Dialogue sur les politiques énergétiques au Cameroun · 2014. 8. 11. · wood, that is to say the...

Contract EIE/04/129/S07.40676 www.enefibio.com

ENEFIBIO Removal of non-technological barriers to encourage SME

energy efficiency by the rational use of biomass

Publishable Result-Oriented Report

Intelligent Energy - Europe Programme / COOPENER

Avec le soutien de:

ENEFIBIO EIE/04/129/S07.40676 Publishable Result-Oriented Report / 48

The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.


Table of content 1. Context ......................................................................................................................................................... 6

1.1. Capacity barriers ................................................................................................................................. 7 1.2. Administrative and regulatory barriers ................................................................................................ 7 1.3. Information barriers ............................................................................................................................. 7

2. Bioenergy: from improved domestic stove to modern industrial technologies................................... 8 2.1. Definition ............................................................................................................................................. 8 2.2. Advantages ......................................................................................................................................... 8 2.3. Limitations ........................................................................................................................................... 9

3. Development of a bioenergy unit............................................................................................................. 10 4. Actions and objectives of the ENEFIBIO project ................................................................................... 11 5. Baseline study: surveys among SMEs in Senegal and Cameroon...................................................... 13

5.1. SMEs in Senegal............................................................................................................................... 14 5.1.1.Rice mills............................................................................................................................. 14 5.1.2.Industrial poultry farming..................................................................................................... 15 5.1.3.Industrial dairy farming........................................................................................................ 16 5.1.4.Bakeries .............................................................................................................................. 16

5.2. SMEs in Cameroon........................................................................................................................... 17 5.2.1.Upstream wood processing industries (Sawmills) .............................................................. 17 5.2.2.Downstream wood-processing industries ........................................................................... 17 5.2.3.Small and medium-sized palm oil mills............................................................................... 18 5.2.4.Drying and smoking of fruits and vegetables...................................................................... 18

6. Capacities strengthening ......................................................................................................................... 20 6.1. Bioenergy projects prefeasibility studies training course .................................................................. 20 6.2. Bioenergy projects feasibility studies training course ....................................................................... 22 6.3. Training course on bioenergy projects development in Sub-Saharan Africa.................................... 23 6.4. Publication of a vade-mecum for bioenergy projects development .................................................. 26

7. Improvement of national administrative and regulatory frameworks for the development of bioenergy units............................................................................................................................................... 28

7.1. Methodology...................................................................................................................................... 28 7.2. Situation in selected sectors ............................................................................................................. 28

7.2.1.Senegalese selected sectors.............................................................................................. 29 7.2.2.Cameroonian selected sectors ........................................................................................... 29

7.3. Non technological barriers to bio-energy projetcs in SMEs in Senegal............................................ 29 7.3.1.Multi-sectoral barriers ......................................................................................................... 29 7.3.2.Rice industries .................................................................................................................... 30 7.3.3.Dairy and poultry breeding farms........................................................................................ 31 7.3.4.Traditional bakeries............................................................................................................. 31 7.3.5.Conclusions and perspectives for Senegal......................................................................... 32

7.4. Non technological barriers to bio-energy projects in SMEs in Cameroon ........................................ 32 7.4.1.Multi-sectoral barriers ......................................................................................................... 32

7.5. Upstream wood-processing units – saw mills ................................................................................... 33 7.5.1.Downstream wood-processing units – joineries ................................................................. 33 7.5.2.Small-scale palm oil mills.................................................................................................... 33 7.5.3.Fish smoking units .............................................................................................................. 33 7.5.4.Coffee roasting units ........................................................................................................... 34 7.5.5.Conclusions and perspectives for Cameroon..................................................................... 34

7.6. Policy Dialogue workshops ............................................................................................................... 35 7.7. Development and access to financing tools adapted to bioenergy projects and SMEs ................... 35

7.7.1.Financial risk perception and reduction .............................................................................. 36 7.7.2.Development of financing tools adapted to bioenergy and SMEs...................................... 36 7.7.3.Support, advisory services, (pre-)feasibility studies and project development................... 37 7.7.4.Implementation of two Bioenergy Centres.......................................................................... 37 7.7.5.Project development costs in Cameroon ............................................................................ 38 7.7.6.Cost of improved wood drying kiln in Cameroon ................................................................ 38

7.8. Specific information tools for SME entrepreneurs ............................................................................ 39 7.8.1.Need for a information service............................................................................................ 39 7.8.2.Need for demonstration projects......................................................................................... 40

7.9. Adapted administrative and regulatory framework for each SME sector.......................................... 41 7.9.1.Upstream wood-processing (saw mills) in Cameroon ........................................................ 41 7.9.2.Downstream wood-processing (joineries) in Cameroon..................................................... 41 7.9.3.Fish smokehouses in Cameroon ........................................................................................ 42


7.9.4.Small- and Medium-sized palm oil mills.............................................................................. 42 7.9.5.Drying of fruits and vegetables ........................................................................................... 42 7.9.6.Structure of renewable electricity sector in Senegal........................................................... 43 7.9.7.Poultry and dairy industrial farms in Senegal ..................................................................... 43

8. Implementation of two Bioenergy Centres in Senegal and Cameroon, and development of the activities of ENDA Energie and ERA-Cameroun................................................................................... 44

8.1. Missions of the Bioenergy Centres ................................................................................................... 44 8.1.1.Missions .............................................................................................................................. 44 8.1.2.Durability of the services provided by the two Bioenergy Centres ..................................... 44

8.2. Start-up activities of the Bioenergy Centres...................................................................................... 45 8.2.1.Strengthening of Centres’ capacities .................................................................................. 45 8.2.2.Presence of ENDA-Energie and ERA-Cameroun in international conferences related to energy and/or SMEs .................................................................................................... 45 8.2.3.Development of advertising tools........................................................................................ 47 8.2.4.Publication of information documents................................................................................. 47 8.2.5.First studies of the Centres................................................................................................. 48

8.3. Technical support.............................................................................................................................. 48 Tables Table 1 : Selected SME sectors in Senegal and Cameroon............................................................................ 14 Table 2 : Training methodology of the ENEFIBIO project ................................................................................ 20 Figures Figure 1 : ENEFIBIO strategy to address non technological barriers to bioenergy projects development...... 28 Photos Photo 1 : Vegetal oil and biodiesel ..................................................................................................................... 8 Photo 2 : Mid-term management meeting with the Cameroonian survey team............................................... 13 Photo 3 : Rice millers in Northern Senegal ...................................................................................................... 15 Photo 4 : Intensive poultry farming in Senegal................................................................................................. 15 Photo 5 : Bakery oven in Senegal .................................................................................................................... 16 Photo 6 : home-made wood drying kiln in a Cameroonian joinery................................................................... 17 Photo 7 : Basic palm oil fruits press in Cameroon ........................................................................................... 18 Photo 8 : wood-fuel for fish smoking in Cameroon .......................................................................................... 19 Photo 9 : Participants of the Bioenergy projects prefeasibility studies training course.................................... 21 Photo 10 : Participants of the Bioenergy projects feasibility studies training course ....................................... 23 Photo 11 : Visit of an industrial CHP unit, fuelled with peanut shells, within the SUNEOR factory in Kaolac............................................................................................................................................................... 24 Photo 12 : Participants of the training course on bioenergy projects development methodologies................. 25 Photo 13 : Training course on MS Excel .......................................................................................................... 26 Photo 14 : Vade-mecum for the development of bioenergy projects in Sub-Saharan Africa........................... 27 Photo 15 : participants in the Policy dialogue workshop in Yaoundé (July 2007)............................................ 35 Photo 16 : ENDA-Energie in the spotlight of the international bioenergy scene.............................................. 39 Photo 17 : Policy dialogue workshop in Senegal ............................................................................................. 41 Photo 18 : ENDA-Energie & ERA-Cam with ENEFIBIO team at Bois-Energie Fair in Orléans (France, 2007)................................................................................................................................................................. 46 Photo 19 : Sectoral fact sheets prepared by ENDA & ERA-Cameroun ........................................................... 47 Photo 20 : « Bioénergie International » journal ................................................................................................ 47


Acronyms

AREED : United Nations Environment Programme's Rural Energy Enterprise Development (REED) in Africa

ASER : Agence Sénégalaise d’Electrification Rurale

BCEAO : Banque Centrale des Etats de l'Afrique de l'Ouest

CIG : Common Interest Group

CO2 : Carbon Dioxide

EC : European Commission

EDF : European Development Fund

EIA : Environmental Impact Assessment

EIB : European Investment Bank

ESCo : Energy Service Company

ESMAP : Energy Sector Management Assistance Program

EU : European Union

FCFA : CFA Franc

NGO : Non Governmental Organization

SME : Small- and Medium-Sized Enterprise

SNI : Société Nationale d’Investissement du Cameroun

UNDP : United Nations Development Programme

UNEP : United Nations Environment Programme

UNEXPALM : Union des Exploitants de Palmiers à Huile ()


1. Context In every part of the world, the SME sector represents an essential socio-economic dynamics. However, in Sub-Saharan countries, the quality of the energy supply is a key factor that frequently hinders the health and the development of these small- and medium-sized businesses. In African countries, many SMEs produce themselves the energy (heat and/ or power) needed for their processes, using biomass or diesel fuelled generators. When biomass is used, the technology is often rudimentary, inefficient and then requires an important quantity of biomass as fuel. On-site energy production using small diesel units implies important expenses for the purchase of the fuel, due to growing diesel price. Furthermore, energy generation using fossil fuels generates significant greenhouse gases emissions, which contribute to global warming. Both techniques cause important expenses for fuel supply that may be fatal for the SMEs, especially for the most fragile ones. On the other hand, Sub-Saharan countries are characterized by economies where production and transformation activities in the agricultural and forestry sectors are largely dominant. These enterprises generate large quantities of biomasses – often wrongly considered as a waste – that can be utilized for efficient energy production. Some examples: Fish smokery, an activity commonly practised in Sub-Saharan Africa (Benin, Congo, Ivory Coast, Mali, Senegal, Chad), requires from 3 to 10 kg of wood per kg of fresh fish. In the capital of the Ivory Coast, Abidjan, the Firewood Association listed 400 units of fish smokery, consuming nearly 60.000 tonnes of wood, that is to say the quarter of the yearly consumption of the city. The artisanal breweries are numerous in Africa: beer from corn or sorghum in Benin, Burkina Faso, Cameroon, Nigeria, and Togo. The preparation of beer from sorghum consumes approximately 21.000 kJ/kg beer. In Burkina Faso, the wood consumption in the small scale breweries would represent nearly 20 % of the wood fuel overall consumption of the country. Most of the energy production devices currently used by SMEs in Sub-Saharan Africa are inefficient and polluting, while adapted and efficient bioenergy technologies have been successfully implemented and disseminated in SMEs in other developing regions. However, African SME managers do not always have the necessary information on the technologies available and on the improvements that could be made regarding the energy production. Furthermore, entrepreneurs face a lack of indispensable tools and services (project developers, technical & financial advisors, adapted financial solutions, etc.) which would enable them to improve the energy production within their SME, from the project idea to financing and implementation. It appears that the development of a bioenergy project in an African SME is hampered by several non technological barriers. These projects can be for instance the improvement of existing bioenergy equipment or the replacement of a fossil-fuelled device by a biomass-fuelled unit. Despite the efforts of African governments, these barriers may create an unfavourable framework for investments in efficient energy production from biomass. These hindrances can be classified into 3 categories:

a) Capacity barriers ; b) Administrative and regulatory barriers ; c) Information barriers.


1.1. Capacity barriers Local actors involved in the development of bioenergy units (e.g. independent consultants, consultancy companies, project developers, financing institutions), where they exist, have often inadequate skills and limited experience in this specific sector. Indeed, local consultants only have a quite vague knowledge of bioenergy technologies, their technical limitations, and economic specificities. Besides, these consultants do not often master the standard methodologies for project development, technical pre-feasibility and feasibility studies, market investigations or in-dept financial analysis.

