnement (MATE). The Departement des Forets is responsible also for promoting efficiency in charcoaling operations. For the considerable share of wood and biomass that is produced in integration with farming, responsibility is shared with the Ministere de l'Agriculture. To address the future challenges within the forestry subsector and, from an energy perspective, those related to the supply of woodfuels in particular, a review of the role and responsibilities of the DF is recommended, as discussed in Chapter HI (para. 3.55). The staff of the DF, even when supplemented with externally financed technical assistance, is small considering the requirements and the urgency of its task and needs to be strengthened. In addition, it is proposed that the Ddpartement des Recherches et Statistiques, in the DGE, with certain responsibilities regarding alternative household technologies, be given a wider role within household energy planning and monitoring in general, whilst leaving the execution and implementation in broad terms with the present organizations (para. 3.57). As indicated by its name, the Minist*re de I'Amenagement, du Tourisme et de l'Environnement furthermore oversees matters related to the environment and land development. Activities related to the environment in Burundi are monitored by departments within the Ministry, in ccoperation with other ministries and departrnents. 2.9 The agency primarily responsible for the promotion of efficiency in end use of wood and other biomass is the Direction Generale de l'Hydraulique et de l'Energie Rurale. The DGHER, as its name indicates, is also responsible for rural electrification and for promotion of alternative energy sources (biogas, solar, wind). The problem of the agency is insufticiency in staff and resources. A large number of extemally financed projects make important contributions to the work but also contribute to the fragmentation of the agency's activities. 2.10 The responsibility for the production and promotion of the use of peat is placed with the Office National dte la Tourbe (ONATOUR), a parastatal company founded in 1977, and reporting to the MEM. ONATOUR's activities in developing end-use equipment and methods (stoves etc), to a considerable extent overlap with those of the DGHER. Transfer of these activities to CEBEA (Centre d'Etudes Burundais des Energies Alternatives) i/ dealing with renewable energy technologies is being considered, allowing ONATOUR then to concentrate on production, promotion and marketing of peat. 2.11 In the field of new and renewable energies, overall responsibility is with two units of the DGE, the Departement des Recherches et des Statistiques (DRS), and Centre d'Etudes Burundais des Energies Alternatives (CEBEA). In addition, DGHER is also involved as indicated above, through the implementation of projects. 2.12 In recognition of the benefits of regional cooperation, Burundi is also an active member in several organizations which promote regional energy development. The first of the-se is the energy affiliate of the Communautd Economique des Pays des Grands Lacs (CEPGL), known as the Organisation de la CEPGL pour l'Energie des Grands Lacs (EGL) which has had its role successively broadened to 3/ In Marcs 1990, responsibilityfor the activities of CEBEA were transferred to DRS pending a review of its activities within the household energy sector.  - 13 - that of a regional institution covering the entire energy sector. In recent years, it has undertaken a variety of planning studies and pilot testing programs of new energy technologies, and it is also involved in improving coordination of power network operations. Furthennore, Burundi is a member of the Organisation pour l'Amenagemerit et le Developpement du Bassin de la Rivibre Kagera (OBK), created by a multi-government treaty to plan and execute projects, including energy sector projects, aimed at an integrated development of the Kagera Bassin region. Burundi is also a member of SINELAC, Societe Internationale de l'Electricite des Pays des Grands Lacs. pverall Policy. Coordination and Planning 2.13 The government agency responsible for the energy sector as a whole is the Direction Generale de l'Energie (DGE) in the Ministry of Energy and Mines, with its departments for Projects, and for Research and Statistics. A Department for Planning is now under consideration. 2.14 The organization of the DGE should reflect the structure of the agency's priority tasks. The foremost task is that of keeping an overview of the energy sector as a whole, assessing requirements and priorities as between subsectors, and giving general guidelines for subsector development. This requires a competent Planning Department, focussing on planning at the energy sector level, as a link bet.ween the country's overall economic planning and the physical, subsector planning which should be the responsibility of the respective subsector institutions. The Planning Department of the DGE would require a strong competence, particularly in economics. The DGE's activity in statistics, as an indispensable basis for planning, should be linked to the Planning Department. The DGE's activities in research would be concerned with technical research, in equipment and methods for better utilization of energy in particular related to households. The activities should be organized in the present Departement des Recherches et Statistiques which should focus on research (and on the planning and monitoring of household energy in general, as mentioned earlier), shedding work on statistics to the new Planning Department. The role of the DGE's Project Department, concerned mainly with projects in the electricity subsector should be carefully considered to avoid duplication with subsector agencies as concerns physical planning. A particular case in point is planning by REGIDESO (see para. 2.18). 