SEVENTH SEMI-ANNUAL MEETING OF SOUTH ASIA

UNCLAS SECTION 01 OF 03 COLOMBO 001050 SIPDIS AIDAC MISSIONS FOR ECON OFFICERS AND USAID DIRECTORS SECSTATE WASHDC FOR USAID/ANE BUREAU/DAAs, WALTER NORTH AND MARK WARD; SA/DIR, ALONZO FULGHAM; SPO/DIR/LARRY BRADY AND SUSAN FINE; DIR/TS, ANTHONY CHAN AND CINDY LOWRY; EGAT/EIT/E GORDON WEYNAND; STATE/SA/RA/DON CAMP; JOHN GASTRIGHT; AND ANISH GOEL; DEPT. OF ENERGY/TOM CUTLER; AND DEPT. OF COMMERCE/INTERNATIONAL TRADE MANILA PLEASE PASS TO USED AT ASIAN DEVELOPMENT BANK E.O. 12958: N/A TAGS: PREL ENRG KSCA XD ECONOMICS SUBJECT: SEVENTH SEMI-ANNUAL MEETING OF SOUTH ASIA REGIONAL INITIATIVE FOR ENERGY (SARI/ENERGY) CORRECTED COPY - PARAGRAPH NUMBERING ¶1. SUMMARY. THE SEVENTH SARI/ENERGY SEMI-ANNUAL REVIEW MEETING WAS HELD IN COLOMBO, SRI LANKA ON JUNE 1-3, 2005. A SARI/ENERGY SPONSORED REGIONAL ENERGY SECURITY REPORT PREPARED BY INDEPENDENT EXPERTS IN THE REGION LAID OUT RECOMENDATIONS AND ACTIONS FOR ADDRESSING REGIONAL ENERGY SHORTAGES AND HEDGING THE RESULTING RISKS TO ECONOMIES. ACTIONS INCLUDE BUILDING AND STRENGTHENING REGIONAL COOPERATION AND TRADE, AND CREATING REGIONAL INFRASTRUCTURE LINKAGES AS SUPPORTED BY THE SARI/ENERGY PROGRAM. THE SARI-ENERGY COALITION, COMPOSED OF REGIONAL BUSINESS LEADERS, LAUNCHED A FAVOURABLY-RECEIVED MEDIA ROUND TABLE PROMOTING ENERGY REFORMS DEDICATED TO NEEDS IN SRI LANKA. TOOLKITS THAT INCORPORATE WIND, SOLAR AND MICRO-HYDRO RESOURCE INFORMATION ARE USED IN SRI LANKA AND THE MALDIVES FOR PLANNING AND PROJECT PREPARATION PURPOSES. THIS EXPERIENCE AND APPROACH WILL BE REPLICATED IN AFGHANISTAN AND PAKISTAN. FIVE SARI/ENERGY SMALL GRANTS RESULTED IN MODELS FOR ENERGY SAVINGS IN RICE MILLING, CREATION OF TWO REGIONAL RESOURCE CENTERS, RENEWABLE ENERGY OPTIONS AND COST-EFFECTIVE COMMUNITY DISSEMINATED ENERGY/WATER CONSERVATION. END SUMMARY. ¶2. THE SEVENTH SARI/ENERGY SEMI-ANNUAL REVIEW MEETING WAS HELD IN COLOMBO, SRI LANKA ON JUNE 1-3, 2005. IN TOTAL 68 PARTICIPANTS ATTENDED OF WHICH 28 WERE HOST COUNTRY STAKEHOLDERS FROM AFGHANISTAN, BANGLADESH, BHUTAN, INDIA, MALDIVES, NEPAL, PAKISTAN AND SRI LANKA. OTHER ATTENDEES WERE REPRESENTATIVES FROM USAID WASHINGTON AND SOUTH ASIA FIELD MISSIONS, STATE DEPARTMENT AND U.S. EMBASSIES IN SOUTH ASIA, U.S. DEPARTMENT OF ENERGY, WORLD BANK, AND IMPLEMENTING CONTRACTORS AND GRANTEES. ¶3. THE MAIN THEMES OF THIS MEETING INCLUDED; (A) REVIEW OF IMPLEMENTATION PROGRESS UNDER PARTNER WORK PLANS (B) STATUS OF PROGRAM EXPANSION TO PAKISTAN AND AGHANISTAN (C)FUTURE DIRECTIONS IN PROGRAM PLANNING AND GOVERNANCE ¶4. HOST COUNTRY STAKEHOLDERS IN THEIR FEEDBACK REGARDING PROGRAM ACHIEVEMENTS OF SARI/ENERGY WERE UNANIMOUS THAT THEIR COUNTRIES NOW ENJOY MORE OPEN, COLLEGIAL AND AND PRODUCTIVE DIALOGUES ON ENERGY TRADE, SECURITY, AND REFORM. STAKEHOLDERS BETTER UNDERSTAND THE FACTS AND ISSUES NOW AND ARE TAKING OWNERSHIP OF, AND RESPONSIBILITY FOR, THE PROBLEMS THAT THE REGION FACES IN MOVING FORWARD WITH ENERGY