1.2. Administrative and regulatory barriers Local administrative and regulatory procedures are sometimes not adapted to support the implementation of bioenergy equipments within African SMEs. These barriers can be very varied, for instance: the conditions for the purchase by the national power company of the electricity generated by an independent power producer, the procedures for licenses granting, the organisation of wood-fuel markets (authorisation to collect). This situation may lead to a framework that can hinder the development of bioenergy projects, while energy production from biomass brings numerous social and economic benefits for the country. A better understanding from local authorities of the technical, economic and environmental possibilities of bioenergy solutions appears to be an essential step to improve again these administrative and regulatory frameworks.

1.3. Information barriers Experience shows that many possible bioenergy projects within SMEs are even not initiated, while these companies have important energy needs and produce (or can have) sufficient amount of biomass as fuel. The reason of this situation is simple: most often, SME managers do not have any idea of the potential of bioenergy technologies. They have no information on technical potential or economic limitations about available bioenergy equipments. Moreover, these entrepreneurs have no contact person for a possible technical, financial or administrative support. The absence of equipment suppliers in Sub-Saharan countries can also be considered as a barrier due to the lack of information. Equipment suppliers (from the EU or other continents) have no well-developed commercial networks in Sub-Saharan countries because of the too much important approach costs and the lack of knowledge regarding the structure of SME sectors. The local or medium-sized commercial finance institutions have no sufficient technical and economic information about the energy sector, and even less about bioenergy. This lack of knowledge leads to a higher perception of financial risk associated with bioenergy projects. As a consequence, financial backers propose less favourable borrowing opportunities and/or conditions, compared to other activities: interest rates are raised (a risk premium is added) or higher guarantees are requested. Moreover, very few financial products adapted to bioenergy and to the specificity of SMEs are available in Sub-Saharan Africa. Larger companies (e.g. large wood processing units, palm oil mills), not considered by this project, have a better information network and can negotiate adapted conditions with local authorities. These large companies, being part of international groups, can benefit themselves from the worldwide experiences of other subsidiaries. However, they can act as a structuring actor for local SMEs, by promoting specialized equipment or by creating a market for technology suppliers. The energy use of biomass could contribute to the development of the SME sector while limiting the country expenditures for fossil energy acquisition, on condition that it provides an environment-friendly and cheaper energy. Bioenergy applications contribute as well to the fight against climate change. SME is furthermore a sector which generates employment and consequently contributes to local development and poverty alleviation.


2. Bioenergy: from improved domestic stove to modern industrial technologies

2.1. Definition

The purpose of bioenergy technologies is to use available biomass as a fuel or a raw material to produce energy. The biomasses that are suitable for energy production may have varying origins: from wood-fuel, to residues from food-processing industries (groundnuts shells, sugar cane bagasse, rice husk, palm oil nuts fibre and shell, corn cobs, coffee husk and spent-ground, etc.), to wood residues from wood-processing industries (bark, chips, shavings, off-cuts and sawdust, etc.) and to residues from agricultural activities (cotton stems, rice straw, etc.). Bioenergy technologies are able to generate different forms of energy:

electricity ; domestic heat and industrial heat (e.g. hot water, hot air or steam for wood drying,

drying or smoking of fruits & vegetables, coffee or cocoa roasting); cold for food conservation,

or to produce solid biofuels (e.g. charcoal, briquettes, pellets) ; liquid and gaseous biofuels (e.g. jatropha or palm oil, biodiesel, bioethanol).

The size and the production capacity of bioenergy technologies also vary a lot, depending on the available biomass resources and the energy needs. They differ as wide as from improved domestic stove to most modern industrial power plants.

Photo 1 : Vegetal oil and biodiesel

2.2. Advantages While the prices of fossil fuels are constantly growing, bioenergy technologies enable SME entrepreneurs to produce the energy requested for their process, using cheap fuels, if not free, and widely available. This mode of energy production contributes to increase the competitiveness of SMEs, thanks to a reduction of operating charges, for fuel purchase. Using local chains for biomass production and supply, instead of importing fossil fuels, bioenergy technologies stimulate local activities and businesses, especially in rural zones, being the most affected by the lack of incomes.


Bioenergy technologies have also the advantage that they do not contribute to greenhouse gases emissions and global warming. Indeed, the use of fossil fuels as oil products, natural gas or coal generates the emission of important quantities of carbon dioxide (CO2), which is one of the main greenhouse gases. On the other hand, the use of biomass as fuel for energy production does not result in an increase of CO2 in the atmosphere. Why bioenergy does not contribute to global warming while emitting CO2 ? When biomass is used as a fuel for energy production, CO2 is emitted, which is a greenhouse gas. However, this amount of emitted CO2 is roughly the same quantity of CO2 that has been captured by the biomass during its growing phases (thanks to photosynthesis). Therefore there is no emission of additional CO2 in the atmosphere: bioenergy technologies are neutral regarding CO2. The carbon cycle of bioenergy chains are considered as neutral, and they do not contribute to global warming. On the other hand, each use of fossil fuels implies the emission of CO2 and increases its concentration in the atmosphere. The carbon cycle of fossil fuels is considered as open and contributes to global warming.

2.3. Limitations

Bioenergy technologies are capital intensive. For the same production capacity, bioenergy technologies will require a higher initial investment, compared to devices fuelled with fossil fuels. However, this overinvestment is balanced rather quickly by the very low price of biomass, compared to fossil fuel such as diesel.


3. Development of a bioenergy unit

Bioenergy projects in SME are more complex to develop and to implement, compared to projects targeting energy production from fossil fuels. Indeed, bioenergies imply an adequacy between an energy demand (i.e. form of energy, demand profile) and a resource of available biomasses. This adequacy has to be guaranteed over a long period, on technical and commercial terms. The development of a bioenergy unit in a SME follows several steps, which aim at assessing the feasibility of the project, on its technical, commercial, financial and regulatory terms. This succession of steps may involve several actors:

• SME managers, who usually are the promoter of the project; • Energy advisors, who can assist the entrepreneurs all over

the different steps of project development, notably for the appraisal of project relevance (pre-feasibility study);

• Independent consultants or consultancy companies. They are energy specialists who will carry out the different parts of the feasibility study;

• Equipment suppliers, who will provide technical data for the feasibility study and will deliver the equipments;

• Financing institutions, who will provide a loan to the project holder;

• Administrations and ministries in the field of industry, energy, environment and finance, who define the administrative and regulatory framework for project development (licences and permits, tax systems, impact studies, etc.).


4. Actions and objectives of the ENEFIBIO project The ENEFIBIO project has contributed to create a more favourable framework to foster investments in SMEs from Sub-Saharan Africa for the implementation of efficient energy production technology from biomass. It has been co-financed by the European Commission, in the frame of the Intelligent Energy Europe Programme, and by the Walloon Region of Belgium. In order to address the 3 types of identified barriers hindering the development of bioenergy units within SMEs, the ENEFIBIO strategy planned 3 components of actions:

1) Capacity strengthening of the different actors involved in bioenergy projects development 2) Improvement of administrative and regulatory framework 3) Implementation of two Energy Centres (in Senegal and Cameroon).

The activities of the ENEFIBIO project have been focused on two countries, considered as representative of the Region: Senegal in West Africa and Cameroon in Central Africa.

A. Capacity strengthening of the different actors involved in bioenergy projects development

Through targeted training courses, the ENEFIBIO project has improved the capacities of African consultants, and made them able to assist SME entrepreneurs in converting a bioenergy project idea into a bankable dossier. Each training session has been designed in order to meet the need of each step of bioenergy project development:

• project identification • pre-feasibility study • technical feasibility study • market investigations • financial analysis • preparation of a business plan • financial packaging

In order to extend the benefits of the training courses and to replicate their results, a vade-mecum for the development of bioenergy projects in African SMEs has been published, gathering the outputs of each training session.

B. Improvement of national administrative and regulatory frameworks Through surveys among SME entrepreneurs and consultations among unions of several SME sectors, activities under the ENEFIBIO projects have brought an improved identification and understanding of administrative and regulatory barriers hindering bioenergy projects in Senegal and in Cameroon. In a second phase, the ENEFIBIO project has stimulated a dialogue between SME entrepreneurs, policy makers, bioenergy project developers and financial backers (including donors) from Cameroon and Senegal, in order to tackle non technological barriers through the formulation of concrete actions. Activities under this component of the project have contributed to strengthen the efforts of local governments to find solutions to these non technological barriers and to encourage an efficient use of biomass for energy production within African SMEs.

C. Implementation of two Bioenergy Centres (in Senegal and Cameroon) In order to improve the information services in the field of bioenergy, the ENEFIBIO project has contributed to the implementation of two Energy Centres. These services are operated by:

Environnement, Recherche et Action au Cameroun (ERA-Cameroun) in Cameroon

ENDA Tiers-Monde in Senegal. They provide technical, financial and regulatory information on bioenergy technologies, to local entrepreneurs.


Finally, through communication and visibility actions, the ENEFIBIO project has markedly improved the perception and the knowledge of administrations, policy makers, entrepreneurs, and of the general public on the potential and the advantages that can be brought by the energy use of biomass within African SMEs. The ENEFIBIO project has lasted for 30 months, from July 2005 to December 2007. Objectives of the ENEFIBIO project

1. Better opportunities for entrepreneurs to equip SMEs with bioenergy equipments, providing better quality and environment-friendly energy services, at lower costs and affordable conditions;

2. Improvement of SME efficiency. The improvement of energy performances (use of biomasses, which are cheaper than fossil fuels – mainly diesel – or through a lower consumption of biomass thanks to the purchase of high-performance equipments) leads to a reduction of energy costs of the company. By improving their energy efficiency, SMEs would be able to improve their financial situation;

3. Creation or preservation of local/ rural activities. The ENEFIBIO project focused on rural and peri-urban areas. The development of the SME sector will contribute to the creation and the preservation of numerous local activities. First, the direct employements of various enterprises would be maintained. Secondly, the prosperity of local SMEs has indirect social and economic impacts on the area through:

- the subcontractors of SMEs (for instance: biomass suppliers, transporters, reseller of manufactured products of the SME), which activities largely depend on the health SMEs;

- direct workers, families and all activities of households will create or maintain local services (school, shops, etc.).

The development of bioenergy within SMEs will also contribute to the fight against rural exodus towards urban areas.

4. Contribution to the struggle against poverty. The ENEFIBIO project targeted Small- and Medium- Sized Enterprises (SMEs). It is widely recognized that these small businesses have a significant impact on the social and economic development in the region where they are active. Because they bring activities and create wealth, the development of SME sectors will contribute to the struggle against poverty.

5. Contribution to the fight against global warming by stimulating the reduction of greenhouse gases emissions.

6. Diminution of dependence of African countries on the imports of fossil fuels.


5. Baseline study: surveys among SMEs in Senegal and Cameroon During the first half of 2006, a baseline study has been organized among SMEs in Senegal and Cameroon. This field survey campaign has been focused on the assessment of biomass resources and energy needs of targeted SME sectors. This survey has been carried out among SME sectors that generate biomasses as a residue, which could be used for energy production, and among enterprises that have energy needs which could be satisfied through bioenergy. In order to prepare the survey and to pre-select some interesting sector, a preliminary study has been performed in Senegal and Cameroon by gathering existing data: e.g. national statistics, data from relevant ministries and administration, previous report. This first step allowed a preliminary selection of SME sectors that showed the best potential in terms of development of bioenergy units (good technical and financial potential as well as high multiplication possibilities). ENDA and ERA-Cam set up survey teams, which have been trained during several preparation meetings. The two survey teams have interviewed SME entrepreneurs during an 8-week field-survey. A large number of SMEs have been visited among each sector, and the results can reasonably considered as representative.

Photo 2 : Mid-term management meeting with the Cameroonian survey team

The analysis of the surveys results led to the final selection of SMEs sectors the ENEFIBIO project should focus on. These sectors have been chosen based on the most promising in terms of potential for bioenergy project development and multiplication of project results. Some sectors that have been preliminary selected have finally been abandoned either because there is currently no existing bioenergy technology to satisfy the need of the sector, either because the multiplication potential for bioenergy is very limited (one-shot operation). The activities of the ENEFIBIO project have been focused afterwards on these 9 selected sectors.


Table 1 : Selected SME sectors in Senegal and Cameroon

Senegal Cameroon

Rice mills Upstream wood processing industry (sawmills)

Poultry farming Downstream wood processing industry (joinery, carpentry, etc.)

