Guinea - Household energy strategy

mp- r LM I ( MILA ~~ Energy Sector Management Assistance Programme Household Energy Strategy Report No. 163/94  JOINT UNDP / WORLD BANK ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAMMiE (ESMAP) PURPOSE The Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP) was launched in 1983 to complement the Energy Assessment Programme, established 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 intemational Commission addressed ESMAP's role for the 1990s and, noting the vital role of adequafe 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 conductingEnergy Assessments, performing preinvestment and prefeasib:ity 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 implementing economically and environmentally sound energy strategies. GOVERNANCE AND OPERATIONS ESMAP is governed by a Consultative Group (ESMAP CG), composed of representatives of the LJNDP and World Bank, the governments and institutions providing financial support, and repre- sentatives of the recipients of ESMAP's assistance. The ESMAP CG is chaired by the World Bank's Vice President, Finance and Private Sector Development, 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. ESMAP is staffed by a cadre of engineers, energy planners and economists from the Industry and Energy Department of the World Bank. The Director of this Department is also the Manager of ESMAP, responsible for administering me Programme. 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, Swveden, Switzerland, the United Kingdom, and the United States. FURTHER INFORMATION An up-to-date listing of completed ESMAP projects is appended to this report. For further information or copies of ESMAP reports, contact: ESMAP c/o Industry and Energy Department The World Bank 1818 H Street N.W. Washington, D.C. 20433 U.S.A.  GUINEA HOUSEHOLD ENERGY STRATEGY JANUARY 199  ABREVIATIONS AND ACRONYMS CERESCOR Centre de Recherches Scientifiques de Conakry-Rogban6 DNFC Direction Nationale des For&ts et de la Chasse ESMAP UNDP/World Bank/Bilateral Donors "Energy Sector Management Assistance Program" MARA Ministere d'Agriculture et des Ressources Animales ONAH Office National des Hydrocarbures SEE Secretariat d'Etat aux Energies SNE Soci6te Nationale d ElectricitW TOE Tons of oil equivalent (-43 GJ) kgoe kilo of oil equivalents (=43 MJ) CONVERSION FACTORS Firewood 16 MJ/kg Charcoal 30 MJ/kg Kerosene 35 MJ/liter LPG 45 MJ/kg Diesel 44.7 MJ/k I kWh 3.6 MJ EXCHANGE RATE 1US$ = FG 655 (1990) lUS$ = FG 710 (1991) 1US$ = FG 918 (1992)  TABLE OF CONTENTS EXECUTIVE SUMMARY .................. i I. INTRODUCTION A. Background for Guinea Household Energy Project .................................................. I B. Project Outputs. . . 1 (a) Institutional Strengthening. I (b) Studies .I II. COUNTRY BACKGROUND. 3 A. Economic and Demographic Trends. 3 (a) Population. 3 (b) GDP. 3 (c) Economic Policy. 3 B. The Energy Sector.. 4 (a) National Energy Balance. 4 (b) Sector Institutions. 5 lI. NATIONAL DEMAND FOR AND SUPPLY OF HOUSEHOLD FUELS. 7 A. The Macro Picture of Household Energy Demand. 7 (a) The Relative Size of Rural and Urban Demand. 7 (b) The Market Shares of Household Fuels. 7 (c) The Informal Sector. 8 B. The Macro Picture of Woodfuel Supply and Demand . . 9 (a) The Economic Scope of the Biomass Supply Chain. 9 (b) The Woodfuel Demand - Supply Balance in Guinea. 9 IV. THE CHARACTERISTICS OF URBAN HOUSEHOLD ENERGY DEMAND ...15 A. Average Consumption of Fuels in Conakry Households . . .15 (a) Consumption of Fuelwood and of Charcoal .15 (b) The Consumption of Modern Fuels .16 B. Socio-Economic Determinants of Demand . .............................. 16 (a) Needs ............................. 16 (b) Household Income ............................. 16 (c) Fuel Prices ............................. 18 (d) Relative Fuel Prices ............................. 18 (e) Prices and Types of Stoves .............................. l9 C. Household Expenditures on Woodfuels and LPG for Cooking ...19 (a) Level of Daily Expenditures .................................................... 19 (b) Consequences for the Economics of Improved Stoves .20 V. THE WOODFUELS SUPPLY CHAIN ..21 A. The Fuelwood Supply Chain ..21 ka) Organisation of Supply in Rural Areas .21 (b) The Organisation of Supply in Urban Areas .21 B. The Charcoal Supply Chain .. ................................ 22 (a) Producer Regions .22 (b) Producers .22 (c) Wholesalers and Retailers .23 C. The Price Structure for Woodfuels in Conakry .. 23 (a) The Price Structure of Fuelwood .23 (b) The Price Structure for Charcoal .24  VI. THE SUPPLY OF SUBSTITUTE FUELS ............................................................... 26 A. Introduction ... ............................................................ 26 (a) General Situation for the Substitute Fuels ................................................... 26 (b) Barriers to the use of Substitute Fuels ......................................................... 27 B. Distribution of Kerosene and of Gasoline . . ............................................................. 27 C. LPG Distribution ... ............................................................ 28 (a) Infrastructure .......28 (b) Marketing Strategies ............................................................... 28 VII. HOUSEHOLD ENERGY POLICIES IN GUINEA . .......................................................... 30 A. PD 'it Government Strategy ................................................................ 30 B. Go. .-ient Policies Toward the Regulation and Taxation of Woodfuel Supply ..... 31 (a) Forest Legislation ............................................................... 31 (b) Taxation Policies ............................................................... 31 (c) Attempts to Rationalize Charcoal Production ......................... .................... 32 (d) Fuelwood Production Projects ............................................................... 33 C. Demand Side Policies: Promotion of Improved Stoves .......... .................................... 33 (a) Household Stoves ............................................................... 33 (b) Improved Stoves for the Informal Sector .................................................... 34 D. Towards a New Household Energy Strategy . ............................................................. 34 (a) The Need for a Reform ............................................................... 34 (b) A Model for the Household Energy Situation 20 Years from Now .............. 35 ANNEXES Annex I: List of background studies prepared by the Guinea Household Energy Project .37 Annex 11.1: Energy Consumption Statistics, Guinea 1990 .38 Annex 11.2: Forecasts for Household and Informal Sector Consumption, 1990-2009, Rural Areas and Major Cities .40 Annex 11.3: Classification of Biomass Resources in Guinea Maritime .43 Annex II.4: Price Structures for Petroleum Products, Conakry, 1990 .49 Annex II.5: Price Structures for Fuelwood and for Charcoal, 1990. 5 1 Annex 11.6: Relative Costs of Cooking .56 Annex II.7: Statistics on the Supply of Woodfuels by Orgin and Means of Transport ........................................... 57 LIST OF TABLES Table 2.1: Final Energy Consumption by Sector, 1989/1990 .....................................................4 Table 3.1: Rural and Urban Household/Informal Sector Energy Consumption ..........................7 Table 3.2: Household and Informal Sector Energy Demand in Conakry ...................................8 Table 3.3: Estimation of Forestry Resources in Guinea, 1990 ....................................................9 Table 3.4: Annual Accessible Natural Production of Fuelwood ................................................. 10 Table 3.5: Use of Mangrove Wood, 1990 ......................................................... 12 Table 3.6: Estimated Volumes of Biomass in Guinea Maritime .................................................. 13 Table 3.7: Population Projections and Household Woodfuels Demand Estimates for Conakry ......................................................... 13 Table 4.1: Household Woodfuel Consumption in Conakry, 1990 .............................................. 15 Table 4.2: Daily Household Market Expenditures by Socio-Economic Group .......................... 17 Table 4.3: Relative Use of Fuel for Cooking in Conakry During the Rainy Season by Socio Economic Group ......................................................... 17 Table 4.4: Evolution of Woodfuel Prices, 1985-1990 ......................................................... 18 Table 4.5: The Relative Prices of Household Fuels in Conakry,1990 ......................................... 19 Table 4.6: Market Share and Cost of Stoves for Principal Use in Conakry ................................. 20  Table 5.1: Fuelwood Price Structures, Conakry 1990 ....................................................... 24 Table 5.2: Price Structure for Charcoal, Conakry, September - October 1990 ........................... 25 Table 6.1: Price Structure of Kerosene and Gasoil Prices in Conakry,1990 ................................ 28 Table 6.2: Upfront Investment for LPG Users, 2.75 kg Bottle .................................................... 