COOPERATION AND DEVELOPMENT. ¶5. ILLUSTRATIVE EXAMPLES OF RESULTS THAT WERE DIRECTLY LINKED TO SARI/ENERGY INTERVENTION INCLUDED THE SIGNING OF A MEMORANDUM OF UNDERSTANDING BETWEEN BANGLADESH AND INDIA ON TRANSIT OF NATURAL GAS, IN WHICH INDIA AGREED TO ALLOW BANGLADESH THE ACCESS TO BHUTAN AND NEPAL HYDROPOWER SUPPLIES THROUGH ITS TERRITORY - A WIN-WIN STRATEGY FROM AN EARLIER SARI/ENERGY PRE FEASIBILITY REPORT. ANOTHER EXAMPLE WAS THE ACCEPTANCE AND IMPLEMENTATION BY THE SRI LANKAN GOVERNMENT OF A SUSTAINABLE GUARANTEE FUND FOR ENERGY EFFICIENCY PROMOTION BY THE PRIVATE SECTOR AS RECOMMENDED BY A SARI/ENERGY REPORT. THE GOVERNMENT OF SRI LANKA ALREADY PROVIDED INITIAL FUNDING AND OTHER DONORS ARE CONSIDERING CONTRIBUTIONS. THERE WERE MANY OTHER RESULTS DISCUSSED OVER THE COURSE OF THE EVENT. ¶6. CONTRACTORS AND GRANTEES OF SARI/ENERGY, NEXANT INC., U.S. ENERGY ASSOCIATION, U.S. CHAMBER OF COMMERCE, WINROCK INTERNATIONAL, AND U.S. NATIONAL RENEWABLE ENERGY LABORATORY PRESENTED THEIR ACCOMPLISHMENTS AND LESSONS LEARNED AND PROVIDED ILLUSTRATIVE FOLLOW-ON ACTIVITIES. EMPHASIS WAS ON ENGAGEMENT WITH THE NEWEST MEMBERS OF THE PROGRAM - AFGHANISTAN AND PAKISTAN. FOLLOW - ON ACTIVITIES PLANNED BY THE PARTNERS INCLUDED POWER WHEELING TRADE ANALYSIS; ESTABLISHMENT OF DISTRIBUTION UTILITY BENCHMARKS; CAPACITY BUILDING ON REFORMS, UTILITY MANAGEMENT AND RENEWABLE ENERGY;CONTINUATION OF PARTNERSHIPS TO STRENTHEN INTER-COUNTRY DIALOGUES ON REFORMS, REGULATION AND UTILITY MANAGEMENT;CREATING AN ENABLING ENVIRONMENT FOR GRID CONNECTED WIND AND FACILITATION OF RURAL ENERGY PROJECTS. PLANNED ACTIVITIES ON POLICY AND ADVOCACY EFFORTS INCLUDE DEVELOPING POLICY PAPERS, ORGANIZING MEDIA ROUND TABLE EVENTS AND AWARENESS CAMPAIGNS ON REFORMS, REGIONAL ENERGY MARKETS AND FINANCING, CROSS BORDER ENERGY TRANSFER, AND POWER QUALITY AND RELIABILITY. ¶7. A SARI/ENERGY SPONSORED REGIONAL ENERGY SECURITY REPORT PREPARED BY INDEPENDENT EXPERTS IN THE REGION LAID OUT RECOMMENDATIONS AND ACTIONS FOR ADDRESSING REGIONAL ENERGY SHORTAGES AND HEDGING THE RESULTING RISKS TO ECONOMIES. THESE ACTIONS INCLUDED BUILDING AND STRENGTHENING REGIONAL COOPERATION AND TRADE, AND CREATING REGIONAL INFRASTRUCTURE LINKAGES SUPPORTED BY THE SARI/ENERGY NETWORKS. THE REPORT IDENTIFIED ISSUES WHICH NEED TO BE ADDRESSED IN THE CONTEXT OF REGIONAL ENERGY SECURITY, SUCH AS THE ESTABLISHMENT OF LARGE ENERGY PROJECTS WITH REGIONAL SCOPE AND IMPACTS, IMPLEMENTING A REGIONAL PROCUREMENT STRATEGY FOR PETROLEUM PRODUCTS AND A STRATEGIC REGIONAL PETROLEUM RESERVE, ESTABLISHING A REGIONAL FACILITY FOR TRAINING AND EQUIPMENT TESTING, DEVELOPING AND EXPANDING RENEWABLE TECHNOLOGY APPLICATIONS,AND EXCHANGE OF INFORMATION ON NEW TECHNOLOGIES INCLUDING CLEAN ENERGY, RENEWABLES AND HYDROGEN FUEL. IN ORDER TO FACILITATE THE ACTIONS, THE EXPERTS RECOMMENDED ACTIVITIES SUCH AS: SETTING UP A REGIONAL INSTITUTION WHICH WOULD FOCUS ON AND TAKE ACTION ON SOUTH ASIAN ENERGY