Dairy Farming Palm oil mills

Bakeries Drying and smoking of fruits and vegetables

Fish smokehouses This baseline study brought an assessment and a better understanding of the biomass resources generated by SMEs and the specific energy needs of these enterprises. This information is crucial for project developers as well as for equipment suppliers that would set up in Africa. The conclusions of the surveys are compiled in two reports “Energy typology of selected SMEs sectors”, which are summarized in the 2 following sections. Besides these results, the survey campaign bas has also allowed the interviews of SME entrepreneurs about the non-technological hindrance they face in entrepreneurs in trying to improve the energy production processes using biomass. These elements are developed under chapter 7.

5.1. SMEs in Senegal

5.1.1. Rice mills Industrial rice mills are located in the area of the Senegal River in the northern part of the country. Paddy de-husking generates large amount of rice husks. This bulky and solid residue, widely available, raises the problem of storage, as it occupies an important area near the mill and because of the fire risks. On the other hand, rice processing requires an important quantity of electricity, which is provided by the national power grid. However, the frequent power cuts from the grid cause considerable losses for the rice millers. The rice husk is not currently used, and represents a burden for the millers: the expenses necessary for its removal is quite high, as they can reach one million of CFA francs per milling campaign. On the other hand, because of the lack of drying facilities, most of the rice millers cannot work during raining season, from July to October, as the paddy is then too wet to obtain good quality de-husking process. The implementation of cogeneration equipments, using rice husks as a fuel, would offer several advantages to rice millers. First, it will provide the mill with cheaper electricity, while reducing dependence of the SME on the grid, and using a troublesome by-product. The heat generated by the unit can be used for drying the paddy harvested during raining season, and then increase the working period of the mill, currently limited to three months per year.


Photo 3 : Rice millers in Northern Senegal

5.1.2. Industrial poultry farming The poultry farming industry in Senegal is the most important of Western Africa, as it produces about seven million chicks per year. The farms are concentrated in the Rufisque Department, in the outer suburbs of Dakar. The standard farm usually breeds about 6 000 animals. The energy needs of the enterprises vary according to the type of farm. The mechanised farms and the farms that include a transformation or conservation unit have high electricity consumption. Their expenses for electricity can reach several million of CFA francs. Heat is only needed to rear the chicks. For this purpose, gas burners are used during one to two weeks, but the gas consumption is quite reasonable. The frequent power cuts of the grid handicap seriously the breeders: the absence of lighting causes important disturbance to the production of the laying hens. The breeders are then forced to use lanterns, or even candles to light the chicks. The most important farms are all equipped with back-up diesel generators to prevent the production from power cuts.

Photo 4 : Intensive poultry farming in Senegal


Biomethanation of poultry litter appears a technological solution adapted to this sector. The manure is fermented in an air-tight tank, thanks to bacterial activity, and produces a gas mix, called biogas. The biogas is combustible and can be used in a burner to produce the heat needed by the farm and even, used in a generator to produce a small quantity of electricity. The digestate can be used or sold as fertilizer.

5.1.3. Industrial dairy farming All the dairy farms using intensive grazing systems are located in the area of Dakar and Thies. Some important herds of dairy cattle are located in the Niayes area. They represent more than a thousand producing cows, spread into three main large farms and a dozen of smaller enterprises, which belong to private entrepreneurs of Dakar Region. Currently, the large intensive farms also ensure the transformation and the conditioning of their dairy products, as well as the marketing of the production, through specialised distribution networks. The energy demand of industrial dairy farms involves on one hand the need of heat to ensure the transformation of milk into yogurt and curds and, on the other hand, the need of cold for the conservation of milk and other dairy products. The large- and medium-sized farms are connected to national power grid but also have back-up diesel generators to prevent production from power cuts, while small farms are neither connected to the grid, nor have generators. Biomethanation units would be implemented in these intensive dairy farms, as they produce important amount of cattle dung and manure. This equipment is able to provide these enterprises with the heat and a part of the electricity they need. The production of cold is even possible from biogas, using specific devices.

5.1.4. Bakeries Small-scale bakeries are very common throughout Senegal. Their wood-fuel consumption is quite important and can reach about 1.5 tonne of wood per month. The bakers use about two cart loads of wood-fuel every week, at a price of about 2 000 to 2 500 CFA francs per unit. It appears that all bakers use the same working method and employ approximately the same traditional ovens. The bakers consider the wood consumption of these ovens as excessive. However, two models of improved bakery ovens have been developed. The wood consumption of these new ovens are three times lower and allow a saving of about 160 000 CFA francs per year. If the improved oven costs about 70 000 CFA francs, the investment's payback period will be very short. In this case, this new technology can be considered as economically interesting. However, the operating charges (maintenance, labour charges, etc.) are still difficult to assess.

Photo 5 : Bakery oven in Senegal


Basically, all the interviewed bakers seemed to be interested in the purchase of an improved oven. However, even if the improved oven enables the baker to make some savings with the reduced purchased of fuels, they face difficulties in accessing to credit.

5.2. SMEs in Cameroon

5.2.1. Upstream wood processing industries (Sawmills) According to the database of the Forestry Tax Service (May 2005), there would be 201 upstream wood processing units in Cameroon, among which about one third would mill more than 50,000 m³, on a year basis. According to the ENEFIBIO survey, more than 15% of theses sawmills are equipped with wood driers, which are powered with grid electricity or fuelled with biomass, for heat production. All the interviewed units have significant amounts of wood residues, generated by the milling activities. Sometimes, a part of these wood residues are given or sold to neighbouring households, otherwise they are burnt or even thrown away. Nevertheless, some sawmills use a part of their biomass for wood drying.

5.2.2. Downstream wood-processing industries The amount of wood processed in the Cameroonian joineries and carpentries would range between 60 and 240 m³ per year and per unit. These enterprises are mostly located in urban or peri-urban areas. All the visited units are connected to the power grid and they suffer from the frequent power cuts. In the city of Yaoundé, all these units generate on average 120 tonnes of wood residues per month (shavings, off-cuts and sawdust). Most of this biomass is bought by neighbouring households for domestic cooking. Some wood drying kilns are implemented in the interviewed units. They use either power grid, or biomass, or both, to produce the heat needed for the drying process. Most installed drying kilns have been constructed by the entrepreneur himself. Without any technical knowledge in the field of energy or wood drying, the implemented drying kilns have usually an inadequate design and very poor efficiency. It even happens that the drying kiln is designed in a way that the wood is dried directly with the smoke from the combustion of the wood residues, producing a very low quality “dried” wood.

Photo 6 : home-made wood drying kiln in a Cameroonian joinery


According to the visited entrepreneurs, dry wood could be sold at a price 10% to 40% higher than the price of non-dried wood. The use of wood drying kilns would also allow reducing the drying time, compared to natural open air drying, and then increasing the production rate, while offering higher quality timber.

5.2.3. Small and medium-sized palm oil mills In the frame of the ENEFIBIO activities, only small- or medium-scale palm oil mills have been surveyed. Bigger units, having plantations for more than 1,000 ha, are no longer considered as a SME. Small- or medium-scale units produce between 7,200 and 350,000 litres of palm oil per year. The size of the estate varies between 4 and 1,000 ha.

Photo 7 : Basic palm oil fruits press in Cameroon

Most of these mills are not connected to the national power grid. The bigger units have diesel generators. The medium-sized oil mills use heavy fuel boilers to cook palm nuts. These inefficient boilers would be usefully replaced by cogeneration equipments, fuelled with palm nuts fibre and shells. Indeed, these residues can easily be used for combustion, while the empty fruit bunches are less suitable for burning as they contain more impurities (stones, soils, etc.) and less residual oil. Smaller units are family firms or are managed by Common Interest Groups (CIGs). In these mills, nuts’ cooking is ensured by wood-fuelled traditional ovens. Oil is extracted using manual presses or mills driven by electricity from small diesel generators. Only a few part of the milling residues are used, blended with wood-fuel for nuts cooking. The unused residues are thrown away.

5.2.4. Drying and smoking of fruits and vegetables Fruits and vegetables drying or smoking units are usually small business, family-run or managed by Common Interest Groups. Most of the firms are connected to the national power grid and suffer from frequent power cuts. Some units, not connected to the grid, have a diesel generator to produce the electricity needed for the process. Even if some units produce themselves a part of the fruits or the vegetable to be processed, most of the firms buy the fruits and the vegetables on local markets. As a result, the resources of available biomass from these businesses are generally insufficient to consider the implementation of modern bioenergy equipments. Nevertheless, these transformation units sometimes use external source of biomass, as wood-fuel and biomass residues from joineries or plantations.


Photo 8 : wood-fuel for fish smoking in Cameroon

According to the surveyed SME managers, the use of efficient bioenergy equipment would allow a reduction of energy charges by 60% to 75%. However, according to these entrepreneurs biomass-fuelled drying devices would imply some issues concerning the quality of the smoked or dried product.


6. Capacities strengthening Capacity strengthening is the major component of the ENEFIBIO project. Three training courses have been organised. They match with the identified needs to ensure that all the necessary steps of the development of bioenergy project in African SMEs (e.g. pre-feasibility studies, financial analysis) are covered.

Table 2 : Training methodology of the ENEFIBIO project

Training course Main topics Target participants

“Prefeasibility studies of bioenergy projects”

Basic assessment of project viability through: basic technical knowledge of bioenergy options

(advantages-disadvantages); basic knowledge on technology costs; basic methodology to assess energy production

costs.

• Energy advisors (less skilled than technical consultants: NGOs, member of an administration or an agency, etc.)

• Technical consultants (independent workers or from consultancy company)

“Feasibility studies of bioenergy projects”

In-depth assessment of project feasibility through: advanced technical knowledge of bioenergy

options; evaluation of project productivity (energy or

biofuels) and inputs needs; methodology to assess technology costs; methodology to assess energy production costs.

• Technical consultants (independent workers or from consultancy company)

“Bioenergy project development in African SMEs”

Project development methodologies, e.g. identification, support to entrepreneurs, with a special focus on: - preparation of project dossier & budget; - financing options and mechanisms.

Advanced financial analysis of bioenergy project, e.g. - financing plan; - investment returns before and after financing; - pre- & post-financing cash-flow statements; - bebt serving and disbursement schedule; - consolidated accounts; - assessment and analysis of financial

indicators; - sensitivity analysis.

• Bioenergy project developers • Financial advisors for

bioenergy projects • (Technical consultants)

The training activities carried out allowed the development of the capacities of African consultants, and made them able to support and to advise SME managers from Sub-Saharan Africa, who want to improve the energy efficiency of their businesses, through the use of biomass.

6.1. Bioenergy projects prefeasibility studies training course A “Bioenergy project prefeasibility studies” training course has been held in Mbour (Senegal), from 04 to 07 September 2006. The purpose of this 4-day training session was to make African energy advisors able to carry out prefeasibility studies of bioenergy projects and to evaluate – in more or less one day – if a bioenergy project in a SME is realistic or not (first estimation of technical and economic viability). The training course has been divided into two parts:

− a theoretical part (2 days) on bioenergy technologies and their scope of application, as well as on methodology of prefeasibility studies ;

− another part dedicated to practical exercises of prefeasibility studies, including an in-site practical exercise.


With the assistance of CRA-W, ENDA and ERA-Cameroun have selected trainees corresponding to the following profile: they had to be engineers or superior technicians with imperative prerequisites in energy and notions in economics. The target sectors were energy advisors from consultancy, NGO or enterprises. The applicants had to send to ENDA or ERA-Cameroon their CV and a covering letter explaining why they wanted to take part to the training course and how they thought they would be able to replicate the results in order to promote bioenergy projects in their country. The following channels were used in order to spread the call for applicants:

ENEFIBIO project website: www.enefibio.com with an email address for the applications: [email protected];

relations network of the African partners, ENDA and ERA-Cameroun; database constituted by experts having participated to previous workshops organized by ERA-

Cameroun or ENDA. The following subjects have been treated in the theoretical part (2 days):

biofuels resources, properties, transport and supply chain; biomass conversion technologies: combustion, gasification, biogas production, and electricity

production and cogeneration. The two last days were dedicated to practical exercises leaning against concrete examples of SMEs identified during the field survey. Experts from the project consortium taught the participants a standard methodology to select realistic projects through prefeasibility studies. Three completed practical exercises have been conducted with the trainees (half a day each):

• prefeasibility study of electricity production from rice husk in the Senegal River region; • prefeasibility study of a wood drying unit in a non grid-connected saw mill in Cameroon; • prefeasibility study of electricity production from biogas produced in a dairy cattle farm in

Africa. These practical studies were conducted by small groups of 2 or 3 trainees and allowed them to evaluate the presented projects feasibility by:

identifying the type of data required in order to conduct a prefeasibility study; choosing the most adapted technology according to the needs, biofuels properties and site

specifications ; calculating biofuel availability, energy needs, unit annual economic balance and return on

invest rate ; thinking altogether to solutions to improve projects cost-effectiveness.

