Exploiting synergies between export promotion, climate mitigation and development. The case of renewable energy in the Middle East and North Africa (MENA)
This project examined required measures enhancing economic growth and a pathway towards renewable energy system in the MENA region. These measures include: a reform of the energy subsidy, a deregulation of the energy sector and the support of competiveness in the private sector. In order to achieve these goals, the project examined Egypt and Morocco and assessed conditions for the success as well as opportunities for the improving the effectiveness of development cooperation.
Project Lead:
Georgeta Auktor
Financing:
German Ministry for Economic Cooperation and Development (BMZ)
Time frame:
2011 - 2014
/
completed
Project description
The wide availability of renewable energy resources in the MENA countries is central to several large-scale initiatives to generate clean energy in countries of the southern Mediterranean region and import some of it to Europe. To achieve such a regional energy market integration, the renewable energy sector should become a channel for technology development, private sector competitiveness and a source of employment and capacity building for the MENA countries. This is critical given that in the aftermath of the Arab Spring, the MENA region is facing enormous developmental challenges, especially in terms of unemployment and private sector development. In addition, most of the MENA countries have long relied on a social contract that maintained social stability through heavy state intervention and the distribution of rents – at the expense of social equality and private sector competitiveness. To address these problems, strategies for economic growth must include innovative social policies and job creation schemes. To support a developmental pathway where renewables play a significant role, a new incentive structure (defined by a new social contract) is needed. The new social contract requires measures such as reforming the energy subsidy scheme, deregulating the energy sector and supporting competitiveness in the private sector.
The project assesses the necessary conditions for achieving these development goals and opportunities for improving the effectiveness of development cooperation, with a particular focus on the North African countries. Two main country case studies are examined, Egypt and Morocco, which offer a varied perspective on the existing challenges and opportunities for the development of the renewable energy sector with respect to energy needs, industrial structure, knowledge development, institutional aspects and political conditions.