2.15 To summarize, it is recommended that the DGE be comprised of three sections, reporting to the Director General, compared to two today (see Annex 2.2): These would be the Planning Department, responsible for giving general guidelines for subsector development, the Project Department involved mainly in overall issues in the electricity and petroleum subsectors, and the Department for Research and Statistics monitoring development within household energy, including alternative technologies. 2.16 An important body is the recently created National Commission for Water and Energy, with sub-commissions for Water and for Energy. The main objective to be pursued by the Commission is to safeguard the water and energy resources and to promote their harmonious and rational utilization. The Commission will i.a. look after the coordination of action and the delimitation of responsibilities among the vario-as institutions in the water and energy sectors. All the ministries involved in these sectors are represented on the commission and the respective sub-commission by their minister or his  - 14 - deputy. Formally, the role of the Commission is consultative to the Government, but once the Commission's recommendations are approved by the Government, they will become official national policy. 2.17 In the initial stage, priority is given to establishing the Sub-commission on Energy, chaired by the Gerteral Director of Energy. The Secretariat of the National Commission for Water and Energy is provided by the DOE. The Commission should lend considerable authority to the DGE and ensure communication in important matters with the ministries involved. 2.18 It is essential that the DGE in its important coordinating role will support and strengthen the respective subsector institutions rather than duplicating or taking over their work. With the power and authority of the DGE, it may be tempting, when weaknesses are identified, to step in and take over the action. Except for emergency situations this would tend in the long run to weaken the subsector. The respective institutions need to be faced with the feedback from the results of their work. Weaknesses should be corrected by strengthening the institution involved and giving it more resources. A case in point is the REGIDESO which should be given full responsibility for planning the expansion of the electricity supply system, which today is done by the DGE. 2.19 Given the weak linkages between energy subsectors in Burundi, for which there are good reasons as commented in para. 1.9 above, management of the sector will be less concerned with coordinating the subsectors to each other and more with the balanced allocation of resources among them. Policy formulation will also be less concerned with the other energy subsectors and more with conditions in those economic sectors which the particular energy subsector serves (biomass with rural development and agriculture, electricity with urban and industrial development, etc.). A formal, top-down planning for an integrated energy sector, starting from the macro level (as proposed for instance by the Energie des Grands Lacs) will hardly be effective, as it rarely is, even in mature economies with strong linkages among sectors. 2.20 Ideally, coordination in a decentralized system would be achieved by establishing uniform investment criteria for linking up with the demand side. With the great dissimilarity between energy subsectors (viz electricity dominated by clearly identifiable projects, the wood and biomass subsector more by ongoing programs and externally financed technical assistance) the use of formal, objective criteria may not always be possible. Setting of priorities may call for judgement by the DGE. In important cases the possibility of referral to the Commission may be very helpful. 2.21 A special problem in coordination is presented by the considerable number of externally financed proj. -ts. This may easily translate into a donor driven energy agenda, something which is the case in Bururdi. Investment plans for the energy sector are not prepared in a coherent and systematic manner and the application of accepted economic criteria for selecting projects is limited. Offers by external donors for financial and technical assistance for a particular project may thus prevail over relevance with respect to national objectives and priorities. Insofar as there is a donor interest in supporting projects in "energy" the DGE and the Commission should be the agencies best suited for directing such project support to where it is most useful. The DGE Planning Department should be  - 15 - responsible for assessing the relative merits of all such projects based on a more rigorous approach to project selection, recommending possible amendments, and keeping track of their implementation. 