14 energy advisors have been successfully trained to carry out prefeasibility studies of bioenergy projects:

- 9 from Senegal (among which 3 from ENDA); - 5 from Cameroon (among which 3 from ERA-Cam).

Photo 9 : Participants of the Bioenergy projects prefeasibility studies training course


6.2. Bioenergy projects feasibility studies training course A “Bioenergy projects feasibility studies” training course has been held in Saint-Louis (Senegal), from 11 to 15 December 2006. The purpose of this five day-training session was to make African energy consultants able to evaluate – in about a week– if a bioenergy project in a SME is feasible or not (extended technical and economic viability). The training course focused on the following themes:

assessment of biomass resource and energy needs ; selection of suitable technology and first sizing ; estimation of project costs ; assessment of unit production and needs of inputs ; brief financial analysis (assessment of production costs) ; competitiveness of bioenergy, compared to other sources of energy.

Beside the theoretical lectures, practical cases of feasibility studies have been carried out with the participants. With the assistance of CRA-W, ENDA and ERA-Cameroun have selected trainees corresponding to the following profile: they had to be engineers or superior technicians with imperative sufficient capacities in thermodynamics and good prerequisites in economics. The target sectors were energy advisors from consultancy bureaux, NGO or enterprises. Several trainees from the training course on prefeasibility studies had manifested an interest in taking part to the sequel of this training course. After discussions among the project consortium, the ones who showed the best abilities have been selected to participate to the feasibility studies training course. Other participants have applied through the same methodology and channels as for the first training course. The training course has been divided into two parts: one theoretical and the other one dedicated to practical exercises. The following subjects have been treated in the theoretical part (2 days):

african biofuel resources and available technologies: selection criteria; feasibility studies: technical and economic study; feasibility studies: data to be collected on the field (preparation of the site visit).

The third day has been dedicated to a site visit to the industrial rice mills of Ross Bethio (Senegal River Delta region). The trainees had to collect all information needed in order to conduct a feasibility study. This site visit allowed them to confront theory with a realistic field situation and to clearly identify the ins and outs of a feasibility study. The two last days were dedicated to the conduct of a whole feasibility study based on the site visit. It evaluated the feasibility of electricity production from rice husk in industrial rice mills. This case study is known as a particular complex and exhaustive one. Every step of the study has been studied:

resource availability and supply; energy needs and technical solutions available; regulations; environmental effects; investments and economic viability.

The expertise of all attending African consultants (participants and ENDA and ERA-Cameroun teams) was a high added value to the conduct of this feasibility study. They all contributed with their own experience and brought several elements specific to African SMEs and bioenergy projects. 11 energy advisors have been successfully trained to carry out feasibility studies of bioenergy projects:

- 7 from Senegal (among which 3 from ENDA); - 4 from Cameroon (among which 1 from ERA-Cam).


Photo 10 : Participants of the Bioenergy projects feasibility studies training course

6.3. Training course on bioenergy projects development in Sub-Saharan Africa A 5-week training course has been held in Thiès (Senegal), from 1 October to 2 November 2007. While the two previous training courses were focussing on bioenergy technologies, their advantages and limitations and the methodology to roughly assess the technology costs and the energy production costs, this third training course mainly focussed on projects development methodologies and in-depth financial analysis. The main topics that have been taught are:

− general methodologies for project development and especially the identification of bioenergy projects;

− market investigation for required biomass, energy produced and by-products; − in-dept financial analysis; − preparation of project dossiers or business plans; − financing possibilities and financing prospecting strategies.

The target participants were consultants (independent workers or from consultancy companies), who have a master degree in management or in economics, or engineers / superior technicians with imperative sufficient capacities in management or economics. Several trainees from the previous training courses had manifested an interest in taking part to this third training course. However, as the topics and the target groups of this session were quite different (more focussed on project development and financial analysis than on technical matters), they have not been prioritized. The participants had to apply through the same methodology and channels as for the previous training courses. The call for participants has been spread using:

- the ENEFIBIO project website, - the relations network of the African partners, - the database constituted by experts having participated to previous workshops organized by

ERA-Cameroun or ENDA. Furthermore, the call for participants has been displayed in several interesting sites (e.g. Engineer School in Yaoundé), and during some energy-related events (e.g. Policy Dialogue Workshops, Energy & Development week in Dakar). With the assistance of CRA-W, ENDA and ERA-Cameroun have selected trainees, ensuring a balance between young and more experienced participants (to boost inter-trainees exchanges) and between the nationalities. 9 consultants form Cameroon and 10 from Senegal have been selected, as well as 1 Beninese young expert. The latter have been accepted because he has a perfect profile to attend the course. This has increased the regional impacts of the project. In total, 20 African have been successfully trained on bioenergy project development.


The training course has been organized using a 5-step methodology: 1) theoretical lectures; 2) common practical exercises; 3) small group practical exercises; 4) practical experiences: visits of existing bioenergy projects and facilities, lectures from actors in

energy project development (EC Delegation, UNDP, MDP specialist, private financing company);

5) integration of elements taught and critical use of tools and methodologies taught. Beyond this mythology, the course has also integrated transversal pedagogical elements, which are crucial skills in developing bioenergy projects:

a) foster participants’ written and oral presentation as well as speaking in public; b) upgrade computer skills, especially with MS Excel©; c) communication around a project and its holder; d) management and critical analysis of information.

The content of the training course was divided into thematic modules:

A. typology of bioenergy technologies (brief review of technologies); B. structure of energy sector in West and Central Africa (lectures given by ENDA and ERA-Cam); C. characteristics of bioenergy projects: biomass supply agreements and contracts ;

maintenance and operation of bioenergy equipments; D. upgrading participants skills in MS Excel©; E. bioenergy project cycle management and project identification (using EuropeAid’s PCM

methodology as model); F. in-depth financial analysis of project (e.g. financing plan, investment returns before and after

financing, pre- & post-financing cash-flow statements, debt serving and disbursement schedule, consolidated accounts, assessment and analysis of financial indicators, sensitivity analysis), using EuropeAid’s ECOFIN methodology as model;

G. financing sources and mechanisms for energy projects; H. writing project proposal/ business plan (e.g. financing prospecting strategies, financing dossier

writing, budget preparation); I. practical experiences in project financing (external lecturers); J. practical experiences in bioenergy project development: visit of bioenergy units.

Photo 11 : Visit of an industrial CHP unit, fuelled with peanut shells, within the SUNEOR factory in Kaolac


In order to improve the integration of the elements taught, practical exercises have been organised using 5 study cases:

• charcoal briquettes manufacturing; • marketing of small-scale biodigesters; • CHP generation in a rice mill, using rice-husks; • energy use of residues from several sawmills; • CHP generation by manure biomethanation in a dairy farm.

These study case have been used for practical exercises on project development methodology and in-depth financial analysis. As the exercises on the project identification methodologies deal with actors having often antagonistic interests in the project completion or non-completion, it has been judged better to use fictive study cases, with fictive company names. Anyway, these study cases are very similar with situations actually met by the ENEFIBIO project team. During this training course, the participants had the opportunity to visit 4 bioenergy applications:

− Combustible balls production unit, from clay and peanut shells, for domestic cooking and SME applications;

− Biomethanation project, using cattle manure, for domestic cooking; − development of improved oven for fish smoking project in the Sine Saloum mangrove; − industrial CHP unit fuelled with peanut shells.

These sites have been selected in order to cover the largest range of situation e.g. production of energy of different forms, technology used, unit scale. The visited sites have also been chosen in order to illustrate the element taught. In order to illustrate the different issues in identifying a bioenergy project, the visits have offered a wide variety of contexts (from village project to industrial equipments) and variety of motivation in developing the project, varying from a project promoter to another:

− creation of activities or improvement of energy supply for village association, − environment protection for « Environmental » NGO ; − energy independence for enterprises, etc.

20 African consultants have been successfully trained on bioenergy project development methodologies

Photo 12 : Participants of the training course on bioenergy projects development methodologies


Beyond this mythology, the course has also integrated transversal pedagogical elements, which are crucial skills in developing bioenergy projects:

e) foster participants’ written and oral presentation as well as speaking in public; f) upgrade computer skills, especially with MS Excel©; g) communication around a project and its holder; h) management and critical analysis of information.

Photo 13 : Training course on MS Excel

In total, 45 African consultants have been trained to support the development of bioenergy units within Sub-Saharan SMEs

6.4. Publication of a vade-mecum for bioenergy projects development In order to enhance the results and the outputs of the training sessions, a vade-mecum for bioenergy projects development has been published, gathering elements and methodologies from training activities. It describes all the necessary steps for the development of a bioenergy project and provides methodological help-to-decision tools for African bioenergy project developers and SME entrepreneurs. This guide aims at supporting the entrepreneurs, who have identified a potential bioenergy project and whish to develop it into a bankable dossier.


Photo 14 : Vade-mecum for the development of bioenergy projects in Sub-Saharan Africa

The vade-mecum is available on printed version, CD-Rom, or downloadable from ENEFIBIO project website: www.enefibio.com.


7. Improvement of national administrative and regulatory frameworks for the development of bioenergy units

7.1. Methodology

The surveys that have been carried out among SME managers in Cameroon and Senegal (see chapter 5), allowed recording the non technological barriers that face these entrepreneurs in trying to improve the energy production processes using biomass. These identified barriers have been analyzed and synthesized during two Sectoral Workshops (Yaoundé and Dakar), gathering SME managers as well as representatives of professional unions. Further to the precise understanding of the barriers, the participants have suggested measures to be implemented in order to tackle these hindrances to bioenergy projects development. Afterwards, two Policy Dialogue Workshops on the strategy for the integration of bioenergies within SMEs have been held in Senegal and Cameroon. These two workshops aimed at gathering high-level national policy makers in the field of energy, SME/ industry, finance and environment, in order to debate on the means that would be necessary to improve national administrative and regulatory frameworks that face the entrepreneurs when developing a bioenergy project. The two events led to the formulation of concrete actions to be carried out.

Figure 1 : ENEFIBIO strategy to address non technological barriers to bioenergy projects development

7.2. Situation in selected sectors The identified barriers, although they are specific to each SME sector, can be classified into different categories. Some barriers are multi-sectoral, in other words they are common to all investigated sectors in Cameroon or in Senegal. The lack of technical information (SME managers have no information regarding the available bioenergy technologies) and the issues of access to financing belong to these multi-sectoral barriers. If this first example can be addressed thank to the implementation of the two Energy Centres for Bioenergy, the difficulties of access to financing is a wide concern, that is difficult to solve in the simple frame of the ENEFIBIO project. The major causes are the lack of capacities for self-financing, the lack of confidence from financing institutions, the necessity to have financial guarantees, etc.


7.2.1. Senegalese selected sectors

Rice industries constitute the most promising sector in terms of bio-energy potential in Senegal given the high motivation of rice growers in finding a useful utilisation for their abundant and unused rice husk. Power production and cogeneration from rice husk is a well proven technology that would allow these SMEs to get rid of a bulky residue while diminishing their dependence towards the frequent power cuts from the national grid. Heat valorisation could be considered as well through rice drying during rainy season or for subsidiary activities, e.g. tomato drying. The potential of dairy and poultry breeding reside in the possibility of biogas production from animal manure. Power could be produced from this biogas, as well as heat to be used in chicks’ breeders or cold for milk or meat conservation. Moreover all fertilizing qualities of the digested manure would be preserved while pathogens would be killed thanks to the heat in the digesters. Regarding traditional bakeries, the project focuses on promoting the use of improved wood stoves, allowing a substantial saving of fuel, especially interesting since wood is a scarce resource in this country.

