In fact an optimal development model for the African energy sector would rely heavily on decentralised forms of energy services with an integrated approach. Communities clamoring for energy services are often remote and scattered. A number of technologies which are suited to small scale decentralised applications have considerable potential in Africa and would also naturally qualify for the CDM because they are renewable. Such small technologies could lead to the development of domestic markets in renewable energy, will have significant advantages in employment creation and lessen the burden on the balance of payments by cutting fuel imports. For the CDM to be relevant to Africa's needs it must give an added boost to the dissemination of such technologies.
Small projects are more vulnerable to the burdens of transaction costs than are large projects.
Transaction costs must therefore not be allowed to outweigh the value of the CERs generated. The rules for the CDM must therefore give small projects clear preferential treatment. An exclusive prompt start to the CDM restricted to small renewable technologies until the rules have been finalised and approved by the Executive Board. This will guarantee the credibility of the mechanism during its early phase. A streamlined bureaucracy minimising up front and transaction costs.