29 LIST OF FIGURES Figure 3.1: Projections for Rural and Urban Woodfuels Demand ............................................I... I I  EXECUTIVE SUMMARY 1. Woodfuels (fuelwood and charcoal) are the major source of energy in Guinea. that is used by 99% of households. Charcoal is only an important fuel in Conakry, however. The natural production of fuelwood is estimated to be twice the projected demand by 2010. It therefore would seem that Guinea does not have to worry about deforestation and fuelwood problems. However, the uncontroled, concentrated and intense exploitat' an of the natural forest cover in densely populated and highly urbanized (90%) Guinea-Maritime, which is the focus of this report, has resulted in growing degradation of the forest cover in general and of the important coastal mangroves in particular. The market efficiently supplies the consumer in Conakry with a steady, uninterrupted supply of woodfuels at low prices. However, these low prices are below their economic cost, due to the fact that woodfuel taxes are insignificant and fiscal compliance rate is low. Despite these low prices the percentage of household income spend on household fuels in Conakry Is very high compared to other West-African countries. Without significant interfuel substitution, which is rendered difficult by low income levels and an inadequate modem fuei distribution system, future demand for fuelwood and charcoal in Conakry will cause environmental problems, in particular in the coastal mangroves. Given the low woodfuel prices and a lack of interest in demand management by consumers; the low fuelwood tax and low fiscal compliance rate, and the growing degradation of the natural forest cover in vulnerable areas a strategy is proposed that alms to [a] create economic incentives for #%e rural population in Guinea-Maaritime to manage the natural forest rationally; lb] protect the environments on which rural dwellers depend for their survival; [c] stabilize employment opportunities in the woodfuel trade; [d] encourage the use of improved wood and charcoal stoves to curb rising urban woodfuel demand; and [e] stimulate substitution of mangrove wood by thermal solar power for rural salt production and demand management measures for rural fish smoking activities. A. Present Situation 2. In 1990, the energy demand of the household and informal sector amounted to 0.95 million toe or 61% of final energy demand in Guinea. Woodfuels cover more than 90% of this demand. Rural and urban residents use mostly fuelwood; in Conakry, the consumption of charcoal Is important as well. 3. The use of modern fuels in households is still in the incipient stage. The rral population uses hardly any modem fuels. 20% of urban households have access to electricity, while most urban households use gasoil as their fuel for lighting. Less than 2% of the urban households possess an LPG or a kerosene stove. 4. The quality of the distribution chain for modem fuels is low. Electricity consumers experience frequent brown-outs and black-outs. Irregular supplies of kerosene and gasoline at the service stations lead to high costs of retail distribution with a mark-up over prices at the pump of about 80%. The kerosene stoves that are marketed are of poor quality and can only be used for minor cooking tasks. The three LPG distributing companies charae different prices for a recharge. The cost of using either LPG or kerosene/gasoline for cooking is three to four times as high as the cost of using woodfuel stoves. 5. The quality of the distribution chain for woodfuels, on the contrary, is excellent. The fuelwood needs of the majority of the population are covered by self-collected fuelwood that is readily available; and the commercial system of woodfuels production and distribution was and is able to fully cover the commercial demand for fuel of the growing urban population. Annual trade tumover is about 7 billion FG (or US$ 10 million). The employment in the trade amounts to about 11,700 manyears, of which some 2,700 are within wood harvesting and the production of charcoal, 4,600 in transport and wholesale activities, and 4,400 are in retailing. Because of the widespWread use of part time workers, the total number of persons employed by the sector is likely to be 25,0- 30,000.  - ii - 6. The forest resource base is favorable for a biomass oriented demand structure. Almost 80% of the land is covered by woody biomass (including fallows) and thanks to favorable soil conditions and high precipitation, the annual productivity of tree growth and the natural regeneration of cut forests is high. If the resource base is exploited rationally, the (growing) demand fGr woodfuels can be covered in a susmainable manner. The problem is that no incentives exist to promote a rational management of the resource base. The (practical) freedom to cut wood almost anywhere makes standing wood a free good, and there are no legal ownership rights to managed resources (except for commercially managel plantations). 7. The rich biormass resource base and the elastic stucture of supply allowed the Government to follow a non-interventionist policy in the woodfuel sector. Currently, there is no effective control over woodfuel production and the legal restrictions on wood cutting are ignored. Neither the wood cutters, nor the production areas nor the produced quantities are known or controlled in a satisfactory manner. The taxation of woodfuels serves no regulatory objective, its level is marginal and amounts to only 3% of the retail price. Moreover, it is levied in an administratively cumbersome and costly manner, while it has a low rate of compliance. 8. The nassive policy of non-intervention in the commercial woodfuel chain is coming under pressure from demographic forces. The growing rural population's need for farm land affects the supply side as wooded areas are felled for cultivation and the fallow cycles are being reduced. The growth of the population leads to a similar growth in the demand for woodfuels; while increasing urbanisation rates accelerate the market shares of traded fuelwood in general and of charcoal in particular. Between 1990 and 2009, the consumption of woodfuels will increase by 80% (from 2.6 mt. to 4.6 mt.), while the consumption of commercially traded woodfuels will increase 180% (from 0.8 to 2.2 million tons fuelwood equivalent). 9. The annual natural producdon of accessible fuelwood will be twice as high as the expected demand in 2010. Thus, demand can be covered in a sustainable manner, if the supply is properly managed and its exploitation is subjected to some form of landuse planning. But because of regional disparities between the local availability of sustainable fuelwood supply and the local demand for woodfuels, a continuation of present "laissez-faire" policies will lead to an overexploitation of woodfuei resources in some regions. Around the larger urban centers, the negative combined effects of the pressures from farm land, and from urban woodfuel demand are becoming increasingly visible. 10. The situation is particularly acute in Guinea Maritime. It has 30% of the national population, but only 15% of the land area and an urbanization rate of 80-90% versus the national average of 34%. In order to cover urban demand, charcoal makers are clearing forest resources in the inner Savannah areas. The prohibition since 1989 against charcoaling by the regional authorities in the prefectures of Dubreka and Forecariah is ignored. At the coast, the increasing cutting of the Mangrove resources north and south of Conakry for fuelwood gives rise to concern over the impact on, inter alia, local fishery resources. 1 The authorities in the SEE (Secretariat dEtat aux Energies) and the DNCF (Direction G 6rale Nationale des Forets et Chasse) are aware of the problems and have launched projects that seek to improve the situation. Most of the projects were in the area of energy efficiency and were failures. Since 1983, the SEE has run a program to dissiminate improved household stoves In Conakry. Yet in 1990, less than 2% of households in Conakry possessed an improved stove. During the same period, improved stove programs in Burkina Faso and in Niger achieved a penetration rate of 30-40% in the urban households. A prototype for an improved stove for fish smoking was tested, but rejected by the end users because of claims that its use led to a change in the taste of the fish products. In 1989, a project was initiated to disseminate improved charcoaling techniques among professional charcoalers in the prefecture of Dubreka. But because of a ban on charcoaling of the prefectoral authorities, the same year, the program had to be stopped without results. The DNCF is trying to reorganise its activities from a repressive orientation to become a provider of advise and technical services to the local communities. Little has been achieved so far in practice, although a project to establish fuelwood plantations is under implementation in Guinea Maritime. A positive  - iii - aspect of the reforms is that the DNCF has become attached to the Ministry of Agriculture and that attempts are made to integrate the forestry arid agricultural extension services at local level. 12. In part, the failures of tne projects can be attributed to errors in the approach that was used. But the main reasons for the disappointing situation can be sought in the weak financial situation of the involved institutions; and in the fact that the projects were isolated initiatives that were not part of an integrated sector strategy. No attempts were made, for example, to define a new pricing policy for household energy that could promote the achievement of the overall objectives for household energy policy. B. Guidelines for the formulation of a Household Energy Strategy 13. The key issue for Guinea's energy sector is to achieve an ecologicaily sustainable balance between the demand and the supply of fuelwood with a minimum of consequences on the import of oil products. Since the financial resources are scarce, and the institutional infrastructure is iveak, household energy policy during thc next decade should focus on regulating the supply and the demand of woodfuels in Guinea Maritime. It is the area with the fastest growing level of demand for woodfuels and it has a topography that facilitates control of the incoming supply. (a) Oblectives for Household Energ Policy 14. The objective for household energy policy during the 1990s Is to prepare the legislative and organisadonal groundwork for a modem system of household energy production and distribution.1 The doyev ten,p1 objeives are: (i) to restructure the fuelwood sector around Conakry so that supply in the medium term will cwme from managed forestry resources (ii) to promote fuelwood conservation in the larger urban centers through the economic pricing of fuelwood and charcoal, the provision of improved stoves and improvements in the distribution and the suoply of modem fuels 15. The immediate objectives of this policy are: (a) To increase the range of choices for consumers with regard to the types of stoves; (b) to focus the fuelwood management activities of the DNCF on the mangroves and on the charcoal producing areas of Guinea Maritime; (c) to strengthen the, institutional capacity of the SEE and the DNCF to monitor and to regulate the activities in the sector, and (d) to increase the level of taxation on woodfuels and to rationalize the system of tax collection. (b) InlividImL rngrammt. 