2.22 In the externally financed Programme Special d'Energie (PSE) the DGE seems to have an efficient instrument for helping to establish a structured approach to energy issues involving many different entities, more specifically, the issue of rural energy with particular emphasis on new and renewable energies. On the whole, where direct support from the DGE would be most needed is in the rural energy sector. DGE should be well placed to take a strong lead in work on the demand side, improving technologies and methods for better energy use - i.a. by cordinating the many donor activities in this area - while tak-ing care not to release other agencies, DGHER, DF, etc., from their responsibilities on the supply side. Recormmendatio 2.23 The main recommendations and conclusions related to institutional matters are: (a) The Direction Generale de l'Energie should have macro-level planning at the general energy sector level as its primary task, overseeing and giving priorities and guidelines for the respective subsector agencies. Physical planning for individual subsectors should be the responsibility of the subsector agency, supervised by the DGE. A Department for Planning in the DGE now being considered should be established as soon as possible; (b) Clear procedures and generally accepted investment criteria to be applied for evaluating projects and programs in the individual energy subsectors need to be elaborated by the Planning Department which also will have an important role of ensuring that these procedures and criteria are applied by the subsector agencies. The acceptance of externally financed projects in the energy sector should be subject to assessment and recommendation by the DGE; (c) An adequate capability for physical planning should be urgently established in REGIDESO and the DGE Planning Department should reduce its involvement correspondingly. The delimitation of responsibilities in rural electrification between the DGHER and REGIDESO should be clarified, along the lines suggested in Chapter V; (d) The DGE should have the responsibility for addressing petroleum supply and demand issues (procurement, transport, storage and pricing) as dealt with in Chapter IV, with the Ministere du Commerce et de l'Industrie continuing to focus on the commercial matters. To avoid creating a new unit, consideration should be given to assigning this role to the present Project Department; and (e) The role of the Departement des Forets should be redefined to meet new challenges, and the DRS should be given broader responsibilities with respect to overall planning and monitoring of household energy and renewable technologies. These issues are dealt with in Chapter m.  - 16 - 2.24 In conclusion, the picture with respect to institutional efficiency in the energy sector is, as might be expected, a varied one. This is, as indicated above, due both to weaknesses within the organizations and to lack of clarity as to specific responsibilities among the institutions involved. However, a firming up of the institutional structure as recommended, particularly the planning activity of the DGE in general, a more integrated approach to household energy and petroleum supply issues, and the activity of the National Commission, should contribute to the setting of clearer priorities and clearer plans for action in the energy sector. Sector level improvements need to be complemented by specific measures to improve performance by the subsector institutions, as proposed in later chapters. 2.25 The indicated reorientation of the DGE will require the addition of a small number of highly qualified key pro.. ,Aonals doing economic and technical analysis and some specialized staff in charge of ope,.ating data bases. For the Planning Department this would mean 2-3 persons with a technical - but even more important - a strong economic background. In the establishment phase, external assistance would be required. Furthermore, the Project Department would need to hire and train two nationals who would be assisted in the early phases by an international petroleum expert and a pricing/fiscal economist, as indicated in Chapter IV. The Department for Research and Statistics would require 2-3 persons with a good background in household energy issues and energy data base and surveys (see Chapter E).  - 17 - III. BIOMASS AND HOUSEHOLD ENERGY Background 3.1 The biomass and household energy scene has not changed much during the 1980's since the first Energy Assessment. Wood remains the primary source of energy (more than 80% of total energy consumption). Deforestation continues to occur locally, but the extent has never been determined due to a lack of reliable data on woody biomass resources. To alleviate the perceived problems of local deforestation and to safeguard the supply of woodfuels in the future, a considerable number of industrial wood plantations have been established through Government and donor financed projects around major urban areas, and a system of rural nurseries has been launched providing seedlings to farmers for individual woodlots. 3.2 It is clear that woodfuels will remain the main source of household energy for several decades since the situation combining high costs of imported fuel and low purchasing power of the population is not likely to change fundamentally in the medium term. The main thrust of the household energy sector policy should therefore focus more on ensuring the availability of sustainable wood supplies and efficiency improvements than on any large scale substitution for woodfuels. It is also evident that the actual supply and consumption of woodfuels need to be known more accurately than is currently the case: large gaps exist in botlh resource and consumption data. Improvements are required in order to develop a well-founded household energy strategy. More and better information is also necessary to determine to what extent the cutting of trees for fuel is responsible for deforestation and environmental degradation. Government Objectives and Policies 3.3 There is no explicit government policy for the household energy sector as such, to set priorities and give guidelines for the activities undertaken to meet the needs for energy in the households. The Fifth Five Year Development Plan, 1988-1992, and the policy document, "Politique Sectorielle du Ministere de l'Energie et des Mines" from 1989, describe the objectives with respect to the supply of energy in rural areas (where more than 90% of the population lives), acknowledge the dependance of the population on woodfuels, and emphasize the need to promote substitution and conservation. The objec- tives and recommendations are couched in general terms, however, are based on limited analyses of the issues involved, but except maybe for the regional planning activities of PSE in Gitega, they do not translate into coherent and concrete policies and programs. Ongoing projects and operations within the sector, covering different types of fuels are to a large extent donor driven and appear not to reflect conscious setting of priorities. 