7.2.2. Cameroonian selected sectors First-stage wood processing units (saw mills) could find interest in using their abundant residues in biomass-fuelled dryers, particularly since they export most of their products towards high quality demanding customers. In second-stage wood processing units too, the use of wood residues-fuelled dryers could increase the value of the furniture sold by these joineries. From very small- to semi-industrial-sized palm oil tree plantations, improvements in the oil extraction can be brought by using extraction by-products, such as fibres and nutshells. These by-products could replace wood as a fuel for nut cooking in small palm oil mills, or be burnt in boilers in small cogeneration units. Beside, power production from palm oil residues has the advantage to diminish the dependence of oil mills towards the electricity grid or, when isolated, from diesel-fuelled generating units. Regarding fish smoking units, the idea would be to use improved furnaces, more effective, less wood-consuming, and more environmental- and health-friendly. Coffee roasting units too could take profit of the use of agricultural or forest residues in their process, instead of electricity from the grid or from a generating unit.

7.3. Non technological barriers to bio-energy projetcs in SMEs in Senegal SME managers from the selected sectors (rice growing, dairy and poultry breeding, and traditional bakeries) have been invited to take part to a national sectoral workshop aiming at identifying non technological barriers to the implementation of bio-energy projects in Senegal. In order to enrich the discussions, Ministries’ and financial backers’ representatives were also invited. European non technological barriers were eventually presented in order to boost the debate, while keeping in mind the specificities of the African context. The following subsections describe the identified barriers in Senegal, distinguishing multi-sectoral barriers from sector-specific barriers.

7.3.1. Multi-sectoral barriers The most often debated concern regarding the regulatory framework relates to the repurchase conditions to be negotiated with the national grid company for the electricity originating from independent producers. These encounter difficulties to come to cost-effective terms or to obtain a guaranteed repurchase price for their electricity production. Contracts seem to be negotiated on a case-by-case basis.


For a start, an inventory of the existing repurchase contracts would help to clarify the situation. Next it would be necessary to establish a common basis for contracts standardization or to launch public calls for tenders, in order to guarantee open competition. Contracts would however be easier to secure if small producers could get together in order to offer power on a more regular basis and in higher quantities. The national grid society actually claims the need for production planification; it is indeed essential to be able to insure the regular supply of electricity on the grid in order to respond instantaneously to demand and avoid power cuts. A requirement even easier to fulfil with bio-energy since biomass is a storable renewable energy source that can be utilised according to the needs. Other multi-sectoral barriers regarding regulation concern the lack of tax facilities for bio-energy project implementation. Heavy import taxes actually restrain potential investments in bio-energy technologies. SMEs’ limited financial means are obviously an important hindrance to investment. But small structures like SMEs also often meet difficulties to grasp all aspects of business accounting and find themselves generally short of arguments or guarantee to offer to banks in order to take out a loan. Micro-credit institutions have a great role to play in this problem, since they are able to procure the guarantees needed by small project developers. Financing bodies also show distrust regarding bio-energy investments, lacking of good examples or technical assistance. Banks could be more trustful if they could work hand in hand with local experts from resources centres tooled up to demonstrate the technical feasibility of a project. But before addressing concerns regarding financial means, project developers deplore the lack of available information about existing bio-energy solutions for their enterprise. What technologies suit their needs or means? Where to find relevant information? Who has the expertise? What are the financing solutions adapted to their situation? As many questions that demonstrate the importance of the presence on the African market of properly informed resources centres and well trained bio-energy consultants. Another frequently observed barrier concerns the lack of qualified manpower for the plant and machinery operation and maintenance, whether it is due to the difficulty to find them or to keep them. This widespread phenomenon is at the origin of plenty of abandoned projects across the Region and even the continent. There is therefore a strong need for professional training, in technical institutes as well as internally in the enterprises, in order to perpetuate knowledge and stabilize the qualified workforce. Besides, in order to reduce investment costs and maximize the chances to build up long-lasting and effective bio-energy projects, priority should be given to locally-built machineries, instead of opting for imported turnkey plants, certainly very efficient but not especially adapted to local climate and social specificities. In order to avoid pollution risks, it is also fundamental that the chosen technology be adapted to locally available biofuel and that operation and maintenance be made in full respect of the good practices. The regulatory framework is sometimes deficient or in abeyance regarding this matter.

7.3.2. Rice industries Several rice growers from the Senegal River Delta Region have already got together and are willing to find a common solution for their currently unused bulky rice husk. As described previously in the multi-sectoral barriers, the main concern of these rice industries regards the negotiation with the national grid society for the repurchase price of the electricity produced. A rice husk-fired power plant would of course consume a part of the generated power for its own use but the rest should clearly be sold to the grid for the cost-effectiveness of the plant. Some interesting renewable energy projects are for instance currently at a stop in Senegal because they were until now unable to come to cost-effective terms with the national grid company. Even if calculations could optimize the size of the plant regarding the range of operation, attention should be paid in order to ensure the rice husk supply. All rice growers of the Region do not intend or have the financial means to join this common initiative. Even if all of them would, at first, gladly get rid of this bulky residue, they might change their mind sensing a profit could be made from this activity. Long-term delivery contracts should insure the continuation of the future rice husk supply to the plant.


Rice husk provision would however be more secure if larger quantities of paddy (non husked rice) could be processed in industrial rice mills. According to the sources, between 50 and 70 % of the paddy is currently treated in traditional mills where rice is crushed and no husk is recoverable (the resulting bran is usually fed to cattle). These traditional rice mills constitute a very important income for many families in this region and it is not easy to envisage a cost-effective modernisation for this activity without depriving them of a part of their revenue. Since many arable lands in the Senegal River Region are still unworked (35,000 ha cultivated on a potential of 240,000), one can notice that rice growing in Senegal is not currently at its full capacity. This can be explained by the high quantities of imported rice, mainly from Asia, based on the supposedly preference of Senegalese consumers for foreign rice, compared to local production.

7.3.3. Dairy and poultry breeding farms Valorising dairy and chicken manure in anaerobic digesters is a very costly investment, especially when farmers are not always willing to associate around a common project. Besides, few farms have important needs for heating (typically for chicks breeding) while heat valorisation is a crucial matter to achieve the cost-effectiveness of a biogas-fuelled CHP plant. Most of their heat or cold requirements are presently supplied by bottled natural gas, which is still currently subsidized by the Government and therefore low-priced. Only locally built materials would enhance the economic feasibility of a manure-fed biogas plant, in opposition to past experiences based on imported technologies. Many past failures while using anaerobic digesters in Africa came from a lack of maintenance, qualified manpower and spare components. Private investments in the future could be more successful than previous communal experiences. Another strong barrier to poultry manure digesting is the sanitary risk of pathogens propagation when transporting chicken dung from farm to farm in order to gather it in a common digester. Farmers are also hesitant to keep manure in their walls, even if locked in a leak-proof digester. Risk chain and precaution measures should be assessed. Animal manure, and especially chicken manure, requires water addition in order to successfully get digested. Now water is a particularly scarce resource in Sahelian countries like Senegal, where in some regions it is strictly forbidden to pump ground water for non nutritious purposes. Rain- or used water recycling could be considered with a special attention to pathogen proliferation hazard. One can in addition weigh up the direct income from manure repurchase as a fertilizer to local green producers. Even if digested manure loses none of its fertilising properties, a costs-benefits analysis of the whole chain would permit to determine the most effective solution.

7.3.4. Traditional bakeries Traditional bakeries, located in rural areas, usually cook bread in homemade and inefficient wood-fuelled ovens. In isolated zones it is not always easy to find relevant information on technological improvements opportunities and existing financing possibilities. Moreover bakers encounter great difficulties to access loans for high-performance wood-fuelled stoves because of the lack of guarantees they offer. Micro-credit solutions have there an important role to play. Another specific problem met in Senegal concerns a disparately applied law that forbids the use of wood as a fuel in grid-connected communes of more than 10,000 inhabitants. Seemingly implemented according to the industrial bakeries lobby, the decree might obstruct the deployment of wood-fuelled ovens, even effective ones.


7.3.5. Conclusions and perspectives for Senegal The most promising SME sector for bio-energy deployment in Senegal is probably industrial rice mills in the Northern part of the country. There we find SME managers willing to associate in order to build a common bio-energy project that would solve two problems – enhance their power independence towards the national grid and get rid of their bulky rice husk – while bringing them an additional source of revenue. These managers are especially motivated since they are aware of the economic profit to be made from diversifying their activities. Electricity production from rice husk-fired power plants is a proven technology, even more cost-effective if heat can be valorised (for rice or vegetable or fruit drying). In addition, thanks to their high silica content, rice husk ashes could be sold to photovoltaic cells manufacturers, another entry that could weigh a lot in the costs-revenue balance. Dairy and poultry manure digestion is not as much promising because of several reasons. First, this investment is not conceivable without a breeders’ partnership and these managers, unlike rice growers, show few interest in getting together around a common project. Next, their energy needs are not very important and easily fulfilled with the grid and cheap natural gas bottles. Finally, they are used to get additional and immediate revenue from manure resale as a fertiliser to green producers. Manure is therefore not a bulky and useless residue. Regarding traditional bakeries, the widespread distribution of high-performance wood-fuelled bread ovens would allow a substantial saving of wood, a precious resource in a country where cutting down trees is forbidden. Investing in this improved technology has in addition a very short return-on-invest rate (less than a year) since it uses three times less wood. It is therefore a rather good candidate for short-term micro-credit and efforts should now in consequence focus on information diffusion.

7.4. Non technological barriers to bio-energy projects in SMEs in Cameroon SME managers from the selected sectors (saw mills, joineries, small-scaled palm oil mills, fish smoking and coffee roasting units) have been invited to take part to a national sectoral workshop aiming at identifying non technological barriers to the implementation of bio-energy projects in Cameroon. In order to enrich the discussions, Ministries’ and financial backers’ representatives were also invited. European non technological barriers were eventually presented in order to boost the debate, while keeping in mind the specificities of the African context. The following subsections describe the identified barriers in Cameroon, distinguishing multi-sectoral barriers from sector-specific barriers.

7.4.1. Multi-sectoral barriers The lack of information on bio-energy technologies available at a sufficiently low cost and offering a return-on-invest rate short enough to meet the requirements of lenders is a unanimously claimed barrier. The interest of an information platform within a resource centre is obvious here. Communication and exchanges between all different actors should clearly be enhanced. Demonstration projects are an interesting mean to promulgate bio-energy technologies since it is always easier to find confidence in a technology that one can see functioning. A universal barrier to the deployment of bioenergy projects is here again the difficulty to access financing, especially for small structures like SMEs. Short-term micro-credit and the establishment of guarantee funds for small enterprises should help developing this sector. Besides, providing assistance to project developers in feasibility evaluation and bankable project presentation would enhance the confidence of financial backers. But before attempting to find financing for a bio-energy project it is required by the Cameroonian law to conduct an environmental impact study. Now these studies are very expensive without any guarantee to obtain a loan afterwards. They are moreover not proportional to the size of the project and worth around 8,000 euros whatever the scale of the project. Because bioenergy projects in SMEs are often low- to medium-sized, this Prime Minister decree should be adapted so that the price of the environmental study matches the proportions of the project.


7.5. Upstream wood-processing units – saw mills

Before addressing recurrent hindrances to bio-energy deployment, such as lack of information or difficulties to access financing, it would be useful, in the saw mills sector, to develop the local demand in dry wood. The national market is indeed hindered by local taxes on dried wood and Cameroonian sawyers are more disposed to export their wood, to more regular demanding customers. Even if a law prohibiting the export of non dried wood is currently in preparation, one can ponder the real effect of such measure as far as another law, forbidding the sale of unprocessed trunks, is still today in apparently total abeyance. The local dry wood market will have chances to expand only if laws and decrees are applied uniformly for all. Finally sawyers deplore the scarcity of the interactions between all different actors of the wood sector, especially between first- and second-stage wood-processing units. This problem has been brought up by joiners too.

7.5.1. Downstream wood-processing units – joineries Although well aware of the advantages of selling dried wood-made furniture, Cameroonian joiners are nevertheless largely affected by the lack of information on the opportunities of investment in biomass-fuelled wood dryers. Some of them have built home-made dryers but deplore the insufficiency of data on possible efficiency improvements and the solutions to finance them. When considering installing a wood dryer, joiners are also confronted to the environmental and hygiene services, always suspicious regarding smoke-emitting devices, especially in urban areas. It seems that these agents are lacking of standards on emissions limits when they have to issue a salubriousness certificate and their decision is therefore often taken in an arbitrary way.