16. The operational implications of these objectives are spli up into the four program proposals that are outlined below. The programs consist of individual projects for which finance can be sought from bilateral or multilateral donors, and present an integrated package of mutually reinforcing measures on the demand and the supply side. The first program, promotion of energy savings", concerns demand management. The second program, "promotion of the management of fuelwood resources", deals with supply management. The third program, "strengthening the taxation of woodfuels", is an instument to further the goals of both the demand and the supply side measures. The fourth program, "promotion of fuel switching", has a demand management objective, but focuses on means to improve the supply of the substitute fuels. 17. The programs have different time frames and different impact. The programs with the fastest Impact are the programs for energy saving and for pricing policy. Lack of data on the economic value of fuelwood in Guinea prevented the calculation of estimates on the economic rates of return for the different programs. But it is known from other countries, that the IRRs of successful I Chapter VII provides a vision of how a modern energy sector could look like in Guinea twenty years from now. The policy objectives and the content of the program proposas are deduced from this vision.  - iv - improved stove projects are very high, and that the cost of investment is rather low. On the other hand, howevet, the reduction in household energy demand that can be achieved by a successful energy saving program is small when compared to the absolute oopulation induced increase in demand. Within the de.cade of the 1990s. the growth ot the urban population will increase the commercial demand for woodfuels by more than 70%. If the improved stove program attains the proposed 30% penetratdon target, it will reduce the absoiute level of this total demand by only 6-8% - the acquisition of an improved stove by a household leads to savings of no more than 20% in use. Higher prices as such will reduce demand. But it is known from neighboring countries, that the ptice elasticity of demand ; no more than -0.1. 18. The economic rate of return of projects that ain tc increase the sustainability of woodfued production is less favorable than fo. energy saving projects, and the impact will only show up in the longer tum. But given the projected demand trends, any real impact of household energy policy will depend on the success of such measures. Finally, fuel switching to modern fuels is a solution for the long run, and will in part depend on an increase in the income per capita. Programme I: Promotion of Energy Savings Project 1.1: Improve Energy Efficiency in the Informal Sector 19. The informal sector accounts for close to 30% of the commercial woodfuel demand In Guinea Conakry. Since more than 90% of the sector's demand is concentrated in four-five energy Intensive industries, energy saving interventions can be precisely targeted. Ranked by order of priority, the project aims to introduce energy saving technologies in salt production, flsh smoking and urban bakeries. 20. Salt is produced in the mangroves in a very energy inefficient way and consumed an estimated 93,000 tons of fuelwood in 1990. From an economic point of view, the national benefits from the production can hardly justify the economic cost of the consumed wood. But salt extraction is economically important for the vilages along the coast, and provides subsistence for more than 8,000 households. A ban on salt production in the mangroves is therefore, hardly feasible. 21. Instead, the SEE in cooperation with CERESCOR and a leading foreign research institution should investigate the possibility of using solar energy systems as a source of process heat for salt extraction. If the investigation shows that use of a solar based energy technology is technically and practically feasible, the Govemnment should subject salt extraction to a system of licenses. Licensed operators should be required to use the developed solar energy technology, which would be leased to them at an annual cost that is close to the financial opportunity cost to the operators of using fuelwood from the mangroves for process heat. 22. The annual lease fee will be far below the amortised cosi of the equipment. Therefore, donor finance is needed to cover the cost of the equipment. From a strict economic point of view it would probably be cheaper to import the salt instead. But in view of the increasing willingness of the international donor community to finance environmental programs, the opportmity cost to Guinea of receiving the finance may be close to zero - the cost may be born by other pote.tial receiving countries instead. The quantitative objective of the program for the year 2000 Is to switch the energy consumption of 90% of salt production to solar energy, thereby saving some 80-120,000 tons of mangrove wood, depending on the development of the demand for salt. 23. The drying a.d smoking of fish consumes an estimated 54,000 tons of fuelwood per year, most of which comes from the mangroves. Since the previously developed improved stoves, did not meet the user requirements in terms of taste preservation and ease of use, the SEE in cooperation with CERESCOR and an appropriate foreign research institute should attempt to develop one or two new protoypes of improved stoves. If the development efforts are succesful, a campaign for the diffusion of these stoves should be implemented. The quantitative objective for the campaign should be to achieve a penetration rate of 90% within the year 2000. If such stoves can save 20% of energy,  such a program could save 10-17,000 tons of fuelwood per year, depending on the evolution of demand. 24. Finally, a similar research and an oven diffusion program should be attempted for the urban bakeries. 25. Charcoaling is an area, where the SEE has atempted to introduce new techniques with higher yields. However, based on the experience of other countries that like Guinea have a long tradition of professional charcoaling (e.g. Ghana), it is unlikely that an energy efficiency program for charcoalers will be successful. The professional charcoalers have developed a high level of energy efficiency within the limits of their traditional techniques. New low cost improved techniques like the Casamance kiln are only slightly more energy efficient. Of more immediate impact will be an effective stumpage fee systenm that is based on the amount carbonized fuelwood rather than on the quantity of charcoal produced. Project 1.2: Diffusion of Imp__ed som Stoves 26. The SEE in its Improved stove project has marketed two improved charcoal-cum- fuelwood stoves that both have lead to resonable savings in energy. The Kalowm stove is a slow cooker, because of a low maximum power, whereas the Mamou stove is to time savings as well. The dissemination of the stoves has been low, because they are considerably more expensive than the traditional maigache stoves although they are produced by the same type of informal sector metalshops. The reasons is that the latter is produced by leftovers of metal from the production of other goods in the workshops, whereas the improved stoves have to be made from whole new metal plates. 27. Thb SEE should seek to have these stoves produced by altemative metal workshops that use scrap metal In their production. These producers have to be tained, and a maketing campaign has to be organised for the promotion of the stoves. The quantitative target for the campaign should be to that one third of urban households use Improved charcoal an fuelwood stoves by the year 2000. This would lead to a saving of 5,000 tos of charcoal and of 20,000 tons of fuelwood. Programme II: Promotion of the Management of Wood Resources 28. The aim of any forest management operation is the sustainable provision of goods and services from the forest area. In the case of Guinea, these goods and services include (depending on the specific site being managed): fuelwood, poles, timber for local building constuction, forage, medicine and other minor but impotant products for the nral population. Even modest gins in sustainable productivity could have a significant impact on the fuelwood supply. Preliminary data suggest that the cost may be no more than US$200ihectare to restore and rebilitate the productive potential of even fairly degraded forest ares. 29. Yet, inspite of favorable natural condidons, commercial fuelwood reforestation schemes are unlikely to become economically viable during the 1990s. This leaves two main avenues to increase supply: (a) Closely coordinating energy policy and agricultural development policy to ensure that a maximum of the wood resources cleared for agricultural expansion are recovered for energy purposes and are not bumed on-site; and (b) increasing the producdvity of the natura forests and of forest falows through the introduction of natural forest managemenL 30. The immediate priority of resource management In the 1990s Is to Implement the Schema Directeur des Mangroves. Next, there Is a need to train DNFC staff in the techniques of land use planning, the organisation of management schemes for forest management involving local villages and in the provision of technical services to the local management cooperatives that am formed.  - vi - Programme HI: Strenghtening of the Taxation of Woodfuels 31. A revision of the pricing and taxation policies for woodfuels is a condition for the attainment of the policy targets for the other programs. The taxation system needs a complete overhaul: The level oi taxation has to be raised from the present marginal 1% of retail prices to promote the objectives for demand management; the design of the taxation system has to be changed to prortiote a management of the resource base; and the administration of the taxation system has to be simplified to save costs and to increase compliance. lTe primarv objective of taxation olicv for household energy should be to correct market imperfections that prevent prices on the market to reflect the correct economic cost of the fuels. 32. At present, the free access to standing wood leads to consumer prices for woodfuels that do not reflect the proper economic cost of the fuels. No proper estimates exist of the economic cost of standing (fuel)wood. But it could be up to 10 FG per kg. This amount is composed of thre different schedules, i.e.: (i) a management fee required to cover the labor and other cost necessary to manage the harvested forest area on a sustained basis and which is estimated to be FG 6/kg; (ii) a fee to cover the cost of operating a mral woodfuel market through which all woodfuels from a managed forest area will be marketed. This fee is estimated to be FO 2/kg, and (iii) an administrative fee of FO 2/kg necessary to cover the cost of the woodfuel control and monitoring system at the entry point into Conakry. If this assumption is correct, the retail prices of fuelwood on the market in Conakry should be raised 40% through taxation, and the prices of charcoal by 50%. The increase in woodfuel pricing should be implemented stepwise over a five year period. That is, full economic cost pricing should be achieved by the end of 1997. 33. Such a level of taxation would convey the correct pricing signals to the consumer of the cost of his fuel use to society and encourage a switch to the use of improved stoves in households. But it is equally important to design the taxation system in such a way that it provides incentives to investments that increase the productivity of the resource base. Fuelwood from non-managed resources should be taxed fully to reflect the cost of replacement and of control The taxation of managed fuels should only reflect the cost to the forestry service of providing technical assistance to the producers and of administering the needed land use planning. Finally, the taxation should promote a maximum exploitation of the wood resources for fuelwood that are on land that is cleared for agriculture. 34. To achieve these objectives, the system of levying the tax has to be simplified. At present, the taxation of woodfuels takes place at three levels: The producer is subject to pay fees for his cutting permits; the transporter for his transport permits; and the wholesaler for his storage permits. This system should be replaced by a single taxation of charcoal and of fuelwood at the points of entry to Conakry. The fuelwood and charcoal from the interior savannah areas comes by road. Since only two main roads lead to Conakry, the taxation of these resources can take place at the check point at km. 36. The fuelwood from the mangroves come by boat to the wharves, and the levy on this fuel should take place there. 35. To ensure compliance, the levying of taxes has to be closely monitored. Through the surveys, the SEE has information on the daily amounts that enter Conakry. Therefore, the data exists to permit a comparison of the daily or weekly tax receipts with the the amounts that can be expected during the particular season. The daily receipts should be registered at the control stations, and weekly reports be prepared. 36. In order to provide incentives for investments in the management of resources, the DNFC should hand over tax exemption tickets for specified quantities of fuelwood that correspond to the managed production from cooperatives that prepare management plans. The receipt of these tickets should be subject to a fee, that reflects the cost of technical services that the DNCF provides to the cooperadves. Similar tax exemption tickets should be issued to farmers that clear land. The quandty of tax exempted fuelwood should equal the fuelwood quota fixed for the land. The farmer should pay a fee for the tax exemption that equals say 50% of the value for tax exemption.  - vii - Programme IV: Promotion of Fuel Switching 37. The urban household consumers for modem fuels can be divided Into two categories: The minority of relatively wefl off consumers that can afford to pay for electricity Installations and for LPG as a source for cooking, and the majority of low Income households to whom only kerosene and gasoil as sources for lighting are of relevance. For both consumers the problem is the same: The high cost of the gross inefficiencies of the public supply companies. The key to a better situation in the sector is to implement the planned privatisation of the hydrocarbon sector, and to continue the restructuring of ENELGUT that has started in 1990. 38. The elimination of ONAH, the national oil company, from the national maiket and its replacement by international professional oil companies will by Itself improve the distibution of oil products. Since the supply of diesel and of kerosene at the service stations wil become regularir4, the retail price of both fuels should fall, as It becomes easier for the smal retailers to acquire the fuels. Further price reductions in the retail margin due to higher efficiencies might be achieved, if the oil companies invest in small tankers to supply kerosene and gasoU directly to the barrels of te small "wholesalers/retaUers" that operate in the market as intermediaries. 39. Several investors are ready to invest in the establishment of small bottling plants and LPG receiving facilities at the harbor. The Govemment should speed up the approval process and avoid that artificial obstacles are set up by the bureaucracy. 40. Finally, the Govermment should test alternative kerosene stoves on the market, that are better adapted to the cooking needs of the local cuisine.  - viii - C. The Cost and the Expected ResulWt of the Progrm ;-vings in %ofyear Coat of pogam Impact. Savigs in tos 2000=sect comBnonetsUS$ Charcoal Fulwood demad PrgammeI: -Renewableeney 500,000 80.000 11 for salt production - New stoves for fish 250,000 smobng Neow stoves for urban 17,000 2 bakeries - hnproved stoves for households 250,000 5,000 20,000 2 -ScheinaDireciur 200,000 des Mangroves - Taining in land use 500,000 planning and extension service - Studies 100,000 -Training 50,000 - Equipment 50,000 Program IV: - Testing of new 250,000 15,000 4 stoves and of new distribution systems for kesene - Total 3,950,000 S,000 182,000 19  I. INTRODUCTION A. Background for Guinea Household Energy Project 1.1 During the nineties, Guinea must deal with four major energy problems: (a) dependence on imported oil for petroleum products with its ensuing foreign exchange burden (b) unreliable and insufficient distribution system for petroleum products (c) unreliable and insufficient public electricity supply (d) persistent and growing demand for fuelwood and charcoal as an energy source, which is increasingly contributing to deforestation. 1.2 The World Bank has provided assistance to the Govemment of Guinea in the formulation of policies and in the provision of finance in all four areas. The most important projects since the mid-1980s concern assistance to the reorganisation of the power sector and of petroleum distribution respectively. 1.3 In 1986, the UNDP-World Bank-Bilateral Donors "Energy Sector Management Assistance Program" (ESMAP) published the report "Guinee - Problemes et choix 6nergetiques", which, inter alia, pointed to the need to elaborate a strategy for the household energy sector. In collaboration with the Government of Guinea, ESMAP undertook the preparation of an urban household energy strategy and action program in 1990. Because of limited resources, the work concentrated on the priority issue, the coverage of household demand in Conakry, the capital of Guinea, and its impact on the supply from the Guinea Maritime Province. 1.4 The present report is the result of a collaborative venture between ESMAP and the Government of Guinea represented by the Secretariat dEtat aux Energies (SEE), and the Direction Nationale des Forets et de la Chasse (DNFC). The report's objective is to outline a strategy which ensures household demand for energy in Guinea Maritime is covered in a least cost manner to society, including a minimisation of the environmental costs. B. Project Outputs (a) Institutional Strengthening 1.5 The process of preparing the report was considered to be as important as its final product, the strategy. The design of the project targeted the preparation of the strategy as a means to strengthen the know-how of the national staff that deal with household energy issues. Throughout the course of this study, the ESMAP consultants worked closely together with staff from the two counterpart institutions and from the National Research Center, CERESCOR. Training was provided to the counterparts through "learning by doing" and through more formal training sessions in key analytical household energy issues, in the preparation and implementation of surveys, in data processing techniques and the formulation for operational strategies. (b) Studies 1.6 The field activities of the international consultants and the Govemment staff began in June 1990 and ended in December 1990. The activities produced background studies in the following areas:  -2- Demand (i) creation of a Data Base on the pattem of household energy consumption based on an energy survey of more than 450 household in Conakry (ii) a sirvey and study of the consumption of fuelwood ("bois de mangrove") for the smoking of fish Woodfuel Production and Supply (iii) a forestry management study and a study of the potential biomass resources in Guinea Maritime. (iv) a survey and study of the structure of charcoal and fuelwood production and trade as well as the effectiveness of government measures to control it (v) surveys of seasonal changes in fuelwood and charcoal supply during the rainy and the dry season (vi) several weight and price studies for the relevant fuels. Analysis of the price difference In the dry season, rainy season and before and during the Golf Crisis Distribution of Household Petroleum Products (vii) a study of the distribution of kerosene Rnd gasoil for household consumpdon (viii) a study of LPG distribution and of the advantages and disadvantages of basing the "mass" promotion of LPG on the dissemination of LPG-stoves for use with small (2.7 kg) cylinders Imnwmvd Stoves (ix) testing of stove efficiency (improved wood stoves, kerosene LPG stoves) (x) a study of the production and marketing structure for improved stoves 1.7 A list of the studies prepared by internadonal and national staff for this project, is found in Annex 1.  -3 - II. COUNTRY BACKGROUND A. Economic and Demographic Trends (a) Popuation 2.1 In 1990, Guinea had a population of 5.8 million. The annual growth of the population averaged 2.5% during the 1980s, and is expected to increase to 2.8% per year during the 1990s. Thus, at the end of this century, the population is projected to reach 8 million, with the urban population reaching 41% of the total, or 3.4 million. 34% of the population live in urban areas. The growth rate of the urban population of 5.7% Is much higher than the growth rate of the rural population. 2.2 1.04 million people (half of the urban population) live In Conakry, the capital. The annual growth rate in Conakry during the 1980s averaged 5.6%. If this growth rate continues over the next 10 years, the city will have a population of 1,8 million in year 2000. The growth rate can easily increase due to an uncontrolled immigration, such as caused by the civil war in Liberia. In 1990 Govenmment officials estimate that there were at least 400,000 refugees from Liberia in the country, of which more than 100,000 had moved to Conakry. (b) O& 2.3 Guinea is one of the least-developed and poorest countries in the wodd, with a uer cjita in 1989 of USD 430. Mining (more than 20% of GDP) and agricuture (30% of GDP) are the most important economic activities in Guinea providing employment for almost 80% of the total population. Services accounted for 38% and manufacturing 3% of GDP. 2.4 The mining sector produces 90 % of the county's exports. Guinea's mineral potential makes it one of Africa's resource-rich countries. The country has two-thirds of the worlds' known bauxite reserves, and a substantial amount of gold and diamond production. Potential deposits of other minerals, such as lead, zinc, silver, uranium, cobalt, nickel and platinum have aso been identified in the country. 2.5 Guinea has a wet rainy season lasting for 5 months with a rainfall of more than 3000 mms, followed by a dry period of 7 months. The soil Is excellent in most parts of Guinea and especially in the Guinea Maritime area. The wide range of natural resources allows a diversified agricultural production. Plantation agriculture, mainly bananas, pineapples, palm kemels and coffee, provided much of the export eamings and public revenue up to the early 1960s. The data from 1960-1985 are unreliable. But it is evident that per capita agricultal output and the quality of the crop declined substantially. Guinea used to be a exporter of agricul products. Now it depends on imports to feed its gmwing urban population. Exports were directed to Eastern Bloc partners in compensation for the loss of the convertible currency markets. But this shift in agricultural trading patterns diminished Guinea's long-term ability to regain access to other markets, especially in Westem Eurjpe, where quality requirements are more stringent 2.6 Production has begun to suffer because of the poor structre of land and soil. The soil is degraded due to the pressure of the growing agriculturd population living on the avaiable resources of land, which begins to undermine the traditional metiods of shifting cultivation. (c) Economic Policy 2.7 Despite a favorable agricultural, mineral and hydropower potential, Guinea's economic performance since its Independence in 1958, has been disappointing. The main causal factors were bad management and poorly conceived policies of the Sekou Toure Adminison. The economic development outside the agricultural sector was based on production by state companies.  -4 - But while the development of the private sector was blocked by public intervention, inadequate tariff and overemployment policies of the public sector, led to the financial ruin of the public companies and a severe decline in the levels of service. 2.8 The new Govemment, which took over in 1985, has implemented a new economic policy based on: (i) public stabilisation, (ii) institutional reform and (iii) the promotion of initiatives from the private sector. B. The Energy Sector (a) National Energy Balance 2.9 Guinea is relatively favorably endowed with energy resources. The country has large biomass resources and a large potential for hydropower. 2.10 Guinea's energy consumption in 1989 of 1.6 million toe, is one of the world's lowest, whether expressed in terms of the final energy consumption per capita of 270 kgoe, or in terms of the per capita consumption of oil products of 96 kgoe. Excluding the mining sector, the consumption figures drop to 197 kgoe and 25 kgoe respectively. 2.11 In spite of the low level of consumption, the cost of importing 570,000 tons of oil products imposes a high burden on the economy. In 1989 the bill for oil imports amounted to USD 180 million, which equaled 24% of export income and 18% of the total import bill. 2.12 The sectoral comoosition of the national energy balance (see table 2.1) is dominated by the household and informal sector with 67% of final energy consumption, followed by mining/industry (25%) and transport (6%). The fue1 strucLtur is dominated by biomass fuels (firewood and charcoal), which account for 63% of the total fnal consumption. Hydrocarbon fuels account for 35% of the fuel demand, and electricity (excluding selfgeneration) the remaining 1%. Power producdon is based on hydropower (30%) and diesel units. Table 2.1 Final Energy Consumption by Sector, 1989/1990 (1000 TOE per year) Fuel- Char- Fuel Gas- LPQI Sector wood coal oil oil KaosenGmoil Petrol EleaL Total Household, inf. sector 947 38 0 30 18 0 0.12 7 1041 Transport 0 0 0 33 0 67 0 0 100 Industry, mining 0 0 330 52 0 13 0 3 398 Public sector 0 6 0 15 0 0 0 8 23 Total 947 38 300 130 18 80 0.12 18 1582 Share(9) 61 2 21 8 ' 5 0 1 100 ESMAP ESTIMATES: Electricity consumption reflects only ENELGUIrs sales in the Conakry and Kindia areas. The extent of autoproduction is unknown, but due to the problems with insfficient and unstable electicity supply in Guinea, autoproduction is common in high income households and in major enterprises, in particular mmug  - 5- 2.13 The consumption pattern for commercial energy (petroleum products and electricity) reflects the low level of industrialization in Guinea and the limited residential use of electricity and petroleum for lighting and cooking. Mining is the dominant consumer and transport the second largest consumer of petroleunm products. 2.14 Fuelwood is almost exclusively consumed by households for cooking and by the informal sector. The informal sector, such as breweries, bakeries, fish smoking houses and blacksmiths consumes about 30% of the fuelwood and about 15% of the charcoal. (b) Sector Illstitutions 2.15 The institutional structure of Guinea's energy sector is relatively complex and presently under change. No single agency manages the sector as a whole. The former government's state control over the key economic sectors, left only the fuelwood and charcoal systems in private hands. This public sector managened system led to an almost complete breakdown of service levels and is now under liquidation in favor of more private involvement. MARA 2.16 The Ministere des Ressources et de 1'Envlronnement (MARA) has the primary responsibility for the development of the country's mineral and energy ressources. Within MARA, e Secretariat d'Etat aux Energie (SEE) is responsible for all activities related to modem fuels;, while the Direction Generate Nationale des Forets et Chasse (DNFC), among other matters, is responsible for the management and the development of forest resources in Guinea. 2.17 The SEE has four technical "Divisions" - "Studies and Planning", "New and Renewable Energy Resources", "Hydrocarbons" and "Hydraulics". The "divisions" are subdivided into a total of 12 "sections". The most relevant "sections" for household energy policy are: (a) "Energy Planning" and "Norms and Control" under the Division for Studies and Planning. The latter deals inter alia with quality control for oil products in Guinea (b) "Exploration-Production" in the Division for Hydrocarbons is responsible for the promotion of LPG. (c) "Energy Savings" in the Division for Renewable Energy Resources undertakes improved stove projects. 2.18 The SEE has a permanent staff of about 200. But insufficient financial resources and technical-economic training of the professional staff, have prevented the SEE from paticipating more dynamically in the sector as a whole. The disastrous financial and operational situation of the public supply companies, is another reason. Before the SEE can start to implement rational policies, a major structural reform of the supply sector is needed. The SEE has been footdragging over these issues. 