3.4 For the country's main source of energy, wood, however, the Government has adopted a forestry policy, as a basis for the large afforestation programs which have been implemented over the last decade or so. The Government's long-term forestry sector objective is the restitution of tree cover on 20% of the total land area, equivalent to some 550,000 ha of forest and woodland, compared to a  - 18 - rough estimate of present tree coverage of 7%. The adopted strategy is to (a) protect and manage the remaining 42,000 ha of degraded dense mountain forests and 15,000 ha of savannah woodlands; (b) establish new plantations through departmental and communal activities; and (c) promote private tree planting through agroforestry and through individual or collective planting around the households of fuelwood and fruit trees. 3.5 In practice, reforestation mainly through industrial wood plantations has been the principal thrust of past efforts to improve the wood energy demand/supply balance. The impact of these plantations on fuelwood supply has been limited by their inaccessibility and the high costs of wood compared to market prices (see para. 3.27). Current Pattern ad Level of Household Energy Consumption 3.6 Most of the household energy demand is for cooking and is mainly met by woodfuels. Other energy demands are for lighting, ironing, refrigeration, and for operating certain various small appliances, which are met with petroleum products, modest quantities of publicly supplied electricity and by batteries. Home heating does not play a major role in Burundi except in certain high altitude areas. The choice of cooking fuel is mainly determined by the user's income level, habits and location, with a predominance of charcoal in urban areas and firewood in rural areas. 3.7 Table 3.1 shows the level and structure of household energy consumption in Burundi in 1988. Furthermore, projections are made up to year 2000. The figures are given in original units (MT, GWh), in primary energy terms (conversion efficiency of charcoal production and electricity generation included), as well as in energy end use terms. There is a lack of reliable data, and current consumption and projections in this report are based on estimates by the Departement des Recherches et Statistiques (DRS) and the mission (see Annex 3.1). Just as was the case at the time of the previous energy assessment in 1982, the present mission concludes that there is a clear need for improvements with respect to data on energy consimption and recommends a household energy survey (see para. 3.18). 3.8 In primary energy terms, overall household energy consumption is at present 1 million TOE. Of this total, fuelwood (73%), charcoal (16%, but only 3.5% measured in end-use) and agricultural residues (11%) cover 99% of the energy needs of households, the balance being met by electricity and kerosene in minimal quantities. This pattern is well known from ether African countries. 3.9 Total wood consumption for energy purposes amounts to around 2.4 million MT per year and is almost entirely accounted for by households (98%), the balance being used by industry and institutions. 4/ In primary energy terms, close to a quarter of the woodfuel consumed is estimated to be purchased and the remainder collected. A distinction between commercial woodfuels and collected woodfuels is made since the likelihood that woodfuels consumption have a negative impact on the I/ Wood consumptionfor energy purposes by other users (in 1988 estimated at less than 50,00X) MT), although dwarfed by household consumption (2,335,000 MT), is included since it is total wood consumption for energy purposes that later in the report is compared to sustainable supply.  - 19 - environment is much larger for commercial than for collected woodfuels due to the intensive tree felling frequently associated with charcoal production, etc. The share of woodfuel that is commercialized also indicates the extent to which demand management through the use of the price mechanism and taxation is likely to have an effect on wood use and wood felling. Table 3.1: HOUSEHOLD ENERGY CONSUMPTION 1988 Share 1995 a/ 2000 a/ Share (%M t%) Energy consumption (in original units) b/ Wood (000 MT) 1,925 c/ 2,326 2,642 Charcoat It 41 c/ 67 98 Agricultural residues 322 392 452 Peat I 0 0 0 Kerosene o 1 2 2 LPG_d I 0 0 0 Electricity (GWh) 22 33 47 Enerav end use (TOE) Wood 724,847 83.8 875,671 994,471 81.4 Charcoal 29,953 3.5 48,847 71,341 5.9 Agriculturat residues 106,000 12.3 129,294 148,918 12.2 Peat 0 0 0 0 0 Kerosene 1,459 0.2 1,788 2,071 0.2 LPG 141 0 212 259 0 Etectricity 1,859 0.2 2,824 3,976 0.3 Total 864,259 100 1,058,636 1,221,036 100 Primary energy (TOE) Wood 724,847 73.0 875,671 994,471 65.2 Wood tor charcoal e/ 154,635 15.6 252,165 368,212 24.1 Agricultural residues 106,000 10.7 129,294 148,918 9.8 Peat 0 0 0 0 0 Kerosene 1,459 0.1 1,788 2,071 0.1 LPG 141 0 212 259 0 Electricity