13th FEMIP Conference: EIB and UfM team up for the development of energy efficiency in the Southern and Eastern Mediterranean region

“The promotion of renewable energies and of energy efficiency is vital insofar as this is a driving force and initiator of national industrial development and job creation in the Euro-Mediterranean region”. This was the key idea put forward by Fathallah Sijilmassi, Secretary-General of the Union for the Mediterranean, at the 13th FEMIP Conference focussing on energy efficiency. “The UfM Secretariat seeks to play its role by heightening regional efforts and promoting feasible projects in the field of energy efficiency. The positive support and commitment of governments, partners and all the parties involved will give a possitive message to the markets as regards the feasibility of investments and the potential of energy efficiency. Together we can develop new regional initiatives and label new projects in 2014 and later which will mean a major contribution in this field”, he added.

This 10th December 2013 the European Investment Bank (EIB) organised the 13th FEMIP Conference in Brussels, in partnership with the Union for the Mediterranean (UfM) and the Mediterranean Energy Observatory (OME). The theme of the meeting was to promote energy efficiency in the Mediterranean countries belonging to the European Union. There were 250 participants at the conference: the Secretary-General of the UFM, the Ministers of Energy of Morocco, Tunisia, Palestine and Turkey, the director for growth and sustainable development of the European Commission’s DG DEVCO, the president of the OME, representatives of companies, experts and professionals from the sector, regulatory and supervisory authorities, financial institutions, academic milieus and representatives of civil society.

The energy sector means a vital challenge for the region’s sustainable development and for maintaining the growth of Arab countries in the democratic transition process. The FEMIP has devoted nearly 40% of its financing (i.e. 5.4 billion €)  to the modernisation of this sector, specifically by promoting renewable energies in the framework of the Mediterranean Solar Plan, in which it handles technical coordination in the framework of the UpM. The characteristics of the energy system of the countries concerned nevertheless make the present situation less and less sustainable: exponential growth in the demand (on average 8% per year); very great dependence on hydrocarbons for electricity generation; under-dimensioning of production and distribution infrastructures leaving many individuals and companies in a precarious state as regards energy; a generalised subsidy system making states’ public accounts flimsy, without enabling making new investments viable, nor ensuring users are aware of the need for energy savings.

In these conditions, the promotion of energy efficiency comes forward as one of the most effective and least costly responses to the need for raising the availability of this resource and rationalising its use: according to a study made with the backing of the Trust Funds of the FEMIP, the potential for energy savings can be identified as 80% in buildings, 60% in industrial processes and from 20 to 40% in private consumption. If this source of savings is thus very real and the theoretical capacity for self-financing of investments highly quantifiable, the enticement of energy transition is weighed down by the fragmented market, shortcomings in capacity of authorities and the financial system, and by the system of subsidies, which are not conceived as encouragement for modernisation.

The ideas swapped during the session enabled the following lines of action to be set:

• There is an increase in collective awareness of political and technical authorities and of the operators in support of promoting energy efficiency: a large number of initiatives are under way with tangible results, for example in Morocco, in Tunisia, in the Lebanon and Palestine. In parallel to this, many countries have undertaken a gradual conversion of their energy subsidy measures to a system for encouraging modernisation.

•   The ministers expressed their determination to extend these developments and specifically to make energy efficiency a priority with objectives involving specific figures and quantified action plans. One should nevertheless bear in mind that such a policy must remain compatible with maintaining the international competitiveness of the economies concerned and take into account local particularities whose recognition is one of the keys to success.

•  The energy transition is a social process: it is made much easier by setting up public agencies able to focus and disseminate expertise, by reworking the statutory and rates framework, modernising the local banking and financial system, and developing financial and regional cooperation tools. From now on, the backing of the international community must extend to both financial instruments and transfer of experiences as well as arranging technical assistance for member countries.