2.19 The DNCF is headed by a Directeur National, who is assisted by a Deputy. Two so- called "cellules" - Planification et Programme" and "Administatdve et Financiere" - provide general and administradve support. The DNCF at the central level has three "divisions" - "D'Am6nagement de For&s", "Foresterie Rurale" and "Economie et Legislation Forestiere". The most important sections that relate to the management, the supervision and monitoring of forest biomass energy resources are: (a) All three sections of the "Division d'Amenagement des Forets", that is, "Inventaire et Classement des Forets", Amenagement des Foitts Schemas Directeurs Porestiers" and "Sylviculture et Reboisement". (b) "Bois-Energie", which is responsible for research and data collectin  - 6 - (c) "Animation et Vulgarisation" of the "Division Foresterie Rurale", which, inter alia, is in charge of the diffusion of improved stoves in rural areas. Interministerial Coordination 2.20 Horizontal coordination ih the field of environment is promoted by the "Conseil National de l'Environnement", which is headed by the Minister of MARA aVd comprises representatives from 10 ministerial departments. In recognition of the links between agricultural development and deforestation, MARA and the Ministry of Agriculture reached an agreement in 1989 to establish joint offices at the regional levels - the Directions Prtfectorales du Diveloppement Rurale et de l'Environnement. Within these "directions", the DNCF operates a "Section Protection Forestiere et Chasse". CERESCOR 2.21 The Centre de Recherche Scientifique de CONAKRY- Rogbane (Ceroscor) includes energy research in its activities, with special emphasis on solar energy and biogas projects. Supply Companies 2.22 ONAH is the state owned oil company, which was responsible for the import, marketing, distribution and sales of oilproducts. ONAH imported more than 50% of hydrocarbons. The remaining part were imported by the SHELL-Guinea or by the mining companies. ONAH was not financially viable and unable to maintain the existing infrastructure. During the 1980s, only the ONAH gasoline stations in Conakry were functioning. Al other stations had broken down and the regional distribution of oil products was taken over by the informal sector. 2.23 ONAH was abolished by Presidential Decree in 1990. Difficult negotations were held with the three international oil companies, AGIP, SHELL and TOTAL for the creation of the joint venture "Societe Guineene des Petroles" (SGP) to take over the responsibility for commercial imports and distribution of oil products. 2.24 ENELGUI is the state electricity company and responsible for the public electricity supply. Due to severe problems with the production and the distribution of electricity the company is under administration and being reorganized. Price Waterhouse is in charge of the mangement of ENELGUI during a five years period. 2.25 The supply of fuelwood and charcoal is in private hands. The Cooperative des Charbonieres is based in Conakry and is the interest group for the producers of charcoal. The Syndicat des Charbonieres comprises a group of wholesale merchants. It is responsible for the distribution and the road transport of charcoal. 2.26 More than 200 NGOs are registered in Guinea. The "Secretariat d'Etat I la DNcentralisation" (a ministry) has created S.CI.O. (Service de Coordination des Interventions des ONG) to coordinate their activities. Several NGOs are active in the field of envirorment and forstry. Some of the first improved stove projects, for example, were implemented by VITA.  -7 - m. NATIONAL DEMAND FOR AND SUPPLY OF HOUSEHOLD FUELS 3.1 Charcoal and fuelwood account for more than 95% of total household energy consumption. Fuelwood consumption is more important (92%) than charcoal (4%) or modem fuels (4%), while rural demand (70%) is more important than urban demand (30%). Energy demand by Guinea Maritime is dominant with 14% as against 16% by all other urban households in total energy consumption. Although the woodfuel demand-supply balance will be positive during the next two decades the biomass resource base, especially the coastal mangroves, is increasingly and unnecessarily being degraded. Another important issue is the energy consumption by the informal artisinal sector, in particular by coabtal salt producing and fish drying operations, which negatively impact on the important mangrove ecosystem. The proposed strategy therefore will focus on the situation in heavily urbanized (90%)and densely populated Guinea Maritime, in particular of Conakry, whose woodfuel demand will increase by 127% or 1 million tons of wood equivalent during the next 15 years. This level of urban demand is equal to the estimated total annual sustainable production of the forest resources of Guinea Maritime. It is clear, therefore, that the exploitadon of woodfuels has to be regulated to avoid undue pressure on the forest resource base. A. The Macro Picture of Household Energy Demand (a) The Relative Size of Rural and Urban Demand 3.2 The rural population comprises two thirds of the total population, and rural per capita energy consumption is higher than the urban average. As a result, rural households account for 70% of final energy consumption in the household and informal sector. The urban household and informal sector accounts for the remaining 30% of the sectoral consumption, see table 3.1 2). Table 3.1: Rural and Urban Household/Informal Sector Energy Consmption 1990, Tons of Oil Equivalents Fuelwood Charcoal Gasoil Keros_ene LPG Tota Rural Household 719,500 1,500 12,400 0 0 733,400 Urban Household, Conakry areas 79,600 32,600 11,820 15,800 155 139,975 Uran Household, other urban 148,000 4,130 6,120 2,700 0 161,000 Total 947,100 3820 30.300 1850 115 1.034.375 Source: ESMAP/SEH 1990 Energy Consumption Survey. (b) The Market Shares of Household Fuels 3.3 Charcoal and fuelwood account for more than 95% of the total household energy consumption. Fuelwood is more important than charcoal, as almost 100% of rural households and 80% of urban households outside Conakry use fuelwood as their only domestic fuel. The use of charcoal is essentially confined to urban households in Conakry, where charcoal is consumed as the primary cooking fuel by 81% of the households during the rainy season and by 42% of households during the dry season. 2 Agricultural residues are not used in Guinea. In rural areas vegetal residues are used occasionally to light fires, but the quantity is negligible.  -8- 3.4 Due to the inadequate and unreliable nature of the supply of oil products in Guinea, gas oil rather than kerosene, is widel, used in Guinea for lighting. The consumptuon of electricity by households is negligeable. Even in Conakry, only 20% of households have access to electricity. (c) The Informal SectoM 3.5 The informal sector is an important source of female employment. A few industries are energy intensive activities and account for 90% or even more of the sector's energy consumption. The smoking of more than 100,000 tons of fish per year consumes an estimated 58,000 tons of woodfuels (including the wood used for charcoal). This represents approximately 50% of the total energy demand in the urban informal sector. Other important consumers are beer production, black- smiths and bakeries. Modem fuels are not used in the informal sector, except LPG and electricity that are used by some blacksmiths and some "higher class" restaurants. 3.6 Due to the consumption of the heavy energy consumers, the informal sector accounts for 28% of total fuelwood demand in Conakry, and for 15% of total charcoal demand see table 3.2. Table 3.2 Household and Informal Sector Energy Demand in Conakry, 1990 (TONS, Electricity = GWh) Fuelwood Charcoal aoi Kerose LPG Elecetcity Households 129,200 38,740 11,100 15,200 107 67 Informal Secter 61,050 6,840 Total 190,250 45,580 11_100 15, 107 67 Source: ESMAP estimates. Electricity consumption reflects only ENELGUrs sales in Conakry. The extent of autoproduction is unknown. But very few national houseltlds can afford to install autogenerators to cover demand during the frequent supply interruptions in Conakry. It was impossible to separate consumption of oil products in the household and the infonral sector. But consumption of oil products in the infonnal sector is insignificant 3.7 In the rurallcoastal area of Guinea Maritime, salt production is the most Important energy consuming industry. More than 90,000 tons "bols de Mangrove" are used for this purpose3. This activity is economically important for the villages along the coast, and provides the livelihood of more than 8,000 families. 3.8 Most of the services in the informal sector are produced to satisfy the demands of households. Major shifts in the rspective market shares of formal and informal sector production in Guinea are not foreseen during the next two decades. Therefore, it can be expected that the energy demand in the informal sector will follow the evolution in urban household demand. The one uncertainty in this assumption is the implicit belief, that the smoking of fish - and the fish catch - can reach the same high growth rates as the urban population. 3 Ptrst loam rich in salt, fom the exudation by mngrove folage, is scawed off the surface of the tidal flat close to a salt poducing village. Secondly, an arement is made for lettng seawater percolate through this loamy ubstance and collecting the solution in a pit. Finally, the resuting liquid is placed in large flat iron pans under which wood fire is maintamed until the crystllizaon of dry salt  -9 - B. The Macro Picture of Woodfuel Supply and Demand (a) Th Economic So of the Biomass Suppy ChAin 3.9 Both the firewood and the charcoal trade in Conakry are well organized and powerful. Annual trade tumover is about 7 billion FO (or 10 mill. US$). Total employment generation in the trade amounts to about 11,700 man-years, of which some 2,700 are within wood harvesting and production of charcoal; 4,600 In transport and wholesale activities and the remaining 4,400 in fuelwood retailing. Because of the widespread use of part-time workers, the total number of persons working in the sector is likely to be 25,000 - 30,000. (b) Thg Woodfuel Demand - Suyply Balance in Guinea 3.10 In the absence of a proper mapping of the national forestry resources, the estimates of national forest cover are subject to a high degree of uncertainty. Table 3.3 is based on estimates by the DNCF, which in turn are based on estimates of varying quality and degree of detail for different parts of the country. According to these estimates, Guinea is still favorably endowed with forest stock. In 1990, about half of the territory was covered by forests. Adding fallows and forest savannah, the proportion of land with some degree of wood resources amounts to more than 86% of the territory. Table 3.3: Estimadon of Forestry Resource in Guinea, 1990 Ve etation: Area % of TeMtor Mngoves 250 1.0 Dense Humid Fore 700 2.9 Dry Dense Foest 1,600 6.5 Forsted Savannah 10,636 43.3 Total Forested Areas 13,186 53.6 Fallows and Wood Savannah 7,500 30.5 Toa Wooded Area 20,686 84.1 Agricultural Land 1,700 6.1 othr 2,200 9.8 Total Territory 24,586 100.0 Soure: Sherif Bah, Les Ressoures Foestixes, 1990. 