7.5.2. Small-scale palm oil mills The number of small palm oil plantations is constantly increasing in Cameroon. When they are not neighbouring industrial plantations where they can sell off their fresh fruit bunches, isolated estates of only a few hectares face difficulties to access a cost-effective market for their hand-crafted and non refined crude oil. A Cameroonian initiative currently intends to gather some of these small producers in a production pool large enough (minimum 200 hectares) to consider a possible consolidated investment in an efficient palm oil residue-fuelled cogeneration unit, and enhance the harvest and oil distribution channels structure. Efficient and modern machineries require qualified workforce for operation and maintenance. Now palm oil estates are often – if not always – located in isolated areas in regions where rural exodus is still prevalent. High salaries could keep qualified manpower in place but are not easy to offer in still rather modest units. Another problem, specific to the Cameroonian climate, regards the highly uneven rain distribution all year round. This has important consequences on palm tree fruit availability: 75 % of the yearly production has to be milled in 5 months, during the dry season, between January and May. Since fresh fruit bunches can not being stored, the size of the palm oil mill needs to be adjusted to deal with this production peak.

7.5.3. Fish smoking units Local demand for smoked fish is in constant growth in Cameroon. This activity mainly takes place in two coastal regions of the country (Idenau and Mouanko) and is usually practised by women, working alone or in small groups.


Smoking units are simply made of four wood stakes surmounted by a metal grate, placed outside or inside houses. Vast progress could be made regarding the efficiency and wood consumption of these furnaces. But fish smokers seem unaware of improvement opportunities; for instance, those of the South-Western Province (Idenau) had never heard of a brick-built closed furnace existing in the Littoral Province (Mouanko). Breeze block-built furnaces are also an efficient widespread technology in Senegal; exchanges between the two countries could help replicating this know-how, providing it is adapted to local fish species. Beside technological improvements, special attention should focus on smokers’ health which is seriously endangered by present smoking methods: eye and breathing diseases are common and strongly slow down this sector development. Health organisations such as the WHO or the Cameroonian Ministry of Social Affairs could look into this case and maybe back up improved furnaces financing. Micro-credit financing too could here again be very helpful, especially since fish smoking is a seasonal activity (6 months a year) in concordance with fish shoal movements and a loan for an improved furnace can not easily be reimbursed in 6 month-time.

7.5.4. Coffee roasting units Coffee roasting units in Cameroon are still uncommon because much of the coffee production is exported before transformation and Cameroonians are not much used yet to drink coffee. This still embryonic sector encounters the same barriers to bio-energy project development as others SME sectors: a lack of information on available and adapted technologies, lenders’ distrust setting short loan reimbursement periods and high bank interests, low financial means, etc. Besides, coffee cultivation generates few waste (branches and trunks are usually sold off for cooking purposes) and biomass would have to be found elsewhere (in neighbouring plantations for instance) in order to insure a sufficient supply to be used in the coffee roasting process.

7.5.5. Conclusions and perspectives for Cameroon SME sectors that show the best potential for bio-energy project development in Cameroon and deserve further inquiry are mostly joineries, small palm oil mills and fish smoking units. Saw mills currently export the huge majority of their production in the form of unprocessed trunks. Local demand for dried wood should first significantly increase before sawyers consider investing in biomass-fuelled wood dryers. Producing electricity from saw mills residue, to be used in process in replacement of gas oil-fuelled generating units, is also conceivable but requires substantial investments that only industrial saw mills (too big to be defined as SMEs) can afford. Joineries showed a great interest in settling biomass-fuelled wood dryers inside their unit. The margin to be gained from the sale of dried wood-made furniture is high enough to consider such an investment, providing a good information diffusion job and adapted financing solutions. Small-scale palm oil planters would significantly benefit from regrouping in order to install a centralised modern mill and organise their harvest and distribution channels. Smoked fish is a more and more demanded product in Cameroon. The development of this sector could be sped up thanks to informative and awareness campaigns highlighting technological improvements and health hazards. Coffee roasting is a still immature sector that faces primarily all the identified major non technological barriers to bio-energy development. Information diffusion would help project developers to upgrade their process and strengthen their trade.


7.6. Policy Dialogue workshops

Two Policy Dialogue workshops have been organized. The Cameroonian Policy Dialogue Workshop has been held in Yaoundé, on 25 and 26 July 2007, while the Senegalese Workshop has been held in Dakar, on 5 and 6 September 2007, within the Energy & Development Week organized by ENDA. These 2 day-workshops have gathered high-level representatives from Ministries of Energy, SME, Industry, Environment protection, Planning and land-use. Representatives from financing sectors as well as entrepreneurs and professional unions also took part in the debates. The discussions have been divided up into 3 sessions, corresponding to the main types of identified barriers:

1. Development and access to financing tools adapted to bioenergy and SMEs 2. Specific information tools for SME entrepreneurs 3. An adapted administrative and regulatory framework for each SME sector.

Photo 15 : participants in the Policy dialogue workshop in Yaoundé (July 2007)

7.7. Development and access to financing tools adapted to bioenergy projects and

SMEs The access of SME to financing is a general issue in Sub-Saharan Africa. According to the size of the bioenergy project planned, the causes of this lack of financing opportunities are different. For the poorest people (e.g. charcoal makers), le very low level of income and the very low level of investment capacities are the obvious reasons to the non-access to financing. For medium-sized enterprises, the loan solicitation in order to invest in bioenergy technologies is also tricky as local financing institutions do not perceive clearly the risks associated to such projects. As a consequence, the requested guaranties are beyond reach. In addition, a large number of these SME belongs to the informal sector, which makes the access to financing more complex. The borrowing possibilities with commercial banks are not easily practicable for these SME, which have to solicit a loan through parallel means, as local usurer, lending with conditions even harder than commercial banks. For the large bioenergy projects, which are capital intensive, the high commercial risk and country risk perceived by the international financing institutions make these classical sources of financing not that practicable without any external guaranties mechanisms.


7.7.1. Financial risk perception and reduction A major issue in the poor access to financing is the perception of the risk by the banks with regards to bioenergy projects, which they do not know. These local institutions, unlike the large international commercial banks, do not have enough resources to have an internal technical advisory service specialized in energy production projects. When the loan application is not simply rejected by these local banks, loans are conditioned by the provision of very important guaranties, which can be brought by few SMEs. Moreover, as these loans can be considered as risky, the borrowing condition (e.g. interest rate) can be unfavourable. The absence of guaranties prevents the bank in providing long-term loan to most precarious companies or entrepreneurs. The setting up of a guarantee fund for SME has been considered by the participants in the workshop as the ideal solution to address this issue. ERA-Cameroun and ENDA-Energie, having already a good technical expertise for bioenergy projects, could be the technical consultants for such a guarantee fund, being responsible for the technical analysis of the application dossiers, and being the link between the project promoter, the guarantee fund and the financial backers. However, the setting up of a guaranty structure for SME requires the mobilization of funds, which cannot be rapidly available. The financial institutions that took part in the two Policy Dialogue Workshops are deeply concerned by the poor quality of the financial analysis that usually accompanies the business plans submitted to them. It appears that the entrepreneurs and project developers have insufficient capacities for financial analysis of project and the setting up of a business plan in general. In addition, these local entrepreneurs have to convince the financial backers of their good and sound management capacities. The requested guaranties are indeed higher in order to compensate the deficit of clarity and transparency in most requests for loan.

7.7.2. Development of financing tools adapted to bioenergy and SMEs The classic issue in financing bioenergy projects is that these technologies are financial intensive, compared to energy production techniques using fossil fuels. On the other hand, bioenergy projects can bring several environmental benefits to the society that should be taken into account. The integration of externalities in the renewable energies production costs is a solution that has been widely discussed during the two Policy Dialogue workshops. However, the implementation possibilities of such a mechanism are complex and difficult to design in practice, in Cameroon and in Senegal. This however remains a fair principle that should be developed by the national Governments. The different initiatives of donors that could or try to develop financial products adapted to bioenergies, in particular regarding the provision of financial guaranties, have been listed and debated during the two workshops:

• the Société Nationale d’Investissement du Cameroun (SNI) would be likely to act in different ways: for instance by equity financing, the setting up of a guaranty fund or by the co-funding of projects;

• the European Investment Bank (EIB, activities limited to large projects); • the European Commission, through its different programmes (e.g. the EDF or the ACP-EU

Energy Facility); • the Banque des Etats d’Afrique Centrale, l’Union Economique et Monétaire Ouest Africaine (or

the BCEAO), or the Arab Banks; • Specific programmes from different international donors, acting directly or through

microfinance agencies, for instance: - the ESMAP, from World Bank, - the micro-finance agencies implemented by the UNDP.

Several financing mechanisms have been implemented within the EU, or in the entire world, for instance:

the revolving funds; the third party financing; the flexibility mechanisms implemented in the frame of the Kyoto Protocol, and particularly

the Clean Development Mechanisms.


The revolving funds seemed to have brought good results in the Yaoundé area, thanks to the action of ERA-Cameroun and the Decentralized Spanish Cooperation. This financing scheme allows putting at a bank’s disposal a fund that can be use for the financing of bioenergy projects. This system would merit to be broadened to a larger area and/or exported in other region of Africa to support bioenergy. Third party financing is an energy project financing mechanism that has meet a great success in Europe, America and Asia. This mechanism applies for projects producing energy or allowing energy saving in a host enterprise (e.g. a food- or wood-processing industry). The question of the applicability of such a mechanism in Senegal and in Cameroon has been discussed. The Energy Service Company (ESCo) is usually a private company but can also be public. The latter is thornier to implement, while the constitution of a private ESCo is more practicable. The most realistic scheme would be the situation in which the State is able to mobilize the necessary funds but in which the management of the third party financing would be ensured by a private body. It is important to keep in mind that this type of mechanism applies easier for large power production projects, as the power sale is easier to meter. The CDM-funded projects, while numerous in other regions of the world, are developing with difficulty in Africa. On the basis of the experience gained so far, it appears that the CDM does not constitute a financing tool adapted to African SMEs, as it require an important initial financial investment from project promoter for dossier preparation. Otherwise, small bioenergy project within a SME cannot be eligible to CDM unless they are clustered. Indeed, only the projects generating an energy saving equivalent to 15,000 tonnes equivalent CO2 per year can be accepted, which is far from the project that could be proposed by rural SMEs in the sectors selected by the ENEFIBIO project. Moreover, the clustering possibilities are not easy as in most SME sectors, the competition persuade the local entrepreneurs to certain confidentiality.

7.7.3. Support, advisory services, (pre-)feasibility studies and project development The financial backers who were present in the Policy Dialogue Workshops have reminded the participants that the preparation of sound technical and economic study, accompanied by a detailed financial analysis, which comprises an in-depth risk analysis, greatly allows facilitating the negotiations with financial institutions. The strategy of the AREED programme, financed by the UNEP and E+Co in several African countries, propose an interesting example of services for the business development in renewable energy production. Indeed, AREDD brings both a technical expertise to project promoters and a start-up financing. Such a programme should be broadened in Central Africa and Cameroon. It remains however conditioned by the mobilization of funds and technical experts.

7.7.4. Implementation of two Bioenergy Centres The implementation of national Bioenergy Centres would allow the project promoters taking advantage of an support service in order to fulfil the different procedures but also to encourage the creation of a Partnership Guarantee, which will support the carrying out of prefeasibility studies of the preliminary evaluation of business plans. The development of the activities of ENDA-Energie and ERA-Cameroun as Bioenergy Centres is one of the 3 components of the ENEFIBIO project. These two Centres will ensure a support service for local entrepreneurs for bioenergy project development (e.g. advisory service, information dissemination). However, the long-term financing of these services, after the end of the ENEFIBIO project remains a crucial question. Adequate strategies have then to be settled to ensure the durability of the activities of these two Centres, which need to support themselves, either through paying services, subscription fees of membership, advertising for equipment suppliers or through subsidies. It is important to keep in mind that, at present time, these two Bioenergy Centres cannot be funded with the sole participation of member SMEs. In Cameroon, ERA-Cameroun has established contacts with several donors and an agreement in principle has been found to support a pilot project that will allow on one hand to increase the guarantee funds already implemented with ERA-Cameroun and, on the other hand to finance the activities of the Bioenergy Centre.