SECURITY; ESTABLISHING DEVELOPMENT FINANCES TO PROMOTE INTER-COUNTRY INVESTMENT AND JOINT VENTURE INVESTMENTS; ORGANIZING INTER-GOVERNMENTAL COMMITTEES/WORKING GROUPS TO PROMOTE REGIONAL ELECTRICITY AND NATURAL GAS GRIDS; AND DEVELOPING A MASTER PLAN FOR THE RATIONAL UTILIZATION OF HYDROELECTRIC RESOURCES OF THE REGION. ¶8. THE SARI-ENERGY COALITION, COMPOSED OF REGIONAL BUSINESS LEADERS, LAUNCHED A FAVOURABLY-RECEIVED CAMPAIGN AND A MEDIA ROUNDTABLE FOCUSED ON THE NEED FOR PUBLIC PRIVATE PARTNERSHIPS TO PROMOTE REFORMS IN SRI LANKA. THE SARI/ENERGY REGIONAL ENERGY PARTNERSHIP PROGRAM REPORTED SUCCESS OF THE REGULATORY PARTNERSHIP IN CREATING A CADRE OF KNOWLEDGEABLE REGULATORS IN THE REGION AFTER INTERACTION WITH THEIR U.S. AND SOUTH ASIAN COUNTERPARTS. SUCCESSES WERE REALIZED IN THE MEDIA PARTNERSHIP THROUGH BETTER REPORTING ON THE IMPACTS OF GOOD ENERGY GOVERNANCE, SUCH AS, HIGHLIGHTING THE BENEFITS OF PUBLIC-PRIVATE PARTNERSHIPS IN SRI LANKA AND THE IMPORTANCE OF THE REFORMS OF THE CEYLON ELECTRICITY BOARD TO ATTRACT INVESTMENT. PLANS ARE UNDERWAY TO DEVELOP A PARLIAMENTARIAN PARTNERSHIP TO IMPROVE THE QUALITY AND RELAVANCE OF ENERGY LEGISLATIVE ACTIONS IN SOUTH ASIA BY SHARING THE EXPERIENCES OF PARLIAMENTS IN SOUTH ASIA AMONG THEMSELVES AND WITH THE UNITED STATES CONGRESS AND STATE LEGISLATORS. ¶9. THE COMPLETION OF FIVE OF THE 34 SMALL GRANTS AWARDED BY SARI/ENERGY HAS RESULTED IN MODELS FOR ENERGY SAVINGS IN RICE MILLING, CREATION OF TWO INTERNET BASED REGIONAL RESOURCE CENTERS ON ENERGY EFFICIENCY MANAGED BY THE SRI LANKA ENERGY MANAGERS ASSOCIATION (SLEMA),ENERGY SECTOR REGULATION MANAGED BY THE ADMINISTRATIVE STAFF COLLEGE OF INDIA (ASCI),RENEWABLE ENERGY OPTIONS AND COST-EFFECTIVE COMMUNITY DISSEMINATED ENERGY/WATER CONSERVATION. THE PROCESS OF SELECTING 3-5 PROPOSALS FOR AFGHANISTAN AND PAKISTAN IS UNDERWAY. ¶10. TOOLKITS THAT INCORPORATE WIND, SOLAR AND MICRO- HYDRO RESOURCE INFORMATION FOR PLANNING AND PROJECT PREPARATION PURPOSES ARE USED IN SRI LANKA AND THE MALDIVES. THIS EXPERIENCE AND APPROACH WILL BE REPLICATED IN AFGHANISTAN AND PAKISTAN TO CREATE RURAL ENERGY PLATFORMS TO PROVIDE ELECTRICITY TO REMOTE VILLAGES. ¶11. THE INTERNAL USG AND PARTNERS DISCUSSION ON THE FINAL DAY FOCUSED ON THE UPCOMING PROGRAM REVIEW. THE EXTENSIVE USE OF LOCAL CONSULTANTS AND EXPERTS WAS HIGHLIGHTED; OPTIONS FOR THE LOCATION OF THE PROGRAM AND MANAGEMENT STRATEGIES WERE CONSIDERED; MECHAMISMS TO PROMOTE TRANSFER OF KEY MESSAGES TO WASHINGTON D.C. WILL BE REVIEWED AND IMPROVED; AND A REVIEW OF SARI/ENERGY INPUTS IN RELATION TO MISSION NEEDS WILL BE UNDERTAKEN TO ENSURE THAT DUPLICATION IS AVOIDED AND VALUE IS ADDED. REPRESENTATIVES OF AID/WASHINGTON AGREED ON THE NEED FOR USG INVOLVEMENT IN THE ENERGY SECTOR IN SOUTH ASIA, AND ALIGNMENT OF PROGRAM GOALS AND OBJECTIVES WITH U.S. FOREIGN POLICY INTERESTS. ¶12. THIS CABLE HAS BEEN CLEARED BY USAID AND/OR EMBASSY REPRESENTATIVES FROM ALL PARTICIPATING POSTS. ENTWISTLE