3.11 In Table 3.4 below, the anmual accessible production is shown, based on the estimates of standing cover, annual productivity and rates of accessibility.  - 10- Table 3.4: Annual Accessible Natural Production of Fuelwood Productivity Annual Prduct.on Accessibility Accessible m ihah'er m Rate Production Mangroves 5-8 1,250-2,000 20% 325,000 m3 Humid Forest 3-5 2,100-3,250 20% 560,000 m3 Dry Forest 2-3 3a20-4,800 40% 1.650,000 m3 Wooded Savannah' 1-2 10,636-21,272 5090 8,000,000 m3 Fallows & Savannah 0.5-1 3,750-7,S00 50% 2,800,000 m3 Total 21,000-39,000 13,300,000 m3 j Source: Sherif Bah, Los Ressouies Forestieres, 1990. 3.12 The resource base is being eroded Csrough the deforestation which takes place duc to the expansion of agriculture, through logging, and, finally, the cutting of wood for fuel. Normally, the cleared terrain is cultivated during two consecutive ycars with two annual crops - the first year with rize and sorghum, the second year with peanuts. 3.13 As soon as a field is fallowed, it produces wood once more. The semi-evergreen forest vegetation in Guinea appears to tolerate and recover from land clearing in an exceptional manner. If the cultivation period has not been very long, a sufficient amount of stumps and tree roots will have survived to ensure, that a dense thicket of fastgrowing tree and shrub species springs up and covers the land with a fully closed canopy within a year.4 3.14 The favorable natural regeneration in Guinea makes it complicated to quantify the impact of agricultural practices on the availability of fuelwood. What can be noted in practice, though, is that the natural regeneration is threatened by a shortening of the duration of the fallow periods. Fallowing now rarely seems to exceed five years. A fallow of seven years is a good source of fuelwood -the poles have a diameter that is thick enough to resist the clearing fire. A fallow of three years, however, produces little fuelwood -most poles bum completely. 3.15 Demand for woodfuels continues to increase. Figure 3.1 shows the trend based evolution of woodfuel consumption in households and the informal sector up the year 2010.5 The total urban and rural consumption of fuelwood can be estimated at 2.3 million tons, and the total charcoal consumption at 55,000 tons. This amounts to a total consumption of fuelwood of around 2.6 million.6 4 A combination of heavy precipitation during five months of the year, botanical composition, deep and fairly well- structrured soils and, not least, original clearing practices, explain this unusual resilience to abuse. When clearing a field, at the onset of the dry season, farmers severe the stems of all sapling and young trees at about one meter above the ground level. After a few weeks they then ignite a fire which consumes the grassy ground-cover and most twigs but only torches the tall stumps rich in sap and eventual larger stems lying on the ground. Having made the land easily accessible in this manner and also enriched the soil with the ashes, the farmer the n proceeds to chop off all the tall stumps and also to remove larger unburnt pieces of wood. 5 The extrapolation is based on the present levels of per capita consumption and population growth rates. That is, annual population growth for the co'Jntxy as a whole of 3.2%, for Conalay 5.6%, for other urban areas 4.2%, with rural population calculated as the difference between total and urban population. In order to show the impact on the availability of fuelwood resources, the consutnption of charcoal has been converted into fuelwood equivalents at the ratio of 5.5:1 - assuming a weight conversior. efficiency of 18%. 6 This estimates is lower than other estimates by Cassagne, Madon and Schirrle which arrive at a figure of 4.5 to 6 million tons. The difference is mainly due to different estimates of rural per capita fuelwood consumption. In this study, a fgure of 1.3 kg per day is assumed.  - 11 ' Figure 3.1: Projections for Rural and Urban Woodfuels Demand Woodfuel Demand CCOAI * Riwood 2.8 2.0- 2.4- 2.8 0.0 0.0 0.4 Thr Ruts I go Uban 3.16 Although the rural consumption of biomass fuels will diminish in relative importance, it wll stil be lrer than the urban consumption in 2009. A more important observation is that although the resource basis will diminish, the total availability of fuelwood at national level in the year 2010 will still be three times higher than the total denund for fuelwood. 3.17 But although the consumption of woodfuels Is a minor factor in the deforestation process, the environmental threat from the consumption of woodfuels will grow considerably: (a) The first pressure emerges from the absolute fncrease In the conswnptlon of woodfels which will increase by 80% from 2.6 million tons in 1990 to 4.6 million tons in 2009. (b) The second pressure emerges from the relative shift to a more concentrated form f demand: 60% of the increase in the annual demand will occur from the urban sector. While rural demand of fuelwood is covered by the autocollecdon of dead wood, urban demand for fuelwood is mostly covered by commercial cutting of dead and green wood. (c) The third pressure emerges from the growing share of the demand of charcoal-derived wood - environmentally the most damaging and concentrated form of wood exploitation. The share increases from 11% of the total consumption of fuelwood in 1990 to 17% in 2009.  - 12 - 3.18 Finally, the regional situation differs from the national situation, as local imbalances exist between demand and supply. The heaviest demand pressure on the available resources of wood Is witnessed in Guinea Maritime, where the demand from Conakry has led to a virtual disappeac of the "bois de service", and where charcoal production has an important local influence on deforestation. (c) The Demand-Supply Balance in Guinea Martime 3.19 With a surface area of 36,208 km2 Guinea Maritime covers about 15% of the total area of the Republic of Guinea. It is one of the densest populated parts of the country accounting for about 30% of the total population or some two million inhabitents. In 1990 the population of Conakry was I million. Other important urban demand centers are the cities Forecariah (130,000 inh.), Coyah (170,000), Dubreka (160,000), Kindia (240,000), Fria and Boffa (both 150,000). The urbanisation rate in Guinea Maritime is thus 80-90%, whereas the national averate rate is 34%. 3.20 The five main types of vegetation are: Mangrove; savannah; degraded tropical humid and dry forests: fallows and thickets; agricultural fields, rice pads and fruit orchards. 3.21 Half of the fuelwood consumed by Conakry comes from the mangroves along the coast; the other half of fuelwood and charcoal comes from the savannas in the prefectures of Forecariah, Coyah, Dubreka, Fria and Kindia. Table 3.S: Use of Mangrove Wood, 1990 Household use in rural areas 152,000 tons Household use in Conakry 54,000 tons Drying and smoking of fish 58,000 tons Extraction of salt 93,000 tons Total estimated consmption 257.000 tons Source: Mission estimates. 3.22 Along the Atlantic Ocean more or less degraded mangrove forests intersected by rice paddies occupy about 250,000 ha of tidal flats. According to very approximate estimates, the annual consumption of mangrove wood amounts to about 257,000 tons in 1990, see table 3.5. Almost certainly, this amount does not exceed the sustainable production capacity of the mangrove forest Twice as much could possibly be extracted from the ecosystems without causing noticeable degradation, by application and enforcement of good silvicultural management. 3.23 While this estimate is guesswork, it is a fact that present unplanned and erratic exploitation is causing rapid and clearly observable deterioration of the mangrove ecosystem. This deterioration is not only leading to a steady decline in productive capacity in terms of wood production. It is also causing severe coastal erosion along the ocean front and affecting coastal fisheries adversely by impairIng the breeding aweas of several important fish species. Finally, fears are being expressed that severe damage to the systems may be caused by the disruption of the formerly more regular flow of freshwater from the adjoining hills towards the mangrove supporting tidal flats, due to the rapidly expanding deforestation of the whole coastal province. 3.24 As far as the inland forest resources are concerned, the information is even more patchy. But it seems, that no estate of effectively protected forest land has survived in Guinea Maritime, which properly protected and managed might ensure future wood supplies. Agricultural expansion seems to occur as intensively inside the "forets classees" established in a not remote past, as outside their official boundaries. Apart from a few patches of degraded forest here and there subsisting either because of "sacredness" or due to their location on inaccessible slopes, and the  - 13 - existence of one of two small sanctuaries, practically all dense natural forest which in the past must have covered between one third and half of Guinea Maritime has now disappeared. 3.25 Some remedial afforeseataon has been carried out since the early 1950's. However, the couple of thousand hectares planted competently with teak and Gmelina cannot influence the overaU supply situation even marginally. Moreover, the plantations have not been thinned until now or in any other manner exploited for the satisfaction of local supply requirements. Table 3.6: Estimated Volumes of Biomass In Guinea Maritime Volume of Biomass Area kn2 m3/ha Growth (%) Growth (m3/ha) C4-Savannah 181 20 5 18,100 N-Savannah 1,085 1.5 5 8,140 D5-Savannah 6,516 5 2 65,160 E3-Savannah 4,800 50 2 480,000 E4-Savannah 454 15 2 13,620 ES-Savannah 3,561 12 2 85,460 Mangove 1,980 40 5 396,000 Makis 923 5 5 23,075 Total 19,500 1,089,655 Source: Mission esimates. For definition of classification, see Annex 1.3. 