In addition to an expertise service upon request, the participants of the Policy Dialogue Workshop in Senegal have suggested the compilation and the edition of a handbook drawing up a summary of the financing options applicable to bioenergy projects, in order to address the lack of experience of local financing institution, the bad appreciation of financial risks associated and the crucial lack of information regarding bioenergy opportunities. This document should be prepared thanks to collaboration in Senegal between the Bioenergy Centre (ENDA) and the Direction of SME (Minsitry of SME, entrepreneurship and Microfinance).

7.7.5. Project development costs in Cameroon In each considered sectors in Cameroon, the high project development costs have been mentioned as one of main hindrance to bioenergy projects development. The fixed costs of Environmental Impact Assessment (EIA), whatever the size of the bioenergy project considered, hardly burdens the project costs. Two concrete actions have been proposed to address this issue:

a) the revision of the Cameroonian Decree N° 2005/0577/PM of 23 February 2005 setting the procedures for Environmental Impact Assessment.

Different solutions have been debated on this topic during the workshop in Cameroon:

- the settlement of a EIA price proportionally to the capacity/ size of investment of the project studied, or the definition of classes of projects according to their size, having each a specified EIA cost;

- to exempt the smaller projects, below a size to define, from the payment of the EIA; - to claim the EIA cost only if the project has been accepted.

The modification of this Decree should be the subject of an inter-ministry dialogue and must come with a revision strategy, gathering all concerned actors and defining clearly the objectives and the planned consequences. However, this revision committee have to be led by one ministry, even if the EIA are transversal by nature. It has been suggested that the Ministry of SMEs will be the promoter and the lead body of this revision committee.

b) the clustering of SMEs among a same sector.

The clustering of actors within some SME sectors in a larger body will allow savings through economy of scale effect and will facilitate the setting up of a joint guaranty. This mechanism, which is already practised in other African countries, would allow the financing projects development costs by all the associated members. In Cameroon, the clustering of enterprises of several sectors has already been initiated. ERA-Cameroun has brought support to the creation of the CIG PROMED, which already gathers about 100 joiners in the Yaoundé area. One of the priority objectives of this union is to support its member for the implementation of improved wood drying kilns, by allowing them taking part in training sessions on the construction of those kilns in November 2007. Representatives of small- and medium sized palm oil mills have also expressed their wish to group together into a sectoral cluster. As a consequence, clustering actions are ongoing, with the creation of the Union des Exploitants de Palmiers à Huile (UNEXPALM).

7.7.6. Cost of improved wood drying kiln in Cameroon

The cost of improved wood drying kiln has been identified as a major barrier for saw miller and joiners in Cameroon, who wish to dry their plank using bioenergy. The granting of tax relief would allow lightening the investment costs for entrepreneurs form these two sectors, who want to dry their planks using the wood residues generated by the company as a fuel. This reform ended up in November 2007 with the passing of the new Finance Act 2008, which grant several advantages and facilities to PME. Thanks to the action of the ENEFIBIO project, this new Finance Act brings SMEs from priority sectors (as environment or energy) a VAT relief for during the two first years of activity. In addition, these SMEs will be exempted from taxes for some imported products, as construction materials or equipments that will contribute to environment protection. SMEs from these sectors will be able to rely on these new tax measures to invest in biomass-fuelled wood drying kilns. Moreover, the Government committed during the National Forum on SMEs to create a single window for the setting up of new enterprises, which would also lead to another reduction of administrative costs linked to the implementation of improved wood drying kiln in Cameroon.


7.8. Specific information tools for SME entrepreneurs

7.8.1. Need for a information service The lack of technical and economic information about bioenergy opportunities is an important hindrance that faces the entrepreneurs in each sector considered by the ENEFIBIO project. The first consequence is the SME managers merely do not have any knowledge about available bioenergy technologies, their cost, and the saving they could allowed. The interviewed entrepreneurs also lamented their lack of expertise for bioenergy project development or the quick appraisal of existing technologies (pre-feasibility study). The development of the activities of ENDA-Energie and ERA-Cameroon in assuming the role of Bioenergy Information Service (dissemination of information and knowledge networking) is one of the main components of the ENEFIBIO project. A Bioenergy Information Centre as ENDA or ERA can also bring several elements in structuring different sector and facilitating the grouping of SMEs in order to boost the development of bioenergy projects. In addition, acting as an intermediary between professionals, the 2 Centres allow promoting good practises and success stories, while also disseminating the outputs of projects that haven’t been successful.

Photo 16 : ENDA-Energie in the spotlight of the international bioenergy scene

In Cameroon, the participants of the workshop have agreed to entrust to ERA-Cameroun the tasks and the function of Bioenergy Information Centre, in the continuity of the ENEFIBIO project. In Senegal, the participants have insisted on the complementarity of the Action of ENDA and the mission of ASER. However, the durability of the activities of the two Bioenergy Information Centres and their financing after the end of the ENEFIBIO project remains a major issue. The financing of the Centres could be ensured:

- using subscription fees by professional members, who can take advantage of free services (information tools);

- through paying services (e.g. studies); - using sponsoring for e.g. equipment suppliers; - with public subsidies; - or by a combination of these options.


The durability of the two Bioenergy Information Centres implemented in the frame of the ENEFIBIO project will have to follow 3 steps:

1. to define precisely the structure of the Bioenergy Information Centres and the services they are able to provide (e.g. content, information, expertise, means of dissemination);

2. to define precisely the methods of technical and financial operation (e.g through sponsoring, subsidies, paying services);

3. to draw up a strategy for the promotion and the marketing of the 2 Centres with all concerned actors, also but at Sub-Regional level, with international institutions and equipment suppliers.

According to the contact taken and the interviews made among SME entrepreneurs, it appears that to be adopted by local SMEs, the Bioenergy Information Centres have first to support the projects promoters in concluding financial packaging. The other components of the services that could be provided by the Centres, as the dissemination of technical information can be concretely implemented in a second phase. During the performance of the ENEFIBIO activities, the project team has noticed that SME are willing to make use of the expertise of the Centres for bioenergy project development. They are ready to pay for this expertise. On the other hand, the other potential services to be provided by the Centres (e.g. dissemination of information, structuring SME sectors), even if considered as important by SME entrepreneurs, seem to be unlikely financed by the SMEs themselves.

7.8.2. Need for demonstration projects It is not an easy task for an entrepreneur to find accurate information on the performance and the financial profitability of available bioenergy technologies. Several EC-funded programmes, among which the COGEN programme in South East Asia, have showed the strong importance of demonstration projects accompanied with adapted information efforts, in developing bioenergy. These demonstration projects appeared to be very powerful tools to convince entrepreneurs to invest in similar techniques. Demonstration projects are useful in developing countries but also within the EU where they were a important component of the European strategy to develop renewable energies and bioenergy in particular. Demonstration projects that have been implemented in Africa have proved to be useful and allowed convincing entrepreneurs, but also the financial backers. These demonstration activities are usually partially financed with public funds, which only cover a share of the project costs (from 5 % to 100%). They are implemented for demonstrating the technical and financial applicability of fully commercial bioenergy applications and allow the multiplication of project that will not be subsidised anymore. During the two Policy Dialogue Workshops, several financing possibilities have been suggested to support demonstration projects:

the ACP-EU Energy Facility; the European Development Fund (EDF); the GTZ’s Policy Development Facitlity (PDF).

The participants in the Cameroonian workshop have decided to prepare an application to the EDF for demonstration operations in the field of bioenergies. However, the dossier preparation and the procedures to request EDF support are far to be easy. As Bioenergy Centre, ERA-Cameroun would provide a concrete support to Cameroonian entrepreneurs. The first task is to identify precisely the demonstration projects that could usefully be implemented in Cameroon. Again, ERA-Cameroun will have to play a crucial role in informing the entrepreneurs and the sectoral unions and also the relevant administrations and ministries about the international financing opportunities that could support demonstration projects.


7.9. Adapted administrative and regulatory framework for each SME sector In both Senegalese and Cameroonian Policy Dialogue Workshop, this debate session has gathered the barriers which are specific to the organization and the operation modes of SME sectors selected by the ENEFIBIO projects.

Photo 17 : Policy dialogue workshop in Senegal

7.9.1. Upstream wood-processing (saw mills) in Cameroon Although the dried wood market seems to be very promising in terms of volumes and added-value, it still remains quite uncertain through lack of clear incentive legislation. Concerning this issue, the participants of the Policy Dialogue Workshop in Cameroon have suggested that a request for a preferential tax relief applied to national transactions of dried wood to be formulated by ERA-Cameroun to the Tax Reform Commission (Sub-Commission on Forest sector). For the participants, the implementation of one or several demonstration projects will act as appeal operation to boost the development of wood drying kilns fuelled with wood residues. The interviewed saw millers are very interested by a long term planning of felling areas in order to avoid long movement of small- and medium-sized sawmill from one felling area to another. The rationalization of felling area planning and management would allow the sawmills settling in a site where biomass-fuelled wood drying kilns could be installed. The participants of the Cameroonian Policy Dialogue Workshop have proposed that the ENEFIBIO Follow-Up Committee, assisted by ERA-Cameroun, submits a comprehensive proposition of modification of the forest planning and management rule to the Ministry of Forests.

7.9.2. Downstream wood-processing (joineries) in Cameroon The fire risks linked with the operation of a home-made wood drying kiln fuelled with biomass seem to be the major barrier for the implementation of such equipment in Cameroonian joineries. Indeed, the hand-made design of these kilns and the proximity of the kiln furnace with the wood residues storage area (mainly sawdust and wood shavings), which is due to the lack of available space in the joineries, are not reassuring elements. The participants of the Cameroonian Policy Dialogue Workshop think that an information sheet prepared by ERA-Cameroun on good practices on wood drying would allow the joiners limiting their worries about fire risks. Moreover, the application of these good practices will allow facilitating the taking out of fire insurance. The latter will reassure both the entrepreneurs and the financial backers.


The issues linked to arbitrary nature of salubrity assessment made by the relevant administration can only be addressed through the definition and the use of formalized and normalized assessment procedures. ERA-Cameroun has been asked to prepare, in collaboration with some saw millers, a normalized procedure proposal, along with a supporting dossier (including acceptable environmental norms with clear, measurable and checkable control criteria) and to submit this dossier to the Ministry of Environment. The lack of available space in the urban and suburban joineries for the implementation of improved wood drying kilns is a issue that can hardly be addressed by the participants of the workshop. The latter have suggested the clustering of joineries and the implementation of common drying kilns.

7.9.3. Fish smokehouses in Cameroon The women smoking fishes complain regularly about the health problems caused by this activity: e.g. smoke in the eyes, respiratory diseases, extend exposition to heat. It is important to keep in mind that these women do not have any information concerning neither the good practices of this sector, nor about the existence of improved smoking ovens, their performance, their profitability and the improvement in working conditions these oven can bring. These improved smoking ovens are not developed in Cameroon, while they are widely spread in Senegal. The participants of the Policy Dialogue Workshop in Cameroon have suggested publishing a information sheet detailing the technical, economical and sanitary advantages of the improved smoking oven employed in Senegal. The participants have also mandated ERA-Cameroun to coordinate with the Ministry of Health the preparation of this document synthesizing the good practices for fish smoking, avoiding health problems. The fact sheet on the Senegalese improved “parpaing” oven for fish smokehouses, published in the frame of the ENEFIBIO project will be put at the disposal of the women in charge of fish smoking. The women operating the fish smoking have also requested a better enforcement of the Decree on the use of deadwood, that would allow them securing their supply in wood fuel and guaranteeing the durability of their activity and incomes.

7.9.4. Small- and Medium-sized palm oil mills The barriers to bioenergy project developments identified with the oil millers belong to several types. Some hindrances as the seasonality of the oil production, or the remote location of these mills (leading to difficulties in finding a workforce motivated but also able to ensure the operation and the maintenance of a steam boiler), are structural issues and cannot be improved by the sole interventions of the participants of the Policy Dialogue Workshop. The high investment costs for efficient bioenergy equipment as well as prohibitive project development costs could be considerably reduced by a better structuring of the sector through a clustering a small and medium-sized businesses into a larger union. The representatives of this sector, who were present at the workshop, have showed a great interest in achieving such a clustering. The representatives of UNEXPALM have committed themselves to initiate actions to that effect, with the assistance of ERA-Cameroun. In order to fill the lack of information on available bioenergy technologies, their cost, and their technical and economic advantages, it has been suggested that ERA-Cameroun prepare an information sheet. This has already been planned in the frame of the ENEFIBIO project and this fact sheets will be distributed to entrepreneurs from this sector.

7.9.5. Drying of fruits and vegetables As for the other sector, information documents prepared by ERA-Cameroun would allow the entrepreneurs of this sector having a better understanding on efficient bioenergy technologies that could be used in SMEs which dry fruits or vegetables. ERA-Cameroun will also attend to facilitate the structuring of most promising SMEs of this sector.


7.9.6. Structure of renewable electricity sector in Senegal The absence of formal and legal framework for the production and the sale of electricity produced by independent power producers from renewable energy sources in Senegal, especially the nonexistence of official power purchase rates (purchase at guaranteed prices), and the legal status of independent power producers, has appeared as the essential barriers to the development of bioenergy in Senegal. The participants of the workshop in Dakar have been informed of the process initiated by the Senegalese government in order to implement regulations on the conditions of the purchase of green electricity. Terms of reference have been produced and a technical committee already drafted a first proposal. The presence of SENELEC and ASER in the Policy Dialogue Workshop has allowed outlining possibilities, even if no precise commitment has been taken. It will be important to take advantage of this new juridical framework for renewable energy production, which is in implementing process, to create the adequate regulatory conditions for the production and especially the optimal pricing for energy produced from renewable source.

7.9.7. Poultry and dairy industrial farms in Senegal The main hindrances that face these two sectors for the development of biomethanation project using poultry or cattle manure were:

the dispersal of poultry and dairy farms over the region; the nonexistence of successful demonstration/pilot projects.

Following the discussions during the Policy Dialogue Workshop in Senegal, It appeared that the solution of clustering the farms together was not really practicable. However, the idea of monitored pilot/ demonstration biomethanation project has been confirmed, especially for these farms.


8. Implementation of two Bioenergy Centres in Senegal and Cameroon, and development of the activities of ENDA Energie and ERA-Cameroun

In order to address to observed lack of technical and economic information of SME entrepreneurs about bioenergy technologies, the ENEFIBIO project has contributed to the implementation of two Bioenergy Centres, in Senegal and in Cameroon. They are respectively housed by ENDA-Energie and ERA-Cameroun.

8.1. Missions of the Bioenergy Centres

8.1.1. Missions The main purpose of these two Centres is to promote the development of an efficient energy use of biomass in African SMEs, through the dissemination of technical information on available bioenergy technologies, including their advantages and limitations, for SME managers and local entrepreneurs. The main activities of these Centres will be:

1. to support SME entrepreneurs in developing bioenergy projects : e.g. assistance in business plan preparation or investigations for financing options;

2. to disseminate information to a wide range of SME entrepreneurs about the available bioenergy technologies, their advantages and limitations and the economic benefits they can bring;

3. to provide a technical support to professional unions in structuring some SME sectors (e.g. SMEs clustering into CIG, unions or federations);

4. to provide a technical support to ministries and administrations in order to continue improving the administrative and regulatory framework that will favour the development of bioenergy projects.

As mentioned in Chapter 7, according to the contacts taken and the interviews made among SME entrepreneurs during the field survey and the different workshops, it appears that, to be adopted by local SMEs, the Bioenergy Centres have first to support the project promoters in assisting them to search for external funding. The other components of the services that could be provided by the Centres, as the dissemination of technical information, can be implemented in a further phase.

8.1.2. Durability of the services provided by the two Bioenergy Centres As pointed out in chapter 7, the durability of the activities of the two Bioenergy Centres and their financing after the end of the ENEFIBIO project remains a major issue. The financing of the Centres could be ensured:

- using subscription fees by professional members, who can take advantage of free services (information tools);

- through paying services (e.g. studies); - using sponsoring/ advertising (e.g. from equipment suppliers); - with public subsidies; - or by a combination of these options.

The support of equipment suppliers through sponsoring and/or advertising seems to be the less practicable solution, because few sectors would need imported bioenergy equipments distributed or retailed by international or local companies, which could sponsor the activity of the Centres, while most of the identified bioenergy solutions can be mostly home-made by the project promoters (e.g. improved oven, biomethanation facility). Usually, the financing of such a structure always starts in the form of subsidies, because the Bioenergy Centres will have first to be known by the SME entrepreneurs and to get some first professional references in order to be considered as reliable experts.


In Cameroon, ERA-Cameroun has established contacts with several donors and an agreement in principle has been found with the French cooperation to support a pilot project that will allow, on one hand broadening the guarantee fund already implemented with ERA-Cameroun and, on the other hand financing the activities of the Bioenergy Centre.

8.2. Start-up activities of the Bioenergy Centres Several preliminary activities have been carried out in the frame of the ENEFIBIO project in order to broaden the capacities of the two Bioenergy Centres and to place ENDA & ERA-Cameroun in the foreground of the bioenergy scene. Indeed, to act as Bioenergy Centres, these two institutions as to be known and considered by SME entrepreneurs as reliable experts in bioenergy. These activities can be split into 4 categories of actions:

a) strengthening Centres’ capacities ; b) presence of ENDA and ERA-Cameroun in international conferences related to energy

and/or SMEs; c) development of advertising tools; d) publication of information documents.

8.2.1. Strengthening of Centres’ capacities

While the executive managers from ENDA and ERA-Cameroun participated as trainer-experts in the 3 training courses that have been organized in the frame of the ENEFIBIO project, other staff members from these two institutions took part in the course as trainees. Thanks to these 3 training activities the whole staff from ENDA and ERA-Cameroun is now able to support bioenergy project development with SME entrepreneurs.

8.2.2. Presence of ENDA-Energie and ERA-Cameroun in international conferences related to energy and/or SMEs

During the ENEFIBIO project duration, ENDA and ERA-Cameroun have taken part in several international fairs and conferences related to energy and/or SME. In these events ENDA and ERA-Cameroun have been in touch with international experts, equipment suppliers and potential end-users of African bioenergy projects (especially for biofuels market). In the conferences that have been held in Senegal and Cameroon, ENDA and ERA-Cameroun had the opportunity to meet SME managers that are potential beneficiaries of the services provided by the two Bioenergy Centres.

PISE 2005 Fair in Dakar (September 2005) In September 2005, ENDA took part in “PISE 2005”. Organized by the MEDES (Mouvement des Entreprises du Senegal), PISE 2005 is a Sectoral meeting to foster EU/ACP inter-company partnerships and investments in the energy sector. Mainly energy services or equipment suppliers from EU, Senegal, Cameroon and Mali attended the event.

PROMOTE 2005 Fair in Yaoundé, Cameroon (December 2005) ERA-Cameroun took part in the International exhibition for enterprises (“PROMOTE 2005”) on 6-12 December 2005 in Yaoundé. This exhibition focused on innovation in enterprises and aims at creating business partnerships. Companies mainly from Cameroon but also from the Sub-Region and the EU attended the event. 71 companies attending the exhibition and a wide range of sectors were represented. ERA-Cameroun wrote out a questionnaire that has been submitted to the visited companies. The questionnaire asked the visited SMEs about their activities, energy needs and their potential interest in bioenergy and in the purpose of the ENEFIBIO project. Among the 71 SMEs met,

28 shown an interest in the project and provided the consortium with the completed questionnaire and/or fact sheets about their activities. These companies were willing to welcome the survey team during field survey and to take part to events (workshop and/ or training course) related to bioenergy.

15 SMEs/ companies did not give ERA-Cam a precise opinion and provided with the contact of their respective management department.

the other companies, either were not present in their stand when ERA-Cam visited them, or did not show an interest in bioenergy.


International Conference on Climate Change 2006 in Nairobi, Kenya

COOPENER Contractors’ meeting and Africa Energy Forum in Berlin (March 2007)

Bois Energie Fair & Exhibition, ENEFIBIO conference Session in Orléans & Sites visit (April 2007)

ENDA and ERA-Cameroun participated to the Bois Energie Fair & Exhibition organised in Orléans (France), from 15 to 21 April 2007. Numerous contacts have been taken by ERA-Cameroun and ENDA among EU equipment suppliers and consultants from the energy sector. In particular, discussions have been launched between ENDA, ERA-Cameroun and EU equipment suppliers about EU technologies and market opportunities in the African energy sector (e.g. rice husk-fired cogeneration in Senegal, pellet production and shipping in Cameroon). Photo 18 : ENDA-Energie & ERA-Cam with ENEFIBIO team at Bois-Energie Fair in Orléans (France, 2007)

A side conference session dedicated to ENEFIBIO and bioenergy in Africa have been organised in the Fair. ENDA & ERA-Cameroun have presented to the participant the energy sector in Senegal and Cameroon (as well as the AREED programme). Before the Fair, an expert from ERA-Cameroun made a study tour on bioenergy in France (3-day visit):

Day 1: Day 2:

Visit of two wood chips fired municipal district heating systems;

Visit of two wood chips production platforms.

Day 3:

Visit of a pellets-fuelled heating system; Visit of a saw mill having a biomass-

fuelled wood drier as well as a pellets production unit;

Visit of pellets fuelled heating system in a cheese production company.

Visit of a wood chips fired municipal district heating

Visit of a wood chips production platform.

COP 12 (Conference of the Parties) in Nairobi (November 2006) 15th European Biomass Conference in Berlin (March 2007) International Forum on Biofuels in Africa, in Addis-Abeba and Exhibition of Renewable Energies

(July 2007) Semaine internationale Climat Développement in Dakar (September 2007)


8.2.3. Development of advertising tools In order to be known and seen by SME entrepreneurs and by national authorities, a poster and a leaflet presenting the two Bioenergy Centres have been produced. These documents present the services that can be provided by ENDA and ERA-Cameroun in the development of bioenergies. They have been distributed and displayed during several events related to energy and/or SMEs.

8.2.4. Publication of information documents The two Energy Centres have written several documents presenting the technical and economic opportunities of improvements within several SME sectors in Senegal and in Cameroon. In particular, ENDA and ERA-Cameroun have prepared and published 9 fact sheets presenting bioenergy opportunities in 9 different SME sectors in Senegal and Cameroon. These information sheets present the advantage, the limitations and the expected profitability of the suggested bioenergy options.

Photo 19 : Sectoral fact sheets prepared by ENDA & ERA-Cameroun

Several papers on bioenergy in Africa have been written by ENDA and ERA-Cameroun on the French Edition of Bioenergy International journal (“Bioénergie International”) that is distributed to all Bionergy International members.

Photo 20 : « Bioénergie International » journal


8.2.5. First studies of the Centres During the ENEFIBIO project duration, ERA-Cameroun has notably been contacted by representatives of 3 SME sectors. Experts from ERA-Cameroun have made a study of the situation of these 3 sectors:

- power and heat generation from palm oil mill residues (empty bunches, fiber, shells) for the Société de Développement Agro industriel du Cameroun (S.D.A.I. Cameroun) ;

- power production from biogas recovery in Nkolfoulou (Yaoundé) dumping site for the Société Hygiène et Salubrité du Cameroun (HYSACAM) ;

- power production from saw dust in the Ngoro saw mill for the CIG FAUCA.

8.3. Technical support In order to support these new Centres, ITEBE has implemented an on-line professional information platform. This dynamic exchange electronic tool has been created to meet the need for technical and financial information, as well as to exchange knowledge among a community of specialists. The platform proposes thematic information, regularly updated by the two Energy Centres and by all registered professionals. There project promoter will find information on available technologies on the national market, advice on bioenergy opportunities for their enterprise and support on how to hang together their ideas into a bankable project. These data are available on line and free of charge. They allow ENDA-Energie and ERA-Cameroun to act as a centre of convergence and capitalization of knowledge about bioenergies in Africa.

Dialogue sur les politiques énergétiques au Cameroun · 2014. 8. 11. · wood, that is to say the...

Documents

Transcript of Dialogue sur les politiques énergétiques au Cameroun · 2014. 8. 11. · wood, that is to say the...