3.26 Tentative estimates of the standing volume and the productivity of forest biomass resources in the fuelwood and charcoal producing regions of Guinea Maritime show a likely annual production in the range of 0.46 million to 1.5 million m3, or 0.35 million to 1.2 minlion tons of fuelwood. Table 3.6 shows the medium estimate of the estimations of an annual production of 1.1 million m3 or 0.9 million tons7. 3.27 The supply situation leads to the conclusion that the priority for household energy policy is to address the situation in Guinea Maritime. This conclusion is reinforced by the demand projections made in Annex 11.2, which show that the relative importance of biomass consumption in will increase from 17% of national demand in 1990 to 27% in 2009. Table 3.7: Population Projections and Household Woodfuels Demand Estimates for Conakry 1990 1995 2000 2005 2010 Growth rate of population and demand 5.6% 5.6% 5.6% 5.6% 5.6% Population (million) 1.04 1.4 1.8 2.4 2.9 Charcoal, tons 45,500 60,000 78,500 103,000 128,000 Fuelwood, tons 1902500 250,100 328,400 431,000 S36.000 3.28 The population in Conakry will incmase from 1.04 million (18% of the total population in Guinea) to 2.4 million in year 2005 (26% of the population). Unless the level and the structe of per capita consumption is changed, the consumption of charcoal and fuelwood in Conakry will increase by 127% during the next 15 years, from 440,000 tons of fuelwood equivalents to one million tons of fuelwood equivalents. 7 See Annex 113 for a decription of the wooden biom resources in Guinea Mritime.  - 14 - 3.29 This level of demand is equivalent to the estimated total annual production of the forest resources in the fuelwood producing areas of Guinea Maritime. Since also the demand of the rural population and the other urban centres has to be satisfied, it is obvious, that the supply of woodfuels has to be regulated in order to avoid undue pressures on the resources. l  - 15- IV. THE CHARACTERISTICS OF URBAN HOUSEHOLD ENERGY DEMAND 8 4.1 Charcoal and fuelwood are the most important household fuels. The major end-use is cooking. Only high income households use electricity and kerosene/gasoil for lighting purposes. LPG is hardly used. The low level of the use of modem fuels is due to low incomes, high prices, unreliable supply and inadequate distribution systems of modem fuels. Wood is by far the cheapest household fuel, while modem fuels are four to five times more expensive, on a useful MJ basis. Despite low woodfuel prices household expenditures for household fuels (17%) are very high. On an annual basis household fuel expenditures of an average household amount to FG 120,000. Investment in an improved stove, therefore, with which urban households have had little experience so far, has a pay-back time of flve months. Successful dissemination of demand management hardware and techniques therefore will have a positive Impact on both urban household revenues and on the demand for woodfuels. A. Average Consumption of Fuels in Conakry Households (a) Consumption of Fuelwood and of Charcoal 4.2 According to the results of the "1990 ESMAP Household Energy Consumpdtion Survey", the average household consumes 0.20 kglcapita/day of charcoal and 0.80 kg/capitalday of fuelwood. Calculated on a weigthed basis over the year, 57% of the families use charcoal as their primary fuel for cooking, and 41% use fuelwood. Table 4.1: Household Woodfuel Consumption In Canakry, 1990 Rainy Dry Season Season WAvemge Chatwal % of families using it as primary fuel 81% 42% 17% consumption cap/day 0.32 kg 0.11 kg 0.20 kg Fuelwood % of families using it as primary fuel 17% 56% 41% consumption cap/day 0.48 k 0.95 kg 0.80 kg Source: SEE/ESMAP 1990 Household Energy Survey. 4.3 The seasonal variation in the level of consumption measured on a calorifc basis is relatively modest, whereas the relative importance of the demand for charcoal and fuelwood varies between the rainy and the dry season. During the rainy season, there are problems with the supply of fuelwood from the mangroves - the main source of fuelwood supply in Conakry - and it is easier to store charcoal and to protect it against the humidity. Therefore, the consumption of charcoal per capita as well as the number of families using charcoal as a primary fuel increases:9 8 The demand data in this chapter were generated by the "1990 Household Energy Survey' conducted in Conary and involved a sample of 430 households. The data supply were generated by several surveys and studies of the charcoal and fuelwood production and of the fuel trade. It covers a study of the inport of charcoal at the 2 axes to Conury (km 36), the main roads from Kindia and Dubreka. The supply study also covers a survey of the mangrove wood delivered at the debarcederes (the wharves at different locations in Conakry). More information on survey methodology and the results are given in the Annexes. 9 High income families who use LPG or electricity for cooking, do not demonstrate seasonal variations in their cooking habits.  - 16 - (a) During the rainy season, 81% of the households use charcoal and 17% fuelwood as their principal fuel. The household consumption per capita and per day averages 0.32 kg of charcoal and 0.48 kg of fuelwood. (b) During the dry season, the percentage of families that use charcoal as the principal fuel falls to 42%; whereas 56% use fuelwood as the primary fuel. The average level of consumption per capita and per day is 0.11 kg of charcoal and 0.95 kg of firewood. 4.4 In the rural areas outside Conakry and in other urban areas in Guinea the average household consumption of firewood Is higher, because wood is more readily accessible and can be self-collected (only some of it in urban areas). In Conakry, self-collection is practically nil. (b) The Consumption of Modem Fuels 4.5 The consumption of modem fuels is low and used mainly for lighting. About 20% of the households in Conakry have access to electricity:I0 60% use kerosene or gasoil as a fuel for lighting-, whereas 20% use the light from open fire. 4.6 Less than 1% of the households use electricity for cooking. About 1% of the households use LPG for cooking, but then only as a secondary fuel. Kerosene is hardly used for cooling purposes at all. 4.7 On average, a household that is connected to ENELGUrs grid consumes 66 kWh per month including sales to neighbours. For the total urban populadon, this leads to an average household consumption of electricity per capita of 33 kWh per year 11 B. Socio-Economic Determinants of Demand (a) NkedI 4.8 The use of fuel for cooking is the most important energy end-use, and amounts to almost 75% of total urban household energy demand in Conakry. Usually, households in Conakry use a mix of fuels to meet their energy needs for cooking purposes. Although the principal household use of fuelwood is for cooking, it is also used for heating water, especially for washing. (b) Household Income 4.9 Household income is the most important socio-economic factor that influences the level and the structure of energy consumption. The size of the household is negatively correlated with income, that is, the average size of the household decreases with income. According to the survey made by SEE/EISMAP, the average size of a family in Conakry is 9.44 persons; the households who use fuelwood as the primary fuel consist of 12.8 persons on average; "charcoal consumers" average 8.7 persons per household, and LPG and electricity consumers 7.5 persons. Finally, although it is well-known that both the level and the structure of energy consumption depend on the absolute level and the relative structure of fuel prices, household income and fuel price are cross-related in their Impact: Low levels of income force households to be very price conscious in their choice of fuel, whereas ease of use (and next, availability) are the most important determinants for the fuel use in high income households. 10 This connection level for the household, is much higher than the official figes, becas households in Guinea often sell electricity to their neighbours. 11 Autoproduction of electricity is common in restaurants and in expatriate households in Conakry. This phenomenon does not influence the number of connections to ENELGUIs grid, but increases the average consumption per capita.  - 17 - Table 4.2: Daily Household Market Expenditures by Soclo Economic Group Share of Daily Market Socio-Economic Class Groun Averaae Households Range Modeste 39% 500-1600 1300 Moyen 29% 1600-2400 2000 Moyen Sup6rieur 27% 24004500 3000 Aise 4% > 4500 Source: SEE/ESMAP Household Energy Survey, 1990. 4.10 The SEE/ESMAP household energy survey distinguished four socio-economic groups according to the professions of the head of the family. Since the survey did not provide reliable data or. family income, table 4.2 uses the daily household market expenses as an indicator for family income. The first three socio-economic income groups, "modeste", "moyen" and "moyen sup6rieur" have very low incomes by European standards - the daily expenditures range from US$ 1 to 7 per household. Therefore, their consumption patterns are "African". Some of the households in the highest income group, the "aise", have levels of income and expenditure patterns of European standards. But mostly, even in this group, traditional forms of energy dominate the use of fuel for cooking. 4.11 Table 4.3 shows that charcoal and fuelwood are the most important imairvfuels in the three lower socio-economic clas.es that together make up 96% of the households. During the rainy season, charcoal is the primary fuel for about 80% of the households in all income classes, while most of the remaining households use fuelwood. Table 43: Relative Use of Fuel for Cooking in Conakry during the Rainy Season by Socio-Economic Group Socio-Economic Class Moyen Superieur Moyen Modeste Prhnary Fuel Wood 15% 14% 23% Charca 82% 84% 77% Kerosen efGas